Post on 05-Jun-2020
Future Vision of Green EnergyPresented by Scott Sandell | October 2010
© 2010 NEA. All rights reserved.
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Quickly, an introduction
»Who am I?Scott Sandell, General Partner at NEA
Joined the firm in 1996
Previously at software startup (C-ATS), Microsoft, and Boston
Consulting Group
Focus on Information Technology and Alternative Energy
Also co-lead NEA’s China practice and Global IT Team
Member of NEA Management Committee
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A snapshot of venture capital
Significant impact on the economy» VC-backed companies accounted for 12.1 million jobs and $2.9 trillion in revenue in the U.S.
The venture capital asset class is about $179 billion» $9 billion in new capital has been raised in 2010 YTD by 124 venture firms
» $17 billion in capital was invested in 2,497 companies in the first 3 quarters of 2010
» Invested sectors: biotechnology 19%; software 17%; clean tech 17%; Internet 15%
» Stages: seed $2B; early stage $4B ; expansion stage $6B; later stage $5B
$2.9 billion U.S.-based V.C. investments in Cleantech YTD (vs. $1.6 billion last year)
» 208 cleantech deals in the first 3 quarters of 2010
Sources: National Venture Capital Association and Global Insight
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• Founded in 1977, NEA is the world’s largest venture capital firm today
• $11.0B in committed capital across 13 funds
• Global reach with 65 professional staff in six offices and investing activities on three continents
• Industry-leading domain experience in:
Information Technology
Energy Technology
Healthcare
• Experienced general partner group
• Extensive network of entrepreneurs and industry experts
Who is NEA?
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We Build Transformative Companies
» 167 IPOs and 271 M&A exits since inceptionMore liquidity events than any other VC firm
» Our top 100 companies . . .Have generated over $100B in peak annual revenuesHave created a collective peak market cap of over $450BHave employed over 290K people
» Today, NEA has 250 active investments in the next generation of market leaders
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SELECTED NOTABLE INVESTMENTS
* Denotes companies that were #1 or #2 in their markets when NEA achieved liquidity
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Scale and Capital
Commitment
EnergyTechnology
Relationships
Domain Expertise
Diversified Strategy
» One of the largest VC portfolios in energy technology» $1 Billion committed; already helped 30 portfolio companies raise $1.5Bn+
» Core team of 10 investment professionals with deep technology expertise across the US and abroad (China, India)
» Portfolio spans both the supply side (generation, storage) and the demand side (efficiency, conservation) of the energy equation, across electricity and clean fuels
NEA in Energy Technology
NEA is fully committed towards achieving industry leadership in energy technology investing
Government & Research Key Industry PartnersUtilities
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Agni
NEA Energy Portfolio Overview
ElectricityFuel
Demand (Efficiency & Conservation) Supply (Generation & Storage)7
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We have a BIG problem…
By 2050, the world needs 28 terawatts (TW) of primary power…
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…because energy demand tripled in last 25 years and the need will accelerate
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»Per-capita still plenty of room for growth as China and other Non-OECDcountries continue to prosper
»China surpassed US as the largest energy consumer and market for green energy financing this year
Source: U.S. EIA
100
1,000
10,000
100,000
1,000 10,000 100,000 1,000,000 10,000,000Energy Consumption per Capita (kWh / person)
GD
P pe
r Cap
ita ($
/ yr
/ pe
rson
)
Qua
drill
ion
BTU
Energy Consumption by OECD & Non-OECD Countries
Source: World Resource Institute
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Putting the 10 TW challenge in perspective
» 10 TW is equivalent of building 10,000 gigawatts nuclear reactors at one every other day for the next 50 years
» It takes 9 years to build one reactor today, plus constraints with storage
» Energy efficiency programs are crucial for short term; longer term it’s included with 28 TW use and assumes 2.8 kW per person
» Solar offers high hope: 89,000 TW of sun light power reaches Earth everyday
» Demand is growing too fast to depend on one solution; each alternative (wind, solar, geothermal, biomass) offers something different
» Concentrated PV doesn’t work in Germany but it wins in Abu Dhabi
» Wind is great at night, but demand peaks during the day
Source: www.undp.org/energy/weaover2004
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The potential of solar
The small black dots show the area of solar panels needed to generate all of the worlds energy (18TW) using 8% efficient PVs.
