Courses of Action for Governments and Companies
(27402)
Turning Regions into Clean Tech “Silicon Valleys”
The most attractive commercial opportunity of the clean tech revolution is for cities and regions to become world-class hubs for specific clean technologies. Whoever ends up building the “Silicon Valleys” of the clean tech future will prosper over the long haul.
The advantages of being a world renowned center of excellence for any of the various clean technologies already discussed are rather obvious:
Learning from Silicon Valley
So what will it take for a regional government to create its own lean tech Mecca? Using the success of Silicon Valley as a guide, there are five key elements cities or regions must offer in order to become clean-tech centers of excellence:
Clean Tech Cities
Many countries and cities are already well down the path of becoming clean tech centers of excellence. Noteworthy examples include:
To Selling Clean Tech in Mainstream Markets
The key to moving clean tech into the mainstream is marketing. This will be its make-or-break point. If great marketing happens, clean tech will move from the tree-hugger niche to the mass markets. It’s all about how the message gets framed that counts.
The Five Marketing Keys
For clean tech to sell successfully in the mainstream markets, it has to be marketed properly. There are five keys to doing that effectively.
It’s all about cost
Don’t lead with the environment
Framing and naming are critical
Make it easy, accessible and convenient
Remember the cool factor
Forget about telling your potential customers what they ‘should’ do. Instead, focus on attributes that that appeal to their sense of value, hipness, style, technological savvy, or simplicity. The more that companies selling clean energy, water and materials follow these five keys and the rules of mainstream marketing, the more mainstream clean tech will become. In many sectors, it’s already there or well on its way.
–Ron Pernick & Clint Wilder
We are in the midst of one of the greatest shifts in human history. Within 50 years, we’ll look back at the beginning of the twenty-first century and see it as the tipping point for clean technology. And as humans, we will wonder how we ever operated without considering the twin concerns of balancing economics and the environment. We therefore believe that the choice for investors, companies, governments and individuals is simple. Be part of one of the greatest economic shifts in recorded human history or become extinct like the dinosaurs. We hope you’ll join us in the clean tech revolution. It offers the promise of untold profits, and we believe it is the most exciting and important revolution of our time.
–Ron Pernick & Clint Wilder
8 Emerging Clean Tech Sectors
(24701)
8 clean tech sectors 1 Solar Energy
10-year Trend
2006: $13.6 billion
2016: $69.3 billion
Key Challenge
To scale up manufacturing sufficiently so as to be able to drive down costs to the end consumer.
2 Key Goals—Reducing Size and Cost
Solar energy is all about the generation of usable power from the energy produced by the sun. The predominant technology is photovoltaic cells, which convert sunlight into electrical current. Photovoltaics were invented in the 1950s and first commercialized in the 1970s, although due to high manufacturing costs, they have mainly been used in niche applications to date.
Today, solar energy is booming as many of the semiconductor manufacturers (Applied Materials, GE and Sharp) as well as startups are entering the field. Nearly $1 billion was raised in IPOs in 2006 by companies that are bringing new and innovative solar energy products to the marketplace.
The introduction of semiconductor manufacturers into photovoltaics is of particular interest. These companies have substantial experience in fabrication technology that is new being used to shrink the size and cost of photovoltaic cells.
Even as these very competent semiconductor manufacturers are taking aim at the solar industry, other companies are working equally intensively to increase the efficiency of solar cells from their current level of around 17% efficiency to 22% or more. It is hoped that solar cells will be operating at 50% efficiency within the next decade or so. At the same time, other companies are applying nanotechnology to create new materials that would enable solar cells to become cheaper, better and smaller than at present.
The “holy grail” of the solar industry is to create a household rooftop device that will meet the power needs of an entire household or small business. The goal is for a complete integrated system (photovoltaic cells, invertors, integration components and installation) to cost less than $5,000 all up and be able to generate power at 5 to 12 cents per kilowatt-hour. This will compare favorably to the 10 cents per kilowatt-hour many utilities are charging today.
