Viridity Software Appoints Arun Oberoi as New President and CEO

For Immediate Release:

With Proven Chief Executive And General Management Experience At Several Of The Industry’s Best-Known And Respected Companies, Oberoi Brings A Track Record For Building Rapid Growth Businesses

Burlington, MA (December 14, 2010) – Viridity Software, the leading provider of data center optimization and energy resource management solutions, today announced the appointment of Arun Oberoi to the position of President and Chief Executive Officer (CEO), effective immediately.

Arun Oberoi has consistently built rapid growth enterprises ranging from start-up businesses to mid-size to multi-billion dollar global organizations, including major brands such as HP OpenView and what is now IBM’s Netcool. Prior to Viridity, Oberoi served as CEO of Aveksa, a market-leading provider of enterprise access governance and management software, where he led the company to revenue growth of over 500%. Previously, he was EVP of Worldwide Sales and Services at Micromuse, an industry-growth leader in high-end network management and service assurance solutions. Micromuse was acquired by IBM for $865M, where Oberoi led the integration, its continued fast growth, and field expansion as Vice President within IBM Tivoli. Prior to Micromuse, Oberoi held various executive roles within HP. He was Vice President and General Manager, HP Worldwide Software Sales and Marketing; this portfolio included HP OpenView where he helped grow the business from early-stages to over $1B. Oberoi was also VP and GM of HP’s Worldwide Top 100 Corporate Accounts and Industries.

“Arun’s background combined with Viridity’s innovation and customer traction provides a great mix for accelerating leadership in this market,” said Jamie Goldstein, Partner North Bridge Venture Partners and member of Viridity’s Board of Directors. “We see a rapidly growing and compelling market opportunity in the data center optimization and energy management space.”

Sunil Dhaliwal, a General Partner with Battery Ventures and a member of Viridity’s Board of Directors stated, “Arun is a demonstrated leader with a history of building high-growth companies. We’re thrilled to have someone of his talent and experience leading our team.”

“I am excited about joining a very talented and fun team whose founding vision for the company solves the escalating problem of mapping the virtual information world to the physical realities of the data center. Attempting to optimize data center infrastructure for IT utilization, power, space, cooling and cost with the dynamically changing service demands is a spiraling problem,” said Oberoi. “This is a huge opportunity to create customer value and we look forward to making Viridity the trusted brand to solve these issues.”

Oberoi holds an MBA from the Kellogg School of Management, Northwestern University, and a BA from Delhi University (India).

Oberoi succeeds former CEO, Bob Steinkrauss, who recently decided to leave citing health reasons.

About Viridity Software
Based in Burlington, MA, Viridity Software is the leader in data center optimization and energy resource management software. Its EnergyCenter™ data center energy monitoring, measurement and management software provides customers with a cross functional solution for understanding the connection between physical infrastructure, IT equipment and applications. Once these connections are fully understood, actionable strategies are provided so that customers can run more efficient, less expensive, highly optimized, eco-friendly, sustainable data centers. For further information, please visit: www.viridity.com, email: info@viridity.com or call: 781-425-2060.

###

© 2010 Viridity Software, Inc. Viridity Software and EnergyCenter are trademarks of Viridity Software, Inc. All other brands and products names in this announcement may be trademarks or registered trademarks of their respective holder.

Contact:

Nicole Gorman
Corporate Communications
Viridity Software
508-397-0131
Nicole@viridity.com

Ontario FIT Program Draws Unwarranted Criticism

I have seen, with growing frustration, an increasing number of comments on blogs and news sites deriding Ontario’s feed-in tariff (FIT) program and similar government incentives that encourage the use of renewable energy and create green jobs in the province. Comments like this anonymous post continue to stand out in my mind, “…‘greens’ only want one thing – the “green” in our wallet. And, thanks to the average gullible/stupid environmentally-oriented Ontarian, it is happening at an alarming rate.”

Perhaps more subtly, but with equal acrimony, an opinion piece in the Financial Post uses loaded words to indicate to the reader that there is no value in Ontario’s efforts to protect the environment – “Witness the initiatives of recent years: the messianic closing of cost-effective coal plants and implementing of higher-cost wind and solar energy initiatives in the name of the environment….”

