Can I Hate the Solar Bill of Rights and Still Love Solar Power?

by Neal Dikeman

A few of you may have run across the Solar Bill of Rights Petition that’s floating around the web.  I was really excited at the idea, until I read it.  For a good environmental conservative like me, I had a lot of trouble swallowing the actual demands, despite the fact that a whole bunch of my friends and people I respect are already signatories.  To be honest, instead of being excited over the soaring rhetoric and call to action, or enthralled by the detailed and well thought out solutions to the thorny issues around power deregulation, local choice, and distributed energy, and my first response after reading it was along the lines of “where do they get off”.  It reads like a very self serving, our child is prettier than your child, our cause is more important than your cause, partisan politics please subsidize me call to unlevel the playing field, and ignores all the devils in the details.

Whereas the reall Bill of Rights is a carefully crafted attempt to reserve rights to protect the individual from the state, this feels like an attempt to use the state’s engines to smash all opposition to particular industry, and local choice and the rights of the people and businesses affected be damned.  Not my idea of a Bill of Rights.

To my friends who know how much I believe in the solar sector and its promise – I’m sorry, I’m sorry, I’m sorry in advance of you reading this.  But somebody please bring me a new version of the Solar Bill of Rights worth signing.

The text of the Solar Bill of Rights is below in italics, with my thoughts and questions after each point.  Read through for yourself, and post your comments on the blog.  Tell me whether you think I should sign, and Cleantech Blog should endorse it.  Or post suggestions for amendments we can propose, and we’ll write our own.

We declare these rights not on behalf of our companies, but on behalf of our customers and our country. We seek no more than the freedom to compete on equal terms and no more than the liberty for consumers to choose the energy source they think best.

1. Americans have the right to put solar on their homes or businesses


Millions of Americans want to put solar on the roof of their home or business, but many are prevented from doing so by local restrictions. Some homeowners associations have prevented residents from going solar through neighborhood covenants, which allow for the association to veto any changes to a property’s aesthetics. Some utilities and municipalities have also made it prohibitively time-consuming and/or expensive to have a system permitted or inspected.

I loved this one, at first blush.  A right to solar?  Terrific.  Then I started thinking, hey wait a minute.  HOAs and deed restrictions are a core defender of local property rights.  Where do we get off retroactively telling the massive number of property owners and zoning boards, we’re sorry, despite the fact that you can’t get 50% vote of your neighborhood to approve changes to the agreement you all live under in your democratic process (and that your neighborhood may have had for 100 years), here’s your new amendment.  That smacks of eminent domain to me.  I hate the use of eminent domain to benefit a specific constituency.  Needs lots of nuance before I could get behind this one.

2. Americans have the right to connect their solar energy system to the grid with uniform national standards


Currently, each state (in some cases, each utility) has a unique process for connecting solar systems to the local electricity grid. National interconnection standards will create a uniform process and paperwork, creating a simple process for the homeowner and a standardized physical connection for manufacturers. Connecting a home solar system shouldn’t be any more complicated for the homeowner than setting up an Internet connection.

Got to love standards, but who’s going to set them?  That part always creates big winners and losers.  Telecom standards for that local internet connection were supported by the government, but never did we have a mandate all ISPs shall go DSL, right?  Oh, and by the way, all local utility grids are very different in design.  Some can do things that others can’t.  How exactly will that be reconciled, and who will pay for it?  Like this one but Devil’s in the details and I don’t think these guys have thought it through.

3. Americans have the right to Net Meter and be compensated at the very least with full retail electricity rates

Residential solar systems generate excess electricity in the middle of the day, when the owners aren’t usually at home. Net metering requires the utility company to credit any excess generation to the customer at full retail rates at a minimum – effectively running the electricity meter backwards when the system is generating more electricity than the occupants of the house are using. Allowing customers to net meter is critical to making solar an economically viable option for most homeowners.

Net metering is a terrific idea in principal, but 1) again, not all grids are capable of handling the impact easily, especially if it’s at volume, 2) right now our always available power distribution system is paid for by charges buried in your power usage bill, if the net metering house still wants the benefit of being hooked up to the grid, how are they compensating the rest of us for the on demand infrastructure use?, and the big one 3) why is retail a fair price?  Saying the utility (in many places owned by you and I) has to buy all the power its customer produces at the same price it would retail it to you is about like saying your local grocery store has to buy the 10 lbs of tomatos you grow at retail.  They buy the rest of their tomatos in volume, with delivery and quality restrictions, for a much lower price (and for the non produce they send back the unsold volumes to the manufacturer);  and 4) which utility has to buy it?  In places like Texas which are deregulated, you can choose your provider.  Shall we pick one at random and force them to buy our power at the highest price they’ve ever sold to any customer?  That sounds fair.

Then I read that last line again, ummh, so you deserve a “right” because the only way it’s profitable for you is if you make somebody else buy it at higher than their current cost?

4. The solar industry has the right to a fair competitive environment


The highly profitable fossil fuel industries have received tens of billions of dollars in subsidies from the federal government for decades. In addition, fossil fuel industries are protected from bearing the full social costs of the pollution they produce. The solar energy industry and the public expect a fair playing field, with all energy sources evaluated based on their full, life-cycle costs and benefits to society. Therefore it is critical that solar energy receive the same level of support, for the same duration, as the fossil fuel industry.

I’m getting really, really tired of this argument.  Renewable and solar advocates conveniently ignore that even incorporating a kitchen sink approach to fossil fuel subsidies (and heaven forbid we add the massive percentage of solar R and D spent by governments over the years), the solar subsidy is many, many, many times higher the fossil fuel subsidy level on a per unit basis (i.e, if we gave the solar guys the same subsidy per kilowatt hours or btu equivalent that they claim the fossil fuel industry gets, the solar industry would never have started.  And it smacks of total smarminess to have this argument right below the “let us sell back power at retail rates” subsidy demand).

Or maybe we should just add as a corollary that all Americans have the right to shares and dividends from any venture capital backed solar company which receives greater than 1/3rd of its funding from a DOE loan program or other public R and D funding and later benefits from a subsidy that Americans pays for in their regulated utility bill.  I’ll go look in my mailbox tomorrow and see if my check arrived.

5. The solar industry has the right to produce clean energy on public lands

America has some of the best solar resources in the world, which are often on public lands overseen by the federal government. But even though oil and gas industries are producing on 13 million acres of public lands, no solar permits have been approved. Solar is a clean, renewable American resource and solar development on public lands is a critical component of any national strategy to expand our use of renewable energy.

Hang on, big fan of leasing national natural resources in a fair and responsible manner, but I don’t necessarily want solar, oil, or ANY industry to have an unrestricted right to use my share of the public lands without environmental reviews, an open and transparent process with stakeholder inclusion, and a competitive market.  While I want to see solar thrown up all across the country, why should the solar industry be demanding this as a right?  The wind industry doesn’t?  The hydro industry doesn’t?  The geothermal industry doesn’t?

6. The solar industry has the right to sell its power across a new, 21st century transmission grid


Over the last 100 years, the transmission grid in the United States has been built as a patchwork of local systems, designed and planned to meet local needs. As the needs of customers have changed, so has the way the electric industry does business. What haven’t changed are the rules crafted in an era of coal-fired power plants. What is needed now is an investment in infrastructure to connect areas rich in solar resources with major population centers.

