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July 12, 2011
France takes new direction in renewable energy infrastructure to play on global scale
The French Government launched yesterday the bidding program to build five offshore wind farms along the coasts of Britanny and Normandy. This represents 3,000 MW of capacity, or the equivalent of two new nuclear reactor sites, and is expected to cost $14Bn. Today, wind produces less than 2% of electricity in France and all turbines have been deployed in land.
The 600 hundred wind turbines to be deployed offshore by 2015 would double the current capacity and help the country join the European elite led by Denmark and the UK. The largest offshore wind farm is currently in Denmark: Horns Rev 2 generates more than 200MW of power in a country that has grown used to offshore turbines in the last 20 years.
If the first phase if succesful, another 3,000 MW is expected to be deployed in 2015-2020 to help meet the 2020 goals of producing 40GW from renewables. This announcement is all the more notable that the French Government decided earlier this year to limit aids for solar installations to 500MW per year.
The concept of quotas was received with uproar and disbelief by the emerging solar power industry in France lagging way behing its neighbor Germany. Industrials argue that any quota on solar will kill this industry. The Government argues in return that the solar power industry has not produced as many jobs as expected.
The French Government does not hide its intent with its the offshore wind power plants that represent twice as much solar installations in the next 3 years. "The objective is to create jobs" stated Nathalie Kosciusko-Morizet, the French Minister of Ecology who estimates to 10,000 the number of new jobs that could be created.
France is in a very different situation than Germany that has built an impressive network of installers to residences and businesses alike. France has a far-reaching nuclear power industry and a strong presence in North African countries via its Oil&Gas industry. In contrast, Germany is much more reliant on its neighboring countries and did not have much choice in leading renewable energy initiatives ten years ago amid environemental concerns in the German Parliament.
While Chancellor Angela Merkel committed her country earlier this year to stop using nuclear by 2020, and by such comforting its leading position in the growing renewable energy market, France is now looking at strengthening its nuclear industrial complex via renewables to be a global player in green energy. Experts argue that the offshore plan favors the French nuclear giants according to French newspaper Le Monde.
Nuclear industry giants like Areva and EDF have already announced that they will participate to the bids that have to be submitted by January 2012. EDF will bid on the five locations in partnership with Alstom and Danish company DEONG Energy that manages 11 offwhore wind farms today, including Horns Rev 2. Areva is partnering with Spanish Iberdola on two sites and with GDF-Suez on the three other sites.
Some argue that the plan was cut into large pieces to favor existing French energy players but not big enough to favor the existing industry leaders. In any case, the biding program will likely not favor new entrants and it remains to be seen whether some of the 10Bn euro allocated will be awarded to start-ups in France. Most of the turbines are expected to be manufactured out of the country but some levels of assembly could be required to be done in France.
The head of the French subsidiary of Portuguese EDP, Frank Lanoe, explains that offshore wind is a mature technology with more than 1,000 wind turbines in operation. The UK passed the 1GW mark and E.ON is one of the major offshore wind actors in Europe. Mr Lanoe explains that "costs are 3-4 times higher but but an offshore wind turbine can produce 50 to 100% more electricity". Frank Lanoe hopes to have a chance to win one of the five contracts and that France will have a European perspective on the project.
This could be the case as Eric Besson, the French Minister of Industry and Energy, went to Marocco this week to meet his counterpart Amina Benkhadra. The French national agency AFD is allocating a $150M to help Marocco's solar energy plan. Marocco announced in 2009 that it would invest $9Bn to deployed 2,000 MW of solar generated electricity. When operational by 2020, this would representing more than 40% of Marocco's electricity needs.
Eric Besson explained the cooperation with Marocco is part of a larger plan among Mediteranean countries: It is the centerpiece of the Mediterranean solar plan". North African countries benefit from ideal conditions for solar farms and excess capacity could be sold to European countries like France. Transport losses is an issue but Eric Besson reckons that new development in electricity transport and the integration of information and communication technologies can solve the problem.
The official trip was the occasion to promote the collaboration between Marocco and French clusters like Systematic that are leading research & development in infrastructure verticals like Telecoms, Transport, etc. In this case, the cooperation is expected to benefit some smaller and larger companies. It has the merit to include developing countries in the equation but the French Government is clearly reorganizing its bets in clean-tech in order to have a better chance to be a global player.
The launch of the offshore wind program and the trip of Eric Besson both confirm a change of strategy in renewable energy from the meetings of Grenelle 4 years ago. France is now taking the course in solar to play on the world scale by betting on the underlying infrastructure that will be needed to connect the different pieces of the puzzle. Solar cells is only one component. Like in the case of the wind project, French companies are encouraged to build international alliances.
France benefits from existing verticals in Telecom and Transport and seems to intend to leverage those cards in an emerging international market that is blurring traditional lines among energy, transport, telecom, water, and construction sectors. Earlier this year Total acquired a majority stake in solar manufacturer Sun Power for $1.4Bn, and Schneider Electric acquired smart grid leader Telvent for $2Bn.
