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Once unfairly perceived as an industry forced to trade environmental benefits for investment returns, renewable energy today is regarded by some investors as the greatest economic opportunity of the 21st century, said Ira Ehrenpreis, general partner of Technology Partners www.technologypartners.com.
“People now realize that the green of the environment and the green of economic profits can go hand in hand,” Ehrenpreis said during the keynote address at the Midwest Alternative Energy Venture Forum, sponsored by the Polsky Center for Entrepreneurship, at Gleacher Center on November 6.
Clean technology is now the fastest-growing segment of venture capital, Ehrenpreis said. VC investment in the sector rose 44 percent to $6 billion in 2007, and has already surpassed that total in the first three quarters of 2008.
Clean tech has grown from about one percent of VC initially to 10 to 15 percent of all VC investment today, he said. “Clean tech has indeed finally emerged as that third leg of the venture stool, right along side IT and life science,” