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by craigshieldsPosted on Posted in Renewables - Business

I’d like to re-extend an offer I made a year or so ago: If you’re trying to raise capital for a cleantech business from angel investors, venture capitalists, or private equity, and want objective feedback on your business plan (in any stage of formality), please send it to me. I’ll get right back to you with my honest opinion of your project – along with constructive suggestions for improvement you may want to consider.

Now in truth, I don’t want to see just any business plan. I would prefer that, in addition to its merely pertaining to cleantech, that it meet as many of the following features as possible:

1) Try to make it a game-changer. Is this an idea that has a very large available market? Does it offer a unique and obvious advantage over current solutions?

2) Demonstrate a market position that offers an opportunity for domination – or at least stability. Have you put yourself in a position where you’re likely to be usurped by large, powerful competitors? Perhaps you could own a market niche that is very unlikely to be challenged – at least for the foreseeable future.

3) Showcase the strength/quality of the team. At the end of the day, an investor has to walk away believing that you’re smarter than the other people who may be having similar ideas.

4) Present a solid marketing strategy. A good business plan contains a good marketing plan; “Build it and they will come” is fallacious business thinking.  How are you going to identify customer segments, and tell them your story in a clear, compelling way?

5) Understand what to expect from government. Most of the boom and bust cycles we’ve seen in cleantech to date have been driven by the rise and fall of incentives, subsidies, tax equity, loan guarantees, etc.   Where is the wind blowing in government?  How does that affect your trajectory for success – and your strategy for dealing with the uncertainties that come from each new election cycle? Can you succeed internationally, even if the US continues to drag its heels?

Again, I look forward to reviewing your ideas, and adding any value I feel I can.

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by craigshieldsPosted on Posted in Renewables - Business

…..continued from earlier post

These same wind turbines have been chosen for the world’s largest wind farm, the 845MW Shepherd’s Flat project in north central Oregon. 338 turbines will be installed; GE says that this turbine yields the highest energy production in its class, building upon its earlier successful 1.5MW turbines (more than 16,000 installed worldwide.) Owned and managed by Caithness Energy, it is estimated that the Shepherd’s Flat farm will power 235,000 average U.S. homes. Operations begin in 2012. GE is a partial financier of the project, along with Google, Sumitoma Corp. and others.  Key components of the new 2.5MW turbines will be manufactured at GE’s plan in Pensacola, Florida.

GE has forged a relationship in China over the years, having previously supplied gas turbines, steam turbines, hydro and wind turbines. Last year, the company announced a new joint venture in China. GE holds 49% and a subsidiary of Harbin Power Equipment holds 51%, and the new company will manufacture GE designed wind turbines for both offshore and near-shore installations in China.

Jack Wen, president of GE Energy China, was quoted as saying. “This is an important investment in China for GE and one that will enable us to participate in the tremendous growth potential of the Chinese wind turbine segment.”  Why would mega-force China, that already has the world’s largest wind turbine sales territory, enter into this arrangement? For one reason, it is anticipated that its market will surge by 500%, with installed capacity soaring from 25 GW in 2009 to 150 GW by 2020. This is thanks to a strong renewable energy plan.

What about solar?

While far behind its wind activity, GE is stepping in to solar. CEO Jeff Immelt identified solar as a key growth platform for the company, saying it could generate $3B in sales by 2015, as reported in the Financial Times (April 7, 2011.) GE announced it will build a 400 MW manufacturing facility in the US by 2013 to produce thin film solar panels. Most current solar modules are made with silicon wafers, but thin film solar panels use different materials that are less expensive and more flexible though not yet quite as efficient as silicon. Researchers are working at thin film technology every day.

GE researchers actually set a world record of 12.8% efficiency for thin film solar panels recently. GE invested in small thin film solar startup company, Primestar Solar, back in 2007. By 2010, the research activities were in full swing with a global team in the U.S., Germany, China and India researching and testing. GE fully expects to exceed the 12.8% mark when its commercial-scale factory opens in 2013. “14% to 15% is in the cards,” said Victor Abate at GE, who oversees solar, wind and renewable energy at the Fairfield, CT base.  Abate said that GE is confident that thin film solar has long-term advantages over other solar technologies.

