US State of the Union 2014: a backseat for renewable energy

New Hampshire, USA-broader domestic social issues and international policy, the by the "a permanent war Foundation" moves away took center stage in President Obama State of the nation (SOTUS) last night. National energy policy, renewable energy, including largely took a back seat of the President major topics of conversation: contractor, hiking the minimum wage for Federal Republic of pushing immigration reform final, strong drives in employment and training, education, pensions and health.

After a short first Leckerbissen--how more now is oil made at home as we buy-from the rest of the world for the first time for almost 20 years - domestic energy was mentioned, as President Obama on the success of his "all the above" not until the half hour mark energy strategy. One reason, he said, is due to natural gas, which he called "the bridge fuel, which makes our economy" with reduced CO2 pollution, and he promised to support what he described as almost $100 billion invested using the natural gas in new factories.

The other reason is that renewable energy and specifically the United States ' global leadership in solar, he said, indicate that a new home or business all four minute-Sol aryanised calls and each Panel proposed in lieu of a worker, whose job can be outsourced." (These jobs grow ten times national average, a just-released study found.)

President Obama calls to use attention to the tax reform specifically for renewable energy. "Let us continue that progress with a smarter tax policy that stops, the $4 billion per year to give fossil fuels industries, that do not require it, so that we can invest more in the fuels of the future," he said. This was probably an allusion to the proposed US energy tax reforms, but how much these proposals be modified or revised, and how quickly a Congress election year, probably not is known be for several months. Nevertheless, enough was a mainstay for different groups to urge more action in their post SOTUS reactions. Peter Kelley, AWEA's Vice President of public affairs, noted how far energy prices down come wind and their contribution to the electricity network has increased, and both should continue "as long as there are more policy support."

Finally, President Obama moved the discussion to the more general question of climate change again, pointed out, the nation that in the past eight years its total carbon pollution "more than any nation on Earth" has reduced the United States he underlines commitment to renewable energy, the President acknowledged that "This change and will not happen to a clean energy economy overnight" and vague pointed out, that "it requires some difficult decisions along the way." "" But he claimed that climate change is fact, and urged that when our children look us in the eye and I want questions whether we have done what we could that, all we can say, "Yes, we have."

Here is the official transcript of the President's speech.

The last two SOTUSes had a focus on renewable power generation, including further development on federal lands (which continues to happen) and a call to action against climate change (which is materialized by the middle of the year in new clean air and power plant proposals) emphasised. He proposed, with royalties from drilling on federal land for the financing of renewable energy development of biofuels, batteries, natural gas as fuel, but little happens there - although a version of this plan by solar energy industries Association (SEIA) as a possible solution for the trade case floated United States and China have been using to finance a piece of profits from products imported to domestic solar manufacturing.

Republican responses on the SOTUS talking energy points calls for further development of skills domestically, criticism of the Government regulations for drilling and exploration. Speaker John Boehner didn't hit energy production despite Obama's Government, because it has become. Republicans also pointed to the KeystoneXL pipeline, no mentions in the President's speech, as another example to get that could secure more America's energy independence.

And finally: in a cold war origin tradition, a member of the Cabinet is kept Capitol Hill during the SOTUS called"survivor" with unfathomable disaster, which eliminated the rest of the Government. This year the Department of Commerce was none other than Minister of energy Ernest Moniz, now created its place as 12th in line to the Oval Office.

View the original article here

A Cleantech-State of the Union

With October now upon us, data providers are beginning to issue their preliminary analyses of cleantech investment in the third quarter of 2012 that just closed. This quarter, the Clean Energy pipeline service of London’s VBResearch is the first to weigh in, counting cleantech venture capital & private equity investment (excluding buyouts) as approximately $1.7 billion.

Data from other providers, like Dow Jones VentureSource, Bloomberg New Energy Finance, PwC/NVCA MoneyTree, and Cleantech Group will follow in the coming days. No two providers’ numbers will be the same, given differences in how they define cleantech and what exactly they track.

Based on latest quantitative and qualitative data we at Kachan & Co. have access to, here’s our own analysis of the state of the union in the global cleantech market, and why.

Consider the following a snapshot of the current health of the cleantech sector, informed by — but not simply an analysis of — the third quarter numbers.