Uh, I’m a big advocate of an advanced grid.  And the cost here is measured well into the 11 or 12 figures, or significant portions of total GDP.  Let’s not write checks and demand someone else’s body has to cash them.  This is a tremendous topic but totally does not belong in a solar bill of rights unless the solar industry is ready and willing to pay for it (which in turn would be unfair to ask of them alone either).

7. Americans have the right to buy solar electricity from their utility

Many utility companies have never considered offering their customers the option to purchase clean solar energy, rather than dirty energy from coal or other fossil fuels. Nation-wide over 90 percent of people support increased use of solar energy, and over three-quarters believe it should be a major priority of the federal government. Despite this, only around 25 percent of utility customers in the U.S. have the ability to actually purchase clean, renewable power from their utility, and only a fraction of those programs offer solar energy. Utilities should be required to offer the electricity source that their customers want.

Dude, a few years ago California voters voted down a solar initiative because of cost, only to have the CPUC implement it anyway.  We could do the right thing and just deregulate like Texas and New Zealand did (instead of stupidly like California tried), and I could buy dirt cheap 100% wind power, hydro power, 20% wind power, natural gas only power, average grid mix, cap and save, fixed rate, floating rate, or any other different combination a marketer can dream up.  Oh wait, since all other forms of renewable power are cheaper than solar, I’d buy that 11.4 cent/kwh all wind power than the solar.  Maybe that’s why the solar industry wants their private right.  How about, every American has the right to buy power in a free market and switch providers when they want to?  And then let’s make the subsidies we give all energy companies transparent, as opposed to making new back door ones?

8. Americans have the right to – and should expect – the highest ethical treatment from the solar industry


Solar energy systems are an investment as much as a physical product. Consumers deserve top-quality information and treatment from solar energy providers and installers. Consumers should expect the solar industry to minimize its environmental impact and communicate information about available incentives in a clear, accurate and accessible manner. Finally, consumers should expect that solar systems will work better than advertised, and that companies will make every good faith effort to support solar owners over the life of their systems. Read SEIA’s code of ethics.

This is just plain odd.  I wasn’t aware we needed this.  Maybe I missed something important about how ethical the solar industry is today?

I’m sorry guys, this whole SOB of Rights just reads as very self serving.  But bring your comments, if the weight of Cleantech Blog readers want me to, I will sign it and we will support.

Neal Dikeman is the chief blogger of Cleantechblog.com, and creator of Cleantech.org, a huge advocate of solar and policy powered financing and R&D, he just doesn’t like using his government to support hidden subsidies to pick winners.  He is a partner at cleantech merchant bank Jane Capital Partners LLC, and has helped found or invested in companies in carbon, solar, superconductors, and fuel cells.

California’s Electric Transit Ride


Proterra Foothill chargingstation 300x195 California’s Electric Transit RideBy John Addison

People take hundreds of million electric rides each year in California. The big news is not the electric car drivers or those happily screaming on Disneyland rides; the larger story is network of connected electric rail, buses with cutting edge electric drive systems, and electric cars.

No LA and SF are not yet NY or Paris, but they are showing off a future of low-carbon and zero-emission transportation solutions. A couple of weeks ago, I went to the highly informative CAPCOA Climate Change Forum which included a couple of hundred leaders from California government, industry, and non-profit. Many of these people have decades of success in improving the health of our air, water, and environment. Now they are taking on the tough challenge of reducing the greenhouse gas emissions of a state that emits more than entire nations such as Spain, or Saudi Arabia, or hundreds of smaller countries. The number one GHG emitter in California is vehicles. Add the emissions of its oil refineries and you have the majority of greenhouse gas emissions in California.

Electric Light-Rail and Electric Trolley Buses

To the rescue are major public transportation operators who are electrifying their rail and bus fleets. These transit operators are unclogging the roads for those who really need cars, reducing air pollution, and reducing California’s carbon footprint.

In fact, I got to the Climate Change Forum on an electrically powered bus. I walked two blocks and boarded a trolley bus connected to special overhead power lines. The electricity is from hydropower. San Francisco has over 300 electric trolley buses, 40 cable cars that use under-street cables powered by electric-motors, an extensive electric light-rail system, and 460 diesel buses which are increasingly hybrid-electric. Like most cities, no one mode is best for the 235 million rides taken in SF each year; what’s best is a portfolio of solutions.

Electric light-rail is popular in many cities. Sleek cars on rail invite people to hop on and off. On their dedicated rail lines they are often the fastest way to get to a city’s major destinations. The rail cars often last 40 years compared to diesel and trolley buses which may only last 12.

Only a handful of transit operators still use the electric trolley buses with rubber-tired vehicles powered by electricity collected from fixed overhead wires. San Francisco and Seattle actively use trolley buses; cities like Boston and Dayton have a few. These buses, connected to overhead electric lines, fight through the car traffic, stop at every red light and stop sign, and require slower boarding than light rail. Transit operators no longer like electric trolley buses. They like the long life, speed, and ridership appeal of electric light-rail. Trolley buses cost more to buy and maintain than diesel hybrid-electrics. Unfortunately, adding a light-rail line can cost $20 million per mile; in a city like SF, $60 million.

A good combination for public transportation is light-rail corridors for the most heavily traveled segments that is well integrated with bus service, bicycling, walking, car sharing, electric car parking, and other modes.

Hydrogen Fuel Cells Extend Electric Range

My wife and I are planning to buy an electric car with 100 mile charge range. That more than meets our daily needs. If you’re driving a 40-foot bus full of people for 12 to 16 hours daily, however, you probably need more than batteries to extend the range to 300 to 400 miles. Hydrogen fuel cells compliment lithium batteries by freeing electrons from hydrogen to feed electric motors and batteries added electricity. Finish the long day with a 10 to 15 minute fill-up of hydrogen and your ready for another day.

AC Transit is currently servicing some Berkeley and Oakland routes with 4 hydrogen fuel cell buses with pure electric drive systems with 8 more on order for the Bay Area. These workhorses go for hours on end, even taking battery draining steep grades. These Van Hool buses use Siemens electric motors, EnerDel lithium batteries, and UTC fuel cells. AC Transit Director Jaimie Levin reports that their UTC fuel cells have worked so well, that they will redeploy several of the older fuel cells in the new buses, even though they have in excess of 7,000 hours of continuous operation on each system, without any failures or repairs, or loss of power.

The AC Transit fuel cell buses provided an inspiration for the Winter Olympics. At CAPCOA, I talked with Dr. Paul Scott, ISE Chief Scientists about the 20 hydrogen fuel cell buses that were used in Whistler for the Vancouver Winter Olympics. Dr. Scott told me that those BC Transit buses have successfully logged 500,000 km in a few months. I estimate that they provided over 100,000 rides during the Olympics. The Vancouver New Flyer buses use Ballard fuel cells, Siemens electric motors, and ISE drive systems and software.

LA Metro subway, light-rail, CNG buses, 40% electric, candidates 300kW pilot

Metro serves a vast geography that extends to the far reaches of the Los Angeles basin.I rode their system for a week, traveling from remote Pasadena to the LA Convention Center faster than I could drive.