Posted by Olivier Jerphagnon in Green policies, Renewable energy | Permalink | Comments (0) | TrackBack (0)
June 30, 2011
From surfing cold waves to rolling out smart eco shirts: do you know Rapanui Clothing?
Rapanui Clothing is rolling out through its distributors a new traceability capability on their lines of eco-friendly t-shirts. In UK stores first, shoppers will be able to use their smart phones to scan QR codes, and know more about the product was made and its carbon footprint. Information is embedded in text and Google-map format. The label is produced for each line of product, including style, color and supplier of cotton.
The Guardian’s eco stores are some of the stores in the UK carrying Rapanui’s T-shirts made of organic materials. As summer season starts in Europe, I talked to Rapanui’s co-founder, Rob Drake-Kinght. “Last year was a breakthrough year for Rapanui’s eco labeling initiative in the UK. It is now that is gathering some real pace.”
Traceability is a key issue in many traditional industries, from clothing to sea-food. Having visibility into the supplier chain is critical to educate the end-customers and transform an industry with eco-friendly practices. Rapanui is not just a clothing company ticking the green box. They are committed to change the entire fashion industry. Rapanui uses certified organic fabrics, support fair-trade labour and their factory is wind powered.
Rob set up Rapanui Clothing with his brother Mart in early 2008 after graduating from University. Avid surfers from the Isle of Wight, they saw and experienced the changing environment and climate at their local beach. Facing a difficult economic recession, they decided that if they could not get a job, they would create one with degrees in Sustainability and Business Administration in their pocket.
Rob and Mart Drake Knight started with only £200 savings each, £400 total. They did not receive Government grants. They bought a box of T-shirts, worked on them and sold them. With the proceeds, they bought two boxes, sold two, then bought four, etc. They used some local “soft loans” leveraging lottery funders, similarly to the use of Groupon in the US as an alternative to seed funding. Rapanui paid their loan back and are now fueling growth on their reserves.
Today Rapanui employs twelve full-time staff in its office in Bembridge, UK. The aim remains to inform through the brand and mix eco with trend - to make it fashionable for people to go green. “It's not that people don't care about child labour, the environment, our climate, it's just that they don't know” reminds Rob Drake Knight. “Rapanui make it easier for people to see where clothing comes from and how it is made so they can make informed choices”. They call it “traceability”
Annual sales have grown 300% year-on-year and brothers Drake-Knight have demonstrated it is possible to be successful entrepreneurs and doing business the right way. They won runner-up place at the 2010 Enterprising Young Brits Awards. Their business ethic and commitment to sustainability was recognized when the brand was Highly Commended by the RSPCA at the Good Business Awards.
“At the end the product has to sell itself. We are not saying that eco fashion is the core product. Attractivity is the core of the product” explains Rob. “We chose the fashion industry because it is a powerful medium to inform people about sustainability and influence their life-choices.”
Where to find the T-shirts in the rest of Europe and North America? Rapanui is in fast growth mode and is in negotiations with larger chains of retail stores. Their eco-label should hit the stores in the US next summer.
Posted by Olivier Jerphagnon in Leadership, Social & environmental entrepreneurship | Permalink | Comments (0) | TrackBack (0)
June 24, 2011
California's energy regulators make UK counterparts seem powerless
Energy prices in the UK, and the rest of Europe, are much higher than those in the US. Residential rates from my energy supplier PG&E average $0.18549 per kWh. Business rates are equally low -I've even heard businessmen report that they tell factory owners in China to start manufacturing in the US because the price of energy is so cheap.
Energy prices in the UK, and the rest of Europe, are much higher than those in the US. Residential rates from my energy supplier PG&E average $0.18549 per kWh. Business rates are equally low - I've even heard businessmen report that they tell factory owners in China to start manufacturing in the US because the price of energy is so cheap.
In the UK, my electricity tariff would be according to this comparison site between 8.7675p per kWh (Npower) and 23.6355p per kWh (British Gas). In the US, these kinds of prices would make the economy grind to a halt.
The UK government is currently struggling with utilities to keep prices in check. But it appears to be failing. Britain's energy secretary, Chris Huhne, recently tried aggressive tactics in urging customers to exercise their right to vote with their wallets in the "free market" energy sector by changing supplier.
The Guardian reported earlier this month that Scottish Power announced it would raise gas prices by 19% and electricity tariffs by 10% from August this year, adding 48p a day, or £175 a year, to the average daily combined gas and electricity bill of its 2.4 million customers.
It is all very well for Huhne to publicly attack the "Big Six" - Scottish Power, nPower, EDF, Scottish and Southern, E.ON and British Gas - and urge consumers to go elsewhere. But where do energy customers go? The electric utilities in the UK appear to act like a cartel and all raise their tariffs after the first power company has broken ranks. Profits may have "slumped" last year at Scottish Power, but profits at its Spanish owner Iberdrola were a bouyant €2.87bn last year.
It is unthinkable that California's utilities would be able to act in this way without reference to the state's Public Utilities Commission, or its consumer watchdog, the DRA. Consumers in the UK by comparison appear remarkably unprotected and the country's defences against price hikes seem toothless - its energy minister and regulator Ofgem expose weaknesses in the system. In contrast, Michael Peevey and other commissioners at the CPUC would be able to put the brakes on.