3Q12 investment is expected to be approximately the same as the one previous. Venture investment in cleantech is going to be down overall this year over last.

The second quarters of the year in cleantech are usually down, if you look at historical data — so a relatively poor 2Q12 was no surprise — but third quarters are historically usually the best quarter of the year for global cleantech investment. Based on deals we’ve seen, we’re expecting about $2 billion in venture investment in global cleantech in the third quarter of this year once all the data is in, and that sometimes takes a few month after the quarter closes. $2b is not great, as compared to previous years on record, but it’s okay. It's not as if cleantech investment has halted. Cleantech is still one of the world's dominant investment themes.

For interest, some of the largest deals of the quarter:

$200 million to China Auto Rental, efficiency/collaborative consumption, Beijing$136 million to Alarm.com, efficiency/smart grid, Virginia$104 to Elevance Renewable Sciences, biochemistry, Illinois$104 to Fiskar Automotive, transportation, Irvine, CA$93 million to Element Materials Technology, advanced materials, the Netherlands
Venture numbers aren’t just down because of natural gas.

Last year, we predicted global venture and investment into cleantech to fall. Not dramatically. But we expected cleantech venture in 2012 to show its first decline following the recovery from the financial crash of 2008. Why? Three big reasons: the lag time of negative investor sentiment towards cleantech that started in 2011, waning policy support for cleantech in the developed world and an overall maturation of the sector that’s making it arguably less dependent on venture capital as corporations take a more significant role.

With the continued low price of natural gas undermining clean energy innovation and project deployment, it should be no surprise that cleantech metrics are down.

But while the price of natural gas is one of the reasons cleantech is depressed, it doesn’t mean the end of the line for the whole of the space. Natural gas is eroding the compellingness of clean energy, but cleantech is more than just energy. Cleantech, as defined, is much broader, and includes transportation, agriculture and other categories that may actually see benefit from lower natural gas prices.

Plus, there are natural gas innovations that could be key to the success of future renewable energy. Renewable natural gas — gas from non-fossil-based sources — could end up the most important form of renewable energy, because it could be distributed in today’s transmission infrastructure, and help utilities generate baseload renewable power without solar or wind, or expensive renewable energy storage. Kachan & Co. has published a report in conjunction with a gas company that profiles seven firms at the forefront of generating large quantities of pipeline-grade renewable natural gas from biomass, based in Germany, the Netherlands, Norway, Switzerland, the U.S. and Canada.

With venture down, pay attention to the increasingly important role of corporations in cleantech. Large global multinationals are increasingly participating as clean technology investors, incubators and acquirers. With the largest companies worldwide sitting on trillions in cash, the climate is right for increased corporate multinational M&A, investment in and purchases from cleantech companies. Corporations have become the source of cleantech capital to pay closest attention to going forward.

Investors are worried about returns in cleantech; some are distancing themselves from the sector. Will that leave governments and large corporations to help companies through the valley of commercialization death?

Not all cleantech investments have worked out as planned. Investors are still waiting for their cleantech portfolios to produce expected returns. Why? Many cleantech investments are still sitting in managers' portfolios waiting for an exit.

The cleantech exit environment is indeed suffering. The North American and European IPO markets remain shut, while public exits are alive and well in China. There were 9 clean technology IPOs raising a total of $1.79 billion in 2Q12, the last quarter for which data is publicly available at this writing, and ALL of them took place in China. We first raised alarms about this trend a couple of years ago. It’s the major area of concern for investors currently. And cleantech mergers and acquisitions are still depressed. Global cleantech M&A activity totaled $16.3 billion in 3Q12, according to VBResearch. That’s a 68% increase on the $9.7 billion in 2Q12 but a 30% decrease on the $23.2 billion recorded in the same period last year.

Of the capital that is being deployed, less of it is going to early stage deals. Venture investment in early stage cleantech rounds fell to a mere $382 million in 3Q12, the lowest quarterly volume since 2009, by today’s Clean Energy pipeline numbers. The large year-on-year decrease was caused by an absence of large solar deals, according to the company.