At the heart of Metro is an electrically powered subway and light-rail system. From those main arteries, 2,500 CNG buses reach streets and neighborhoods that could never be covered with electric rail. In the long term, up to 40 percent of these CNG buses could be replaced with battery-electric buses for rush hour coverage. Although CNG buses have a range of at least 300 miles and can stay on road for 16 hours daily; battery electric buses are well suited for six to 8 hours of daily use during peak service periods. LA Metro plans to pilot test an electric bus with 300kW lithium battery pack, giving it 100-plua mile range appropriate for peak hours.

Foothill Transit Goes Electric

The Ecoliner silently glides along the streets in San Gabriel Valley giving passengers a break from the famous grid-lock traffic that extends east from Los Angeles for a hundred miles. The Ecoliner is Foothill Transit’s new pure battery-electric 35-foot bus built by Proterra, which is headquartered in Golden, Colorado. The Proterra BE35 is propelled with UQM electric motor using innovative lithium batteries that keep the big bus moving for 3 hours and are then quick-charged in ten minutes. The buses range is extended because the Proterra is aerodynamic made with lightweight composite material.

Proterra’s system allows a battery electric bus to pull into a transit center terminal or on-route stop and automatically connect to an overhead system that links the bus to a high capacity charger without driver involvement, even while passengers load and unload. The charging station technology includes advanced wireless controls that facilitate the docking process and eliminate any intervention from the driver. Proterra’s FastFill™ charge system is comprised of the software and hardware to rapidly charge the TerraVoltTM Energy Storage System from 0% to 92% energy charge efficiency in as little as 6 minutes.

Under California’s zero-emission bus program, 1,000 zero-emission (fuel supply to wheels) buses will be in service by 2020.

Commuter Rail and HSR

Metrolink rail and the Subway link some major Southern California light-rail and bus systems and BART and Caltrain link some Northern California systems. As a rider of these systems, I can testify that navigating through multiple systems is often slow and confusing. Using Google Maps on my smartphone makes the navigation possible.

In the future, California’s 25 major transit systems will be linked with an 800-mile high-speed rail network. Voters approved the system because it is a less expensive solution than widening highways and expanding airports. Because it depends on local and public-private partnership funding, as well as state and federal funding, it will be built in sections. First online are likely to be areas that are currently overwhelmed with passenger vehicles crawling on freeways that should be renamed “slowways.” Likely to be among the first in service are the Orange County – Los Angeles section.

Big Oil Fights Back

California is electrifying cars, transit, and high-speed rail at the same time that it expands its use of renewable energy including wind, solar, geothermal, hydro, agricultural waste, and even ocean power. The transition may reduce the state’s overwhelming dependency on petroleum for over 97 percent of all transportation. By comparison to other nations, California is the third largest market for petroleum. Only the USA as a whole and China use more. California uses more petroleum than Japan, Germany, India, and other nations.

Reducing the use of petroleum, of course, would cost oil companies billions. Texas oil companies are spending million to encourage Californians to vote “yes” for Proposition 23 this November. The proposition would require the State to abandon implementation of a comprehensive greenhouse-gas-reduction program that includes increased renewable energy and cleaner fuel requirements, and mandatory emission reporting and fee requirements for major polluters such as power plants and oil refineries, until suspension is lifted.”

Prop 23’s biggest backers, Valero and Tesoro, are responsible for 16.7% of California’s emissions, according to the California League of Conservation Voters. Prop 23 will allow California oil refineries to avoid paying over one billion dollars for carbon emissions, so they are attacking California Global Warming Solutions Act supported by the majority and California’s Republican Governor. Prop 23 is promoted as a jobs creation proposal, but a recent UC study reported that California’s successful efforts to become cleaner and more efficient have saved us money and grown the economy, resulting in the creation of 1.5 million jobs with a total payroll of over $45 billion. Opposition to Prop 23 fears that the law would open a Pandora’s Box of lawsuits against anything that reduces greenhouse gas emissions. CLCV Prop 23 Details

Currently California leads the nation with 25,000 electric cars on the road and thousands of new electric charge stations are scheduled for installation. Hundreds of millions of rides are taken on electrified light-rail and commuter rail. Zero emission buses are on the roads. Renewable energy is growing by gigawatts. In a few weeks, we will learn if California moves ahead with efficient and electrified transportation, or if its initiatives are derailed.

Rethinking the Jet Engine

by Richard T. Stuebi

Since their discovery and invention in the early 1940s, jet engines have experienced dramatic improvements in thrust, reliability, emissions and efficiency. However, the basic turbofan engine design has remained largely unchanged since the late 1960s, when they were developed to enable the emergence of wide-body passenger jets. As the design has matured, the improvements have become more incremental.

As reported in the September 4 issue of The Economist, a start-up firm called R-Jet Engineering is exploring a pretty significant departure from the conventional turbofan. R-Jet is pioneering the use of an orbiting combustion nozzle (OCN), wherein the combustion process in the center of the engine occurs in rotating vortex, rather than in a straight line, as it flows through the engine. R-Jet claims that this combustion approach would reduce fuel burn by at least 25%, and reduce emissions by about 75%.

From an environmental standpoint, it would be great to see this kind of improvement spread widely throughout the aviation market, as it represents one of the fastest growing segments of greenhouse gas emissions in the world. However, don’t expect to see this OCN-jet technology under a wing anytime soon. In addition to the normal technology development hurdles that any company faces in commercializing a new technology, a huge challenge for R-Jet will be gaining customer adoption.

It’s essentially impossible for a venture like R-Jet to sell directly to aircraft manufacturers like Boeing (NYSE: BA) or Airbus – they are too risk-averse to use an unproven technology critical to their product’s saleability from a company with such a small balance sheet.

So, R-Jet will probably need to partner with, sell through, or sell to jet engine manufacturers with sufficient wherewithal and brand to back a breakthrough innovation to aircraft manufacturers – and there are really only three: General Electric (NYSE: GE), Pratt & Whitney of United Technologies (NYSE: UTX), and Rolls-Royce (LSE: RR). In turn, these companies will present significant challenges for R-Jet – first in paying attention to them and taking them seriously (i.e., the “not-invented-here” syndrome), secondly in working at the speed an entrepreneurial venture requires to stay afloat, and lastly exerting so much relative muscle that the corporation captures most of the value.

This is a common problem facing the cleantech innovation sector. In energy, the industry is massive, the products/technologies are typically very capital intensive, and most of the key players (potential customers, research collaborators or channel partners) are correspondingly huge corporations. It is not easy for small ventures like R-Jet – as shown conclusively by Clayton Christensen in The Innovator’s Dilemma to be the type of company much more likely to develop disruptive technologies than big incumbents – to succeed in such an ecosystem.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

Ford Wins EcoGlobe Award for Technology in Fiesta ECOnetic

Ford wins a major environmental award for its new technology that makes engines more efficient and uses some hybrid technology, such as auto-start-stop and braking regen energy without the cost of a true hybrid electric. Ford has received a prestigious EcoGlobe award in recognition of its achievements in introducing environmentally-advanced, yet affordable technical solutions under the Ford ECOnetic Technologies programme.

The award – one of ten presented annually by an independent jury for what they consider are outstanding environmentally-friendly vehicle solutions – was presented to the Ford Fiesta ECOnetic as a representative model from the Ford ECOnetic Technologies range. With CO2 emissions of just 98 g/km, the Fiesta ECOnetic is one of Europe’s most fuel efficient, low CO2 passenger cars.

