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by craigshieldsPosted on Posted in Renewables - Business

Anyone coming to New York City who expects to see selfless acts of warmth and empathy for one’s fellow man clearly has no understanding of the spirit of the place.  Having said that, my experience at the 2011 New York Venture Summit went beyond the pale in terms of sheer mean-spiritedness.

Let me set the stage:  75 entrepreneurs in life sciences and cleantech each had seven pressure-packed minutes to present their business plans in PowerPoint to a panel of 8 – 10 venture  capitalists.  Most presenters were visibly nervous–and who wouldn’t be?  A room packed to the rafters with judges and fellow contestants, each waiting anxiously for his name to be called.  At the appointed time, the speaker would come to the stage and make a pitch that could either culminate in the few million dollars of funding necessary to get his “baby” off the ground, or, 100 times more likely, rejection.

And when I say “rejection,” you had to see it to believe it.  The VCs were (for some reason) asked to comment on each plan after it was presented.  And these comments were uniformly critical, some in constructive ways, I’ll grant, but, for the most part, they were unkind, and occasionally quite vicious.

A smirking wunderkind from Khosla Ventures (whom I desperately wanted to slap) and the guy sitting next to him from Kleiner Perkins often turned to one another and snickered audibly at presenters’ statements they considered inappropriate.  A panelist from another firm grilled a presenter (a PhD in materials science) on a business point after his talk.  “I understand,” said the presenter humbly in response to the criticism.  “Yeah right,” his tormentor mocked with obvious sarcasm.

Maybe I lack the thick skin required to deal effectively in today’s world.  Or maybe I’m taking too much pity on the victim in this master-slave relationship.  After all, the VCs have the money, and the entrepreneurs desperately need it; beggars cannot demand to be treated with respect and kindness.  But have we come to this?  Some of the smartest, most driven people on Earth, many with fantastic breakthrough ideas–developed over years, in some cases decades of work–being publicly ridiculed by a team of snotty young MBAs?

Had I not been paid to be there, I would have left before lunch.  As I told the conference organizers, “Good conference overall, but this idea of rude, arrogant pigs heckling the presenters–often in the middle of their talks–is really deplorable.  It’s shameful.  Don’t expect to see me next year.”

 

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by craigshieldsPosted on Posted in Renewables - Business

I’m in New York City this week, doing a consulting project for 2GreenEnergy client Doty Windfuels. I knew going in that this was going to be interesting, but there was no way I could have predicted the drama.

Windfuels is one of 75 companies “pitching” its business concept to a large group of venture capitalists.  Each entrepreneur has a highly refined PowerPoint deck, and uses carefully chosen works to describe his “baby,” in the hopes of landing a workable relationship with a VC partner.  All of these 75 have some merit, it seems to me; in fact the group was screened, eliminating those whose ideas clearly didn’t merit further attention.

Yet the evaluation of a business idea is clearly a bit subjective; some people have an understanding of a certain type of technology, an appetite for a certain type of risk, etc.  Yet VC’s have little compunction about telling entrepreneurs that their baby is ugly.  In a session yesterday, someone responded to the Windfuels concept, “I don’t doubt the science, but I don’t see the business case.”

I, for one, can see that, after a development period of 2 – 3 years, Windfuels is a very good bet to be able to demonstrate a pilot plant in which high-grade fuel is being produced from energy, water, and CO2, using processes that can be expected to scale, making the price competitive with oil at $55 a barrel.  That doesn’t have value?  Imagine you’re an ExxonMobil or a Chevron, you’re running out of oil to extract, and your costs are rising.  At the same time, you’re trying to convince the world that you’re not an oil company; you’re an “energy company.” You visit a facility where your product is being made cost-effectively without a molecule of crude.  Sounds pretty appealing to me.

Fortunately, some people really “get it” when it comes to the concept, and see that the world’s first workable approach to synthetic fuels has potential that dwarfs literally every other idea here.  We’re talking about a trillion dollar market; this is not a better approach to spear fishing, or something like that.

Well, today is another day, and a new set of VCs.  It only takes one.  And, in truth, Windfuels is a better fit for a different type of investor anyway; I’m going to try to find them someone who may be more appropriate.  Let’s see what happens.

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by craigshieldsPosted on Posted in Renewables - Politics

Frequent commenter John Sullivan asks:

How can you cite “eviscerating environmental regulations” as a factor in our lack of competitiveness, when China has a horrible record and is arguably using their “green” investments as a shield for now?

It’s probably true that the reason for China’s investment in renewables has little or nothing to do with environmentalism. But I’m not sure I see the relevance to what we’re trying to in the West. There is no doubt in my mind that environmental regulations in a market economy spur innovation in cleantech, and that their removal provides additional incentive to pursue the status quo. (In the meanwhile, such regulations protect our health and safety, and there’s something to be said for that as well.)