The UK energy industry's regulatory issues do not end there. Something really is amiss despite having the world's only legally binding targets on reductions in CO2 emissions and reasonably aggressive targets on renewable energy. Issues in the integration of policy and regulation across the energy industry became clear when the National Grid has got itself into a power purchase agreement that means it had to pay wind farm operators £2.4m to switch off its turbines during a low period of demand thanks to an unusually warm May.
Perhaps coal-burning power stations are also compensated in this way, but I doubt it since they carry the UK's baseload. And I am still searching for an example in the US of a utility being compensated in this way.
It raises serious questions about the UK government's strategy when it comes to integrating renewables into the grid. Premiums for renewable energy is an acceptable part of trying to bring the market to maturity and will eventually lead to price parity with fossil fuel energy.
When Scottish Power receives £720,000 for not producing electricity and raises prices without reasonable explanation, then the UK consumer has every right to ask questions about the effectiveness of the government and the regulators to protect them - whether from oil shocks in the Middle East or unseasonally warm springs.
These snags in the UK's renewables sector really need fixing if it is serious about clean energy. Perhaps it's time Peevey shared some tips with his UK counterparts…
Read more at Clean Energy Connection
Posted by Felicity Carus in Green policies, Renewable energy | Permalink | Comments (1) | TrackBack (0)
June 21, 2011
Signs that the water sector is getting smarter
Water is a critical resource and there are clear signs that the water sector is getting smarter. After GE, a number of Fortune 500’s like IBM and Coca Cola are now jumping into the big pond. “The interesting thing is that you see companies involved in water that you never heard of” notes water industry veteran Hu Fleming from Hatch Water before adding: “IBM just announced that they are going to do 3 to 5 billion dollars in water this year… IBM! Google is now in water and everybody is asking why?”
“The most interesting part in water is data management” explains Dr. Fleming. “The water equipment market is traditionally sized around $100Bn. What traditional water treatment equipment manufacturers miss is that the overall market is over $600Bn when you include the “soft” part like sensing, data management, analytics and so on.” IBM estimates the smart-water market alone to be between 15 and 20 billion dollars. IBM originally started to invest in water for semiconductor fabrication that requires large quantities of high purified water.
“The water industry: a massive market bubbles to the surface” was a recent headline on Greenbiz.com. And investors are starting to take notice. A number of smart water companies are closing financing from non-water funds. WaterSmart Software closed in May a $900,000 seed-round led by Menlo Incubator and joined by Sand Hill Angels, Draper Fisher Jurvetson and Physic Ventures. “WaterSmart Software is really about creating a relationship between the water utility and the homeowner.” Explains Co founder Peter Yolles that is aiming to have the same impact that OPower has had with power utilities.
The Israel-based company TaKaDu is also making headlines. It is going after the other grid – water – that needs to be smarter. TaKaDu is currently the only SaaS analytics platform provider for water utilities. The company is backed by Emerald Technology Ventures, Gemini Israeli Funds, and Giza Venture Capital. The amount of legacy data in water treatment facilities is considerable and this provides opportunities for vendors across the entire value chain. Monitoring and control of water is a critical task at treatment facilities.
The main barriers to innovation in the traditional water industry are the fear to test new technologies on the utility side, and the lack of seed funds for early-stage companies. Booky Oren is CEO of Booky Oren Global Water Technologogies and was the co-founder of Miya, which offers water loss management solutions to municipal water utilities. He explains that municipalities are locked into a risk management mode. When he was previously the head of Mekorot, the Israel National Water Company, he championed the idea of using its existing facilities to integrate new technologies under the Watech program. It took some convincing and trust building but 20 innovation ideas were tested out of 600 reviewed.
“Israel decided to expand this initiative to municipalities with a seed fund that covers the cost of the first beta-site after a methodical and rigorous screening of new technologies” applauds Mr. Oren. “The fund is less than $10M but it comes from the regulator, thus easing the way to introduce new technologies.” As a result Israel continues to be a leader in water technologies. Israel is the world's leader in wastewater recovery, with a water recycling rate of about 75%. Spain is a distant second with a rate of 12%.
However, Booky Oren quickly points out that it is a global problem that requires collaboration. An example of collaboration across countries is the request for information that the cities of Akron, Ohio and Natanya, Israel issued last year. They realized that they invested $15M a year in new technologies on their city infrastructure of similar size, yet identified they did not have any software the data. They now are issueing a common request for proposals. The winner will have two reference sites, which will be a lynchpin to sale worldwide.
Suez Environment is the other French water giant and is present around the world, managing and operating water projects. Unlike Veolia with its accelerator prgram, it established a €50M seed fund called Blue Orange that will primarily invest in water management. Bertrand Camus, the CEO of Suez Environment and United Water sees opportunities for innovation In the Western US where there is a competition for the use of limited water across sectors: “How to use water more efficiently and do more with less?” In constrained areas like Los Angeles, agencies are reviewing allocation of water. They looking at new technologies like water re-use, desalination, smart metering, etc. "The goal is to survive with less water and avoid situations like in Nevada where agriculture still uses 70% of the water but only provides for 6% of the jobs" notes Mr Camus.
