Clean technology in the United States is at a critical point in its development. Consumer and commercial demand for clean, green energy and products is well past the tipping point, creating an increasingly diversified market that is drawing billions of dollars in venture capital and federal investment funds, and affecting every major industry in the country.
“A few years ago, [clean-tech investments in] transportation mostly consisted of biofuels. Today, clean tech is transforming the entire value chain,” said Ira Ehrenpreis, chairman of the seventh annual Clean Tech Investor Summit, during his opening remarks at the event last month. “We have hybrids, electric vehicles; we’re seeing clean electricity from wind and solar now coupled with new-generation storage systems.”
At the same time, many at the conference pointed to the lack of a national energy policy as a major drag on American momentum in the sector and a signal of market instability for investors.
“We have underinvested in clean energy and the energy infrastructure literally, and we also lack a comprehensive map for the way forward not unlike what we put together before we built out the national highway system,” said Jonathan Silver, executive director of the U.S. Department of Energy’s Loan Guarantee Program, which is now threatened with total defunding by proposed Republican budget cuts. “The wind blows and the sun shines in both red and blue states,” Silver said. “It’s not a political issue; it’s a global competitiveness issue.”
The summit’s mix of cutting-edge innovation and bottom-line perspectives is at least part of the reason it has become an increasingly important event for clean-tech investors and executives, who come for an update on emerging trends in the field.
Land development issues were not a major thread at the event—held yearly in Indian Wells, California—but the interconnections between land use and topics such as transportation, energy efficiency, and renewable-energy development are implicit and, as Ehrenpreis noted, potentially transformative.
Cathy Zoi, assistant secretary for energy efficiency and renewable-energy development, did speak about key programs at the Department of Energy (DOE) that could have short- and long-term effects on the nation’s building and housing stock. Federal stimulus dollars have funded research initiatives, such as the Greater Philadelphia Innovation Cluster’s work on energy-efficient building methods, and given new life to existing programs such as the DOE’s home-weatherization program, which got a $5 billion boost to retrofit homes of low-income residents. “Nobody thought this particular sector would rise up to meet the challenge,” Zoi said. “As of December 31, 300,000 low-income people are feeling more comfortable with lower energy [bills].”
Roger Platt, the U.S. Green Building Council’s senior vice president for global policy, during an interview with Urban Land online magazine pointed to the many clean-tech opportunities spawned by green building. About 40 percent of all the projects registered for Leadership in Energy and Environmental Design (LEED) certification in the past six months have been outside the United States, he said.
“The Commerce Department treats LEED as an export,” said Platt, who also chairs ULI’s Responsible Property Investing Council. “LEED . . . has the effect of creating whole industries, often billion-dollar industries around whole credits, and so whether you are building a green building in Amman, Jordan, or Mexico City, there are going to be opportunities for those who have created technologies that help people achieve these green points.”
Ehrenpreis also sees huge international potential—if policy makers provide the needed leadership. “Developing nations today have the vision to leapfrog old energy technologies and build renewable-energy infrastructures,” he said. “Consider the growth opportunities that will emerge when politicians collectively embrace clean technology.”
Other conference highlights included the following:
Transportation: Tesla Motors CEO Elon Musk announced his company’s plans to roll out increasingly affordable electric cars over the next four years. With a driving range of more than 300 miles (480 km), the Tesla Roadster has broken the long-distance barrier for electric cars, but at $109,000 it is still priced for an elite clientele. The Model S sedan due in 2012 will be priced at $50,000 to $100,000, Musk said, followed by the Model X SUV and a third-generation production model, to sell at $30,000, by 2014.
“By 2030, a majority of all new cars in the United States will be pure electric, and 20 years after that, the vast majority of cars on the road will be electric,” he said. “Our aspiration is to make the best car on the road. You want people not to have to accept a bunch of negative things to be environmental; you want to be the best product, such that even if someone doesn’t care about the environment they would still buy it.”
Natural gas: Both natural gas and nuclear power are being touted as bridge technologies to transition the United States from its ongoing dependence on fossil fuels and to cleaner, renewable energy sources. Carl Pope, chairman of the Sierra Club, set out short- and long-term visions for a change-over using the sea of natural gas now available to the country from the Marcellus shale oil beds running from New York to Virginia. In the short term, i.e., five to ten years, existing natural gas plants need to be run more hours, he said.
“We have unused, in some cases brand-new plants that have never operated—highly efficient and very cheap because they’ve already been built. Natural gas could displace probably 30 percent of our existing coal-fired electrons within six months; we could do it that quickly,” he said. Over the longer term, Pope wants to replace urban natural gas peaker plants, used to generate electricity during times of peak demand, with natural gas–powered fuel cells. “Fuel cells that run on natural gas can generate 24-hour base-load power for the urban areas and take off the pressure to bring in electrons from hundreds of miles away,” he said. “Looking at the system as a different kind of system is essential to getting the partnership of natural gas and renewables right.”
Nuclear: Peter Schwartz, chairman of Global Business Network, a scenario–planning firm, laid out the argument for nuclear in stark terms. The recent onset of extreme weather disasters—which killed hundreds of thousands of people last year—clearly signals that climate change is a real and present phenomenon, and solar and wind cannot be brought online fast enough to slow down carbon emissions. American technology and views on nuclear are out of date, he said.
“We have not started a nuclear plant in the last 30 years,” he said. “Over time, the technology options have increased; there are better choices being pursued elsewhere in the world today—designs that range from about 250 megawatts all the way down to 10-megawatt, small-scale modular plants. The options are increasing because the demand is increasing.”
Ralph Cavanagh, director of energy programs for the Natural Resources Defense Council, provided the counterargument, saying that nuclear simply doesn’t pencil out in the world’s competitive energy procurement market. “We need a functioning system of long-term resource procurement; we need the utilities empowered to make ten- to 20-year commitments to the best options available through competitive procurement,” he said. “I don’t want the world energy markets to run only on spot markets, and long-term utility procurement is very much under challenge in the U.S. and elsewhere.”