The Ford’s ECOnetic Technologies programme was launched earlier in 2010. It is a customer-driven initiative bringing together a range of vehicle features and technologies specifically targeting better fuel economy, reduced emissions and overall lower cost of ownership, including:

  • Ford EcoBoost – all-new petrol engines featuring turbocharging and direct injection technology to provide the performance of a larger displacement engine with the fuel economy and CO2 benefits of a smaller unit.
  • Ford Duratorq TDCi – a range of high-efficiency common-rail diesel engines which have been further improved to deliver even better fuel economy and lower CO2.
  • Ford PowerShift transmission – an advanced dual-clutch design, combining the efficiency, optimised gear ratios and driving enjoyment of a manual gearbox with the smoothness and ease-of-use of a conventional automatic.
  • Ford Auto-Start-Stop – automatically cuts the engine when at a standstill and restarts it as required by the driver to avoid unnecessary fuel use.
  • Smart Regenerative Charging (SRC) – creates electrical energy from braking movements to enhance existing power sources.
  • Active Grille Shutter – variable grille opening which reduces when the vehicle is at speed to improve air flow efficiency and lower fuel consumption.
  • Ford ECO Mode – an driver information system that helps educate the driver to achieve improved real-world fuel economy.
  • Electric Power Assist Steering (EPAS) – a more efficient steering system which reduces the drain on power reserves and thereby supports more efficient operation.
  • Gear Shift Indicator – advises the driver of the most efficient point for gear changes.

In addition to ECOnetic Technologies, Ford also continues to offer dedicated ultra-low emission ECOnetic models, including the EcoGlobe-winning Fiesta, the Focus, Mondeo and Transit. These Ford fuel economy hero vehicles feature unique technologies including longer gearing, specific engine calibrations, special aerodynamic packages, and ultra-low rolling resistance tires, in different combinations according to model.

Longer term, Ford ECOnetic Technologies will expand to include a range of other hi-tech features under development, including further weight reduction and aerodynamic improvements, electric, hybrid and plug-in hybrid electric vehicles, biofuel-capable vehicles, and hydrogen-powered vehicles.

Efficiency, Meet Elasticity

by Richard T. Stuebi

I sometimes receive criticism for not sufficiently promoting energy efficiency as a means of reducing our reliance on fossil fuels. I don’t think that the criticism is justified – I do strongly support the pursuit of energy efficiency – but I am willing to admit that I spend more time and attention focusing on energy supply technologies.

This is for two reasons. One is that we can’t realistically shrink our way to zero energy requirements – or even close. Yes, we must stop wastage, but for continued human progress over the centuries to come, we will always need a substantial supply of energy, from more benign and everlasting sources than the fossil fuels we depend upon today.

Second, and more subtly, the adoption of energy efficient technologies often begets a perverse reaction from the market – increased energy consumption — due to the effect of the economic concept of income elasticity.

This concept is illustrated by a paper entitled “Solid-State Lighting: An Energy-Economics Perspective” by Dr. Jeff Tsao and colleagues at Sandia National Laboratories in the Journal of Physics D: Applied Physics, assessing the long-run implications of the adoption of more efficient lighting technologies. Their study indicates that, by 2030, LED lighting will be three times more efficient than fluorescent lights – but that customer demand for lighting (as measured in lumens) will increase by a factor of ten, meaning that electricity requirements to supply lighting demand would have to double, even with elimination of incandescents and replacement with LEDs.

Again, I support the transition to LEDs. It should be noted that LEDs have much less of a thermal footprint, so even if the paradoxical results suggested by Dr. Tsao et al come to pass, there may still be a substantial reduction in energy requirements associated with air conditioning as LEDs come to replace incandescent lights.

The moral of this story is that energy efficiency is not a panacea for our environmental challenges. It is easy for advocates of energy efficiency to overlook consumer behavior when considering the aggregate impacts of a new technology – and thereby may overstate the potential environmental benefits associated with energy efficiency innovations. As a result, the search for new and better energy supply approaches remains an imperative – even while more aggressively promoting more efficient energy consumption technologies.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

Electric Car Charging and Building Integrated Wind Power

By John Addison (9/14/10)

Greenway Self-Park is Chicago’s new 11-story parking structure is the world’s first to combine integrated wind power, electric car charging, and two car sharing services with plans to offer electric cars. The green parking structure was designed by HOK, a leading global architectural firm. Beautifully integrated into the structure is a 12-paired array of vertical turbines, located on the southwest corner of the garage, designed to harvest energy 24/7 in this famous “Windy City.”

Greenway car sharing partners include iGo and Zipcar which offers members the ability to pay for plug-in cars by the hour in select markets. Car sharing is a perfect fit for millions who live in the city, primarily use transit, but at times need a car for a few hours. Both iGo and Zipcar plan to expand their offerings of electric cars and plug-in hybrids.

Friedman Properties’ new energy-efficient parking structure is currently pursuing LEED® (Leadership in Energy and Environmental Design) Certification from the U.S. Green Building Council. Sustainable design initiatives for Greenway Self-Park include a cistern rain water collection system, electric car plug-in stations, and a way-finding system at each elevator lobby that educates Chicagoans on how to live more sustainably and better protect the environment. The 11-story structure is a beautiful and compact contrast to the vast sprawl of uncovered parking lots.

In May, I was in Chicago to give a speech about sustainable transportation at the headquarters of the American Planning Association. View my APA webinar “More Smiles, Less Miles.” I was very impressed with Chicago’s leadership in green LEED buildings, green roofs, and transit oriented development. Chicago is ranked #4 in Sustainlane’s green ranking of U.S. cities.

Chicago again demonstrates its leadership with building-integrated wind power, electric car charging, innovative car sharing, and sustainable design.

By John Addison, Publisher of the Clean Fleet Report and conference speaker.

Jeremy Grantham on Climate Change

Richard T. Stuebi

Jeremy Grantham is one of the world’s most successful investors, over a very long period of time. He founded Grantham Mayo Van Otterloo in 1977, which now manages $100 billion of capital for sophisticated investors from around the globe. He tends to take positions for his clients that anticipate the formation of bubbles and defend against their collapse. His quarterly newsletters are extremely well-written: thoughtful and deeply researched. In short, he’s someone who’s thoughts matter, and the thoughts of his readers also matter.

So it’s with extreme interest to me that Grantham devotes pages 7 and 8 of his most recent quarterly newsletter to the issue of climate change. It’s well worth reading. He breaks down the topic in a way reflecting the mind of a long-term strategist who is smart enough to understand risk-reward tradeoffs in a world of imperfect information. And, of someone who is deeply concerned about the environment — as reflected by his founding of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.

His closing paragraph is both stunning in its sweep and unsettling to those of us in the cleantech capital markets: “Global warming will be the most important investment issue for the foreseeable future. But how to make money around this issue in the next few years is not yet clear to me. In a fast-moving field rife with treacherous politics, there will be many failures. Marketing a ‘climate’ fund would be much easier than outperforming with it.”

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

A New Cleantech Taxonomy

Classic definitions of cleantech, and the industries under its umbrella, have gotten long in the tooth. The sector has changed, and taxonomies haven’t kept up.

Why is a clean technology taxonomy important? As a list of nested categories, it shows where a clean technology “fits”. It helps vendors understand their competitive sets. It defines and helps investors understand the breadth of the sector and its sub-categories, and helps research and data organizations report consistently.

