Market Indicators

Each week I am going to publish key indicators as to why the New Energies sector is emerging as the economic driver in today's 21st Century global marketplace.


News Events & Announcements

• Cleantech venture capital investment totals $903m in Q1 200719/04/2007, representing a 16.5 per cent increase over the $775m invested in Q4 2006 and a 42 per cent increase over the $634 million invested in Q1 2006, according to Cleantech Venture Network researchers. North American cleantech venture capital investment reached $731m, an increase of 19 per cent over Q4 2006 and 42 per cent over Q1 2006 investment. For Europe it was $172m, representing a six per cent increase over Q4 2006 and a 43 per cent increase over Q1 2006. Energy generation took in $398m in North America and $98m in Europe.
• The Toronto Star reports that a California startup company (OptiSolar) has just received approval from the Ontario government to build a 40-megawatt solar farm in Sarnia.
• Merrill Lynch forecasters report solar cell production growth about 35% - 40% in 2006, the numbers clearly show that the market is healthy and growing strongly with demand forecasts with continued production growing at 35% in 2007.
• Frito-Lay NA, a division of PepsiCo, has approved construction of the largest business-owned, (PV) power system in Arizona, genrating 201-kilowatts and covering 27,000 square feet of roof space at the company's Arizona Service Center in Phoenix.
• Wells Fargo has released its Corporate Citizenship Report, detailing progress in 10 key areas, including: environmental stewardship, Wells says it has offset 42 percent of its greenhouse-gas emissions from electricity and became the largest purchaser of renewable energy in the U.S.
• Baxter CEO Robert Parkinson, Jr. announced that Baxter has purchased renewable energy certificates equivalent to 15.5 million kilowatt hours. Parkinson also said that Baxter has established new standards to reduce greenhouse gas emissions at all of its facilities, resulting in savings and cost avoidance approaching $10 million a year.Baxter purchased the renewable energy certificates from Constellation NewEnergy.
• Unlike “early adopters,” people who purchased Prius automobiles did not feel that they paid a premium for owning an environmentally friendly car, they also saw clear financial benefits study by Topline Strategy Group, the study concludes that the economic case for hybrid purchases is stronger than typically discussed.
• The average fuel efficiency of U.S. cars and trucks sold in the 2006 model year showed no improvement from the year before at 25.4 miles per gallon, as increased sales of fuel-thirsty cars offset slightly more efficient trucks, according to federal data.
• A bill introduced yesterday in the U.S. House of Representatives would provide financial support for research and development (R&D) of energy sources based in oceans, rivers, lakes, streams and other waterways.
• Solar PV Takes Off at U.S. Air Force Base where MMA Renewable Ventures will fund, own and operate Nellis Air Force Base photovoltaic system through third-party financing. The Nellis solar power plant is the start of the way ahead for future, construction on the system is now under way in the Mojave Desert.
• Ford has promoted Susan M. Cischke to senior vice president to lead the company’s sustainability efforts, her new title will be senior vice president, Sustainability, Environment and Safety Engineering, will report to Ford President and CEO Alan Mulally.
  
  Industry & Technology Developments

• SRI International has licensed technology to produce lower cost solar-grade silicon to three Asian companies that promises to make solar-grade silicon for $14 per kilogram, less than half the price of competing technologies.
• CleanBreak reports that reliable sources confirmed that battery maker A123Systems has quietly acquired Concord, Ontario-based Hymotion, which is one of the leading experts on retrofitting hybrid-electric cars into plug-in models.
• Kleiner Perkins Caufield & Byers, a venture capital firm, has opened operations in China, formed a $360 million fund to invest in Chinese startup companies to assist Chinese high-growth industries, including technology, Internet, media, wireless communications, new consumer areas, healthcare and green technology.
• Ballard, fuel-cell maker rolls back losses as revenue rise.
• Ocean Power Technologies, Inc. (OPT) announced the pricing of its U.S. initial public offering (IPO) of 5,000,000 shares of its common stock at a price to the public of $20.00 per share.
• 21 renewable wind energy facilities selected to power New York
• European wind power companies growing in U.S. where new worries about the environment, technology advances and tax breaks extensions are empowering European wind energy companies to try their luck in the United States.The U.S. has led the world in installing new wind turbines for the past two years, but it still ranks behind Germany and slightly below Spain in wind power production, with policies to encouraging energy alternatives have led companies with years of experience in Europe to invest in U.S. shores, challenging both the U.S. market leaders.
• IPL to buy Iowa wind farm and turbines from Clipper Wind Power, (IPL), a subsidiary of Alliant Energy (NYSE: LNT) announced today that it is buying the Eclipse wind farm in western Iowa from developer Clipper Windpower, announced plans to equip the facility with massive new turbines built by Clipper, the Eclipse site near Adair, Iowa has the potential to produce as much as 200 megawatts (MW) of power.

