Jan. 25, 2008 SDF Clean Energy

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On January 25, 2008 at AMD’s headquarters in Santa Clara, SDForum partnered with FountainBlue to present ‘Policy and Its Implications for the Clean Energy Entrepreneur’. It attracted entrepreneurs, tech executives, investors and policy-makers looking for opportunities in clean tech.

Clean tech will change industries like semi-conductors, vehicles, nanotech, biotech, chemistry and geology. The implications will affect the way governments make policy and how businesses make decisions.

Craig Tighe of DLA Piper introduced the first keynote. State of California’s former Attorney General and current Treasurer Bill Lockyer talked about “California’s Investment in the Clean Revolution”. Lockyer spent 25 years in state government encouraging policies that are friendly to the environment and the economy. He sees clean technology as the new economic engine to do well and to do good at the same time.

Lockyer says OPEC countries are unlikely to reduce their prices. They are diversifying their investment and are learning accept substitution of alternative energy sources. The State of California continues to sue automakers for stricter emissions and fuel economy. Detroit resisted innovation and now Toyota dominates the hybrid vehicle market.

Lockyer believes that when a crisis occurs it is best to forge ahead while others retreat. Lockyer wants to hear from Silicon Valley experts on what they think about the latest and greatest in technology. He thinks dramatic changes are in store in the next few years.

California’s Treasury has trillions of dollars to invest in clean technology. PERS created a fund to invest in green stocks. The state can offer low cost loans to companies starting out. An example is a company that covert garbage trucks that use alternative fuels. The state can create green bonds that retrofit 2 million square feet of state owned buildings to green tech. It can low hanging fruit like installing a more efficient boiler in the basement and pay for itself in five years. It saves tax dollars and energy something that appeals to conservatives and progressives alike. Long term they want zero energy consuming buildings by 2030. The state could sell a bond that would pay for power purchase agreements on state buildings with innovative energy companies. It is another way to control costs and encourage innovation.

One idea is a carbon credit bank. If an insurance company could offer lower premiums to homeowners, it might get carbon credits from the state.

Ultimately it is important to attract, encourage and keep innovative technology in California.

The first panel was from a corporate perspective titled “Doing Well While Doing Good”. Moderated by Craig Lobdell of KPMG, the panelists were Janice Berman of PG&E, Reed Content of AMD, Annette Finsterbusch of Applied Ventures and Christina Page of Yahoo.

Janice Berman, Senior Director said PG&E is investing in large and small scale projects in solar, wind and geothermal energy. They continue to improve efficiency despite growing demand. One target is to improve efficiency in water. Nineteen percent if the energy in the state is used to pump and clean water and this needs to be improved.

Reed Content, AMD Fellow, said they are retooling their operations to build improve efficiency and speed in its products and operations. They want semiconductors that use less energy or need a smaller battery. They are contracting with green energy producers for their facilities around the world.

Annette Finsterbusch, Director at Applied Ventures invests some sixty percent of their funds in clean tech. They consider the environmental impact on their customer’s customers. Innovation can be as simple as looking at software that leaves a piece of factory equipment on too long. They are looking for technology that not only breaks new ground but also brings the costs down for individual consumers. Investing in new battery technology can affect everything from cell phones to cars.

Christina Page of Yahoo focuses on operations, employees and customers with a voluntary Green Team that looks for solutions. They measured their carbon footprint and then tried to reduce or buy offsets. They invested in alternative energy projects in Brazil and India. For employees can commute to work on their shuttle bus with a WiFi connection. Their data centers in Washington state using hydropower and cool it with passive ambient air versus air conditioning. They share what they have learned with other companies to have a multiplier effects in efficiency.

The second panel was from entrepreneur’s experiences called “Lessons Learned from Around the World”. InfoWorld’s Senior Analyst Ted Samson, who covers green-tech trends in his Sustainable IT blog, moderated panelists Dan Lankford of Wavepoint, Paul McGrath of Ridespring, Gregory Pal of LS9, Inc., and John Melby of APX.

Gregory Pal, Senior Director, Corporate Development at LS9 combines a passion for building sustainable businesses with a pragmatic approach to problem solving. LS9 is focusing on biofuels, which must be profitable as an unregulated, unsubsidized commodity. In Germany, tax breaks on biodiesel were removed, dramatically increasing the price and destroying the market. He wants government to be technology neutral to allow a level playing field to let the best alternative energy solutions win. He thinks submitting a trade group’s letter to a legislator carries more weight than one letter from one company. Seek allies.

