Solar’s an interesting fight. It feels like two companies are pulling away from the pack, U.S.-based First Solar and China-based Suntech Power. So clearly the U.S. wants the U.S. to win (cough…Solyndra…cough) and China wants the same for their companies. I am probably a biased Westerner, but China is playing hardball. It’s not the loans. China is also subsidizing through land grants, tax breaks, and who knows what else. It’s hard to track and even harder to see what the impact on First Solar will be.
File this under the “Just kinda cool” category. The Technion-Israel Institute of Technology is working on piezoelectric roads that generate electricity as cars drive over them. Using crystals the experimental road generates 400 kilowatts of power per hour. Not a lot but… I like the outside the box/herd thinking.
Foreign dependence on oil is the triple threat: economic vulnerability, killing the planet, and inciting traditional, terrorist, and religious wars. We need a Manhattan Project slash Go to the Moon by the End of the Decade-like commitment to attack this problem. It’s gotten lip-service and the occasional ineffective government initiative for the past 40 years. We haven’t moved the dial at all. What we need is an aggressive yet realistic program to get energy independent. Now I’m not sure about the math or the pitfalls of the proposal but Andy Grove has an interesting article in the latest edition of McKinsey Quarterly. In it Mr. Grove makes a convincing, concise argument for retrofitting existing cars with batteries as the most practical and expedient method of getting us off our dependence on foreign oil. He makes some really interesting points:
- 80% of cars in the U.S. drive daily distances that wouldn’t make any use of gasoline in a hybrid engine,
- Replacing existing U.S. cars with new hybrids would take too long. If 10 auto makers did as good a job as Toyota in rolling out hybrids, in 10 years they would still only account for 5% of all cars on the road,
- The $10 billion cost of a pilot program is peanuts given everything else we are throwing money at,
- We’d have an opportunity to grow a strategic industry – battery technology
Again, I haven’t looked into the math so I’m taking Mr. Grove’s word for it. But it makes for an interesting discussion.
Battery technology versus alternative fuels is a really interesting dynamic in reducing our foreign oil habit. It’s similar to the disk storage versus high-bandwidth downloads for digital distribution. Storage improvements drive down the alternative cost of just-in-time delivery. In the case of cars, increasing battery technology will drive down costs across the board for powering cars even if batteries themselves aren’t employed widely. However, electric/battery-powered cars are inevitable as we move the technology forward. Witness the recent advance by a Korean research team in solving silicon degradation problems that prevent silicon from replacing graphite in batteries as an example of the progression. Battery technology, in cars and elsewhere, is not there just yet but it’s just a function of time.
A friend of mine recently said that cleantech is going to be bigger than the Internet. I’m always on the lookout for leading indicators, so that got my interest. Kleiner Perkins was the canary in the coal mine example my friend pointed to. They were recently profiled in Fortune magazine. They’ve moved completely into cleantech and away from the Internet. Having just raised $1.2 billion for “Green” investments. John Doerr thinks cleantech is a $6 trillion industry. Big bets by some really smart people. Bets that have been ramping for a while. I’ve been hearing about cleantech for some time but always thought of it as 10 years out. The Fortune article plus my friend’s vehemence however got me to take a quick look. What can we make of that statement “bigger than the Internet”? That’s a rather large statement. One leading indicator or at least baseline would be VC investment. According to a recent PwC and the NVCA report on Q2 ’08 VC investments, cleantech investing garnered $884 million in 65 deals while Internet investing was $1.5 billion on 238 deals. So Internet early-stage investing is alive and well and hasn’t been surpassed by cleantech yet. Though that doesn’t mean cleantech won’t be “bigger than the Internet” as this data point doesn’t really speak to velocity nor long-term opportunity. Interestingly, the two largest VC deals for the quarter were cleantech, $132 million and $115 million and cleantech has had the greatest growth as a sector in the past 5 years.
So how else could we gauge the potential? Realistically we won’t know for quite some time. But it’s clear that cleantech is on a tear and ripe for outside the herd potential. Course we’ll also see if it goes through the same bubble, bust, real-potential cycle.