So if it’s so important, why haven’t leading cleantech taxonomies kept pace with the sector’s evolution? Because it’s hard. Especially for cleantech data companies like Dow Jones, Bloomberg New Energy Finance, GTM Research, PwC/NVCA MoneyTree, or Cleantech Group. Any edit could mean having to re-tag years of data in difficult-to-change back end systems. And, truth be told, there are usually more profitable things for a data company to do than pay people to sit around and think about what cleantech is, what it’s not and how the industries it spans should be organized.

Ah, but it’s a different story for a fledgling new cleantech research and advisory shop. At our firm, the taxonomy of cleantech is something many of us have been itching to dig into for years. We’ve seen the limitations in today’s taxonomies. And so, the last few months, I and the high profile consulting, analyst and writer colleagues I’ve been lucky to work with in the cleantech research and consulting team at Kachan & Co. have been quietly working on our own take, which I now get to share with you for your feedback.

[Click here to view this post with embedded taxonomy graphics view]

As a new firm, it was an important exercise for us:

  • It gave us a brand new framework for tagging and scheduling current and future research and analysis
  • We were able to rethink what many organizations have been holding up as 11 hallowed categories of cleantech (we think there are only 8 that deserve to be high-level categories. See our detailed classification, below.)
  • We were able to use our collective dozens of years in this sector to make some logical changes that we’d all been wanting to make, e.g. categorizing smart grid as a subset initiative within the larger phenomenon of energy efficiency. Or collecting green building-related materials under a category we call clean industry, recognizing that these materials are used more widely than just in structures for green building.
  • We adopted terms the market has settled on, and did away with outdated terminology
  • We chose not to categorize projects financed. Therefore wind, solar, even aquaculture farms don’t appear here as categories. We intentionally framed this as a taxonomy of technology and business model innovation.
  • It required discipline to remember the exercise was a classification for technologies, i.e. when hardware/software or other systems are involved. It was not a categorization of larger climate change initiatives, for instance… just where tech that’s supposed to get commercialized is involved, and where entrepreneurs and investors hope to make a return.
  • It forced the internal discussion of whether nuclear is a clean technology. While some argue nuclear has no place in cleantech, we opted to include it, as we’ve recently been made aware of nuclear-related innovations being pursued to derive power from non-weaponizable fuels, and other new R&D aimed at cracking that other historical nut of nuclear power: waste. But those are other stories.
  • It forced a focus on cleantech-related innovation. For instance, just because recycling is a category doesn’t mean that everything in the recycling industry is cleantech. Likewise semiconductors. Or hydro. But these areas are ripe for clean technology innovation, and there are new cleantech breakthroughs happening in each there today. Hence their inclusion.

[Click here to download the taxonomy as PowerPoint slides from the Kachan & Co. website]

After years of writing thousands of clean technology articles and reports, our team proposes this categorization as a cleantech category taxonomy. But consider this a ‘crowdsourced’ first draft. We’re interested in industry feedback before calling this done. Weigh in with comments on this same taxonomy posting on OUR site, and we’ll incorporate your best thinking in a final version we’ll publish on our website here a few weeks from this writing. We’ll then start using the final as a framework for other forthcoming cleantech information products, and invite you to use it, too.

(Credit: dozens of others’ frameworks were reviewed in this process, but special acknolwedgement to taxonomies from Cleantech Group, China Greentech Initiative, StrategyEye, Greentech Media, Skipso and Wikipedia, all of which informed our final structure below.)

In outline form, Kachan & Co’s taxonomy of what fits where in cleantech:

  • Renewable energy generation
    • Wind
      • Turbines
      • Components, incl. gearboxes, blades, towers
    • Solar
      • Crystalline silicon
      • Thin film
      • Thermal
      • CSP
        • Thermal
        • PV
      • Organic
      • Nanotech
      • PPA providers
      • Systems
    • Renewable fuels
      • Grain Ethanol
      • Cellulosic Ethanol
      • Biodiesel
      • Biogas
      • Algal-based
      • Biobutanol
      • Hydrogen [when produced from non-fossil sources]
    • Marine
      • Tidal
      • Wave
      • Run-of-river and other new hydro innovations
      • Ocean thermal
    • Biomass
      • Wood
      • Grasses (e.g. miscanthus, switchgrass)
      • Algae, non-fuel
    • Geothermal
      • Hardware & systems
    • Waste-to-energy
      • Waste heat recovery
      • Anaerobic digestion
      • Landfill methane
      • Gasification
      • Plasma torching
    • Nuclear
      • New designs
      • Non-uranium fuels
      • Waste disposal
    • Emerging
      • Osmotic power
      • Kinetic power
      • Others
    • Measurement & analysis
      • Software systems
      • Sensor and other hardware
  • Energy storage
    • Batteries
      • Wet cells (e.g. flow, lead-acid, nickel-cadmium, sodium -sulfur)
      • Dry cells (e.g. zinc-carbon, lithium iron phosphate)
      • Reserve batteries
      • Charging & management
    • Fuel cells
      • PEM
      • DMFC
      • SOFC
      • MCFC
      • Zinc air
    • Thermal storage
      • Molten salt
      • Ice
      • Chilled water
      • Eutectic
    • Flywheels
    • Compressed air
    • Super/ultra capacitors
    • Hydrogen storage
  • Energy efficiency
    • Smart grid
      • Transmission
        • Sensors & quality measurement
        • Distribution automation
        • High voltage DC
        • Superconductors
      • Demand management/response
      • Management
        • Advanced metering infrastructure (AMI) & smart meters
        • Monitoring & metering
        • Networking equipment
        • Quality & testing
        • Self repairing technologies
        • Power conservation
        • Power protection
        • Software & data analysis
    • Green building
      • Design
        • Green roofs
      • Building automation
        • Software & data analysis
        • Monitoring, sensors and controllers
        • Metering
        • Networking & communication
      • Lighting
        • Ballasts & controllers
        • Solid state lighting
        • CFLs
      • Systems
        • HVAC
        • Refrigeration
        • Water heating
      • Consulting/facilities management
        • ESCOs
    • Cogeneration
      • Combined heat and power (CHPDH)
    • Electronics & appliances
      • Efficient power supplies
      • Data center virtualization
      • Smart appliances
    • Semiconductors
  • Transportation
    • Vehicles
      • Improved internal combustion
      • Hybrid ICE/electric
      • All electric
      • Rail transport innovation
      • Water transport innovation
      • Components
    • Logistics
      • Fleet management
      • Traffic & route management
      • Lighting & signals
      • Car, bike, equipment sharing systems
      • Parking management systems
    • Fueling/charging infrastructure
      • Vehicle-to-grid (V2G)
      • Plug in hybrids
      • Induction
    • CNG
      • Engine conversion
      • Storage improvement
  • Air & environment
    • Carbon sequestration
      • Carbon capture & storage
        • Geological
        • Ocean
        • Mineral
        • Bio capture, incl. algae
        • Co2 re-use
      • Geoengineering
      • Biochar
      • Forestry/agriculture
    • Carbon trading/offsets
      • Software systems
    • Emissions control
      • Sorbents & scrubbers
      • Biofiltration
      • Cartridge/electronic
      • Catalytic converters
    • Bioremediation
    • Recycling & waste
      • Materials reclamation
      • New sorting technologies
      • Waste treatment
      • Waste management & other services
    • Monitoring & compliance
      • Toxin detection
      • Software systems
      • Sensors & other measurement/testing hardware
  • Clean industry
    • Advanced packaging
      • Packing
      • Containers
    • Design innovation
      • Biomimicry
      • Software
    • Materials innovation
      • Nano
        • Gels
        • Powders
        • Coatings
        • Membranes
      • Bio
        • Biopolymers
        • Biodegradables
        • Catalysts
        • Timber reclamation
      • Glass
        • Chemical
        • Electronic
        • PV
      • Chemical
        • Composites
        • Foils
        • Coatings
      • Structural building material
        • Cement
        • Drywall
        • Windows
      • Ceramics
      • Adhesives
    • Equipment efficiency
      • Efficient motors
      • Heat pumps & exchangers
      • Controls
    • Production
      • Construction/fabrication
      • Resource utilization
      • Process efficiency
      • Toxin/waste minimization
    • Monitoring & compliance
      • Software systems
      • Automation
      • Sensors & other measurement/testing hardware
  • Water
    • Generation
      • Desalination
      • Air-to-water
    • Treatment
      • Filtration
      • Purification
      • Contaminate detection
      • Waste treatment
    • Transmission
      • Mains repair/improvement
    • Efficiency
      • Recycling
      • Smart irrigation
      • Aeroponics/hydroponics
      • Water saving appliances
    • Monitoring & compliance
      • Software systems
      • Sensors & other measurement/testing hardware
  • Agriculture
    • Crop treatment
      • Natural fertilizers
      • Natural pesticides/fungicides
    • Land management
      • Erosion control
      • Sustainable forestry
      • Precision agriculture
      • Soil products/composting
    • Aquaculture
      • Health & yield
      • Waste management
      • Containment

