18-20 January 2011, Palm Springs, California

By Denis Gross

The seventh CLEAN-tech Investor Summit (a CleanEdge/International Business Forum event) took place on 18-20 January in Palm Springs, California. The event attracted a high-octane mix of investors, entrepreneurs and senior figures in the clean technology world.

Ira Ehrenpreis of Technology Partners (and Conference Chairman) opened proceedings with a ’State of the Clean-Tech Industry’ address. He noted the tremendous increase in importance of the sector over the ten years between 2000, when it represented far less than 1% of venture investment, and 2010, when it accounted for 17% following a thirty-fold increase. The ’greening of America’ carries on apace, with State-led initiatives gaining traction, but Ehrenpreis also remarked on the particularly strong growth outside the US, especially in Europe, China and Brazil - with China now accounting for 30% of global wind turbine production and 40% of solar PV. However, he emphasised that the challenge remains immense, with global demand for energy, fuelled by Asian (principally Chinese and Indian) growth, set to rise by 50% between 2009 and 2035 in a world still encumbered with economic problems and weak global leadership.

Ehrenpreis believes that technologies now under development will have a profound effect on us in the future - in the same way that the incandescent light bulb changed the way we live and work, “the essence of cleantech is innovation”.

Ehrenpreis commented on the lack of an overarching energy policy in the US – a theme that was echoed in the luncheon keynote talk by John Hofmeister, the former President of Shell Oil Company, founder and CEO of Citizens for Affordable Energy and author of “Why we Hate the Oil Companies”.  A solution suggested by Hofmeister might be the creation of an independent body to manage energy policy, along the lines of the Federal Reserve.

The role of government was an issue that ran throughout the conference. The recent announcement of the closure of Evergreen Solar’s Massachusetts plant, which had received US$58 million in state aid, was a hot topic. Cathy Zoi, Acting Under Secretary for Energy and the Assistant Secretary for Energy Efficiency and Renewable Energy at the US Department of Energy, gave an upbeat account of a change in mindset within her team. She believes there is now a clear focus on reducing the time to market for promising technologies. Zoi explained that Recovery Act monies have been deployed rapidly and efficiently, targeted at battery technology, solar power and weatherproofing low income housing. However, she observed that “subsidies can only close the last 20% of the price difference between a new technology and the incumbent” – an issue which is underscoring the drive to carefully select viable technologies and then move them down the price curve before considering subsidies.

Subsidies were, however, critiqued strongly by T. J. Rodgers, CEO of Cypress Semiconductor, a very public believer in laissez-faire capitalism and a climate change sceptic. Rodgers urged the audience to demand stand-alone economic viability and not to rely on government funding when considering investing in companies or technology. Although he perceives global warming to be a “secular religion” and in need of debunking, Rodgers successfully invested in the concentrated solar power company Sunpower and helped it grow to a profitable entity.

The importance and benefits of natural gas were hotly debated, especially the abundant reserves of natural gas in the US. There are plenty of ideas for using natural gas, allowing intermittency to be time-shifted or using it to take over base load generation. It is already in use as CNG (compressed natural gas) and LNG (liquefied natural gas) for fuelling buses, trucks and fleet vehicles, and in some inefficient ’peaking plants’, and appears poised for large scale use.

Carl Pope, Chairman of the Sierra Club, warned that utilities will be desperate to hang on to coal and that renewables and natural gas will therefore struggle to get a toe-hold. Vickram Rao, a former CTO of Halliburton, noted that an oil production plateau (not to be confused with peak oil) is imminent, which will tend to push up oil prices. However, the abundance of natural gas and the onshore production of shale gas will ensure that natural gas prices can be expected to remain low to moderate.

Electric vehicles were much in evidence, with a strategically parked Tesla roadster outside the venue. Elon Musk, Chairman of Tesla Motors, discussed SpaceX and Tesla. John Lauckner, GM Vice President and President, General Motors Ventures, gave it as his opinion that the Chevrolet Volt marks the tipping point between the internal combustion engine (ICE) and the use of electricity as the primary fuel for automobiles. Lauckner pointed out that GM’s involvement in electrification goes further than just the Chevrolet Volt, listing General Motors Ventures’ main points of focus as: automobile cleantech; infotainment; and smart materials.

Estimates of 50 million EVs on the road by 2030 and the related load on the electrical grid is one of the drivers behind smart grid investment, according to Malcom Unsworth, President and CEO of Itron Inc. He believes that smart  gas, water and electricity metering will be vital in the future – “the  way we manage energy and water will shape the century” – and made the point that energy efficiency is no longer optional.

Peter Schwartz and Ralph Cavanagh debated nuclear power in a lively session moderated by CleanEdge’s Ron Pernick . Although long-standing friends, these two have debated this topic publicly from diametrically opposed viewpoints over a number of years. 

Schwartz (author of “Art of the Long View”) presented the pro case, that climate change is happening now and we need zero carbon generation now. In the next 20-40 years an extra four billion people will want the same lifestyle as that currently enjoyed by the wealthiest two billion. Today, electricity is driven by coal, and in the next few years the amount of carbon emitted by China, India etc. will equal the total carbon pumped into the atmosphere since industrialisation. Only nuclear offers the potential of supplanting coal in this timeframe. Moreover, thanks to developments around the world, better technologies have become available since the last US nuclear reactor was built in 1973. There are also a number of new technologies like micronuclear reactors, and even fusion as a possibility by 2020. 

Cavanagh’s case against nuclear centred on costs: the utility industry is increasingly dominated by competitive procurement, and needs competitive energy production. Nuclear is in no way competitive. Reactors are too big, too remote and – in his view – are the antithesis of all that cleantech stands for.

The Innovators’ Hot Seat was occupied by Warner Philips, co-founder of Lemnis and President, Lemnis Lighting USA – a solid-state lighting company. Lemnis Lighting is the leader in consumer LED (light emitting diode) lighting, having sold more than three million of its Pharox bulbs. Around 19% of global electricity is consumed by lighting, and using LEDs can reduce this consumption by 50-80% . The opportunity is immense, as currently lighting is a $70 billion per annum industry, with 15 billion light bulbs sold each year. LEDs could replace 45% of lighting in 2015, and then 80% by 2020, provided the industry can meet the right consumer price point.

All in all, 2011’s CLEAN-Tech Investor Summit was an event with high quality presentations, debates and keynote addresses. The breadth of expertise present cannot be overemphasised – and this brief account fails to do justice to the sheer quality of the networking opportunity.