Clean Tech Spending Goes Up
Since 2002, venture-capital investments in cleantech world-wide have soared from about $1 billion to an estimated $5 billion to $6 billion this year, according to the Cleantech Group, a San Francisco market-research firm. After experiencing one of its first back-to-back quarterly declines in March, venture funding for cleantech, much of it based in California’s Silicon Valley, has resumed its climb.
In the U.S., the lack of a strong Copenhagen deal may set back some of these investments, already hurt by falling oil prices. But the Obama administration still plans to use the Environmental Protection Agency to clamp down on the nation’s greenhouse-gas emissions, and the Energy Department remains committed to spending billions in public funds to jump-start alternative-energy technology. In the European Union, companies still have to comply with laws that require member nations to reduce emissions collectively to 20% below their 1990 levels by 2020, despite the summit’s lack of binding targets.
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On a smaller scale, California is pursuing a program to garner a third of its electricity from renewable sources by 2020, more than double current levels. Most Northeastern states are expected to cut carbon-dioxide emissions, based on regional targets.
The adoption of renewable-energy standards, completed or under way in many states, should boost demand for technologies that make electrical grids more efficient, says Dan Adler, president of the nonprofit California Clean Energy Fund, set up by the state to help spur cleantech investment. Such efforts have fueled the growth of Silver Spring Networks Inc., a Redwood City, Calif., grid-technology provider, which has tripled its work force since 2008 to about 450.
“From our standpoint, we have been cheerleading Copenhagen,” says Eric Dresselhuys, the company’s executive vice president, “but it’s not a direct impact on this business.”
Many U.S. states will continue to shift toward lower-carbon fuels, says Michael Peevey, president of the California Public Utilities Commission, which regulates investor-owned electric, gas and water utilities in the state. California is “not going to turn back,” he says.
Officials at Iberdrola, the Spanish power company and the world’s biggest renewable-energy company say they are evaluating investments based on local policies, such as renewable-energy standards in states like Texas.
Some businesses, worried about a patchwork of federal and state regulation, are still pushing for Congress to enact a nationwide system for cutting carbon-dioxide emissions. But the prospects for congressional action in the 2010 election year look dim.
China, spurred in part by its desire to reduce dependence on foreign oil, remains committed to a sweeping energy efficiency program that calls for cutting carbon intensity, a measure of emissions relative to the size of the economy, by 40% to 45% from 2005 levels by 2020. That means government support for alternative energies, and for Chinese companies in that field, is likely to continue to grow.
Gao Jifan, chief executive of Trina Solar Ltd., a Chinese maker of solar panels, says the continuous cost reductions being achieved by solar-panel producers are making the technology more affordable. “So the outlook for its development is unstoppable,” he said in a statement.
