Wednesday, October 26, 2011

Cleantech and Good Business On Display in Portland, Oregon

October 27-29, Net Impact will host their 19th annual conference in Portland, Oregon.  The 2011 Net Impact Conference bills this as the world’s largest and most inspirational event for professionals and students interested in using their business skills to create social and environmental good.

The event, hosted at the LEED-certified Oregon Convention Center, attracts professionals from a variety of fields, including consultants, CSR practitioners, nonprofit leaders, and sustainability specialists.

While there are far too many presenters and panels to list, here are a few highlights in the Cleantech and Investing tracks coming to the conference:

Marc Gunther, Contributing Editor, FORTUNE magazine, will lead a discussion on what's new and what's next in cleantech with a panel that includes Dave Graham, Founding Partner of Greenstart, Rodrigo Prudencio, Partner at Nth Power, and Trae Vassallo, Partner, at Kleiner Perkins Caufield & Byers.  These VCs will share what they look for in choosing their investments, why more capital hasn’t been invested, and how finance will continue to drive innovation in the clean tech industry.

Clean Power Finance and RockPort Capital Partners will lead a discussion on what can be done to encourage communities to maximize solar technology implementation under the Solar Investment Tax Credit.

A session led by Autodesk and Green LIte Motors will focus on how digital prototyping has helped clean tech innovators develop their products and get to market faster.

Mart Bailey, Managing Partner at Callaway Private Equity Partners, Bill Tyndall, SVP, Federal Government and Regulatory Affairs at Duke Energy, and Puon Penn, Senior VP and Head of National Cleantech and Emerging Tech Markets at Wells Fargo will examine the U.S. and China's race to clean tech dominance.  This panel will discuss the current state of clean tech in the U.S. and China, the intersections where companies and investors play to each other’s strengths, and how innovations in clean energy are affecting this complex and important relationship.

Impact investing will receive considerable attention at the conference as well, as panelists representing the infrastructure developer, user, and promoter perspectives will cover IRIS, GIIRS, ANDE, Investors Circle, the GIIN, investor networks, and social stock exchanges, including where these impact investing tools are  effective, and what else is needed to help drive capital to social entrepreneurs and investment vehicles through impact measurement.

More news to come from the conference in coming days, including tweets from @stevefarone.  Follow #ni11 on Twitter.

Sunday, October 16, 2011

Local Organic Food IS Clean Technology

In honor of World Food Day, October 16th, a few words about the technology of food.

In production systems, efficiency increases with scale.  Or does it?  Has the massive scale of modern American agriculture led to choices that increase efficiency?

Ninety percent of the fresh vegetables eaten in the US are grown in California’s San Joaquin Valley.

The average American dinner travels 1,500 miles before its eaten.

This transportation-intensive food system is possible only through the use of large quantities of fuels.  Feeding one American for a year now uses over 400 gallons of fossil fuels.

And while dependence on transportation is a big problem in our inefficient US food economy, the biggest culprit of fossil fuel usage is overuse of chemicals. As much as forty percent of energy used in the food system goes towards the production of petroleum-based fertilizers and pesticides.

Buying locally-produced food immediately begins to eliminate waste, and supporting sustainable farming practices further benefits local communities by protecting local resources of soil, water, and air quality.

For many, the most appealing thing about buying local is that dollars spent on local food sales are often transformed into local jobs, as study after study demonstrates:
  • A U.S. Department of Agriculture study in North Carolina found that if  individuals spent just 10 percent, or $1.05 per day, of their existing food dollars on local foods, an additional $3.5 billion would be available in the local economy.
  • A study in Oregon schools found that allocating just seven cents per school lunch to the purchase of Oregon-grown food not only served to support Oregon farms, but reverberated into 401 of the state's 409 economic sectors. 

And for those who haven't shopped their local farmers market lately, know that even mega-giant retailer Wal-Mart recognizes the need to change their practices and source more local and sustainable food products.

Wal-Mart's new global commitment to sustainable agriculture pledges to support farmers and their communities by selling $1 billion worth of food from one million small and medium farmers who will be trained in sustainability practices. This move will effectively double the amount of locally-grown food they sell in the US, while increasing revenue to smaller farmers by 10-15%.

Can we depend on the big retailers to fix our wasteful ways?  Better stop by your local farmers market, just in case.  Local organically-grown food isn't just a great economic idea, its delicious.

Happy World Food Day.

Friday, October 14, 2011

Blue Skies for Aviation Biofuels Investment

In 2007 by the International Air Transport Association (IATA), set an industry-wide goal of carbon neutral growth by 2020.  Meeting this goal will require that carbon emissions remain steady as global air travel increases.

Recent technological improvements in aircraft have increased fuel efficiency significantly, yet investment in additional technologies, including better air traffic management and biofuels, are needed to reach the IATA goal.

Supporting this goal in the Northwest US, Sustainable Aviation Fuels Northwest (SAFN) was launched in 2010 to research sources for sustainable aircraft biofuels.