I sat next to an extremely senior Australian scientist/businessman during lunch at the energy storage show last week. My jaw almost fell into my arugula salad when he told me about the firm but simple carbon tax his country is deploying. It’s not 1500 pages of pork-barrel back-room deals; it doesn’t have cap and trade, loopholes, wormholes, or buttonholes. It’s extremely plain and direct, phasing in over a few years, giving everyone plenty of time to understand its impacts and make whatever adjustments to their businesses they see fit.

Australia has a well-deserved reputation for being straightforward in its approach, and this strikes me as the perfect example. Here, they perceived that they faced a serious problem with a social ill (like cigarette smoking), and simply put a tax on it. Instantly, they created incentive for innovation in clean energy; in fact, they’re using the revenue to provide further incentives for the development of green solutions.

Miraculously, it didn’t take years of political posturing and grandstanding; they just did it. Try to imagine that in the US.

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by craigshieldsPosted on Posted in Renewables - Business

Clean energy investment worldwide was up 30% in 2010, after a steep decline in 2009, says the Pew Charitable Trusts.  “The clean energy sector is emerging as one of the most dynamic and competitive in the world, witnessing 630 percent growth in finance and investments since 2004,” said Phyllis Cuttino, director, Pew Clean Energy Program.

Venture capital investment in U.S. green technology rose 46% in 2010 after a big decline in 2009, says Clean Edge, Inc. Clean tech companies took in 23% of all U.S. venture capital dollars (more…)

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by craigshieldsPosted on Posted in Energy Storage

Before my day in New York City comes to a close, let me mention a highlight: my meeting with Steve Hellman, president of Eos, energy storage giant of the not-too-distant future.  I won’t bore you with the details of his company’s breakthrough in zinc-air battery chemistry; I’ll only point out what I think it will mean in the sexiest aspect of the storage business: enabling electric vehicles in a very big way. 

Steve and I had a very interesting and engaging talk, during which we realized that we share a common viewpoint:

Have you ever noticed that the great consulting companies like Deloitte and Accenture have ridiculously smooth projections for the adoption of cleantech over the coming decades?  These graphs, like all attempts to project the future from the past, are a complete crock. And in no case is this more evident than in automobiles – the place at which we will choose between one great infrastructure and another.  Once the right combination of factors falls into place (an acceptable range, an acceptable price), the change will happen very suddenly – and drive the loser out of business in a very short period of time. 

As I’m about to tell my audience at the upcoming electric vehicle show in Los Angeles at which I’ve been asked to speak next week: once this starts to happen, you will have the same trouble buying a gasoline-powered car that you do now shopping for a turntable for LPs. 

Hey, did the Internet happen slowly?  Or did it come to dominate the way we live in just a few years.  Something to think about – as is Eos.

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by craigshieldsPosted on Posted in Biomass

When I was lucky enough to meet the eminent Bulgarian scientist Dr. Boris Monahov at the Energy Storage conference last week, we spoke about the advanced battery solutions he and his team are developing. But Dr. Monahov is also a proponent of algal biofuels, and sent me the article linked here.

I remain skeptical.  Algae, while it works fine in the laboratory, has presented one problem after another in the real world. And this article suggests that algae can replace 17% of US purchases of foreign oil. In my estimation, that’s good, but not good enough.

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by craigshieldsPosted on Posted in Electric Vehicles

In a couple of hours, I’m off to New York City for a few days, delivering a short consulting project for a client. I mention this to note the magnificent job that “The City” has done in electrifying its fleet.

Mayor Bloomberg held a press conference recently to let the world know that New York is now believed to have the largest municipal fleet of electric vehicles in America and possibly the world: 430 in all, not including hybrid-electric transit buses. Bloomberg announced the purchase of another 70 electric drive vehicles, 50 of them Chevy Volts, with the first one going to the NYPD. In addition, the fleet includes the Ford Transit Connect electric, the Navistar eStar, the Nissan LEAF, and the original electric Toyota RAV4.

As usual, the eyes of the world are on you. Keep up the good work.

　

　

　

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by craigshieldsPosted on Posted in Electric Vehicles

I have mentioned that I work with four American and three Bermudan business partners in an effort to bring electric vehicles to this charming island nation. Bermuda has all the potential in the world for a super-steep EV adoption curve: expensive gasoline (imported at great cost), a total of 125 miles of twisty roads (militating low-speed, preferably narrow vehicles), and an off-the-charts wealthy, eco-aware population. I’m confident that we’ll ultimately succeed.

But to what end? I hope to make a buck; I’ve done it before, and folks tell me I’m a good bet to do it again — and that’s all just great.  But though EVs have the potential to provide clean transportation, from an environmental viewpoint, we obviously need to understand the actual source of the energy.

And in Bermuda, that’s not pretty. Two huge smokestacks (soon to become three?) visible from all over the island, tell the story: diesel power plants – among the dirtiest of all the world’s energy sources.  When the wind blows the wrong way, Hamilton (the capital) gets coated in soot.  And to their credit, Bermudans know that there is far more at stake.  In a recent white paper (linked below) we read:

This … will guide Bermuda to take an increasingly sustainable approach toward the production and consumption of energy. The paper outlines how we will begin a path toward an alternate future not bound by fossil fuels, but one where we conserve energy, use energy more efficiently and harness indigenous renewable energy resources.