Thoughts on how to improve? Please leave a comment on the official comment thread for this discussion on our site.

A former managing director of the Cleantech Group, Dallas Kachan is now managing partner of Kachan & Co., a cleantech research and advisory firm that does business worldwide from offices in San Francisco, Toronto, Vancouver and London. Its staff have been covering, publishing about and helping propel clean technology since 2006. Kachan & Co. offers cleantech research reports, consulting and other services that help accelerate its clients’ success. Details at www.kachan.com.

10 ETFs to Capitalize on Cleantech Growth

Clean Technology and Clean Transportation Growth

Members of the cleantech community follow the success of public companies in energy efficiency, renewable energy, and electric transportation. Some people, of course, also invest in these companies or in funds such as exchange traded funds (ETFs). The ETFs discussed in this article provide a barometer for the industry.

For the 30 years from 1979 to 2009, solar energy has grown 33 % CAGR (compound average growth rate). For this decade, over 40 percent is forecast. The U.S. wind energy grew in 2009, despite a severe recession. Now 36 states have utility-scale wind projects. Wind and solar power have created jobs in all 50 states, with U.S companies like GE and First Solar fighting for global leadership. The EIA’s International Energy Forecast 2010 projects renewables to be the fastest growing segment in energy through 2035.

Energy efficiency is in demand. The 2009 Green Building Market and Impact Report found LEED registered green building activity has grown to a cumulative total of more than 7 billion square feet worldwide since the standard was launched in 2000 — more than 40 percent growth in 2009. Energy efficient lighting alone could probably eliminate 20 percent of our nation’s coal power plants. Research firm Strategies Unlimited predicts a 53% surge in packaged LED lighting for 2010 to a total of $8.2 billion. LED lighting is already used in new cars, new computers, and flat screen TVs. Through 2014 they predict a 30.6% CAGR ramp to $20.2 billion.

In transportation, one billion vehicles are becoming more efficient. Cars with 15 percent efficient gasoline engine drive systems are starting to be replaced with electric cars with 70 percent efficient electric drive systems. China alone has 120 million people using electric vehicles ranging from e-motorcycles to e-bikes to e-cars. Detroit initially ignored hybrids and electric cars and is now scrambling to get ahead of the curve. Accenture forecasts 1.5 million electric cars on the U.S. road by 2015. From mobile phones, to mobile computers, to cars, the demand for lithium batteries will grow.

Voting with billions of dollars, the investment community is pouring more money into cleantech. Growth, rapid technology advancement, and industry disruption create exciting opportunities when selecting individual stocks. ETFs can provide diversification and risk moderation.

This article discusses 10 cleantech ETFs. I own more than one of these funds to be better diversified. Some funds are U.S. centric, others are global; some are concentrated in renewable energy, others in clean transportation, others in clean water; some focus on large cap stocks, others on mid and small-cap stocks. There are dozens of mutual funds and ETFs with a green theme that are not listed. Some of these only invest in solar or wind companies; others are more controversial about being green. Let’s explore these 10 ETFs.

Ten Exchange Traded Funds (ETFs)

PowerShares Cleantech (PZD)

PowerShares Global Clean Energy Portfolio (PBD)

First Trust NASDAQ Clean Edge Liquid (QCLN)

Market Vectors Global Alternative Energy (GEX)

iShares S&P Global Clean Energy (ICLN)

First Trust Clean Edge Smart Grid (GRID)

Global X Lithium (LIT)

PowerShares Global Progressive Transport (PTRP)

PowerShares Global Water Portfolio (PIO)

iPath Global Carbon (GRN)

The following description of the funds, performance, top investments, and ratings are a best effort to approximate the date of this post. Ratings from Morningstar are included.

PowerShares Cleantech (PZD) invests in the 77 companies that comprise the Cleantech Index: alternative energy, energy efficiency, advanced materials, air and water purification, eco-friendly agriculture, energy generation and transmission. The Cleantech Group is respected for delivering cleantech market intelligence since 2002. The index is 56% North America, 31% Europe, and 13% Asia. The index is a weighted harmonic average that considers several factors including market cap, PE ratio, and ROE. Median market cap is 1.2 billion. ABB, Siemens, Corning, Schneider, and Johnson Controls are among its top holdings. Morningstar rating is 3 stars. For 3 years, the fund has outperformed most broad averages and is up 2% for the past 12 months.

PowerShares Global Clean Energy Portfolio (PBD) is based on the WilderHill New Energy Global Innovation Index (NEX) with 88 companies who manufacture, develop, and own wind, solar, energy efficiency, and related products and projects. NEX is a rule-based index with weighting modified by sector and market capitalization bands to provide diversification across the clean energy industry. It is rebalanced on the last day of each quarter. This global fund is about 40% North America, 39% Europe, and 21% Asia. Median market cap is about 1 billion. Top holdings include EDF Energy Novelles, China Wind Power, and GT Solar. Morningstar rating is 1 star. The fund has lost 14 % in the past 12 months, hurt by the European downturn and difficulties in large-scale wind and solar project financing.

First Trust NASDAQ Clean Edge Liquid (QCLN) invests in the companies of the NASDAQ® Clean Edge® Green Energy Index. The weighted index of clean energy companies that are publicly traded in the United States includes solar photovoltaics, energy efficiency, biofuels, and advanced batteries. The Index is a modified market cap weighted index in which larger companies receive a larger index weighting. The index is reconstituted twice a year in March and September and rebalanced quarterly. Median market cap is just under one billion for the 53 stocks in the fund. The funds top three holdings are First Solar, Linear Technology Corporation, and Cree. Morningstar rating is 2 stars. The fund has lost 7 percent in the past 12 months.

