Clean-tech sector: A quick review of 2007 and 2008

2007 was undoubtedly the year of clean-tech. The debate around global warming frequented the front pages of major newspapers, and reached our homes and dining tables. There were too many exciting clean-tech related news to recount, and there were a few disappointments as well. I have been asked several times if there is anything ‘substantial’ to be expected out of this clean-tech boom, or are these just science fair type curiosity projects, but on a larger scale and consuming tons of public sector funding? While many clean-tech blogs are highlighting technologies to look out for in 2008, ‘Automotive News’ recently published a tongue-in-cheek list of 10 potential alternative fuels that included chicken droppings and cheese.

I remain optimistic that what we are witnessing is not just a shift in our understanding of the need for cleaner energy sources, but also a unique coming together of science, engineering, health, business, investor and public policy stakeholders that ultimately need to work closely together to find winning solutions. This is no science fair – this is evolution in action. An evolution of technologies and policies, and of our abilities to incorporate better ones into our lives.

Here are some thoughts that stuck with me through 2007, and what I am expecting in 2008. Would love to hear what you think about these.

2007

  1. Ethanol bubble bursts – A few failed IPOs, the spectacle of rising food prices around the world, esp Mexico, and a realization that ethanol actually gives lower fuel economy provided enough material to disillusion even some of corn-ethanols strongest supporters. On the issue of technology trajectory for ethanol, it seems cellulosic ethanol has not yet moved fast enough to be commercially viable in the short term.
  2. Clean coal continued to garner attention, esp as gasification projects got major funding for building demonstration projects. But I am still looking for serious and convincing plays in this sector. There is much potential here but people seem scared of venturing too far into the dirty coal business.
  3. CO2 sequestration debate seemed hot at the beginning of the year but went into a lull later on. Is there any certainty around the geological entrapment of CO2 if it is buried deep under our oceans of earth? And what happened to all the excitement around CO2 conversion to fuel via algal blooms? The projects seem to be hiccuping for now, but hopefully it is only temporary.
  4. Federal CAFÉ rules changed for the first time in decades. For the first time we saw a clear legislative change to improve our transportation consumption of energy. As high mpg is required of vehicles, clean diesel are set to enter the USA in a big way. All major car manufacturers are gearing up for the only practical way to make a significant shift in our fuel economy, i.e. move large vehicles in their portfolio to diesel platforms.
  5. Solar PV got big, huge, infact enormous! But there remains a big question: Is this sustainable in the long run? Is there a PV bubble happening now, and is the process of manufacturing PV cells really clean given that it needs high energy inputs which are currently coming from coal and natural gas?
  6. Khosla and Kleiner Perkins became household names, even in distant lands like India and Greece. Their partners became demi-gods to the nascent clean-tech/energy/environment community. As smart investors they placed lots of bets – a few may be questionable but certainly covering a broad range of technologies and with a vision for a cleaner future.
  7. Google entered clean tech in a big way. And these days people believe anything Google touches turns to gold. First with their support of Plug in hybrids, then the solar PV installations at the Google-plex, and finally the big bang RE<C investment fund.
  8. Flex-fuel frenzy faded. Advertisements around yellow caps were all the rage before a realization among consumers that there was little E-85 available, and questions were already being asked if it was a cleaner and safer fuel. Biofuels remained in the realm of complicated biology in 2007. I would like to someday tally how many biologists and agriculturalists are now sitting on advisory boards of bio-fuel companies, and how many senior executives from il companies have head hunters calling to join startup entities? Speaking of biofuels: there were some astronomically high valuations of biofuels related technologies – remember the $470 million series B valuation for Amyris biotechnologies?
  9. A123 and its Li-phosphate ion batteries made some big waves in the field of energy storage technologies. I continue to be impressed by how well they have done. Electric vehicles seemed ready to enter the market place with new battery technologies until Toyota Prius decided to stay with older technologies, and Tesla’s delay announcements became too frequent for comfort.
  10. Nobel Prize goes to Al Gore and IPCC. What better recognition of decades of word by climatologists, scientists, tree-huggers and other good people around the earth to save the very eco-system we depend on for our survival. A befitting way to celebrate the year that will always be remembered as the tipping point in the climate debate.
  11. Oil hits $100/barrel. The year ended on this double-edged sword of high oil prices. The price of oil is showing no signs of weakening, and the dollar seems to continue to weaken! Will the demand for oil be elastic? Will this really change how we think about our carbon foot print? Does this give the breathing room needed by clean-tech companies?

