Oct. 19, 2010 SDF PWC

On Tuesday, October 19, 2010 in Palo Alto, SDForum with Pillsbury Winthrop and PricewaterhouseCoopers held a Quarterly Venture Breakfast on “Clean Technology.” Allison Leopold-Tilley of Pillsbury Winthrop moderated panelists Steve Bengston of PricewaterhouseCoopers, Sven Strohband of Mohr Davidow Ventures, Don Wood of Draper Fisher Jurvetson and Rick Yang of NEA.

Steve Bengston of PricewaterhouseCoopers delivered Wayne Hedden’s report “Clean Technology Investment Trends October 2010” that included data from the MoneyTree Report and Thomson Reuters. After taking a dive with the economic downturn at the end of 2008, cleantech investments rose again only to decrease in the third quarter of 2010. The largest deal was $106 million for Trilliant who provide wireless network solutions for grid management. The cleantech sector is maturing and starting to behave like the sectors for biotech, medical and software.

One of the unique parts of cleantech are the large capital requirements for developing infrastructure to the last mile, best seen in smart grid or power generation startups. The other is the lack of Moore’s Law in the efficiency of photovoltaics. While the efficiency of solar panels is increasing, it is not increasing exponentially like semiconductors. What can increase dramatically is energy efficiency. If twenty five percent of US electricity is consumed for lighting, the potential for savings with sensors and LEDs could drive down it down to five percent of consumption.

The panel saw the next big growth in the cleantech sector as water. Just as smart grids can increase efficiency in electricity, smart pipes can reduce waste. Better measurement and management will be necessary as more of the world population moves into cities and consumption increases. Look for opportunities in water desalinization that requires less or even no electricity like forward osmosis developed by Oasis.

It is important to remember that like the old energy sector, the cleantech sector is very much a product of government policy and subsidy. China, Germany and other countries are making progress because they have a national consensus despite political changes in government. Recognizing and dealing with the inevitable changes we face will reward investors and the countries that move toward cleantech.

Copyright 2010 DJ Cline All rights reserved.

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