SAFN’s vision is that by 2020 or soon thereafter, “all or most flights from major airports in the region will be using at least a blend of bio-based fuel that is sustainably developed,” said Ross Macfarlane, senior advisor with the nonprofit organization Climate Solutions that is helping manage SAFN efforts.

Pacific Northwest regional efforts receive a sizable boost

In September, the Agriculture Department announced the awarding of more than $136 million in research and development grants to public- and private-sector partners in 22 states, in part to support development of aviation biofuels.  Eighty million dollars of this was awarded to consortiums led by Washington state’s two largest universities.

The University of Washington will lead a consortium of universities and businesses in a $40 million project to research converting poplar trees that are grown on plantations to aviation, diesel and gasoline fuels, while Washington State University will lead another $40 million project to research the potential for using residual wood after logging and forest thinning for aviation fuel.

“This is an opportunity to create thousands of new jobs and drive economic development in rural communities across America by building the framework for a competitively-priced, American-made biofuels industry,” said Agriculture Secretary Tom Vilsack.

These federal grants may be only the beginning, as a partnership announced by President Obama in August promises to invest up to $510 million over three years to develop biofuels for both commercial and military transportation.

Entrepreneurs on the move

Entrepreneurs in Washington and neighboring states are already moving quickly to leverage new research and seize the coming market opportunities.  

In Seattle, AltAir Fuels is developing a biofuel refinery to produce 100 million gallons of jet fuel per year, potentially supplying as much as 10 percent of the fuel consumed at Seattle-Tacoma International Airport.

“The aviation industry has incredibly thin and challenging profit margins, and one of the biggest variables is the 100 percent dependence on petroleum fuels,” said Macfarlane. “Their challenge is managing the price volatility and supply volatility that is presented in that market. I think the question for most of the aviation stakeholders isn’t whether they are going to invest in alternatives, but what those alternatives are going to be and how they can quickly get there.”

Sunday, October 9, 2011

Clean Energy 'Unreliable', Subsidies 'Unsustainable', says Forbes

The lead paragraph from the July Forbes Magazine article screamed for my attention: 
"The global clean energy industry is set for a major crash. The reason is simple. Clean energy is still much more expensive and less reliable than coal or gas, and in an era of heightened budget austerity the subsidies required to make clean energy artificially cheaper are becoming unsustainable" (The Coming Tech Crash, July 2011).
Is this pessimism warranted?  With governments as well as growing communities of venture and angel investors targeting clean tech investments around the globe, and with so much U.S. capital stockpiled and seeking ventures for investment, why the gloom and doom?  

Forbes blames a slowing of government subsidies, along with poor targeting of subsidies already rolled out.  Moreover, Forbes' analyst accuses cleantech energy of failing to demonstrate cost-efficiency in general.  In a disconcerting prediction, coming cuts in subsidies, they say, will soon lead to an exodus of investment dollars from the U.S. to Asia.

Gloomy stuff.  Yet Forbes' assumptions are worth a second look.

Over the next weeks, this blog will explore a number of factors driving  investment in clean technology, including Forbes' demonized government subsidies, global recession, new technologies, declining oil stocks, risk management, and geopolitics.

Forbes' current view of cleantech investment may be too strongly colored by its view of subsidies launched by President Obama in 2009.  At that time, investors' hopes were riding high as the new administration assembled its stimulus plan in response to the growing recession.  That optimism set up the president to take a share of blame when subsidized investments in cleantech met uneven returns in the unstable markets of 2009-11.  

Critics of Obama's subsidies might be wise to spend more time focusing on more fundamental market forces.

Clean technology investing slowed dramatically with the crash of 2008, as did investments in other sectors.  Yet, a recent report by the Cleantech Group measures first quarter 2011 investment in US clean technology at its highest level since 2008.  
Why, with subsidies coming under new criticism, with a gridlocked U.S. government running out of options, with a global recession lingering, why is investment rising?

The desire to be green may not be so much a part of the equation as it was in those heady days of early 2008.  Business leaders, as always, are seeking secure supplies and a stable prices.  Many are targeting these very attributes in cleantech.

For example, global companies need forward-thinking supply chain strategies, of which biofuels are a growing component.  Price instabilities are now systemic in the global oil industry, petroleum stocks management is complicated by geopolitical uncertainty, and markets are overly influenced by speculation (more on this in coming weeks).  While rising oil prices are challenging for business, uncertainty is worse.  It is the growing risk management issues these instabilities create that are now fueling new growth in the biofuels sector.

To Forbes, the cleantech sector today looks overly subsidized, too capital intensive, and inextricably tied to a passing era of government activism.  Yet. cleantech is showing continued signs of vitality, and the real reasons for this cleantech investment rebound may be back-to-basics pragmatism.   

Sustainability, after all, is about reducing risk and planning ahead.

Next week, we'll explore more clues regarding the future of cleantech investment.