GE is licensing the company eSolar’s technology using flat mirrors to concentrate sunlight to heat up water in a tank on a tower for steam; the steam runs a turbine and to generate electricity, with the design configuration such that each tower has 4MW capacity (at about 12% efficiency.) GE is using the technology in concert with natural gas for a hybrid power solution. The license is exclusive worldwide (except India and China) which also allows the construction of stand-alone thermal power plants. Solar plants cannot produce energy at night so using this technology allows power plants to cut the use of natural gas. “It’s critical for natural gas to pair well with renewable sources,” said Paul Browning, CEO of thermal products at GE Energy.

A few other projects to mention

This year, GE joined an alliance with other companies to develop the U.K. smart meter market, to help meet a government goal to install 53 million smart meters in homes and businesses by 2020. Last March, the U.K. government announced this plan to help cut electricity use and lower greenhouse emissions, which can ultimately save money. This may end up being a $6.2B market, reported Bloomberg news (June 22, 2011.)

LED lights are another interesting story at GE. Walmart engaged GE around the world for LED lighting systems inside and out. “The normally high costs of outdoor lighting can be turned into an energy efficiency bellwether for the company and the industry as a whole,” said Charles Zimmerman, VP at Walmart (GE website.) Lighting can take nearly one-third of a Walmart store’s energy consumption.  To start the project, Walmart made a 22 store in Puerto Rico – all stores now use GE’s LED lights for parking lots, which is expected to save up to 48% of the electricity use previously in place, less maintenance costs and bring a 10 year life, much longer than the traditional lighting that was used before. LED lights are also transforming the retailer’s displays indoors, and is expected to eventually transform the retail industry.

In an open letter to all on the GE website, Chairman and CEO Jeffrey Immelt and Mark Vachon, VP of ecoimagination, write that ecoimagination is working. It is, they say, GE’s business strategy to create new value by solving energy, efficiency and water problems through innovation.

In 2010, it has met each of the goals set including $5B of clean tech research investment, $85B in revenue from ecoimagination products, 30% reduction in water use and $130M in energy efficiency savings.  The company helped drive adoption of electric cars by purchasing 25,000 EVs and launching the WattStation chargers; and of course, it held the ecoimagination Challenge and helped launch 22 new ecoimagination products in 2010.

What are the GE ecoimagination goals set for the next five years?

According to Vachon and Immelt:

  • Double green-tech R&D investment to $10B
  • Grow ecoimagination revenue at twice the rate of GE revenues
  • Reduce energy intensity by 50% and greenhouse gas emissions by 25%
  • Reduce water use by 25%

What else does GE’s Immelt see on the horizon?

In a speech in Washington D.C. earlier this year, CEO Immelt weighed in on energy policy and business. He said, “Energy policy is controversial and it’s unlikely that the U.S. will lead. But how many times do we have to watch massive energy price volatility before we do something. I truly believe that the U.S. can achieve energy security through investment in energy infrastructure and R&D, and I also know we can create jobs through energy efficiency retrofit programs and other programs…”

We need, he continued, to “…improve the collaboration between government and business. History I think has proved the superiority of market economies where private initiative and individual choice are the great engines of progress. But business and government can work together to improve our competitiveness. Government should encourage business as it seeks to revitalize our manufacturing competitiveness with incentives for investing in R&D, opening new markets to our goods and trade agreements, and changing tax policies that discourage business from investing over-seas earnings back in the U.S.”

 All eyes will continue to follow GE.

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by craigshieldsPosted on Posted in Electric Vehicles

[youtube http://www.youtube.com/watch?v=9Q7prldEBpo&w=425&h=349]

Here’s the presentation — including the audio track — that I made to the Electric Vehicle Summit at the Biltmore Hotel in downtown Los Angeles last week.