Profit Opportunities of the Immediate Future in Solar Energy
8 clean tech sectors 2 Wind Power
10-year Trend
2006: $17.9 billion
2016: $60.8 billion
Key Challenge
To exploit the availability of big finance, very large scale projects and emerging technology niches.
A Now Energy Source Favored in Europe and Asia
Wind power very much a large player’s game at the present time. To achieve a useful amount of energy from wind-powered turbines, large numbers of turbines are required. Rather than being a consumer-driven marketplace, wind power in the foreseeable future will remain the domain of the large utility companies, which can afford to fund and manage wind farms with 75 turbines or more cost effectively.
Despite that restriction, the amount of energy generated worldwide by wind power is booming. In the United States in 2006 alone, 11.6 GW of electricity was generated by wind power—enough to power around 2.9 million homes. New investment continues to pour into wind power, giving the wind turbine manufacturers an extremely buoyant market.
Interestingly, countries outside the United States have been even more bullish on wind power. Europe—as of 2006—accounts for about 75% of the world’s wind-energy capacity. Germany leads the world in wind production and Denmark, Spain and other European countries aren’t far behind. Both India and China are now looking for wind power to supply a big chunk of their future power needs. China has set a goal to move from 2.6 GW of wind generated electricity in 2006 to more than 30 GW by 2020. Many Asian countries are also following suit.
The “Not in My Backyard” Mindset
Wind turbine technology is becoming more advanced as well. Early turbines had an output of 750 KW each. The current generation of turbines crank out about 2 MV each—roughly enough power for 1,500 homes in the United States. Wind turbine manufacturers are also hoping nanotech advancements will allow them to make more efficient and bigger turbines in the future. It is hoped that next generation turbines will have improved strength and durability. If these developments come about as planned, the cost of generating power using the wind will reduce substantially.
Obviously, the fundamental advantage of wind turbines is the fact that they offer fixed costs. Once the turbines have been installed, there are no ongoing costs involved except for routine maintenance. Wind is the ultimate green power source because it is free and clean. Probably the only obvious limiting factor to the growth of wind power lies in the fact that many people have a “not in my backyard” mind-set when it comes to wind farms. There is often local opposition on the part of land owners when farms seek regulatory or planning approvals. To offset this, a number of sea-based wind farms are currently in the planning phase.
Wind power technology is also being adapted to turbines that harness waves and the tides. Around the world number of pilot projects are underway that use tidal movements to drive the turbines and generate power. Tidal movements are very well established, so it is actually easier to forecast energy production for these turbines than it is for wind powered turbines.
Profit Opportunities of the Immediate Future in Wind Power
8 clean tech sectors 3 Biofuels and Biomaterials
10-year Trend
2006: $20.5 billion
2016: $80.9 billion
Key Challenge
To develop the next-generation plants and feedstocks required to supercede hydrocarbons.
The Promise of Cellulosic Ethanol
Biofuels are rapidly becoming very big business. A new carbohydratebased economy that uses plant crops is starting to replace the existing hydrocarbon economy with its reliance on fossil fuels. Ethanol has made the largest inroads thus far, but there are also an array of other products including biodiesel warming up in the wings. Similarly, bioplastics are also catching on and will soon move to replace the more widely used petrochemical based products in the near future.
The great technical challenges of the present era are to bring down the costs of biofuels, to match demand and feedstock supply and to build an efficient and accessible distribution infrastructure. To achieve this, new biotech breakthroughs will be required. The growing demand for ethanol as a fuel is already causing price spikes in the cost of corn, which is also generating flow-on effects in other parts of the economy. Coming up with new crops that can be used to generate biofuel and then having available enough farms to grow these dedicated energy crops in sufficient quantities is a delicate balancing act.