It took me only five minutes to find these two examples, but you can easily find more of the same in the comments section following just about any online news article covering green incentives, financial or otherwise. Some of the authors’ concerns are valid. It is true that electricity prices are on the rise, partially as a result of the high prices the FIT pays to producers of solar, wind, and biofuel energy projects. It is also true that photovoltaic and wind technologies generate fewer kilowatts per dollar than traditional coal, oil, and gas. Yes, change is scary. For that very reason, it took a lot of guts for the Ontario Liberals to commit to such a sweeping, costly, and potentially career-damaging program. But this is the face of progress. Someone has to do the job. Someone has to get his hands dirty, and hard work brings rewards.

Solar, Wind Energy Incentives Create Jobs, Training Programs, and Clean Air.  Even a cursory look at the foreseeable future shows that we are getting off lightly if our only worries regarding energy are increasing prices. Prices would go up, with or without the FIT – financial costs as well as other lifestyle costs. It is not uncommon to see global warming denials used as grounds for criticism, but this is a bit of a red herring.

Global warming is not required in order for Ontario’s progressive efforts to be of value. How many oil spills can the ocean sustain before they destroy our fisheries altogether, either directly or by fatally interrupting the balance of sea life? How many airborne toxins can our bodies, and those of our children and unborn future generations, inhale or soak into our skins before we, ourselves, shut down? How many rivers and estuaries can be polluted by oil sands run-off before our declining water supply becomes undrinkable? All of these eventualities carry far greater costs to us and our pocketbooks than the higher prices that emerge with the FIT.

To me and my family, the above-mentioned issues alone justify radical policies such as the Liberals’ FIT. However, the program carries with it its own financial benefits. In Ontario, where a rapid decline in the auto and other manufacturing sectors has left many without work, the program has created solar energy jobs and photovoltaic training programs. And the FIT’s requirements for Ontario-sourced content have inspired the creation of manufacturing plants and other new business ventures in the province.

Change can be tough, but given Canada’s growing and collective commitment to a greener tomorrow, change is inevitable. In the future, we will laugh (or perhaps cry) at the way we used to fuel our lives. In the meantime, those truly concerned about their rising electricity bills would be wise to invest in solar technology or photovoltaic training, as these are quickly becoming the surest ways of putting some “green” in your wallet.

OPIC To Mobilize $1 Billion To Assist Developing Nations in Combating Climate Change

Agency to open a call for proposals from private equity fund managers; announcement made at UN Climate Change Conference in Cancun

CANCUN, Mexico – Elizabeth Littlefield, President and CEO of the U.S. Overseas Private Investment Corporation (OPIC), announced today that OPIC will provide at least $300 million in financing for new private equity investment funds that could ultimately invest more than $1 billion in renewable resources projects in emerging markets. The announcement was made at the United Nations Climate Change Conference.

OPIC’s mobilization of these funds represents one of the largest initiatives by the U.S. Government to support the international effort to mitigate climate change.

“When President Obama and global leaders negotiated the Copenhagen Accord in December 2009, they included a financial commitment to help developing countries reduce their greenhouse gas emissions and adapt to the effects of climate change. OPIC-supported investment funds represent an important and innovative step toward the realization of that goal,” Ms. Littlefield said.

OPIC will issue a “Global Renewable Resources Call for Proposals” for private fund managers investing in a wide variety of businesses promoting renewable energy and the sustainable utilization of natural resources such as energy, water, and land.

Specifically, the funds will accelerate investment in renewable energy, including solar, wind, hydro, tidal, geothermal power as well as waste and biomass. Investments in agriculture, land, and water may include efficient irrigation, cold storage, transportation, water treatment, sustainable forestry, natural resource preservation, and forest rehabilitation. OPIC will also place particular emphasis on the efficient utilization of natural resources via investments in energy efficiency products, systems and equipment, emissions control, and waste management.