Perhaps, the biggest sign that the water industry is getting smarter is that it questions some of its long-time assumptions like the current centralized model. Aleid Diepeven is Director for the Netherlands Water Partnership stated that “the water system needs to be distributed to be more efficient”. The Netherlands is known for private public partnerships to accelerate and reduce the cost of new infrastructure build-out. Their broadband policy and shared fiber network build-out remain references in the developed world.
Dr. Hu Fleming comments that “it does not make sense to build pipes in countries like Bangladesh”. The western world is attached to the throwing large capital at building infrastructure but drinking water represents only 2% of our needs. He adds that “non centralized distributed treatment make sense when you at the overall cost. 95% of the cost is in the pipeline. Why not do treatment at the point of use?” The solution is distributed community-size water systems that avoid transportation losses and that empower the local populations in developing countries.
The bigger issue might be the need for a change of narrative from the traditional ‘black-hats’ vs. ‘white-hats’. Two thirds of the world’s population does not have access to tap water nor water sewage. NGOs continue to claim that access to water is a right and must be free while counting accurately the death toll related to water scarcity. On the other side, companies building infrastructure in Africa scratch their head on how to extract and convey water to populations that theoretically cannot afford it. Developing a sustainable business model is part of creating a sustainable eco-system. We are all stake-holders.
Dr. Andrew Benedek received the first Lew Kuan Yew Water Prize in 2008 and he is working with the World Bank to adapt the water innovation model from the western world to developing countries. "Instead of copying of the model of developped countries, which is like expensive mainframes in computing, let's take membrane technologies to small and affordable water plants, like personal computers". He adds "It is happening very slowly and it is painful for me to watch over the last 20 years". The World Bank has a new initiative and Dr. Benedek remains confident that we will rethink water treatment and water waste: "Human inginiuity is boundless".
Some interesting new business models are being tested with the help of micro-financing or trackable Government subsidies, in the Eastern part of Africa for example. A pilot deployment of solar powered water kiosks was successful earlier this year in Nairobi, Nigeria. The villagers are empowered in this situation and have now more time to produce goods. The key is to show the local Government that productivity is increased significantly. There can be a real economic return in developping countries with smart and decentralized water solutions.
Posted by Olivier Jerphagnon in Smart water | Permalink | Comments (0) | TrackBack (0)
June 14, 2011
Is smart water the answer to the water puzzle?
I embarked a month ago on a journey to understand the “water puzzle”: it is arguably the most important resource on the planet, yet it has seen a limited amount of venture investment despite decades of alarming stories and predictions that water is the new oil. Unlike James Bond in Quantum of Solace running after a mad man buying water wells around the globe, I simply asked international experts to help me put the pieces together.
Investments in this area represent only 3% of venture capital invested in clean-tech according to a recent report from Mia Javier, Sr. Research Analyst at the Cleantech Group. The $257M invested in 47 companies in 2010 spanned across water treatment (47%), waste water (41%), and water management (12%). One of the barriers is the complexity of the water eco-system that does not facilitate the integration of new technologies to re-use water and to transform waste to energy. Mia Javier calls for a smarter water framework and simpler water landscape. Is smart water the answer to the water conundrum?
Industry giants like GE and Siemens have shaped the current market with a few but significant acquisitions. Dr. Benedek sold Zenon Environmental, a Canadian water treatment company that developed early membrane technologies, to GE Power & Water group for $1Bn in 2006. It is one of the rare success stories in water visible to the larger high-tech and financial community. Andrew Benedek remembers when he started the company in 1980 that there was no VC money available. Yet, he was “determined to make a difference in the world”.
Government funding for R&D was easier back then. Water is a necessity of life so passionate entrepreneurs will find a way to get funded today, according to Dr. Benedek. He does not think that there is a shortage of money – there are even several water dedicated VC funds like XPV Capital and Meidlinger Partners – but rather a shortage of opportunities that VCs look for. Most VC funds look for companies with annual revenues that broke the $1M mark. Many early-stage companies struggle to secure their first customer wins in a very conservative industry.
“There are established value chains with gate keepers that are not under a threat to move quickly unlike the automotive industry today with electrical vehicles” explains Alois Flatz, Managing Partner at Zouk Ventures, a London-based private equity fund manager focused on clean-tech markets. Water technology companies have to sell via intermediaries to municipalities and they have little incentive to change their ways of doing business.
Mr. Flatz takes the example of Germany where Zouk Ventures is very active: “There are thousands of companies in the water space with revenues ranging from €50,000 and €700,000. They are not able to grow fast in the current environment.” He thinks some of the Government funding used to keep the R&D industry afloat could be redirected to promote innovation. Seed capital is also needed to help cross that bridge but it is rarely the case today. Entrepreneurs are often on their own.