Dan Lankford of Wavepoint Venture capital is looking for early stage opportunities in clean tech. He thinks it crucial to understand government policies around the world that encourage or subsidize alternative energy in order to get return on investments. Germany has a great program for solar. It drove the demand for polysilicon and subsequently the price or profitability of the project. Ironically it led to even more innovation with new techniques and materials that require more investment. Flexibility to global markets is key. Belonging to a trade group or lobbying organization can give you greater access and influence over policy.

Paul McGrath of Ridespring wants to make alternative commuting as easy as possible using a company-focused web service reduce traffic congestion. He talked about the frustration of well-meaning people trying to commute as the looked for solutions on the web. The result bypasses government programs and works directly with companies to get their employees to work. Ridespring services are so cheap that they don’t qualify for many government programs.

John Melby President & CEO of APX, Inc. is North America’s leading infrastructure provider to create, track, manage, and retire with serial numbers the various environmental commodities in renewable energy, energy efficiency and greenhouse gases including carbon. They intend to extend this technology to greenhouse gas markets worldwide including carbon offset credits and emission allowances. He believes there will be carbon cap and trade in the United States based on global standards by 2012. He sees tremendous business opportunities in this space. If you want a particular government policy, get involved.

The final keynote was from Scott Sandell, NEA titled “Clean Energy Opportunities and Challenges: the Venture Perspective”. Sandell studied at Dartmouth and Stanford worked at Microsoft then sponsored investments in companies like Salesforce.com and WebEx. He knows how to recognize and literally capitalize on an opportunity. His presentation offered specific opportunities to the grim statistics.

Do we have the existing technology to solve our energy demands? We currently generate 13 terawatts of primary power worldwide. According to Nathan Lewis at Caltech, the world will need 28 terawatts of primary power by 2050. To keep carbon dioxide levels at 550 parts per million we need to have 10 terawatts to come from carbon free energy. With oil at a hundred dollars a barrel and even the cost of coal going up, the comparative cost of going green is going down and investors are lining up. What are the options?

Increasing efficiency or conservation can help in the short run but there are not the returns on investment most people want. It is low hanging fruit and can be optimized quickly.

“Hydroelectric, geothermal, biomass and carbon capture they are part of the solution will not get us there alone.” Wind is great at night but demand peaks during the day. Wind sources tend to be remote from users. We need all of them.

Nuclear energy may be carbon free, but we would have to build a nuclear power plant every other day for the next fifty years to meet this demand. They are complicated and only a few companies in the world know how to build them.

Solar energy gives the Earth 89,000 terawatts a day and offers the best hope. Sandell had a global map with little dots spread across the sunniest parts of the world showing the total area needed to meet all our energy needs. The cost of photovoltaics (PVs) is going down as the production scaling goes up. They used to 10 percent efficient they are 25 using less silicon. The more you make the more you learn and increase their ROI. It is fast. You can build a solar plant in a year versus nine for nuclear. Solar power can be stored as hydrogen in fuel cells and transferred to homes and vehicles. Installation is currently fifty percent of the cost but that will go down as solar technology is built into products.

Companies he thinks are interesting are SolFocus, Bloomenergy, Serious Materials, Suniva, Gridpoint, HelioVolt, Deeya Energy, Tri Alpha Energy, Glacier Bay, Bandgap and Konarka. A hundred billion dollars has been created in the clean tech space by public companies alone since 2005. Venture capital made five billion dollars available to start-ups in 2007. Abu Dhabi is committing 15 billion to the Al Masdar CleanTech initiative. India has a feed-in tariff tax credit for a ten year tax holiday.

Germany now has a five billion dollar solar industry creating 53,000 jobs and is now home to 15 of the worlds 20 largest plants. Roland Berger thinks by 2020 more Germans will work in the environmental sector than automobiles or engineering.

California can do this too. It takes enlightened legislators like Bill Lockyer, corporate leaders like Sunpower and Clipper Windpower, research centers like CalTech, Stanford, UC, Lawrence Livermore and VCs like DFJ, Khosla, Kleiner Perkins and NEA. In Silicon Valley it may be the start-ups that will make the unexpected breakthroughs.

Brad Rock of DLA Piper Senior Partner made the closing remarks.

For entrepreneurs it is a great time to be in clean tech.

Copyright 2008 DJ Cline All rights reserved.