First Trust Clean Edge Smart Grid (GRID) has similarities to QCLN, both share a few common stocks, but GRID tracks the NASDAQ OMX® Clean Edge® Smart Grid Infrastructure Index (SM) which includes companies that are primarily engaged and involved in electric grid, electric meters and devices, networks, energy storage and management, and enabling software used by the smart grid infrastructure sector. The index employs a modified market-capitalization weighting methodology. The index is rebalanced quarterly and reconstituted semi-annually. The median market cap is $1.2 billion for the 32 stocks in the fund. The fund is about 70% U.S. and 30% European. The top three holdings are Prysmian, Schneider Electric, and SMA Solar Technology. The fund has lost 11 percent since its inception on November 19, 2009.

Van Eck Market Vectors Global Alternative Energy (GEX) invests in the Ardour Global Index (SM), a rules-based, global capitalization-weighted, index that tracks 30 companies engaged in the wind, solar, and some other cleantech. The average market cap is $4.2 billion. The fund is 39% U.S., 17% China, and a high percentage in Europe. Top holdings include First Solar, Vestas Wind, and Cree. Morningstar rating is 1 star. The ETF is down 17% in the past 12 months.

iShares S&P Global Clean Energy (ICLN) invests in the S&P Global Clean Energy Index of 31 companies, giving access to some international companies that could be a hassle to buy individually. The index weights companies on a modified market-cap basis adjusted for market capitalization and trading volume and is rebalanced semiannually. The ETF is 21% invested in U.S. and 43% emerging providing diversification from the other Cleantech ETFs being discussed. The average market cap is about $6 billion. Its concentration in emerging wind and solar also increase risk. Top holdings include Empresa Nac Elec-Chil-SP, CIA Paranaense Ener-SP, and First Solar. Morningstar does not rate this. It lost 34% in the past 12 months.

Global X Lithium (LIT) is a bet on the growing use of lithium batteries in notebook computers, mobile electronics, electric cars, products, and industrial processes. This ETF is highly concentrated with 50% of this fund is currently in mining companies with lithium being a small part of the companies’ total business. Average market cap is $1.2 billion, 49% U.S., 20% Chile. Top holdings are currently concentrated with Sociedad Quimica Y Minera De Chile 24%, FMC 17%, and Rockwood Holdings 8%. A number of automotive battery companies are included such as Sanyo, GS Yuasa, SAFT, ABT, Ener1, Exide, and A123; but electric car leaders not included are Panasonic, LG Chem, and NEC. The fund has increase 7% since its recent launch.

PowerShares Global Progressive Transport (PTRP) is distinct from the other ETFs by covering high-speed rail, transit, bicycle, and electric vehicle components. The fund is based on the Wilder NASDAQ OMX Global Energy Efficient Transport Index. The Index is rebalanced quarterly using a modified, market-cap-weighted methodology. The 40 stocks in the fund have an average market cap of $2.8 billion. The fund is about 37% North American, 35% European, 6% Japan, and 22% Emerging. Top holdings include Donfeng Motor, Sociedad Quimica y Minera, and Wabco Holdings. The fund has increased 11% in the past 12 months.

PowerShares Global Water Portfolio (PIO) is distinct from the other ETFs listed by mitigating the effects of global warming rather than necessarily reducing global warming. Over one billion people suffer health damage due to clean drinking water. PIO is based on the Palisades Global Water Index. The modified equal weighted portfolio is rebalanced and reconstituted quarterly with an average market cap of $2.5 billion. Top holdings include water and waste service giants such as Suez and Veolia; and water technology companies such as Tetra Tech and Nalco. There is risk in this ETF being European dominated. Morningstar rating is 2 stars. The fund is up 5% in the past 12 months.

iPath Global Carbon (GRN) is an ETN based on Barclays Capital Global Carbon Index Total Return™ (BGCITR) two carbon-related credit plans: 86% European Union Emission Trading Scheme and 14% Kyoto Protocol’s Clean Development Mechanism. The fund has beaten the averages for the past 12 months, basically with zero gain or loss.

This article should only to be a first step in your investigation of cleantech ETFs. A good investment adviser can help you consider these as part of a balanced portfolio of fixed income and widely diversified funds. Given the forecast for growth in cleantech, one or more of these ETFs could be part of your total portfolio.

Disclosure: The author currently owns PZD, QCLN, GRID, LIT, PTRP, GRN and a few of their underlying stocks. John Addison speaks at cleantech conferences, takes part in industry panels, and publishes the Clean Fleet Report.

The Carbon Industry Is the Unsung Hero in the Cleantech M&A

Voices from the cleantech venture sector whine at least once a quarter about lack of M&A activity.  In carbon that hasn’t been the case this year (though only a handful of US venture capitalists could stomach that “obscene” foreign policy risk in carbon, and so largely non traditional investors made the bucks).  Despite the carbon sector getting hammered somewhere between 50-80% from its highs, depending on what metric you use, once prices fell, smart money started buying.  So despite the massive uncertainty hanging over the sector, the last year has seen upwards of $1.5 Bil in M&A. 

Of course, the whiners will complain that it’s all policy driven and European and that’s not our market.  And I’d respond, yes, and sort of.  Of course it’s policy driven you nimwit – energy, environment and cleantech is always policy driven.  And the cleantech market is global whether you like it or not.  So what exactly makes EU policy risk more risky than handicapping the California PUC?  Silicon Valley itself is close to irrevelant in cleantech, except for the pools of venture capital collected there.  Get global people.

Or the whiners would complain you can’t spend a billion dollars to see exits at a $1.5 Billion.  And I’d respond, yes, I can do math, too, if you had to spend a billion dollars maybe it wasn’t so good an idea.  Maybe you should follow my Rules in Cleantech Investing.  And then I’d add, and these carbon M&A exits are at bargain basement prices, down two thirds to 80% in some cases from their public market highs, and are by and large a hell of a lot better than the M&A exits in other sectors.  To which the whiners would reply, yes but some of those highs were in damn foreign currencies, or worse AIM listed stocks.  And we don’t understand AIM because it’s foreign therefore it must not be real, and since it has less liquidity than a company 10x that size on Nasdaq, we should hate it (not withstanding that AIM stocks liquidity is like 500 hundred bejillion times the liquidity as a private venture backed company).  To which I’d respond right, but if the check clears, and it’s measured in 7 or 8 or 9 figures, or real Tier 1 buyers buy companies listed on AIM, maybe it IS real after all.  But then I never went to Stanford, Berkeley, MBA school, or even a private university, so what would I know. 😉

Anyway, while that may explain the unsung part for carbon M&A, the reality of who bought what is pretty interesting.  A few threads to chew on:
  • Primo assets are getting sold, often first movers founded years before the carbon boom
  • At bargain basement prices
  • Some real money is getting made and a few founders can retire
  • It’s tier one acquirors doing the buying
  • It’s very global
  • It’s not very technology focused
A few of the key deals, which just don’t seem to stop coming:

The latest announcement is the NYSE tying up a JV merging its carbon trading assets with voluntary markets registry operator APX. APX is a holdover startup from California’s botched power deregulation days, which got into RECs, and later carbon now running most of the major voluntary carbon registries.  Most recent investors included Goldman Sachs.