In essence, my point is that, though I’m bullish on the EV adoption curve, and I’m excited that for once, the good guys have a chance to win big, there are several open questions. In particular, there are so many variables here that have the potential to turn the world upside down, that it seems a bit foolish to me to think that predictions that go out 40 years have any real meaning.

Having said that, EVs are vitally necessary to the well being of all of us. Sustainability (generally) can only come from national security, which requires energy security, which in turn requires weaning ourselves off of oil. And there are other imperatives as well:

Health: We spend $250 billion a year dealing with the lung damage caused by the inhalation of the aromatics of fossil fuels.

Peak oil. We’re running out of oil.

Long-term environmental damage: Global climate change and ocean acidification.

Yet I grant that EV naysayers have some good points:

Drivers demand absolute freedom, and will not deal well with range anxiety.

Consumers are risk-averse; no one wants to invest $30,000 in the automotive equivalent of the Betamax.

Most (though not all) consumers refuse to pay extra for a benefit that accrues to everyone (eco-friendliness).

Even if this weren’t the case, there is widespread confusion and apathy about the true ecological benefits. I’m astonished by the effectiveness of the PR team that has convinced a significant number of Americans that global climate change does not represent an important problem. Morally, they’re certainly not very upright people, but I have to respect their effectiveness.

So, how to promote EVs in the US? I would consider appealing to a sense of patriotism, as there is nothing one can do that is better for the strength of our country as a whole than ceasing our reliance on oil. Simultaneously, this would:

Reduce the power, and thus the threat, of terrorism,

Remove a great deal of the motivation for war, and

Stop the outflow of US cash to the tune of $1 billion per day.

In any case, I hope you’ll enjoy the presentation.

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by craigshieldsPosted on Posted in Electric Vehicles

The talk I gave at the Electric Vehicle Summit last week is linked here, including the PowerPoint as well as the audio track.  I concluded it with a reminder that, in terms of the EV adoption curve, we don’t really know as much as we think we do. 

“Let’s put this in perspective,” I told the audience near the end of my 45-minute presentation.  “You folks are listening to me, and, I’d like to think, trusting what I’m telling you.  But I got my information from various sources, that, in turn, got their information from other sources.  At the end of the day, it’s possible that, pardon the pun, we’re all just breathing one another’s exhaust.  When there are so many variables, and so much of our world changes month to month, I look askance at  projections that go out 40 years.  I think you should too.” 

I read a poem (Please Mrs. Butler) that, in a round-about way, makes this point, i.e., maybe I’ve raised more questions than I’ve provided answers.  I acknowledged the chuckles I received, took a few questions, and sat down.  

But the idea that we think we know more than we do is an extremely important one; it certainly applies far more broadly than the EV adoption curve.  This subject, called “epistemic arrogance” lies at the root of so much of human folly.  I’m reminded of an eminent business leader I’ve met a few times who takes every opportunity to offer his position on global warming.  “It’s a hoax.  Mankind positively does not possess the power to alter the incredible power of nature.  The concept is absolutely idiotic,” he re-asserted at a recent meeting. 

“Are you sure?” I asked the first time I heard this, my jaw on the floor.  “I mean no offense — and I know there are ‘climate change deniers’ out there — but you seem quite certain about a proposition that flies in the teeth of the peer-reviewed findings that the vast majority of climate scientists have published over the last 30 years.”  But couldn’t get him to back off even a micron.

I’m wondering where we’re going to see the most dramatic and lethal evidence of our epistemic arrogance.  It certainly could be global warming, though there’s no reason to rule out nutrition.  The last hundred years has seen agricultural science develop hundreds of pesticides, herbicides, and fungicides, as well as farming methods that many say have ruined the soil.  Others believe that our GMOs represent a terrible biohazard.  Almost no one thinks that commercially raised tomatoes have any flavor, but, more importantly, anyone who’s studied the subject knows that the nutritional value of the food in our grocery stores is a small fraction of what it was a century ago.  

We also have skyrocketing rates of diseases that simply didn’t exist in the early 1900s. Is there a connection? 

And what’s the solution?  Should we feel comfortable with the approach that ADM, Monsanto, and the other agri-giants are taking, i.e., more unnatural processes and higher doses of more powerful chemicals — aimed at undoing the damage caused by the last round?