Unfortunately, very few technology companies define themselves as solution providers that gain critical mass in a vertical, like Gas & Oil or Food & Beverages. That prevents them from benefiting from market synergies to attract capital according to Alois Flatz. Industrial markets are not as conservative, and they are probably the best entry points for water technologies. Dr. Vikram Rao, former CTO of Halliburton and now Executive Director of the Research Triangle Energy Consortium, also sees big opportunities for water in the Oil & Gas industry.
“We should stop moving bio-mass and water around as mush. Transmission lines losses are up to 40%!" states Dr. Rao. Drilling technologies like shale gas fracturing use considerable amount of water that could be re-used and need to be treated. The gas drilling technique also know as "fracking" was started by Halliburton in 1949 gained popularity because it is a cleaner source than oil. However, fracking is under increasing scrutiny and was recently banned in France. Alois Flatz comments that “shale gas fracturing will not happen in Europe where population is more dense until it can be proven that the negative environmental can be solved” pointing to geographic and demographic specificities.
Dr. Hu Fleming, Global Director for Hatch Water, has been involved with water for 32 years and works in the mining industry. Some of the largest mining sites are operated in countries like Australia and South Africa where water is scarce. Hatch has tens of offices in and thousands of employees in the southern hemisphere. “Australia is the laboratory of the world when it comes to the water” states Dr. Fleming. Yet, the water industry has not captured people’s attention for a lack of exciting technology innovation deals according to him: “Water is not as sexy as chips and cloud computing. This has been a real issue.”
“There is also a view of ‘being bitten’ by the mirage of water in the eighties” adds Hu Fleming. Water is not quite as tangible as other areas in clean-tech.” He remains very excited about the new prospects in the water sector: “This is the most interesting time I have ever experienced in my thirty plus years.” Historically, water has been reduced to water treatment. Water management is now gaining momentum and is the space to watch in the water industry.
“The real interesting part now is smart water. How do you manage water?” asks Dr. Fleming. It is not just about treating water according to him, it is about managing it through the entire value chain. This requires integrating sensor technologies, conveyance technologies, asset management technologies, water treatment technologies, etc. He concludes: “It is important not to look at water in itself and draw a fence around it. The interaction of water and energy is very important.” Integrated power plant with water management has been a hot issue in clean-tech for example.
As recent advertizement campaigns for bottled waters indicate, smart water could be a lot 'sexier' than traditional tap water. Water companies do not have access to celebrities like Tom Brady or Jennifer Aniston to attract investors' attention but they definitely have an opportunity to tap into our imagination and impact other cleantech verticals.
Posted by Olivier Jerphagnon in Smart water | Permalink | Comments (0) | TrackBack (0)
June 10, 2011
Fight to preserve fish stocks gains momentum: McDonald's and Sodexo to use MSC's blue eco-label internationally
This week McDonald announced that it will add the blue eco-label from the Marine Stewardship Council on the wrappers of Filet-O-Fish sandwiches in Europe. The largest food chain company in the worlds uses four species of wild fish for its sandwiches in Europe: cod, haddock, Alaska pollock and New Zealand hoki.
Why does this matter? McDonald's is committing to procure the 100 million fishes they consume every year only from MSC certified sources. Restaurant and supermarket chains represent about 70% of the seafood sales in the world and have a lot more bargaining power than consumers to influence fishing and farming practices with volume purchases.
Most supermarket chains are changing their procurement habit. Greenpeace publishes every year the Carting Away The Ocean report that ranks the top-20 supermarkets in terms of sustainability. Over the last few years, it has helped bring awareness to this critical environmental issue and influence large retailers like Safeway, which led the scorecard list this year. Wal-Mart was the first in 2006 to introduce MSC’s blue label in nationwide stores to distinguish sustainable seafood.
Does the eco-label help sales? McDonald's thinks that it will in Europe as they have been using sustainable suppliers but stayed away from licensing MSC's blue label. Their sustainable seafood policy is the same in the US, yet MCDonald's will not use the label there for now. The European arm faced more public pressure in a market more sensitive to food safety.
Joanna Trigg, a McDonald’s spokeswoman in London, notes that in North America “foods made with genetically modified ingredients are generally accepted, while that isn’t the case in Europe.” For granting McDonald’s the right to its blue label, MSC will receive 0.5% of the cost of the millions of frozen filets labeled in Europe where McDonald’s has 7,000 restaurants in 39 countries. “There have been some conversations about extending the deal to the United States as well” according to Ms. Trigg.
Sales in sustainable seafood soared in the UK earlier this year. Consumers started to ask for coley, dab, mussels, squid and sardines after species were championed on Channel 4's Fish Fight campaign. The cook and Guardian writer Hugh Fearnley-Whittingstall was credited with boosting demand. UK's fish! was the first restaurant chain in 2001 to use MSC's blue label.
MSC is a non-profit organization based in London and was founded by the World Wildlife Fund and Unilever to encourage stores, restaurants and consumers to choose fish harvested in responsible ways. The MSC eco-label is awarded to fisheries that meet, at their cost, international standards relating to environmental, sustainable, management and traceability issues.