Most environmentalists see corn-derived ethanol as just an intermediate step in the movement to biofuels. It is widely known that cellulosic ethanol is a far better biofuel because it can be made from corn stover, forestry cutting wheat straw, rice husks and other waste products. It has been estimated that waste products have the potential to be converted into 50 billion gallons of ethanol per year in the United States alone—more than ten times the amount of ethanol being produced circa 2006 and enough to halve U.S. oil consumption.
Growing Energy and Plastic
Adding to the allure of biofuels is the fact that they burn cleaner in engines and generate less toxic emissions. This has been widely known and acknowledged within the automotive industry since its inception. In 1912, Rudolf Diesel, the father of the diesel engine, actually envisaged his engine running on vegetable oils. Similarly, Henry Ford’s Model T was designed to run on either ethanol or gasoline, since Ford favored growing fuel locally. The availability of cheap oil and the 1930s decision to use lead as an additive to reduce engine knocking rather than ethanol effectively put biofuels on the back burner. Today’s growing environmental concerns have changed all that.
Many countries are already well down this road. Most widely publicized is Brazil, where ethanol blends provide around 40%of the country’s total automobile fuels. Ethanol is less than half the price of petrol in Brazil because the country produces ethanol from inexpensive sugar cane grown locally.
Of equal interest are bioplastics, which are cheaper to manufacture, recyclable and biodegradable. Toyota is gearing up to manufacture 20 million tons of bioplastics by 2020, hopefully capturing around two thirds of the global market and generating $38 billion in revenues. The development of new biopolymers and other materials is currently the subject of intensive work.
Profit Opportunities of the Immediate Future in Biofuels and Biomaterials
8 clean tech sectors 4 Green Buildings
10-year Trend
2006: Style
2016: Efficiency
Key Challenge
To come up with good ways to leverage advanced building materials and electrical power systems
Saving Energy As a Viable Energy Source
Today commercial and residential green buildings can be constructed that use 30% or more less energy than conventional buildings, while at the same time providing space that is brighter, healthier and more aesthetically pleasing for the occupants. This is why green buildings are attracting the attention of entrepreneurs, corporate investors and savvy business executives.
The prevailing logic in this field is that the cleanest and cheapest kilowatt of electricity you’ll ever buy is the one you don’t use. By integrating more efficient technologies into the construction of buildings, everyone benefits. Therefore, green buildings are being designed that work in sync with nature rather against it. These designs make the most of the available sunlight, air and water so that the ongoing energy requirements of the building are minimized. Green buildings also use construction materials that are themselves manufactured as efficiently as possible and with minimal impact on the environment.
To some degree energy efficiency in constructing buildings flies under the rader. In and of itself, this is not a high profile subject subject. Gradually, however, people are starting to view saving energy as a viable energy resource in its own right. By designing a building to be energy efficient and then integrating power generation technologies, you even end up with something that at times produces more power than it uses.
Types of Technologies Commonly Being Integrated into the Design of Today’s Green Buildings
Note that the energy “footprint” of a green building isn’t simply the amount of energy it uses or consumes. An accurate footprint also includes the energy demands of the manufacture of its construction materials and the cost of transporting those materials to the site. While materials and the cost of transporting those materials to the site. While all green buildings aim to use the least amount of energy feasible, the goal of making the construction process as green as possible is also quite important. If recycled materials can be used rather than traditional energy-intensive materials, so much better.
Profit Opportunities of the Immediate Future in Green Buildings
8 clean tech sectors 5 Personal Transportation
10-year Trend
2006: 20 mpg
2016: 40-60+mpg
Key Challenge
To design, build and service ultra-efficient vehicles that are also low-emission and high performance
Cars of the Future Will Be Lignter and More Efficient
Year in and year out, 65 million new vehicles are manufactured around the world. If all of these vehicles can be made slightly more fuel efficient, the cumulative savings from just single initiative will be staggering. This is why the automakers are scrambling to come up with something that is genuinely ultra-efficient.