While it doesn’t seem likely to me that this will this fix the problem, and it’s certainly not the direction I’d be taking if I were directing this effort, I have to say what I wish other people would admit: “I don’t know.”

I’m reminded of an important idea in law called the Precautionary Principle, that requires the developer of an action or policy to prove that what he is advocating will cause no harm to the public or the environment.  I.e., if a concept could potentially contain a risk to public health and safety, the burden is placed on the concept’s proponents to prove that such risk does not exist, rather than on the public to prove that it does.  

But in cases like the food supply as discussed here, it’s obvious that we as a civilization are light-years away from any meaningful implementation of this principle.  Agribusiness makes decisions that affect the health of everyone living on this planet.  We eat what they feed us, and we suffer the consequences.

Occasionally it would be nice to hear, “Look, we clearly have no idea of the unintended consequences of what we’re doing here, so let’s err on the side of caution.”   Wouldn’t that be refreshing? 

But I’m not holding my breath.  What about you? 

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by craigshieldsPosted on Posted in Renewables - Business

General Electric (GE) is speeding ahead on a number of renewable energy fronts.  This includes continuing to build its wind turbine division, a new smart meter project, planning to build the largest solar plant in the U.S., keeping its successful Eco-Imagination project going and increasing clean energy investment and financing through its financial services division, among other things.

In fact, the Financial Services division is growing rather dramatically and has strongly committed to renewable energy. To date, it has invested in wind, solar, biomass, hydro and geothermal power assets with a portfolio over $6B. About 30% of the division’s portfolio is in renewable energy today, while in 2006 only 6% of the portfolio could be categorized as such.

GE Financial Services has been providing structured project finance using debt and equity, as well as construction loans, (more…)

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by craigshieldsPosted on Posted in Renewables - Politics

When I wrote the other day: “Every day we read about the global dominance that China is achieving in cleantech, and wish the US could get on the stick as well,” a well-meaning reader wrote back: “It makes you sad and it makes you furious at the shortsightedness and hypocrisy of the people we elect.”

Personally, I don’t blame the people, but the system that selects them. Put another way, shortsighted and hypocritical people are the only ones who will fit into “leadership” positions in what’s left of our “democracy.”  Just like you don’t expect to find midgets playing professional basketball or leg-amputees on “Dancing with the Stars,” don’t look for honesty and decency in government.  Apple trees don’t produce tangerines.

Until we remove the corruptive elements of our election processes, we’re doomed to an eternity of “leadership” by people like the ones who grace our evening news reports. I hope you’ll check out MoveToAmend.org and get involved. 

Btw, here’s a radio interview I did with MoveToAmend’s David Cobb.  If you get the chance to catch him on one of his speaking tours, I urge you to grab the opportunity; he’s one of the most articulate and powerful speakers you’ll ever find.  He ran for US president in 2004, so I suppose he’s had some practice.

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by craigshieldsPosted on Posted in Sustainability

Guest blogger M.L. Kiely writes:

The Earth has two paths which humanity can follow.  The first revolves around greed and oil, and assures the vast majority of humans will starve, suffer and perish. The second focuses on serving one another without borders and monetary gain, the elimination of the haves and the have nots, and eliminate the divisiveness of religion and state.

The intelligence and resources exist today to feed, house and maintain health of all of humanity; the desire to do so is the fundamental issue.

The odds of the second alternative happening would seem slim to none until you cast extinction into the mix.

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by craigshieldsPosted on Posted in Biomass

I just spoke with Sean O’Hanlon, leader of the American Biofuels Council, a national institute for biofuel research, analysis, development, and education in the United States.  Sean impressed me as a doer rather than a talker; the emphasis of his organization is moving biofuels out of the classroom and laboratory and into the world of day-to-day commerce.