This is merely the tip of the iceberg this week but the conclusion is simple, big money is propeling the cleantech/new energies sector forward as firms and investers find economic incentives to apply these new technologies.

Introduction

This is the first post of what I envision will be regular contributions for those who find the subject of Cleantech or the New Energies field important and interesting. My contribution and expertise lies with executive search where I practice my trade with the Woodmoor Group of senior level recruitment (see bio). Specifically I have worked the embodiment of career in emerging technologies and growth companies spanning the spectrum of hi-tech and services. In 2006 I couldn't help but notice that the financial capital markets had finally found this long-running embryonic market as "the place" for long term venture investing. Each day a new firm emerges on the scene seeking senior management teams to execute exciting business plans that will result changing the business and social landscape as Information Technologies (IT) and Telecommunications (telecom) did in the 1980's and 1990's.

The best analogy of the economic and social forces at play right now with the energy sector mirror similar forces that were present in 1980 with the the IT and telecom sector best described as the hi-tech field. When the IBM PC challenged the Apple II were unveiled to the market labor costs were pressuring businesses and society with stagnant productivity and large inefficient systems throughout. At that time the computer technology was big, limited and most of all costly. Telecom was just beginning to unbundle itself from the throws of long term monopoly that primarily served the interests of those business owners.

Fast-forward ten years and the hi-tech revolution was in full swing where software and networking were rapidly changing the world and business/labor structures with automation and productivity gains as never seen before. By 1995 the famed Alan Greenspan recognized the power of computer automation by pointing that it was providing ever increasing productivity gains for both big and small business. And just sixteen years after IBM used a Charlie Chaplin character to introduce the IBM PC on the Super Bowl the world was in the midst of the dot.com balloon fundamentally changing the way good and services would be marketed and sold.

Over the next twenty years we will experience a similar revolution in business and society with Cleantech and the New Energies sector. Fossil fuel costs are on an unabated run escalating in cost and demand as both the global economy continues to bloom while production is stagnant and environmental concerns and costs continue to rise. It is a dangerous spiral. We know that Global Warming is real but do not know the eventual long term effects. Oil production is almost set at 86 billion barrels a day while worldwide demand is hovering around 84 billion barrels a day. The United States, China and India continue to increase their demands. Soon demand will eclipse supply and consequently the Federal Government's strategic push to rapidly develop E-85 fuels from ethanol. But that is only a stop gap effort. Like the escalating labor costs of the 1970's and early '80's business found that investing in capital technology to replace direct labor costs was the competitive pathway to survival and success. This even though business spent large expenditures in hardware, software, training and support services, even 3rd party consulting services. In turn we will see the same investment by companies and individuals into renewable and alternative energy to replace the high direct costs of fossil fuel energy over the next 20 years.

What does all this foretell for those seeking new careers? Opportunity is the only word that comes to my mind having worked through the last era of change. Initially the growing and emerging new companies will seek managers who will have experiences outside the field until the marketplace begins to catch up with experienced and educated professionals. The other opportunity is to be directly engaged with companies based on rapid growth and new marketplaces. Each energy platform (alternative or renewable) will mean an entire sub sector of supporting businesses. There will also be opportunities with convergent technologies in and out of the new energies sector.

As it stands now many emerging new energies firms are generally at three different stage of develop; post IPO yet still small or mid-sized cap except for two technology conglomerates, GE and Siemens, pre-IPO small-cap or venture based. In most cases the management teams are still relatively flat and focused on technology and business develop. Private equity and venture capitalists have been making placements in ever increasing investment levels each quarter since 2004 where in 2006 it appears that almost $2B was invested in the market. Early analysis state that the investment community invested over $900M in the 1st quarter of 2007. North American and European venture investment in the Cleantech category totalled $903m in the first quarter of this year, representing a 16.5 per cent increase over the $775m invested in Q4 2006 and a 42 per cent increase over the $634 million invested in Q1 2006, (according to Cleantech Venture Network researchers.)

Each week I intend to update the reader with pertinent news and anecdotal information gained from conversations with executives and investors engaged in this exciting field.---Robert