Sodexo also announced this week that it signed a global agreement with MSC to extend its pilot certification process across the 80 countries in which it operates. The agreement includes maintaining a wide variety of species in Sodexo’s catalogs and menus, banning at-risk species and implementing control measures for others.
In 2009, Sodexo was the first foodservice provider in the Netherlands to obtain the MSC eco-label and certification. The MSC certification was extended to 1,000 sites in the United Kingdom and Ireland working with Bureau Veritas in France.
Nicolas Guichoux, Regional Director for Europe at the MSC, said: “we are delighted to see one of world’s largest foodservice companies make such a commitment to certified sustainable seafood. their leadership will contribute to transform the global seafood market to a sustainable basis, which is also MSC’s top priority.”
Posted by Olivier Jerphagnon in Sustainable seafood | Permalink | Comments (2) | TrackBack (0)
May 31, 2011
Solazyme's model for 'winning the future' through innovation
Americans love innovation, particularly if they are venture capitalists . Kleiner Perkins Caufield Byers claim to be able to "see around corners" and anticipate the "next big thing". They must risk real-world capital on often untested ideas that fuels innovation.
Solazyme, the algal biofuels company, has been a great success story for its VC investors, which include VantagePoint Capital Partners, Braemer Energy Ventures and Lightspeed Venture Partners. The company received early investment from The Roda Group.
President Barack Obama said investment in innovation would be how the US would "win the future" by unleashing the ingenuity of business, leading to the country's Sputnik moment in his state of the union address he gave at the beginning of the year.
I had often wondered whether this focus on innovation was more than contemporary alchemy… the profits from innovation could become real gold for the investors, but what would be the benefit for the wider economy. Would jobs, taxes and other revenues flow out of the country?
Henry R. Nothhaft writing in the San Francisco Chronicle clarified this conundrum for me with a fantastic analysis of what this innovation-only policy means: outsourcing manufacturing to other countries such as China, while the US leads on game-changing innovations, creates problems for the economy, not jobs or revenue.
Innovation-only "explains why the $30 billion trade surplus in high-tech products that the United States enjoyed 10 years ago has become a $56 billion deficit," he says.
"Consider that in 1980, America produced 42 percent of the world's semiconductors. Today, the United States produces only 14 percent of the world's supply of a device that we invented 53 years ago. And along with the movement of production offshore, 8 percent of R&D spending by U.S. semiconductor firms within the United States also has moved offshore."
Americans in general appear to find gadgets and shiny new things more appealing solutions to climate change and transport issues. That explains the enthusiasm among VCs and politicians for electric vehicles rather than something a bit simpler to deploy, but less sexy, such as a comprehensive bus system.
Even academics get swept up into these flights of fancy when characterising what "innovation" could do for the future of US transport. Tyler Cowen, who is a professor of economics, lamented in the New York Times at the weekend that companies are being restricted in testing and developing technologies for "driverless" cars. Google has apparently requested a relaxation of laws in Nevada to allow it to test on the state's roads.
Prof Tyler has written in the past about how little benefit the average American may gain from innovation:
"Although America produces plenty of innovations, most are not geared toward significantly raising the average standard of living. It seems that we are coming up with ideas that benefit relatively small numbers of people, compared with the broad-based advances of earlier decades…"
Which is why his comments in the NYT on Sunday were all the more surprising when he described what I would view as a nightmare scenario on US roads:
"The benefits of driverless cars are potentially significant. The typical American spends an average of roughly 100 hours a year in traffic; imagine using that time in better ways — by working or just having fun. The irksome burden of commuting might be lessened considerably. Furthermore, computer-driven cars could allow for tighter packing of vehicles on the road, which would speed traffic times and allow a given road or city to handle more cars."
I can't imagine an arena that an American would find more "irksome" than not having control of their car. And doing something useful while commuting is not a "radical innovation" in countries that are willing to invest in public transport. Cars driven by computers - sorry to contradict the bright minds at Google - belong in the same category as Jetson-style personal spacecraft.
All this blue sky thinking when VCs talk about innovation can be a bit dizzying, which is why companies such as Solazyme come as a breath of fresh air.
Last week, it started trading on NASDAQ after raising $198m on its IPO which exceeded expectations. Solazyme is focused on transport fuels, and has so far signed three increasingly large deals with the Department of Defense to provide hundreds of thousands of tonnes of algae-based fuel for the US Navy.
Those deals, and last week's IPO are ringing endorsements of the science behind Solazyme's technology. But bringing this innovation to scale is problematic, even for a successful startup such as Solazyme, and doubts remain over the scalability of the production of algal biofuels.
Solazyme said last week that it purchased its first commercial-scale plant in Illinois, funded in part by a $22m grant from the Department of Energy, according to Bloomberg.
But it will need much more capital than that to compete with the heavyweights in the oil and chemical industries. The IPO was part of this strategy but Solazyme will also have to partner with the competition - Chevron and Dow Chemicals and Unilever - are among those in the frame. So far, Solazyme, is possibly the closest to a breakthrough start up that can show VCs, and Politicians, that the alchemy of investment innovation - with its magic formula of bringing a new idea to scale - can turn into real gold for the US economy.
