Austin’s Clean Energy Venture Summit Is Next Week. Here’s A Few Reasons To Get Excited.

When a reminder about the upcoming Clean Energy Summit hit my inbox, I jumped at the chance to make the case for why Austin should be excited about this event. And while I’d be the first to advocate the benefits of a clean energy community, this isn’t a rah-rah session. Let’s look at what’s happening in clean energy to see why this year’s gathering should accelerate Austin’s clean energy future.

The Economic Climate

Clearly this isn’t the best of times for the economy. Unemployment is unfortunately unwavering, wages are stagnant, and now there’s even a potential poster child for clean energy failure with Solyndra’s collapse.

Even so, Cascadia Capital showed cleantech investments totaled $1.42 billion over 113 deals during Q2 2011. While that’s down 10 percent from Q2 2010, one thing to note was the shift to the “capital-efficient energy sector,” displacing investments in biomaterials and biofuels.

Big Fish Getting Involved A Good Sign.

A good barometer for clean energy is to also look at what established companies are doing to get a seat at the negotiating table. Fortune 500 companies are often a cleantech company’s first customer. And if they’re not a paying client, they often provide needed infrastructure or partnerships in key markets.

As an example, GE is aggressively investing in energy startups, telling the Wall Street Journal its deal flow for 2011 is already at 20, easily eclipsing its 2007 figure of 11.

That’s also consistent with data provided by UMASS economics Professor Nancy Folbre, who points out private venture capital has quietly moved towards the clean sector, rising to 16 percent in 2010 from 2 percent in 1995.

The other footnote to GE’s activity, and one startups should pay attention to, is its approach to cultivating its clean energy portfolio. Besides obvious industry partnerships, it created the Ecomagination program, aimed at spurring ideas to help the environment. And while there’s a PR veneer to it, GE is no doubt getting a leg up on what’s happening in the trenches, an innovation-driven sneak-peek if you will.

 

Where Are The Opportunities? How Is Austin Positioned?

Austin’s tech lineage is strong, particularly in software and semiconductors. A good start would be bridging that expertise. If we look at comparisons to the rise of information technology in the United States, the picture is clearer.

BrookingsMark Muro at Brookings Institution sized up how things might play out for clean technologies, making just such comparisons.

“The aggregate green economy, which includes jobs in the public sector and waste management, is just under half the size of the IT producing industry, but measured by jobs, “cleantech” is similar in size today as the computer manufacturing industry (162,000) and roughly half the size of the semiconductor industry (370,000).”

Those numbers are compelling for a few reasons. One, it shows cleantech isn’t as far behind as some pundits would have us believe. Not to mention the computer industry isn’t exactly tearing it up these days. Can you say Tablets? Heck, the most exciting innovation I’ve seen lately is proof that our computers are doubling their energy efficiency every 18 months. I’d also bet those semiconductor numbers decrease as processors increasingly move to smaller, more mobile devices. Unfortunately for some that might correlate to less manufacturing and fewer jobs.

Mr.Muro capped of his post with another important observation.

“..many solar producers are classified in the IT-sector as semi-conductor manufactures; smart-grid technologies are also heavily IT-based. It’s therefore not unimaginable that, with a few strong years of growth and innovation, cleantech could be large enough to fuel considerable increases in aggregate economic growth.”

One of the takeaways here is the breadth and potential depth of clean ecosystem and markets. Famously, many Silicon Valley companies have ‘pivoted’ to capitalize on other markets. The point is, Austin’s clean energy companies have plenty of ways to innovate in a sector that’s tied to so many converging forces. Today’s motherboard producer might be tomorrow’s solar fabricator.

Cities, Infrastructure Provide Opportunities

Getting more hyperlocal, there’s other reasons to pay attention to clean economy activity, not the least of which is better paying jobs. Here’s a few charts I pulled from the Brookings’ clean economy report. The first one is self-explanatory. There’s growth in our own backyard.

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In the second image, you’ll notice that Austin ranks 36th when you compare the largest 100 metropolitan areas. But look at the growth. The growth metric moved Austin up a number of notches and also shows clean jobs grew more than 5% each year. Not too shabby.

And before you scoff at the annual wages, we’re looking at you Mrs. software engineer, it’s important to keep it in perspective. Wages are higher compared to all other Austin jobs Brookings analyzed.

Austins_Clean_Economy

One other notable piece in the Brookings report was the huge emphasis on energy efficiency. It was the largest category analyzed by Brookings, capturing 13 out of the 39 distinct segments. That’s called bulletin board material if you’re keeping score. (Sorry for the sports cliche, but it is football season)

It shouldn’t be that surprising. Old buildings, old schools, all of them could use some sort of energy upgrade. Couple that with new commercial and residential activity and it’s no wonder ABI Research projects cities will spend $39.5 billion by 2016 to become smarter. The other data point I like to point out is research from the University of Massachusetts that estimated roughly 15 jobs are created for every $1 million invested in energy efficiency.

City Mayors Get Behind Clean Energy And Efficiency

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Another positive sign for CEVS is having the eyes and ears of local government. That was echoed in the form a recent letter to Washington from U.S. Mayors, entitled a “Common-Sense Jobs Agenda.” Local officials analyzed parts of Obama’s Jobs Act, emphasizing how the clean economy can spur job growth and stoke the economic fires.