Probably at least in partial reaction to earlier to the announcement earlier this year of the $600 mm acquisition of Climate Exchange Plc by Intercontinental Exchange (NYSE: ICE). 

In May Barclays announced the acquisition of Tricorona, one of the larger independent CDM carbon developers (and one of our pilots) for 100 mm pounds.

Ostensibly to match JP Morgan’s acquisition of EcoSecurities for $200 mm late last year.  Mission Point was one of the original backers here.
And this last quarter French energy giant EDF announced it was acquiring Chinese CDM developer Energy Systems International.  EDF was the losing bidder to JP Morgan for EcoSecurities.  A 37.5 mm ton CER consolation prize.

And in the media and data analytics end of carbon Reuters acquired long time front runner Point Carbon for a rumored nearly US$200 mm, ostensibly to match the acquisition of Point Carbon’s largest competitor, New Energy Finance by Bloomberg.  Oak Investments is the rumored big investor beneficiary.

Numerous smaller deals have been done over the last two years, as well.  SAP acquiring Clear Standards and IHS acquiring ESS in the software space, energy giant AES acquiring the bankrupt assets of early CDM leader AgCert, and JP Morgan’s 2007 acquisition of Climate Care, and in consulting, Point Carbon’s acquisition of Perspectives GmbH, Lloyd’s Register acquiring Ryerson Master & Associates, et al.

Of note, Reuters, Barclays, NYSE and ICE announced their deals in 2010 after the Copenhagen political debacle.

As I said, carbon appears to be the unsung M&A hero in cleantech markets.  Not bad for a sector virtually ignored or written off by US VCs, pummeled by the winds of global policy fortune, and barely understood by a soul in the American media.

Neal Dikeman is the Chairman and cofounder of Carbonflow, cofounder of Zenergy Power (AIM: ZEN) and a founding partner of cleantech merchant bank Jane Capital Partners.  He is chief blogger of Cleantechblog.com

The Gort Cloud

by Richard T. Stuebi

A few weeks ago, I was pointed to something called The Gort Cloud. I’ve been to the website, and can’t wrap my head around it.

As best as I can tell, it seems to be a social networking map for the green business community, created by The Brand Marketing Group. Although I’m not quite sure, it appears that the point of the Gort Cloud is to facilitate more connectivity within the green community so as to improve efficiency and effectiveness in the overall network.

However, unlike Facebook or MySpace or Twitter, an individual doesn’t sign up to participate in the Gort Cloud. Rather, it appears that an interested party contacts The Brand Marketing Group, who will vet them for their true greenness; if the party is deemed acceptable, then the applicant appears on the Gort Cloud network to enable contact with others that have also passed muster.

I’m intrigued, but confused, about the Gort Cloud. If anyone can better clue me in on how it works, or what its value is to a user (particularly with some good examples), I’d appreciate a note.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

Electric Cars get A+ from EPA

By John Addison (9/2/10 from original post at Clean Fleet Report)

New Proposed Stickers

When you go shopping for a new car it is useful to see a quick summary of fuel economy, how much you might save in fuel over 5 years, and the price. Now that people are web surfing faster, moving with purpose through auto shows, and scanning car lots with speed, the EPA is proposing adding grades “A” to “D” on window stickers. You would still get rich comparative details at a website like the popular http://fueleconomy.gov/

Pure battery-electric cars would get an “A+,” go to the head of the class, make their parents proud, get to stay up late on weekends, and get accepted by exclusive fraternities and sororities. Plug-in hybrids would proudly display an “A” for their shining example of helping reduce our dependency on oil, cleaning the air, and help with global warming. Drivers will be lauded as honor students. Climate deniers will add bumper stickers to their suburban assault vehicles that say “My kid beat-up your honor student.”

The added info that we’ll be given to make an informed is welcome. The barcode that takes our smartphone to a website for details looks most promising in this era of mobility and smart apps. Yet, somebody has to speak-up about the lax grading that’s sweeping the nation. In my day, I had to work for every “A,” there were no incompletes, and I had to walk 5 miles daily to school in the snow. The idea of no “F” means that no gas guzzler will be left behind. Under these 2012 proposed ratings, you can get a “B-“ for a car that gets 20 mpg – those oil countries in the Middle East will love that. If you can fuel it with E85 from corn, you don’t even need to get 20 mpg to get your “B.”

An electric car that uses zero gallons of gasoline annually deserves an “A.” Does the average car that now demands 600 gallons per year deserve a “B” in 2012? We’ll never get to those 2016 CAFÉ standards by letting everything with four wheels slide through.

EPA Needs to Talk with DOT and DOE

The DOE provides wonderful models to calculate the lifecycle emissions of a vehicle from either source-to-wheels with GREET 1.x or include the lifecycle emissions including the supply-chain that went into making the vehicle using the GREET 2.x model. Let’s hope that the new website includes both. Let’s hope that grades “A” through “F” are based on lifecycle emissions, using GREET 1.7 as a minimum. I’m all for cars that emit less than 4 tons of CO2 per year getting an “A,” but emit 16 tons per year and you should get an “F” and that includes corn-guzzlers.

The Department of Transportation’s 2010 Climate Impacts report to Congress also effectively compared the emissions of different fuels and drive systems.

The Good News

One proposed sticker includes a grade, one does not.

The good news is that both are better than the existing sticker because they let you visually compare one car with others in its class. For example, you can see that the Ford Fusion Hybrid has is among the best in fuel economy for midsized sedans. That Lamborghini that you’re drooling over won’t compare well on fuel economy, but you can put a bumper sticker on it that says “I dropped out and made millions while you were struggling to be an honor student.”

For electric cars, such as the Nissan LEAF and Ford Focus Electric, the new labels will estimate annual electricity cost based on 12 cents per kWh; 5 year savings estimate; range; kWh per 100 miles; MPG equivalents and comparison to other electric cars; and show zero tailpipe emissions. Plug-in hybrid labels for cars such as the Chevy Volt and Toyota Prius Plug-in will include 5-year savings estimate; electric + gas combined MPGe; gasoline only MPG; and comparisons with other plug-in hybrids.

For hybrids and conventional cars, such as the Honda Insight and Mini Cooper, the new labels will estimate annual fuel cost; MPG for city, highway, combined, and compared with others in class; CO2 emissions (tailpipe only); and emissions compared with others in class. All labels will make it easy to use an Internet browser or smart phone scan to get more details.

If the letter ratings are adopted, they will be based on combined CO2 emissions and mileage equivalent.

Tell Them What You Think

All new cars and light-duty trucks sold in the U.S. are required to have a label that displays fuel economy information that is designed to help consumers make easy and well-informed comparisons between vehicles. Most people recognize the current label (or “window sticker”) by the gas tank graphic and city and highway MPG information. EPA has provided fuel economy estimates in City and Highway MPG values for more than 30 years.

EPA and the National Highway Traffic Safety Administration (NHTSA) are updating this label to provide consumers with simple, straightforward energy and environmental comparisons across all vehicles types, including electric vehicles (EV), plug-in hybrid electric vehicles (PHEV), and conventional gasoline/diesel vehicles. The agencies are proposing two different label designs and want public input. Specifically, which design, or design features, would best help you compare the fuel economy, fuel costs, and environmental impacts of different vehicles. For more information and to give your feedback.