Read more at Clean Energy Connection
Posted by Felicity Carus in Green policies, Renewable energy | Permalink | Comments (0) | TrackBack (0)
May 25, 2011
From building water platforms to investing in water companies: do you know Dr. Ramesh?
“What is the source of your passion for water?” That is the first question I asked Dr. Rengarajan Ramesh from Wasserstein & Co. He simply answered: “I grew up in India and there was a massive shortage of water. Even today, my parents get water at home only twice a week.” Water got into his DNA at an early age.
We met last week at the water summit in Toronto. He held a panel on industry sectors, like Oil & Gas, where water plays a critical role. If it was up to him he would have invited half a dozen more experts to join the debate. Dr. Ramesh pointed to me that “In the US, 45% of water is consumed by the power industry” before adding that “globally, 70% of water is used, or rather abused, by agriculture.”
Water treatment is a similar process across industrial sectors. At a high-level there are only two things to be removed to clean water: suspended and dissolved matter. The various types of suspended and dissolved matter are what differentiate technologies different and cause costs to vary significantly. The game in the water treatment industry is to select the right technology for an application, and package it at an appropriate price to deliver the required purity.
The new paradigm is to treat water in a sustainable manner. This has completely changed the water industry according to Rengarajan Ramesh: “Waste water is no longer waste water. It is value that we have not captured yet.” There are increasing regulations across sectors to re-use water, and this opens a whole new set of opportunities to integrate water with energy, etc. GE Water and Process Technologies was the first company to integrate water, waste and energy in a sustainable manner.
During his tenure as CTO, Dr. Ramesh played a key role in the development and implementation of the strategy that led to the creation of GE’s $2.5 billion global water platform, managing engineering and technology organizations of over 700 engineers and scientists while leading the integration efforts of GE Water’s major acquisitions. He has fond memories of those days: “GE is a great company. They have great vision and are typically 5 to 7 years ahead in the market.”
Big corporations like GE saw the value first in water and acquired most of the good private companies. According to Dr. Ramesh, that explains partially the lack of private investment in the water industry. The investment community simply missed the boat. With regulations now enforced, like the drilling wastewater deadline in Pennsylvania, there are new opportunities in the Gas industry and other sectors. Water scarcity is driving prices up and that will also drive change.
At Wasserstein & Co, Rengarajan Ramesh came back to his first love, agriculture, and sees investment opportunities in water management, water control, etc. Wasserstein typically invest in privately held companies with $10M or more EBITDA. He spent 20 of his early career with A Schulman Inc. and got to work with fertilizers to increase crop yield: “Water is the life of a plant. The medium to deliver nutrients is water”. He explained further: “Without water plants die. When you realize that 80% of water is wasted in agriculture, I see opportunities in that space.” Even large fertilizer companies are looking at water seriously now.
After leaving the corporate world and getting in the financial sector, Dr. Ramesh has also been trying to help the third world with charitable organizations. What large corporations have done successfully with water treatment is applicable to the western world because they can afford it. Taking those technology ideas and apply it to third world countries is a big challenge. Dr. Ramesh took the example of hygiene. “I was in India recently to work on self-sustaining toilets. There is no toilet paper and people use water for washing.” Actually, people go out in the open because public toilets are in a very bad shape.
Technology is available today to take the urine out of water and make it usable again. UN has stated clear goals for drinking water and sanitation. The reason why countries like India are not meeting the goals for sanitation is because it is not economically viable. Dr. Ramesh concluded that “applying technologies to the third world and making the transformation to sustainable water possible is what I am passionate about.”
Passion was visible around the summit where Dr. Ramesh caught up with his friends in the industry: “People are here because they are passionate about this industry. Water is not a renewable resource and it has to be preserved.”
Posted by Olivier Jerphagnon in Leadership, Smart water | Permalink | Comments (0) | TrackBack (0)
May 17, 2011
Ontario green companies getting their head above water
Two years ago, Ontario was particularly hit by the global recession due to its reliance on the manufacturing and forestry sectors. The most populated Province in Canada is starting to turn around the corner with a reduction of its deficit in 2011, while continuing a policy to protect education and foster job creation.
World leaders in the water industry gathered today in Toronto, from Private Equity investors to Fortune 500 executives. One of the partners of the H20 Ontario summit helped bring CEOs of companies around the world to discuss opportunities in the water tech sector: “The purpose of the Artemis Top 50 Awards ceremony is to support the most promising water tech companies as they go to market with their solutions” according to Laura Shenkar, founder of The Artemis Project.
Yesterday, I had the chance to meet the four companies based in Ontario that are listed among the 50 winners. All four have enjoyed steady growth recently, doubling sales every year on average, and have broken into a difficult market despite a relative lack of investments in the sector. The CEO of Evandtec, Paul Wickberg, one of the three awardees in water purification, commented that he sees “as many flat water companies as start-ups that are taking off”. “There is a higher awareness around water conservation and I receive more calls every week. Water is becoming a precious commodity.”