There are two main trains of thought on how to achieve this goal. One idea is to make the existing internal combustion engine powered vehicles more fuel efficient by making them lighter, smarter or from entirely different materials like carbon fiber rather than steel. The alternative is to use a different type of engine altogether, an electric engine that draws its power from batteries or a hydrogen fuel cell. (The use of biofuels is also another option that has been previously discussed.)
The Four Main Alternatives in Electric Vehicle Design
Which of these four alternatives ultimately comes to garner the largest share of the market remains to be seen, but there is no question that clean tech transportation is an impressive business and investment opportunity. Picking the actual winner may be fraught with risk, but knowing more fuel efficient vehicles will be required in the future is a no brainer.
Profit Opportunities of the Immediate Future in Fuel Efficient Personal Transportation
8 clean tech sectors 6 Smart Grid
10-year Trend
2006: $3 trillion
2016: $10 trillion
Key Challenge
To create an intelligent, distributed power grid better suited to the demands of the twenty-first century
A Self-organizing, Self-healing Grid
The world’s current power distribution grid was always designed to distribute power from large, centralized generators. In the years ahead, however, the grid will need to get much smarter and more distributed so that it will be able to cope with power generators of all sizes right down to a backyard wind turbine at someone’s home. The power grid of the future will resemble the Internet far more than it will the centralized, top-down system that exists today.
In just the same way as the Internet is self-organizing and allows two way communication, so too will the smart power grid of the future. It will need to be, because it will need to interact with:
Obviously, for all these different components to fit in with the power transmission and distribution systems of the future, the smart grid will need to have the ability for devices to send and receive information. Smart meters that track the movement. Smart meters that track the movement of power from or into the grid accurately will be required. This will enable people to monitor, track and then optimize their energy usage. The fact that this smart power grid will also be self-healing is important because that consistency of supply can be maintained even in the face of a physical or cyber attack.
The current estimate is that the North American grid currently loses around 20% of the energy it transmits and distributes. The smart grid of the future will probably be built of nanotechnology-based cables or superconductive material that dramatically slashes those power losses. By the time intelligence gets embedded into the system, the smart grid of the future could introduce a new economic boom that would dwarf that generated by the interstate highway system or other developments of previous eras.
Profit Opportunities of the Immediate Future in the Smart Grid
8 clean tech sectors 7 Mobile Technologies
10-year Trend
2006: $13 billion
2016: $25 billion
Key Challenge
To provide energy storage and power for people to use their electronic devices on the go away from home
Power on the Go
Mobility is one of the defining characteristics of the twenty-first century. Consumers want to be able to use their iPods, laptops, cell phones, personal digital assistants and a host of other devices wherever they go. To do that requires batteries (or other energy storage devices) that are portable, lightweight and easily recharged on the fly as required.
Batteries are a known quantity in this field. The main focus of development efforts in this area is dedicated to finding new materials that can make batteries less toxic while at the same time better performing. From a clean tech perspective, however, what’s most interesting are the other portable technologies also under development at the present time. These include:
Vast Military Applications
The fact that these portable power technologies will have obvious military applications should not be underestimated. The military benefits are so obvious and compelling that it is clear the U.S. military will be prepared to fund the development of robust clean tech portable power sources. Already, a number of military bases are powered entirely by renewable energy because this provides protection from those who would attack a base by cutting off its power.
As has happened so many times before, what gets developed for the military will then cross over into other markets. There is an obvious need, so much so that funding will be forthcoming from the military’s research funding pools. Portable power is an imperative and a necessity for the military rather than something that would be nice to have.
Other key applications for portable power sources will be in natural disaster relief efforts. Invariably, one of the problems in dealing with natural disasters is the fact that the energy grid goes down and often is not restored for days, weeks or even months. If the relief workers can arrive with their own portable power stations, their effectiveness can be multiplied many times over. Clean power that is also portable has many obvious benefits.
