April 17, 2007

The Library House Cleantech event

Library House is putting together some really high quality conferences these days. Here are three interesting speakers from their recent Cleantech event:

Vinod Khosla (eminent VC and founding partner in Kleiner Perkins)
– In a recorded keynote, Vinod said that Cleantech is an attribute, not an industry, and should be subject to rigorous scrutiny of fundamentals, just like any investment.
– He is clear that businesses supported by subsidies, or in markets created by policy, will not be sustainable.
– He does not believe that wind or solar can provide more than 20% of our energy needs, so alternatives will be needed. Biodiesel and biomass cannot scale sufficiently.
– Interestingly, he says that any new energy must be cheaper than existing sources. In other words pure economics, not climate change policies, will determine success!

Neil Rimer, Index Venture (prominent VC. Investor in Skype, FON and others)
– Expressed some scepticism around cleantech deals. Many are more suited to project finance than to VC, and cannot produce high returns.
– Neil likes solutions that intersect IT and environmental technology ( e.g. software for more efficient distribution of electricity).
– Routes to market are the biggest challenge in cleantech due to government intervention and regulation.

Eckart Wintzen (Radical dutch entrepreneur and founder of a green VC fund)
– Made a fascinating argument for a Value Extracted Tax (VET) based on carbon emitted in production of goods and services. This would encourage re-use.
– Rightly challenged the economic mantra of GDP, whereby more consumption means a healthier economy.
– Argued against biofuels because of the large area of land required to produce them.
– Interestingly, said we should let people have everything that they want in Second Life (a virtual world) so that they consume less in real life !
– Came up with an interesting buzzword: to "dematerialise". i.e. to reduce materials used in delivery of products and services.

There were some great start-ups there, including

Solar Century founded by Jeremy Leggett, author of "The Carbon War". He believes firmly in a solar future (which is odd given that solar is expected to make up only 0.1% of electricity by 2010). His firm is coating one entire side of the CIS tower in Manchester with photovoltaic cladding.

Quiet Revolution, producing attractive small scale vertical axis wind turbines that will soon be appearing on the Vauxhall tower and Brighton tower and others.
BAC2, producing electroconductive plastic for use in fuel cells.

Loremo, a german firm designing a very cool looking stripped down electric car.
Enocean, enabling hundreds of tiny automated self-energising sensors (e.g. in buildings) to chatter to one another over radio without needing a power supply. Fascinating idea!

Some themes:
– The conference focussed almost entirely on ‘carbon reduction’, which is the crisis of the moment, rather than more broadly on reducing waste and conserving resources.
– There is a lack of innovative ideas in water distribution, purification etc. There are tremendous opportunities here though it doesn’t fall into the fashionable ‘carbon reduction’ theme.
– There was healthy scepticism at carbon offsetting as a ‘get out of jail card’ rather than a real answer to the problem.
– There is a growing public focus on food miles, local production and distribution. Concerns about energy use are getting integrated into notions of corporate social responsibility (CSR)
– Business and consumers could end up being a more powerful force for change than governments and international bodies.

For Library House’s own review of the conference, see here.