But he made a pithy remark that I immediately jotted down with the smile that comes over me when I encounter something that’s truly well said: “There is no romance in renewables.”  There are so many flavors of biofuels that simply do not compete well in the overall market. Sean told me, “Do not expect to enter a market with a low-grade product, or one that’s more expensive than a fossil fuel competitor, on the basis that there is ‘romance” to renewable energy. It doesn’t exist.”

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by craigshieldsPosted on Posted in Biomass

I just had a fascinating call with Jim Lane, editor and publisher of Miami, FL-based BioFuelsDigest.com, a group that provides information products and a series of top-flight industry conferences to more than 14,000 organizations worldwide.

When I happened to mention that I run across plenty of crackpots and charlatans in my day-to-day dealings with cleantech entrepreneurs, it was instantly apparent that Jim’s had the same experience. And the more I learn about biofuels, the more I can understand how easily this may be the case. There is so much complexity; there are so many different combinations of feedstocks and technologies, it’s really impossible for anyone to keep track of all of them. One hopes for peer-reviewed analysis, but that’s not always possible; one can understand that certain of these businesses need to protect their IP very carefully.

This is further complicated by the fact that many biomass technologies work to some degree – just not at a commercially viable level. It’s not like somebody who claims to have built a car that runs on seawater.

Take waste-tire-to-biofuels, for instance. I happen to believe that the version of pyrolysis that my associates at Southeastern Biomass bring to the table will work as advertised. But I’m certainly skeptical; I think anyone needs to be. Pyrolysis has been around for a century, and dozens (hundreds?) of people have tried to make the waste-tire dream come true.

At the end of the day, some of these folks are showmen. And, while every business needs a convincing front-man, there is a line between enthusiastic promotion and fraud.

Just ask the U.S. District Judge who, last week, handed down a summary judgment against John Rivera, bombastic leader U.S. Sustainable Energy Corp, affirming charges levied by the U.S. Securities and Exchange Commission, which had alleged that Rivera used false press releases and other false public statements to drive up interest — and stock price — reaping huge profits in what turned out to be a virtually worthless company. Looks like Rivera’s headed for the slammer, which sounds about right to me.

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by craigshieldsPosted on Posted in Renewables - Business

To understand this little anecdote, you have to know that about a year ago, I became a friend of a French fellow, Gerolf Jacobs, a very personable clean energy investor/deal-maker who lives near Bordeaux. In a few of our numerous conversations, Gerolf has mentioned his specific penchant for renewables projects in Bulgaria.

I told him I’d keep an ear to the ground, and let him know if I came across any relevant contacts in this space. Of course, I didn’t think that such an event was too probable; in fact, I was altogether ignorant of modern Bulgarian history; when I think of the place, I recall Stalin and Soviet-bloc totalitarianism and bureaucracy.

Fast-forward to July. I was playing hooky from one of the plenary sessions at the Energy Storage conference show, sitting in the lavish hallway of the top-flight resort at which the conference was held. In fact, I was writing a blog post, much like I’m doing now. Across from me was a distinguished looking guy, bespectacled and well dressed, speaking a language I didn’t recognize into his cell phone. I remember thinking: That’s a Slavic language, but I sure couldn’t tell you which one. It’s actually good that I can’t understand it; if it were English I’d be distracted.

When he hung up, I asked, “I like the sound of that language – what is it?” “Bulgarian,” he explained.  A bit later in the conversation he mentioned, “I’m connected with dozens of people in my country who are working hard to forward the cause of renewables.”

“Hmmmm. I’m wondering if I could introduce one more,” I smiled.

Well, I just learned that the two – Gerolf and Dr. Boris Monahov, Director of the International Lead Zinc Research Organization — are meeting in Sofia later in August, and I’ll let you know what comes of it. 

In any case, I’m glad to report that I’m a bit less lost when in comes to current events in Bulgaria; I’ve come to learn that it’s a remarkably stable, sane — and beautiful place. 

Now, if my father were here, he’d ask, “Craig, are you going to make any MONEY from this?” and I’d have to admit the truth. “It’s extremely unlikely in this case, Dad. Sometimes there’s a way to make a buck, and sometimes you take an action just because it’s a cool thing to do. This falls into the latter group.”

　

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