Profit Opportunities of the Immediate Future in Mobile Technologies
8 clean tech sectors 8 Water Filration
10-year Trend
2006: $400 billion
2016: Unknown
Key Challenge
To turn oceans, wastewater and other untapped sources into pure water fir for human consumption
Renewable Water Resources
The World Health Organization estimates that 2 million people die each year because of insufficient water for drinking, sanitation and personal hygiene. Providing clean water is already big business, and it will probably continue getting bigger still in the foreseeable future. In fact, in many parts of the world, usable water is already more valuable than oil.
So how do you go about getting clean water? There are three basic clean-tech approaches currently under development:
In addition to providing enough water to meet the growing demand of humans and industry, there are also considerable commercial opportunities in water monitoring, saving and distribution. It is estimated that in most developed countries, there is is around 30% leakage from established systems. Plugging those leaks, providing more cost effective ways to distribute water and empowering people to use water more efficiently are all going to be large markets in and of themselves.
Profit Opportunities of the Immediate Future in Water Filration
In short, tech has now moved from the back-to-basics fringe elements to the business mainstream. The big profit opportunities of the future lie in designing, selling or funding eco-friendly products and services. Literally trillions of dollars in economic opportunities and prosperity will be created in this sector of the economy in the years ahead, so the time to get on board is now.
Many of the same companies and entrepreneurs that innovated and built profitable integrated-circuit, flat-panel and disk-drive manufacturing businesses are poised to win in next-generation solar. They’re applying to the solar industry the same expertise they’ve gained in applying conductive materials onto substrates and in ramping up low cost, high-volume, continuous-flow, semiconductor-based manufacturing processes. In fact, many current and emerging clean technologies take advantage of manufacturing breakthroughs perfected in the computer and high-tech industries.
–Ron Pernick & Clint Wilder
We’re very bullish on wind power now. All the growth elements are in place: reliable technology, industry experience and maturity, and heavy investment from global manufacturing giants, large influential electric utilities, and many of the world’s largest and most respected financiers. Add in wind power’s cost competitiveness, and world, and huge growth potential in China and India, and the future looks breezy and bright.
–Ron Rernick & Clint Wilder
For markets to really take off, biofuels must overcome the classic chicken-and-egg dilemma. For a robust market to develop, not only must the fuels be refined but the vehicles that can run on them must also be readily available to consumers and the distribution channels and gas station pumps must be in place to deliver the fuel. The same is true for bio-based plastics and other bio-based materials. The shift is well under way, but the biofuel and biopolymer industry will need a significant push to take it from the realm of promise to ubiquity. While many of these issues, challenges and conflicts are not insignificant, we believe that they will prove to be more like bumps on the road than significant barriers.
–Ron Rernick & Clint Wilder
In the clean tech revolution, the battle to cut the energy use of a computer network or use fly ash instead of cement in a concrete slab may not sound sexy. But a closer look reveals otherwise. The efficiency goal is inspiring and emboldening radical new designs, new ways of thinking, and a new realization that energy savings translate directly into dollar savings and improved overall value. A new mind-set is emerging in which savings energy constitutes an energy resource—the cheapest and cleanest resource of all. This mind-set now affects decisions by governments, corporations and investors worldwide, and is gaining new converts at a rapid pace. Efficiency is a critical growth opportunity in the clean tech revolution and should not be overlooked.
–Ron Pernick & Clint Wilder
Designing ultra-efficient, low-emission vehicles to serve the mobility needs of the carbon-constrained, high-oil price years and decades ahead is truly one of the industry’s biggest challenges. These trends have already shaken up the global automobile industry in a major way, rewarding sellers of efficient vehicles and even opening the door for start-up clean-car companies in one of the world’s highest entry barrier businesses. The new paradigm may be hybrid, plug-in hybrid, all-electric, fuel-cell, some combination thereof, or something entirely new. There will be winners and losers in all these sectors, with new entrants already shaking up the auto industry, a trend that’s likely to continue. If innovators can figure out how to launch billionaires into space, what about a new, safe and dramatically better way to drive millions of families to their jobs, schools, and soccer games in ultra efficient, low-emission vehicles. Now vehicles. Now that sounds like a business opportunity.
