The Visibility and Invisibility of Cleantech in 2011
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The Visibility and Invisibility of Cleantech in 2011 v\“ ¶\‹ kƒ¡‒›fiY d“¡¶¡‹ |“¡\‹‡¡|⁄ fi‒¡~ƒ|‡ƒ›‹† ¢›‒ QOPP ¢‒›« b⁄‒„†\“ƒ‚ d‹¡‒£„ u¡‹‡·‒¡ b\fiƒ‡\“ bdn v\“ ¶\‹ kƒ¡‒›fiM 2011 is almost upon us, and beyond being reminded that I’m another year older with a few more grey hairs, I’m anticipating another strong year for cleantech ahead. But my specific opinions stemming from ten years in cleantech investing may be different from many, so I’d like to present you with my “Top 11 List” and outline how I believe the industry will evolve within the next 12 months. - b“¡\‹‡¡|⁄ •ƒ““ ‘¡|›«¡ «›‒¡ ¶ƒ†ƒ‘“¡M Cleantech applications will get wider acceptance in many industries. The “electrification of transportation” and its infrastructure, including (fast) charging and supporting energy storage, will become more important. LED-based products will become more common on Home Depot and Walmart shelves. Energy efficiency will become the building industry standard, and cleantech will start to make more significant inroads in traditional oil, coal, and gas processes. The “mainstreaming of cleantech” will finally take off. - b“¡\‹‡¡|⁄ •ƒ““ ‘¡|›«¡ «›‒¡ ƒ‹¶ƒ†ƒ‘“¡M As cleantech starts penetrating into mainstream industries and taking place more within the walls of large companies, it will become more difficult to measure what is actually happening within the industry on the whole. 2011 will be the first year where “cleantech” as a generic market slogan will start to lose some of the power it had in past years. - b“¡\‹‡¡|⁄ ¡‚ƒ‡† •ƒ““ \‒‒ƒ¶¡ . Since Labor Day 2010, the IPO window has opened up again, but most exits will come from the increasingly frequent “shopping sprees” undertaken by large, mainstream industrial companies with war chests trying to make evolving startups accretive to their bottom line, and by the natural consolidation process any industry experiences when it starts to mature. There is an arms race building up to claim global cleantech leadership positions. - s⁄¡ b⁄ƒ‹¡†¡ •ƒ““ ‡›fi ‡⁄¡ ☜†⁄›fifi¡‒†M☝ The “bite of the dragon” will go after a wide variety of technologies, IP, and cleantech products to satisfy the Chinese internal demand and further grow exports and employment. Key drivers for this are the Chinese desire to strengthen 1 / 3
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Transcript of The Visibility and Invisibility of Cleantech in 2011
2011 is almost upon us, and beyond being reminded that I’m another year older with a few moregrey hairs, I’m anticipating another strong year for cleantech ahead. But my specific opinionsstemming from ten years in cleantech investing may be different from many, so I’d like topresent you with my “Top 11 List” and outline how I believe the industry will evolve within thenext 12 months.
- Cleantech applications will get wider acceptance inmany industries. The “electrification of transportation” and its infrastructure, including (fast)charging and supporting energy storage, will become more important. LED-based products willbecome more common on Home Depot and Walmart shelves. Energy efficiency will become thebuilding industry standard, and cleantech will start to make more significant inroads in traditionaloil, coal, and gas processes. The “mainstreaming of cleantech” will finally take off.
- As cleantech starts penetrating into mainstreamindustries and taking place more within the walls of large companies, it will become moredifficult to measure what is actually happening within the industry on the whole. 2011 will be thefirst year where “cleantech” as a generic market slogan will start to lose some of the power ithad in past years.
- . Since Labor Day 2010, the IPO window has opened upagain, but most exits will come from the increasingly frequent “shopping sprees” undertaken bylarge, mainstream industrial companies with war chests trying to make evolving startupsaccretive to their bottom line, and by the natural consolidation process any industry experienceswhen it starts to mature. There is an arms race building up to claim global cleantech leadershippositions.
- The “bite of the dragon” will go after a widevariety of technologies, IP, and cleantech products to satisfy the Chinese internal demand andfurther grow exports and employment. Key drivers for this are the Chinese desire to strengthen
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their global cleantech leadership aspirations and to exchange rapidly devaluating dollars forassets.
- Private equity and project financing, which had beensluggish since the 2008 recession, bounced back in the latter half of 2010. This will continue in2011. More Mezzanine funds will also emerge to help bridge clean energy technologies into themainstream.
- You could not have dreamed of this five years ago,but large industrial companies will start calling loudly for a carbon tax to get investment clarity --at the detriment of all of those vague cap-and-trade plays that seem good in theory but fall apartin practice.
- Natural gas will remain cheap and continue to jeopardizeunsubsidized solar and wind projects.
- This will be driven by the ongoing explosion ofgrowing amounts of data, the “dog’s breakfast” of new distributed generation, the growth ofsmart grid solutions, and the arrival of new entries into the utility space.
- VC investments in energy generation will goback to the basics. It’s no longer about the next exciting technology. Instead, it is all about cost.After all, energy is a commodity industry so cost is king. Expect more early-stage participation innew forms of nuclear, biomimicry, and waste-to-energy. Traditional energy generation will alsotry to be more efficient and “clean.”
- Water will become the fastest-growing cleantech sector asdesalination, irrigation, and waste-water treatment will get more attention than ever before.
- No, not theme parks. China’s rapidly growing cities willbecome cleantech development, procurement, and demonstration parks, driven by China’s newFive Year Plan. China will be the first to start marketing the “Cleantech City” as an integralsolution -- quite visionary, given the hundreds of 100 million+ cities we will see pop up all overthe world in the decades to come.
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2011… I can’t believe it’s here and I can’t believe it means our 10-year anniversary at Chrysalix.Now I really feel old. The only thing that would make me feel better is to see significant progressin the “mainstreaming” of clean energy technologies in 2011 so that one day soon, we won’teven have to say “cleantech” any longer. It will just be the way we do things.
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