Limited partners (LPs), the institutions that fund venture capital firms, are less enthusiastic about cleantech today. Why? Mixed returns. The 5-year old CalPERS Clean Energy and Technology Fund, a fund-of-funds-type program, had a net internal rate of return since inception of -10% on $331.7 million invested as of Dec. 31, 2011, the last period for which data is available, according to data obtained by Pensions & Investments. Contrast that with the performance of Riverstone/Carlyle Renewable and Alternative Energy II. While only some $172 million of its $300 million commitment in September 2008 has actually been invested, the pension fund has seen a 12% net IRR from the investment as of Dec. 31, 2011. CalPERS' $25 million commitment to VantagePoint CleanTech Partners LP, made in 2006, has earned a 12.4% net IRR—again, according to Pensions & Investments.

Most cleantech investors will have heard of Moore's Law. Now some are learning, if they hadn’t known of it by name previously, of Sturgeon's Law, that ‘90% of everything is cr*p.’ Which, unfortunately, but clearly, also applies to cleantech investments.

It begs the question: If venture investing is down and large corporations are taking more of a role in fostering cleantech innovation, can they and governments (which we argue should get out of the business of funding cleantech companies) be trusted to support emerging cleantech innovation as it struggles to reach meaningful commercial scale and availability? Increasingly, venture investors are proving reluctant to play this role in cleantech, given the large sums required.

What will propel cleantech’s success?

While much has been written about how global policy support has waned in cleantech, a silver lining is to be found in Japan. Japan’s new feed-in tariffs are among the most impressive the planet has ever seen, even more so than Germany’s former solar support. Japan is showing signs of helping breathe life back into the solar sector in an important way (download this free report that details Japan’s newfound commitment to cleantech.)

Say what you will about the murkiness of the future of clean energy, the fundamental drivers of the wider cleantech market persist. The sheer sizes of the addressable markets many cleantech companies target, and the possibilities for massive associated returns, will continue to spur innovation and support for the sector. Why? The world is still running out of the raw materials it needs. Some countries value their energy independence. More than ever, economies need to do more with less. Oh, and there’s that climate thing.

Cleantech is the future, undeniably. It can’t NOT be. We need to reinvent every major infrastructure system on the planet, from energy to agriculture to water to transportation and more. And we have to live more efficiently to accommodate more people than ever. Large corporations see record opportunity for profits in doing this — and that’s what’s going to be the biggest driver of clean technology, we believe, institutional investment hiccups aside.

Don’t focus too much on quarterly ups and downs.

Finally, note that quarterly numbers are a good leading indicator of transitions. But there’s a danger in reading too much into quarterly figures, and lumpiness of individual quarters, which are easily skewed by large individual deals.

This article was originally published here and was reposted with permission.

A former managing director of the Cleantech Group, Dallas Kachan is now managing partner of Kachan & Co., a cleantech research and advisory firm that does business worldwide from San Francisco, Toronto and Vancouver. Kachan & Co. staff have been covering, publishing about and helping propel clean technology since 2006. Kachan & Co. offers cleantech research reports, consulting and other services that help accelerate its clients’ success in clean technology.

View the original article here

President Obama State of the Union address promotes clean energy

President Obama calls for clean energy tax credits and a clean energy standard January 24 in his annual State of the Union address.
IMG credit: Pete Souza, White House

President Obama calls for clean energy tax credits and a clean energy standard January 24 in his annual State of the Union address. Said: "I go not away from the promise of clean energy", the President surrounded the issue of international competition, pledging not to "cede the wind or solar or battery industry after China or Germany because we refuse to the same commitment here." He announced also on two initiatives promote the deployment of clean energy technologies.

"I am directing my Government permit the development of clean energy on enough public land to 3 million households, making", President Obama said. "And I am proud to announce that the Department of Defense, working with us which energy in history make the world of's largest consumer of energy, one of the greatest obligations to clean - with the Navy enough capacity by a quarter of a million makes buying apartments a year."

President Obama stresses also the need for more energy efficiency, waste of energy proposes incentives to may update their homes to manufacturers in their factories to eliminate, and the company cut its energy costs by $100 billion over the next ten years. The President referred in addition series tax incentives, the domestic manufacturing clean energy technologies, including an extension of the advanced energy manufacturing tax credit would help. Find data sheets to the President on the website of the White House and the White House proposals on energy and production under the president's State of the Union address.

View the original article here