Silicon Valley Watcher - reporting on the business of technology and media

Tech CEOs go to Washington D.C:

TechNet announced its green tech policy agenda during "TechNet Day,” the organization's sixth annual trip to the nation's capital for CEO meetings with leaders in Congress and the Administration.

 (The full report is available here: http://www.technet.org/resources/GreenTechReport.pdf)

 

Some of the proposals:

      o Double federal funding for basic energy research
       o Enhance the federal government's role as purchaser of new energy technologies
       • Fundamental reform of federal tax policy to spur the development and adoption of new energy technologies
       o Increase the level of incentives to spur new energy technologies
       o Restructure incentives to enable market signals that drive new technologies
       o Encourage technology neutrality enabling the marketplace to pick winners
       o Establish an effective tradable Renewable Energy Certificate marketplace
       o Enable utilities to recover investments in renewable generation and transmission
       

It is all good stuff. But waiting for the government to do these things is like waiting for the government to admit that global warming was a problem in the first place. It takes way too long and the action is needed now.

Silicon Valley should be able to figure out the business models for innovation in clean energy and related "green" markets without government help.

Subsidies and government programs remove the effect of market conditions that test business models.  And it can leave worthy green ventures at the mercy of future political decisions. That's a risk that investors don't need.

TechNet and other tech related lobby groups have been spectacularly unsuccessful in Washington, D.C. Their time might be better spent just getting on with it at their own companies and within their own industry.

(The full report is available here: http://www.technet.org/resources/GreenTechReport.pdf)

The Chronicle ran a front-page look at the Valley's cleantech industry (or "green tech" - reporter David Baker emphasizes that the industry is so new it hasn't settled on nickname yet), profiling some of the new and more established companies in the area.

There's Menlo Park's Solazyme, which is genetically engineering algae to produce oil. They recently picked up a financing round from Berkeley's Roda Group. The current interest in cleantech is a welcome change for such companies. A few years ago, Valley VCs were a lot less interested.

We'd go talk to biotech VCs, and they'd say, 'This is interesting, but we know nothing about this energy business," said Harrison Dillon, Solazyme's chief executive officer.

Then there are more established companies, like SunPower in San Jose, which makes highly efficient solar powers. It brought in $236.5 million in revenue last year, up 200 percent from $78.7 million the year before. Its profit hit $26.5 million.

Competing with SunPower is Santa Clara-based Miasolé, of Santa Clara, which will soon start producing "thin-film" solar panels.

Rather than collect the sun's energy with silicon wafers, the traditional solar technology, Miasolé uses a combination of copper, indium, gallium and selenium -- all deposited on razor-thin, stainless steel sheets.

Thin-film cells don't convert sunlight to electricity as efficiently as silicon cells. But Miasolé's process for making cells will be far cheaper, said Chief Executive Officer David Pearce.

If all goes as planned, Miasolé should be able to cut the production cost of solar cells by 70 percent, Pearce said, making solar power far more competitive with other ways of generating electricity.

The Green Grid, a consortium of major computer and power companies dedicated to lowering power consumption in data centers, announced its board of directors today and released three white papers on energy-efficient data centers, CNET News.com reports.

The board is composed of Advanced Micro Devices, Intel, Dell, Hewlett-Packard, IBM, Microsoft, Sun Microsystems, Rackable Systems, Spraycool, VWware and American Power Conversion.

The white papers are:

• "The Green Grid Opportunity," which identifies both short-term and long-term objectives to increase the energy efficiency of datacenters and IT infrastructure equipment.
• "Guidelines for Energy Efficient Data Centers," which provides a framework for improving the efficiency of both new and existing data centers.
• "The Green Grid Metrics: Describing Data Center Power Efficiency," which explains the use of the Power Usage Effectiveness (PUE) metric, along with its reciprocal the Data Center Efficiency (DCE) metric.

The Australian government is banning old-fashioned lightbulbs. In four years, only energy-efficient lightbulbs will be available, AP reports.

Legislation to gradually restrict the sale of the old-style bulbs could reduce Australia's greenhouse gas emissions by 4 million tons by 2012 and cut household power bills by up to 66%, said Environment Minister Malcolm Turnbull.

Australia produced almost 565 million tons of greenhouse gases in 2004, official figures show.

A good start, putting Australia in the company of California, which is just considering a measure to ban the sale of incandescent lightbulbs. Conservatives oppose the measure because it takes away consumers' right to choose their lightbulb technology.

Environmentalists caution, though, that industry, not lightbulbs are the major cause of global warming - and Austrlia's John Howard is a steadfast opponent of the Kyoto Protocols.

"It is a good, positive step. But it is a very small step. It needs to be followed through with a lot of different measures," Australian Conservation Foundation spokesman Josh Meadows told Australian Broadcasting Corp. radio.

VC investment in cleantech companies hit $3.6 billion in 2006 (that includes North American and European investors), a 45% increase over 2005's $2.5 billion. The fourth quarter saw a 10% increase of investment over the previous year, from $704 million to $775 million, according to a Cleantech Venture Network press release.

Naturally, most of that money - 72% - went into energy-related investment. That represents a $2.6 billion investment, double the $1.3 billion invested in 2005.

Still, Nicholas Parker, co-founder of the Cleantech Venture Network, said other sectors also benefited from the investment boom.

“Energy was the most prominent beneficiary, but companies that specialize in transportation, water, air and environmental technologies and other categories also attracted venture capital,” he said.

