Clean Energy Continues to Thrive Despite Downturn

Even in the midst of a severe economic crisis, recent evidence has emerged indicating that clean energy industry jobs remain a bright spot in an otherwise gloomy economy, and will continue to generate job growth in the years ahead.

A report released this week by the Pew Charitable Trusts revealed that between 1998 and 2007, clean tech jobs grew at more than double the rate of all other jobs.

Another report released this week by a UC Berkeley professor found that accelerating deployment of renewable energy resources in California would accelerate job growth in the years ahead, with the possibility of generating over 500,000 new jobs over the next 40 years.

Perhaps most interesting is the fact that the overall number of clean energy jobs was fast gaining on the number of jobs in the fossil fuel industry. The Pew report found that fossil fuel jobs amounted to 1.27 million workers in 2007 while there were approximately 770,000 clean energy jobs the same year.

The reports found that the major beneficiaries of the expanding clean energy industry is local economies. Whereas fossil fuel industry dollars overwhelmingly sends money overseas, clean energy results in more dollars staying local – with more money spent on solar installers, sales people, contractors, and farmers who grow feedstock to produce biofuels. Money spent locally also recycles within the local economy, benefiting numerous businesses, workers, and families.

In addition, according to an analysis of both reports by John Gartner of Matter Network, a clean tech website,

money saved by consumers on energy efficiency is the most potent local economy stimulus. A dollar taken off the energy bill will be spent on other things that will equal from 10 to 100 dollars in wages for new workers.

For millions of Americans who are currently out of work, these reports provide a measure of hope for a brighter future.

You can find a link to the full Pew Charitable Trusts report here.

You can find a link to “Energy Pathways for the California Economy” by UC Berkeley professor David Roland-Holst here.

Here is an analysis of both reports by John Gartner of Matter Network.

Initial Pictures from my Tesla Test Drive

I have been meaning to write up a review of my test drive of a Tesla Roadster yesterday. Until I have a chance to do so, here are a number of pictures from our ride.

My friend Joseph Andresen set up the test drive through a friend of the family who works for the company. I met Joe through the Obama campaign and he and I discovered that we're both a little nutty about electric vehicles (he drives a Toyota RAV4 EV; I drive just the run-of-the-mill Prius). I felt incredibly fortunate to get a chance behind the wheel of this beautiful vehicle, especially considering how much attention electric cars have gotten this week at the Detroit Auto Show. Just a few months ago, Tesla wasn't given anyone test drives. Now, I believe that Tesla is still requiring people to put down $5,000 and put their name on the waiting list before going for a test drive, so I feel incredibly fortunate to get to drive the car around town for about an hour and a half.

Here's a quick review: the car is absolutely incredible. It completely lives up to the hype, which is no easy feat. It was incredibly fast off the starting line -- you can slam down the (ironically-named) "gas pedal" and within seconds, all other cars that had been waiting with you at the stop light will be a football field's length behind you. And yet you never feel out of control. The car is very nimble and accutely aware of your guidance.

The car is gorgeous, and a major attention-getter. We received a number of stares from people as we drove up and down the 280 freeway and around the streets of Palo Alto and Menlo Park.

I hope to write up a longer review of the entire experience and post it within a few days.

Cleantech Group's List of 9 Predictions for 2009

    The Cleantech Group has published its annual list of predictions for the coming year, and the list includes a number of interesting and provocative ideas.

    The predictions, authored by Cleantech Group Executive Chairman Nicholas Parker, included:

• #1 … Boom in Energy Efficiency Infrastructure. Parker predicted that due to the ability of energy efficiency technologies to create jobs, there would be increased investments in energy efficiency in 2009. Parker singled out modernizing the grid and insulating homes as two examples of likely continued investments, and noted that there is a “quadruple bottom-line benefit to focusing on energy efficiency."

• # 3 … Parker predicted that the U.S. will pass a national renewable portfolio standard (RPS) in 2009, along the lines of the RPS in California and numerous other states.

• #8 … Parker predicted that companies would continue to acquire green growth assets, citing as an example Panasonic’s acquisition of Sanyo in late November, primarily because of Sanyo’s solar and battery divisions.

    Parker further predicted that investment dollars in clean tech companies would stabilize at $7 billion in 2009, after dropping off during the 4th quarter of 2008. He projected that the failure rate of early stage clean tech companies would double, from the traditional rate of 20% up to 40% in 2009. He attributed this fact to a desire by investors to focus their assets on the most promising companies in their portfolios.

    One of the more interesting suggestions in the article is that hybrid-electric or electric-drive vehicles use a lot more water than internal combustion engines.  This statement is based upon a report in Scientific American which found that the number of gallons of water depleted to travel 100 miles was as follows:

Ethanol = 130

Fuel Cell = 42

Plug in = 24

Gasoline = 7-14

    The Scientific American article stated that the electricity-generation industry relies heavily on water to generate electricity. While these figures may appear shocking, there is an explanation for these statistics.  Much of the electricity generation sector continues to rely on large hydro-electric plants to generate power.  