UV Pure Technologies and Purifics have made remarkable technology breakthroughs in the water purification industry. Purifics’ process uses a photo-catalytic and ceramic membrane process that decomposes organic and other toxic materials with an oxidation power 2.5 times stronger than chlorine. Their President, Brian Butters, gave a live demonstration of a system. One of the advantages of photo-catalysis compared to UV is the ability to reach the particles even if contaminated water is colored or has an opaque suspension.
UV Pure circumvents the common limitation in UV with a smart design that provides 2.5 times more UV energy penetration than conventional designs. The company has shipped over 10,000 systems for residential, commercial, and industrial applications. An aerospace version of the technology has been chosen by Boeing to purify water on the new 787 Dreamliner.
The three water purification companies are ready to take off in North America but face a number of challenges, especially in the municipal market that is risk averse and requires demonstration sites. Industrial applications have provided the steadiest growth overall so far and allowed the companies to keep their heads above water. Industrial sites like water treatments are particularly interesting because they can be integrated with energy needs and present clear financial returns on investments.
The fourth Ontario based company, Enbala Power Networks, specializes in grid balancing. The Independent Service Operators (ISO) are responsible to mitigate the inherent variations on the electric grid. In Ontario, IESO operates the wholesale electricity market, balancing supply and demand to ensure reliability. Currently, the valves on the Niagara river in Ontario are adjusted every second to compensate for variation on the electricity grid. Enbala is currently testing its solution in a pilot program with IESO and also with PJM and ISO-NE in the US.
Pumping, treating and managing water is an energy-intensive process. By integrating the industrial site needs and the variations on the supply side, Enbala can offset energy production. One of the judges of The Artemis Project Top 50 competition, Dr. Ramesh of Wasserstein Co., commented that GE was the first company to integrate water and energy needs. He sees tighter integration of water across multiple sectors such as Food & Beverages, Oil & Gas, and Mining.
"Regulation services is an existing market" explained Enbala's CEO, Ron Dizy. "We pay water plants to provide Grid Balanace to ISO's, allowing the grid to reliably integrate renewable energy sources". Renewable energy sources, like solar and wind, are intermittent by nature. This has not been a significant issue because wind power only represents so far a few percents of power generation.
But things are changing: solar and wind are called to rise in the double digits with Ontario's Green Energy and Economy Act. The "green economy" is an opportunity for prosperity. Ontario's Government expects the Green Energy Act to create 50,000 new jobs by the end of 2012.
Posted by Olivier Jerphagnon in Conferences, Smart water | Permalink | Comments (0) | TrackBack (0)
May 15, 2011
Tunnel under Niagara Falls to generate electricity for 160,000 households near Toronto
The sheer beauty and power of nature is the first thought that came to my mind today. Ahead of the Ontario’s Global Water Leadership Summit, I had the opportunity to visit the famous waterfalls along the river connecting Lake Erie and Lake Ontario.
Niagara Falls is a worldwide touristic attraction: the royal newlyweds, the Duke and Duchess of Cambridge, are expected to stop there part of the first official trip this summer. The twin cities of Niagara Falls, on both sides of the border, testify of the economic value of the natural landmark.
Less known is that the hydraulic power stations on the Canadian side of the waterfalls are a major source of renewable energy. Sir Adam Beck (SAB) stations 1 and 2 combine 26 generators for a total capacity of 1.95 GigaWatts.
As the state of Ontario is phasing out coal-fired plants, new hydraulic projects are coming to fruition on the Canadian side of The Great Lakes. A new tunnel will improve the efficient use of the power of the Niagara River and will generate about 1.6 billion kilowatt hours, enough to power 160,000 homes.
In comparison, the Pickering nuclear plant operated by Ontario Power Generation, also in charge for digging the tunnel, currently has a total capacity of 3.12 GigaWatts. The Province of Ontario has closed all but four coal-fired electrical power plants to support the overall grid reliability in the region and US neighboring States.
Last Friday, Premier Dalton McGuinty and Ontario Power Generation officials were on site to celebrate when the giant boring machine broke through to daylight. Named after the local hydroelectric power stations, the “Big Becky” completed the tunnel under the Niagara Falls, completing a major phase of the $1.6 billion hydro project.
“This is an incredible engineering feast” stated Canadian Energy Minister Brad Duguid. "It's a tunnel that's four stories in diameter and may well be the largest tunnel ever dug to this point, anywhere in the world." The Opposition pointed though that the project went largely over budget, adding to rising electricity bills for consumers.
"Six hundred million dollars over budget and four years late, so it's hardly a time to be rejoicing" said Progressive Conservative energy critic John Yakabuski. Nonetheless, the Ontario Clean Air Alliance recommended in a report earlier this year that the Government should finish the coal phase out as "an historic opportunity for climate leadership" . According to the updated study, Ontario produces enough energy to keep by 2014 the coal-fired plants on stand-by only, in case of emergency.
Posted by Olivier Jerphagnon in Renewable energy | Permalink | Comments (0) | TrackBack (0)
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