Are data centers contributing to global warming or the energy crisis? A new study commissioned by AMD says no: While data center energy consumption has doubled from 2000 to 2005 and now matches the consumption of the state of Mississippi, it's still only 1.2 percent of total US consumption.

SF Chron: Demand grows, but data centers don't hog power

That's massively less than previous estimates that Internet power use was as much as 13 percent.

"If you see that there might be a problem, you have to ask how big is the problem," Jonathan Koomey, a scientist at Lawrence Berkeley and the author of the study, said. "The purpose of the study is to give a reasonable estimate of how much electricity is used. From that, you can then figure out whether there are actions that industry can take or that government can take."

Still, it's a huge increase and AMD's John Fruehe says customers were starting to max out their energy budgets. Both to save money and to retool to be less polluting, companies are looking at how to make data centers more energy efficient.

Chandrakant Patel, a research scientist at Hewlett-Packard Labs, said tech companies need to focus on every aspect of the data center, from the microprocessor to the air-conditioning system. "You really must look at the stack," he said. "It has to be addressed holistically."

If you're interested in the growing cleantech industry, check out the CleanTech Expo XII next week in San Francisco. Pressing concerns about climate change plus a widespread re-engineering of American business to reduce greenhouse gas emissions means clean technology will play an increasingly important role in Silicon Valley. I'll be reporting from the conference Monday and Tuesday.

From a press advisory we received:

Cleantech Forum XII will be held at the San Francisco Marriott (SOMA) on February 19-21 and will feature technologies that will develop alternative energy, increase energy efficiency and mitigate global warming - while making money.

Attracting nearly 400 venture capitalists and entrepreneurs, the SF Cleantech Forum provides first-hand access to cleantech leaders. Key speakers include Vincent Chornet, Enerkem; Chris Poirier, Coaltek; Jan-Olaf Willums, Th!nk Electric Car Company; Bob Epstein, Environmental Entrepreneurs; Dan Kammen, Berkeley Institute of the Environment; Alexander Karsner, Department of Energy; Jonathan Lash, World Resources Institute; Amory Lovins, Rocky Mountain Institute; and Governor Edward Rendell of Pennsylvania.

HP's redesigned print catridge and packaging will reduce greenhouse gas emissions by 37 million pounds this year, the company said last week.

HP estimates its redesigned print cartridge packaging will eliminate the use of nearly 15 million pounds of materials, including 3 million pounds of corrugated cardboard in 2007. The packaging also will eliminate the use of more than 6.8 million pounds of polyvinyl chloride (PVC) plastic through material reduction and substitution of recycled content plastic and paperboard.

The release quotes Greg Norris, Ph.D., environmental life cycle assessment instructor at Harvard University: "What I see here is smart design. The changes all go in the right direction environmentally and all in ways that make economic sense to HP and its customers. More power to these designers."

PG&E has agreed to buy three billion cubic feet of cow-produced methane (otherwise known as "renewable natural gas") from Central Valley-based BioEnergy Solutions, enough hot air to provide electricity to 50,000 California homes, according to a press release.

"BioEnergy Solutions was founded by dairymen, and we understand the challenges agriculture faces in the coming years to reduce emissions," said Albers, a third-generation dairyman. "PG&E has a similar challenge, which is to increase its production of renewable energy. This agreement turns what would otherwise be a growing problem for farmers into a new revenue source and helps PG&E reach the environmental goals set by the company and the state."

Here's how it works, reports Green Wombat:

BioEnergy Solutions will install methane digesters at dairies, where manure will be pumped into covered lagoons. As methane is released from the decomposing manure, the digester will remove the carbon dioxide and impurities before piping the gas to a PG&E plant to be burned to produce greenhouse gas-free electricity.

Albers says BioEnergy will install and operate the digesters at no cost to dairy owners while giving them a share of the gas sales (he wouldn't say how much) and any renewable energy credits that result. "Even though there’s been a lot of digester technology out there, there's never been a situation where the dairyman can share in the profits," Albers says.

The solution is a win for PG&E because by 2010 they have to be delivering 20 percent of their electricity by renewable energy sources. It's a win for the environment because methane is a powerful greenhouse gas. And it's a win for Albers and California dairies because they're getting paid for the stuff.

And it's no skin off the cows' noses.

San Jose didn't spend $20 million to lure solar-cell "printer" Nanosolar to Silicon Valley, as the California Assembly is considering giving to Tesla Motors. The city's $1.5 million incentive, far less than what Nevada and Arizona were offering, was sufficient - coupled with the Valley's commitment to cleantech and the benefits of being in the technology hub.

Paul Krutko, director of the San Jose Office of Economic Development, told the Green Wombat blog that SJ doesn't just flash greenbacks, it builds green.

San Jose touts its green building initiatives - it opened the world's first LEED (Leadership in Environmental Design) certified public library - and cites local companies' efforts to fight global warming. Software maker Adobe's downtown San Jose headquarters, for instance, has been rated the greenest corporate building in the United States.

Green tech companies, says Krutko, are "looking at communities that have an approach to sustainability. It is very much a competitive advantage in having a community that really gets it in dealing with the global issues we’re facing in terms of climate change and global warming."

Ultimately, Krutko says, it's not about tax incentives. Speaking like a true Valley guy, he says, ""Our currency is really about time to market. Market entitlements and the ability for a company to find space and quickly occupy that space and move forward."

San Jose invests in a Pacific Community Ventures fund that will finance local companies. It's also streamlining the permitting process and changing zoning regs to accomodate green companies.

Posted by Richard Koman on February 8, 2007 1:33 PM | Permalink | Comments (0) | TrackBacks (0)