Source: Wikipedia
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There is huge opportunity
Solar is a great technology, but it’s not the only one!• Wind
• Energy from waste
• Geothermal
• Smart grid
• Battery technology
• Fuel cells
• Hydro
• Biofuels
• LEDs
• and more…
Multiple energy generation and efficiency solutions to the problem
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What does this look like?
This is what you know how to do…how can you apply it here?
$ / Millions of Instruction
s(in
log scale)
10M+
1M+
1B+
100M+
Mainframe
Minicomputer
Workstation
Personalcomputer
Mobilephone
Driving down the cost of computing has made computing ubiquitous
10B+
Devices or users (in log scale)
1E+6
1E+7
1E+8
1E+9
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Balance of system costs are underappreciated
Applying iNEMI expertise to balance of system components
39%49% 50%
Sources: Barclays Capital, IPHE
Standardizing BoS components can significantly drive down costs
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A closer look at solar BoS costs
Source: Barclays Capital
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Manufacturing know-how and scale matters
Applying iNEMI expertise to high volume manufacturing
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There are challenges ahead…
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» Global economic downturn has decreased funding sources for green energy companies across all stages
Startups, manufacturing scale-up, project finance, etc.
» Subsidies are uncertain and unfair
Early nature of the market and technology still relies on subsidies
Solar and wind markets have suffered (Germany, Spain, U.S., etc.)
From 2002 – 2008 subsidies to fossil fuels totaled $72bn, while renewables subsidies totaled $29bn over the same period
» Projects utilizing new and innovative technologies are difficult to finance
Limited pockets of capital willing to take on the risk over a long period of time
» Traditional dirty energy is abundant and very cheap
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…but here are just a few reasons for hope
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» Green energy funding trends are moving in the right direction
» Technology innovation and progress continues
» Share of green energy is growing
» Green jobs can help rebuild the global economy
» Governments worldwide continue to make green energy a priority
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Reason for hope:Green energy funding trends
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Green Energy VC Funding
Funding for green energy continues despite bumps in the road
Global Green Energy IPOs
China Green Energy IPOs
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Reason for hope:Global government support
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Source: Bloomberg New Energy Finance
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Reason for hope:Green energy is growing globally
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Source: Bloomberg New Energy Finance
Power capacity added:% renewable power
Global power capacity:% renewable power
10%
16% 15%
21%
31%
36%
4% 5% 5% 6% 6% 7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2004 2005 2006 2007 2008 2009
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Reason for hope:Green energy creates jobs
22Source: Navigant Consulting, 2010
Green energy jobs created in the U.S. alone by a national renewable energy standard
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Solar PV
Dry WallEfficient Windows
Smart-Grid Platform
High-Efficiency LEDs
Fuel Cells
Behavioral Modification
Grid Storage
Solar PV
Plug-in Hybrid Electric Vehicles
NEA sees hope in our own portfolio…
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…with our companies changing the world today
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“Empire State Building Completes Groundbreaking Building-Wide Window
Refurbishment; New Jobs Created, 96% of Original Materials Reused
Johnson Controls and Serious Materials refurbish 6,514 windows to dramatically
reduce energy output”
Fisker Automotive unveiled the first factory-built luxury plug-in Karma. Designed by Fisker Automotive co-founder, CEO and executive design director Henrik Fisker, the four-door, four-passenger Karma combines style with high efficiency and low emissions to deliver what the company calls "an
uncompromised, premium vehicle that sets the tone for the future of driving."
“Adobe Powers San Jose Headquarters with Bloom Energy Fuel Cells
Largest “Bloom Box” Installation to Date Will Generate 30 Percent of Adobe HQ Electricity Needs,
Promote Sustainability”
“Suniva has announced that the U.S. Department of Energy Loan Guarantee Program is initiating discussions with
Suniva for a loan of approximately $141M. Suniva plans to start the construction of a new manufacturing plant in
Saginaw County, Michigan. Building such a manufacturing plant could create approximately 500 direct jobs at Suniva,
while creating an additional 2,000 indirect jobs for the Michigan economy according to the Michigan Economic
Development Corporation.”
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Conclusion
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There is carnage around us, but strong companies with a compelling value proposition and a global
outlook will survive and ultimately thrive…