The call for proposals will open for submissions on December 15, and remain open until mid-February. Information about the call may be obtained on the OPIC website, www.opic.gov, on December 15.

EV Economics are getting interesting

EVs are getting interesting.  With the Nissan Leaf this year, Ford planning to release its Focus EV in 2011, and the Honda Fit EV scheduled for 2012, the 100 mile range EV class will provide consumers with several choices within a couple of years.

So it’s time to take a look at whether EVs are a good deal for consumers.   It took a bit work to analyze but the results were worth it.  The initial step is to review the key drivers affecting consumer economics.

First is upfront cost for the EV, the charging station, and the incentives being offered.  The EV costs more, even after vehicle and charging station incentives.  I estimate the additional cost at $7,334 for a Nissan Leaf versus a basic Toyota Camry.

Second is annual cost.  A Camry gets 24.5 EPA miles per gallon.  A Nissan Leaf, by my estimate, will get about 3 miles per kWh.  So what matters is how much a driver drives and the cost of electricity.  The average driver drives 15,000 miles per year, or 41 miles per day, which should be reasonably feasible in an EV.

Electric costs are a big factor.  Retail rates nationwide are something like 11 cents/kWh.  In high cost states like California, without time-of-use metering, costs are 15 cents/kWh and higher.  I’m a SMUD customer with an old meter.  I’m into Tier 2 consumption and if I charged up tonight it would cost me 17.55 cent per kWh.   But wholesale, nighttime rates are dramatically lower.   One wholesale electric price forecasting company that serves electric traders shared their outlook for the next 12 months with me:

Quarterly forecast prepared 12/3/2010, Off-peak prices

period        NP15 (Northern California)
2010-4      3.3 cents/kWh
2011-1      2.7 cents/kWh
2011-2      2.2 cents/kWh
2011-3      3.3 cents/kWh

These prices may seem amazingly low but they are, in fact, realistic.  Thanks to the shale boom natural gas is being delivered to  power plants for $4.40 per mmBtu.  And the power plants setting prices throughout the western US are modern combined cycle units with heatrates around 7,200 Btu/kWh. (4.40 * 7200 / 1000 = 3.2 cent/kWh).  In Northern California alone on Dec 3 there are over 4,000 unload MW of these plants.  That’s enough to charge 1.3 million EVs consuming 3 kW each.

Tying the analysis together I computed the IRR of owning an EV under three scenarios.

  • In scenario 1 my utility is serious about promoting EVs and they flow cheap nighttime power to me at a 5 cent/kWh rate.  They can do this with their new smart meters; at night they have plenty of distribution capacity; and they would make some money.
  • In Scenario 2 I pay roughly the national average for power, say 11 cents/kWh.
  • In Scenario 3 my utility does nothing and I have to pay Tier 2 rates — 17.55 cents/kWh.

I computed when I break-even, or when my fuel savings equal the extra cost of the EV, and my IRR, or the return on my initial investment after I’ve driven 105,000 miles (this is 7 years at 15,000 miles per year).  The results are presented below:

Scenario                 Break-even years      IRR at 105,000 miles
1  (5 cent/kWh)                 3.9                                17 %
2  (11 cent/kWh)              4.8                                 11%
3  (17.6 cent/kWh)          6.2                                 3%

At a 17% return the EV option is pretty compelling and my local utility can make it happen, if they really want clean energy technology.

At the national average rate 11% isn’t bad, and early adopters may find EVs attactive.

And under my current personal rate schedule, EVs aren’t interesting.

That said, with a bit of creative utility rates, and leveraging the big smart meter investments being made, EV can be a hit.  And if they are a hit car companies with early products, like Nissan, GM, and Ford can pick up market share.

At the national level this makes great sense.  Every EV driven will displace over 600 gallons of gasoline per year, virtually all of which is produced from imported oil.  This reduces our balance of payments and trade deficits and improves our security situation.  Maybe a higher federal incentive would be cost effective and should be pursued?

Disclosures: none
Credits:  Price forecast and electric data courtesy of Plexos Solutions LLC and its weccterm forcast.