–Ron Pernick & Clint Wilder
The current North American grid is largely based on technology created and developed more than a century ago. Thomas Edison, Nikola Teals and George Westinghouse, the forefathers of the electric industry, would all feel relatively at home with of today’s technology. The grid, for all its faults, has served us pretty well and was the first major and successful experiment in interconnection. Grid operators and electricity generators have been wary of messing with a system that has been ranked as one of the greatest engineering achievements of the last century. The current system is 99.9% reliable, but it has been unable to keep up with growing demand. In the new energy order, you’ll have nodes and distribution networks akin to the Internet. You’ll have a system in which most everyone is producing, storing, distributing, and sharing energy. We will likely see the current grid, much of it envisioned in the late one of the greatest clean-tech opportunities of our time.
–Pon Rernick & Clint Wilder
In all aspects of society, mobility is one of the hottest and most fundamental trends of twenty-first-century technology. It’s a wireless world and getting ever more so. Planners and logistics experts are thinking not just about how we can better arm the military but also how we can better ‘arm’ the frontline personnel working to tackle some of the biggest battles of our time: the fights against disease, poverty, resource depletion, environmental degradation, and climate change. These trends all demand energy sources that are portable lightweight, and easily recharged or refueled. Clean tech can make that happen, in a big way. All these technologies add up to potential multi-billion-dollar markets in the coming years. And the field remains fairly open for start-up companies.
–Ron Pernick & Clint Wilder
As we move into the second decade of the twenty-first century, the water industry will look increasingly like the clean-energy sector, with new distributed technologies and business models emerging. Certainly it will continue to have its share of mergers and acquisitions and be dominated by very large players. But there will still be room for innovators who develop new technologies and deploy service-centric business models that pull water from the air, turn wastewater and seawater into potable water, leverage nanotechnologies for state-of-the-art filtration, and serve the emerging markets of India, China and Africa. The ability to transform salt water, polluted well and surface water, and wastewater into clean, high-quality water is one of the last great frontiers of human industrialization.
–Ron Pernick & Clint Wilder
The Clean Tech Revolution
The Next Big Growth and Investment Opportunity
(24700)
“Clean tech” is any product, service or process that delivers value while eliminating or reducing the use of natural resources. As such, clean tech companies and technologies typically:
In the 1970s, clean tech was often labeled as “alternative” and there are six major forces that are fueling the drive towards clean tech:
Today, industry giants like Toyota, Sharp and Goldman Sachs are making multi-billion-dollar investments in the clean technology for solid business reasons rather than in an attempt to change the world.
The Clean Tech Revolution
December 28, 2007 by admin
Filed under Books, Green, Technology
The Next Big Growth and Investment Opportunity
by Ron Pernick and Clint Wilder (24700)
Developing “clean technology” is no longer just a social cause championed by the tree huggers or environmentalists — it is rapidly becoming the next big engine of business and economic growth for a large number of mainstream companies.
“Clean tech” is any product, service or process that delivers value while eliminating or reducing the use of natural resources. As such, clean tech companies and technologies typically:
In the 1970s, clean tech was often labeled as “alternative” and there are six major forces that are fueling the drive towards clean tech:
Costs: clean-energy costs are falling as the costs of oil and fossil fuels steadily rise.
Capital: there is now a large influx of capital flowing into making clean tech products better.
Competition: many governments are going green in order to help create the jobs of the future.
China: the explosive growth of developing nations is driving clean tech development.
Consumers: who are starting to prefer cleaner products which use less resources.
Climate: business feels a need to be seen as contributing to the solutions to the world’s problems rather than generating more.
Today, industry giants like Toyota, Sharp and Goldman Sachs are making multi-billion-dollar investments in clean technology for solid business reasons rather than in an attempt to change the world.