But underneath the rhetoric, what is Bermuda doing about this issue? Where are they in their migration to renewables? After three full years of being a part of this group, to be honest, I’m not at all sure.

As one can imagine, this is a three-ring political circus, with a constantly changing set of personalities – and even ministries. When I was last “on island” (as they say), I made 30-minute-long presentations to eight different commercial and political groups, including the then-Minister of Energy, Michael Scott and his entourage.   He was a kind and intelligent man with a deeply penetrating glare, completely attentive to every syllable coming out of my mouth.  But as I was to learn later, the talk was totally inconsequential, as Scott was on his way out.

Now, not only is Scott gone, but the whole Ministry has been replaced.  The current Minister of “Environment, Planning and Infrastructure Strategy,” Walter Roban, now offers this 2011 Bermuda Energy White Paper.

Is this whole conversation moving forward with the pace that we would have hoped? No. But is it becoming the political football that clean energy is in the US?  Again, I’m not sure. I’ll ask you to read the white paper, if you want, and be the judge.

The honest answer for Bermuda is so much easier than that which we face in the US, as they have far fewer renewable resources about which to quibble.  They don’t have the landmass or geologic resources we in the US argue about daily: no deserts for solar, no plains for wind, no geothermal, nor attractive amounts of biomass.

If the Bermudans want to solve the problem, let me ask them about the compound they have all around them: water.  Therein lies the answer. If you want my input (at no charge), hit Contact, and ask me to tell you about the latest breakthroughs in hydrokinetics.  All I ask of you is what I request of your American counterparts:  put the politics aside, and let the technology do the talking.

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by craigshieldsPosted on Posted in Fossil Fuels

In a recent post I suggested that renewable energy throws a new set of variables into an already complex energy market: intermittencies, transmission issues, suitability for certain kinds of storage, etc.  At the end, I asked: Are we intellectually capable — and honest enough — to make all this happen?

In preparing for a talk I’m giving at a conference later this month, I started to think about that.  We?  Who’s “we”?  The citizens of Earth? Am I implying that the seven billion inhabitants of Earth have some collective voice in the matter?

In truth, most of the decisions that this world makes on a day-to-day or year-to-year basis with respect to energy policy fall largely into the hands of a very few billionaires, whose fortunes were made in the energy monopolies, and, though those fortunes seem bound to ebb in the future, will certainly not go down without a considerable fight. 

It’s clear that our civilization will, in fact, get to renewable energy – purely because it must.  Fossil fuels, starting with oil, will prove too costly in the long run.  Supply and demand alone will ensure that the energy stored here over the last hundred million years (and consumed without a thought over the last century) will soon become unacceptably expensive. 

But what will happen as we struggle along this supply and demand curve?  Will this become, as most of our scientists say, a tough time for a growing population of people and the biosphere that supports it?  

It’s clear that there’s more at stake here than the fortunes of a few billionaires.  May we make the right decisions.  Oops — there I go again..  Who’s “we”?

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by craigshieldsPosted on Posted in Energy Storage

In the venture capital community, one hears a great deal about “technology risk.”  In my most recent meeting with Ray Lane, Managing Partner at Kleiner Perkins a few months ago, he told me: “We want all technology risk removed before we put more than a few million dollars into a deal.” 

OK, but what exactly does that mean?  To illustrate the point, let me tell you about a company I came across at the Energy Storage show in San Diego earlier in the week, that appears to me to be the poster child for technology risk. Check out “Gravity Power.”

The website does a far better job than the description I’m about to provide, but imagine a hole 30 meters in diameter and 2000 meters deep, filled with water, in which a huge stack of pancake-shaped concrete disks rises and falls. The concrete, which is heavier than the water by a factor of 4 to 1, is driven upwards by energy coming in beneath it pushing it up, or falls, releasing that stored energy. In the energy generation mode, as the concrete falls, it pushes water up through a return pipe connected to the main hole. In the charging mode, water is pushed down the pipe, forcing the concrete to rise.

Is this theoretically possible? Of course. But has anything like this ever been built?  Sort of.  Anything of this scale?  No, and the first deployment will cost $600 million. Now that’s what I call risk.

And yes, most of the risk is associated with technology. What if you can’t fabricate a huge concrete pancake with seals sufficient to do the job? What about earthquakes — and hundreds of other issues that I can’t even imagine?

But let’s acknowledge that there are other forms of risk here as well. What happens if a better form of energy storage comes into play in the years that it takes you to get your first implementation in place?  What happens if energy storage is taken over by vehicle-to-grid connected EVs — or somehow doesn’t turn out to be the big deal that most people expect? 

I can find you people who will risk $6 million on an idea like this that has the potential to impact the world of energy storage as we currently conceive it.  But $600 million?  That’s some real risk.