Where is the Green in Greentech?
LaunchSquadders Amy Neal and Sunshine Mugrabi attended the Dow Jones Alternative Energy Innovations conference held at the Sofitel in Redwood City last week. The show had a great line-up of speakers with a panel of heavy hitters to kick off the event, including Ajit Nazre, partner at Kleiner Perkins Caufield & Byers, and former California controller and manager of the Westly Group, Steve Westly. Not surprisingly, the economy and fears of a “green tech bubble” dominated conversations. No one seemed to agree on smart green technology investments right now, but everyone was aware that the future is murky.
A lot of the talk was about looking beyond areas of green tech that are already saturated, such as solar and wind power, to sectors of clean tech that have actually been under-funded, such as water technologies and manufacturing companies throughout the green tech supply chain.
Amy’s take: I found Wall Street Journal reporter Rebecca Smith’s interview with Michael Peevey, president of the California Public Utilities Commission, a particularly intelligent and enlightening discussion of California’s green initiatives in light of the economic downturn and the federal government’s “don’t call it a bailout” bill. Smith asked if California was at risk of an energy shortage given the efforts to push renewable resources before traditional power, but with a bad economy increasing the chances of green companies not getting the funding they need to meet energy production and growth goals. Peevey asserted that we have every reason to be optimistic about California’s renewable energy future. He’s also confident that government incentives will provide more opportunities for smaller companies (as opposed to getting pushed out by the big utilities) because incentives have been in place for some time and larger energy companies haven’t taken advantage of them to date and are often slow to change.
Given the universal agreement on the need for immediate improvements in energy efficiency, I left the conference feeling even more confident that LaunchSquad client Optimal Technologies is in a unique position to be a leader in the green energy movement with its AEMPFAST platform, which can optimize the electrical grid now. AEMPFAST serves as a central “brain” for the electrical grid, providing unprecedented visibility into all parts of the system and has been proven to improve energy efficiency by at least 10 percent. The technology has the potential to completely eradicate blackouts, significantly reduce costs for energy producers and end-users, create more reliable and efficient power and lower greenhouse gas emissions. The company is funded by Goldman Sachs and I’m looking forward to seeing the impact their technology will make.
Sunshine’s take: What a difference a month makes. Back in September, the mood at another similar conference – West Coast Green – was one of near euphoria. At that event, crowds packed the San Jose Convention Center to rub shoulders with Al Gore, David Suzuki and other luminaries, and there was a sense that, as Al Gore so eloquently told the assembled crowd, “Instead of a financial bailout … we need to bail in renewable energy and green building.”
Yet, by the time the Dow Jones conference came around last week, it was clear that a certain amount of green fatigue had set in as the reality of the financial meltdown started to hit home for clean technology companies. While the federal bailout contains tax credits and other major incentives to help push forward the move toward renewables, there is also a sense that the pipeline of cash from venture investors for start-ups that are in this space is starting to slow–or, at the very least, that valuations will start to decrease.
Still, there is plenty to suggest that the green technology boom (or, if you’re a pessimist, bubble) isn’t going to tank any time soon. Speaking to the assembled crowd, Kaj den Daas, Chairman of Philips Lighting North America, said he believes that the future in his industry belongs to green innovations like energy efficient LEDs, promising that his company is very much on the lookout for companies to acquire.
Even more to the point, there were dozens of start-ups giving presentations to showcase their innovations in just about every area of green technology, from cellulosic sugar to fuel cells to thin film solar to tidal tech. Every seminar room I poked my head into was close to full, with potential investors and acquirers scribbling away on notepads and asking pointed questions. All of which, to me, bodes well for the continued greenification of clean tech.
This post was co-written by Amy Neal and Sunshine Mugrabi and is also posted (with a few edits) on the GreenAmy blog.