    The Scientific American statistics highlight a number of important points regarding clean tech.  First, the run up in food and commodity prices last year demonstrated that there is a connection between new biofuels and the price of food, and therefore any development of biofuel sources of energy will have to recognize this connection. In addition, much of the water which is “used” by electric vehicles or hybrid electric vehicles is not entirely lost. As utilities use large hydro plants to generate water, the plants spill out the water back in the rivers and streams, albeit not without disrupting the ecosystem.  On balance, internal combustion engines continue to cause far worse environmental damage than do hybrid-electric or full electric vehicles, even taking into account greater consumption of water. 

    The larger point is that large hydro dams are not "renewable" under the law for the purposes of satisfying the renewable portfolio standard requirements, and we do need to continue transitioning our power grid off of these non-renewable sources of power.  As the nationwide grid continues to become more renewable, hybrid electric and electric vehicles will eventually require less water to operate. 

Is Clean Tech In for a Rebound?

    The Silicon Valley Business Journal is reporting that Akeena Solar, Inc., a major designer and installer or solar systems, had to revise its earnings estimate for 2008 from its previously reported figure of 30-40% down to 25-30%. 

    In most years, 25-30% returns would be considered by most to be a job well done, and even more so in this difficult era of crumbling stock values.  But not this year. Despite Akeena Solar’s job well done, the company’s stock price declined by 80% during 2008 over the previous year and the company had to cut staff.  And Akeena is not alone: across the sector, clean tech companies' stock values are down dramatically.  

    It’s hard to believe that prospects for the clean tech industry would appear so gloomy so shortly after clean tech appeared to be investors’ darling during early 2008. 

    Many industry analysts are wondering whether clean tech companies are just in a temporary ditch.  Commentators have pointed to the possibility of rising gas prices and the incoming Obama administration as bright spots which may help the clean tech and solar industries to turn around. 

    Some industry veterans are optimistic.  Pagemill Partners LLC Managing Director Michael Mitgang told the Business Journal: 

“While oil prices have declined in the short run, we don’t expect them to remain low for long. Also, the new administration is planning huge spending programs that will include programs in cleantech and renewable energy. We expect continued activity in the sector, though not at the pace seen in 2008.”

    Many venture capitalists who invest in clean tech have changed their approach and reduced their investments.  In Sunday's New York Times, reporter Claire Cain Miller wrote that "big, expensive projects like building factories to manufacture solar panels or biofuels are falling out of favor," although she noted that overall funds invested in Clean Tech was up through September of last year, from $1.9 billion to $3 billion.   

    No matter your view, the new administration will have to act fast. With many job losses arriving on the heels of 2008, it’s likely that the economic downturn is going to get worse before it gets better. 

    President Obama will have the most capital early in his term, and a limited window of opportunity to enact the kinds of major sweeping changes which could have a quick impact upon the economy. 

    Companies will also have to be careful to maintain efficient staffing levels, trim extra costs, and focus on revenue-generating areas of their businesses to be prepared for long-term doldrums in case the turnaround does not come right away. Clean tech companies are also well advised to put off major purchases and major outlays of capital for a little while.  In difficult economic times, it seems there is no substitute for belt-tightening. 

 

 

President-Elect Obama Mentions Continued Support for Climate Change Cap and Trade System

President-elect Barack Obama, speaking today via YouTube to the Bi-Partisan Governors Global Climate Summit in Los Angeles, reaffirmed his support for a federal cap-and-trade system that would sound very similar to California’s cap and trade system currently being developed by the California Air Resources Board as a part of its AB 32 mandate.

In his remarks, he endorsed a federal cap and trade system, and marked his support for reducing GHG emissions to 1990 levels by 2020 and to 80% below 1990 levels by 2050.
Also notable in his remarks was what he didn’t say. During the presidential campaign, he frequently mentioned a litany of new and old energy technologies, including solar power and wind power and others. Today, while he said we should “tap nuclear power while making sure it’s safe, and develop clean coal technologies,” he left out any mention of “limited offshore oil drilling” as he had mentioned during the campaign – or of any oil drilling for that matter.

Bloomberg: Obama May Put Renewable-Energy Plan Ahead of Climate Package

Bloomberg has a story this morning speculating that President-elect Obama may propose a renewable energy package as his first order of business as President, in an effort to stimulate the economy.

"With unemployment at a five-year high, an early effort to create jobs by encouraging electricity production from solar and wind will get top priority, energy lobbyists and analysts said. A more far-reaching effort on a climate-change bill may be delayed until late next year or 2010."

Read the full article here.

Of course, an investment in renewable energy tax credits or investment credits would likely provide a major boost to renewable energy companies and clean tech companies, which have already been one of the few brights spots in this year's economy.