The group (Mayors) has been vocal recently, penning an earlier report (June 2011) from its national conference, in which 86 percent of the 396 cities surveyed saw building retrofits and clean energy conversion as economic priorities.

So whether you’re a startup, an investor or you just want to see Austin continue to evolve, there’s plenty of reasons to get behind clean energy. Get out and support these companies, your grandkids will thank you.

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Who’s The Mayor Of Cleantech?

wind energy is good

Image by George Dearing via Flickr

With dwindling resources and tight budgets, local governments might not be the first place to look if you’re a startup pitching clean technology. The data tells a different story, however.

An April survey of almost 400 mayors in all 50 states, showed 75% of cities plan to increase cleantech deployments over the next five years.

Some of the key findings paint a vivid picture of what’s motivating the heads of city. 

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U.S. Conference of Mayors.  (PRNewsFoto/U.S. Conference of Mayors)
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For starters, energy efficiency, while it may lack green glamour, is an immediate win. Cities are realizing that efficiency retrofits using better automation tools and dashboards are sending savings right to the bottom line. In other words, smarter buildings are becoming the norm for smarter companies.

• LED and other efficient lighting (76%), low-energy building technologies(68%), and solar systems to generate electricity (46%) are the top three choices among mayors as the most promising technologies for reducing energy use and carbon emissions.

On Wednesday, the Cleantech Group released its investment numbers for Q1 showing energy efficiency was the growth highlight, even as overall investments dipped more than 30% for the period.

“Our global VC numbers point to continued strength in energy efficiency, which tops the charts in both amount invested and deal count,” said CEO Sheeraz Haji, in a prepared statement.

Another key finding in the mayors’ report was related to climate change, showing one in three cities have already configured its effects into capital planning and capital improvement programs.

That should signal a strong opportunity for startups offering cleantech and renewable solutions. Corporations will be bulking up to serve local governments as they look for technology support and infrastructure upgrades. Young companies offering sustainability software, smart grid tools and of course IT-driven solutions are poised to capture significant business. To achieve that, startups need to dig deep to understand what’s really driving local governments to adopt a resilience strategy. Ironically, it seems, cities might ultimately lead much of the activity taking place around ‘adaptation.’

Maria Gallucci at SolveClimate News had a recent piece referencing a June report called Caring for Climate, [PDF] that echoed the point.

“While 86 percent of the companies surveyed said that investing in adaptation solutions is a viable business opportunity, less than one-third are taking action to build climate resilience in the communities where they operate.”

The Central Texas Connection

ATC_CEO_Summit At the ATC’s CEO Summit in May, Austin  Mayor Lee Leffingwell mentioned a number of things that puts Austin in the center of many of the reported trends. During his presentation, he mentioned Life Sciences and clean energy as two of the biggest areas of job growth in Austin.

The mayor stressed better transportation and resource management, emphasizing sustainable energy approaches and better water management.  In a matter-of-fact manner, Leffingwell  told more than a hundred CEOs, “those are things you have to plan for 50 years down the road.” 

Stratfor’s CEO and author George Friedman, who also spoke at the conference, said attracting R&D centers for industries like biotech and life sciences would be critical for cities like Austin.

“Don’t become silicon hills — attract industries like biotech — it’s important to know who your target is,” he said.

A neighboring Austin community is showing how that’s done.
The Pflugerville Community Development Corp. has a deal in place with local electric vehicle (EV) company Community Cars Inc. If the EV company meets certain commitments for establishing its local presence, more than $100,ooo in funds will be available to the Austin company founded last year by Austin attorney Stacy Zoern.

These types of initiatives show what can be achieved when local officials have a proactive approach towards cleantech. They’re already trying to lure startups to city centers, so why not go the extra mile to ensure it’s a sustainable choice for long-term growth? That’s a win for everyone.

Mayors Report – Clean Energy For US Cities

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Pike Research Shows The Relationship Between “Tech Geeks” & “Cleantech Nerds”

Pike Research surfaced some interesting data after compiling information from some its surveys. The aggregate showed there’s a strong connection between tech early adopters and cleantech users, which isn’t too surprising as even cleantech is starting to see shades of ‘consumerized IT’. I’d guess that’s why the smart grid and smart meter percentages are fairly close.
 
 
 

 

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ABI Research Predicts Big Market for Plug-in Vehicle Chargers

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If you need more evidence of real upside in the cleantech and renewable sectors, chew on this from ABI Research.

A new market study “Plug-in Vehicle Infrastructures” projects a fast-growing market for charging station infrastructure, with worldwide revenues reaching $11.75 billion for the installation of 3 million charging stations by 2015, up from just over 20,000 stations installed in 2010.”

And if you throw in just-in-time transportation services like ZipCar, you can really start to connect the dots around what the electric vehicle (EV) ecosystem might look like. From a scale perspective, the benefit to companies providing services is clear: these are models that are interconnected from day one to the grid.

Whether it’s via smartphones, in-car systems, or real-time meters in homes and businesses, the data will be always-on and interactive. That’s quite a change from just a few years ago. And it’s quite an opportunity.

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