2008

  1. Solar-thermal and concentrated solar will get attention because they deserve it for their low cost and ease in scalability.
  2. Butanol and bio-butanol will get traction despite the disappointments around ethanol. These fuels have a better energy content, are easier to transport, and better utilize existing infrastructure. If 2007 was the year of biology and bacterial developments for cellulosic conversion of biomass to fuel, I believe 2008 will be the year for inorganic catalysis and commercial chemical engineering sciences. Such just seem easier and more scalable to me, but Biology has always been scary for me.
  3. Clean diesel vehicles will not only become available (e.g. BMW in late 2008) but will certainly turn peoples’ heads for their low emissions, high fuel economy rates, and better performance.
  4. Economic models that can support distributed energy generation, such as solar and wind, will become critical for the success of the many technologies currently in startup mode. Can they actually make money without subsidies, and can they compete if price of oil drops?
  5. New technologies continue to come out of university labs, research institutes and personal garages. I expect interesting developments in the field of thermoelectric power generators, wind-energy storage, ultra capacitors, waste to energy conversion technologies, (O)LEDS, and clean coal.
  6. Significant funds have been raised for investments in the clean tech sector. From VC’s raising dedicated clean energy funds to reports of a $750 million fund set up by OPEC! Where are the deals coming for this much money to be effectively invested? Will the blurring of line between technology investments and project financings stop?
  7. Pay to cover your carbon foot print schemes are just crazy in my opinion. Will they go away or will they stay as annoying clean-tech movement artifacts.
  8. Will there be an introduction (or at least a national discussion around) carbon tax or a CO2 cap and trade system? Probably not, at least not until the new government takes over in the federal capital.
  9. CNG fuel continues to pique interest in governments from developing countries. Will this take hold as a cleaner fuel? Will there be a CNG shortage worldwide, raising prices, leading to complicated geo-political situations (Doesn’t Iran have the largest reserves of natural gas)?This could be a positive for technologies that produce syn-gas or natural gas as products!
  10. Clean water remains a big global problem but technologies are too expensive, and cannot be afforded by the poor of the world. Will business models finally emerge that will be affordable and profitable? Bottled water remains a dark spot on the clean-tech industry. How can that be sustainable in any way?
  11. Severe energy shortages in the developing world cripple their economies. Do renewables have anything to offer to these countries? They have a clean slate as far as infrastructure deployment is concerned, so one could make a strong case for investments in renewable energy installations if the economics made sense. Where should they invest their limited funds? In the same vein, what should they be teaching their students? Are traditional science and engineering disciplines well suited to solve these kinds of inter-disciplinary problems?
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7 Responses to Clean-tech sector: A quick review of 2007 and 2008

  1. […] Clean-tech sector: A quick review of 2007 and 2008By Bilal Zuberi Clean coal gets some attention, esp as gasification projects get major funding, but I am still looking for serious moves in this sector. There is much potential here but people seem scared of venturing into the dirty coal business. …BZ Notes! – https://bznotes.wordpress.com Posted in Industry News […]

  2. […] Clean-tech sector: A quick review of 2007 and 2008By Bilal Zuberi Clean coal gets some attention, esp as gasification projects get major funding, but I am still looking for serious moves in this sector. There is much potential here but people seem scared of venturing into the dirty coal business. …BZ Notes! – https://bznotes.wordpress.com Posted in Industry News […]

  3. rnopporn says:

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  4. sandrar says:

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  7. Loving obama’s passion but I’m doubtful this initiative will help the economy at all during this next year. I know i’m pessimistic, but I think there is a lot more bad to come before we see the economy recover.

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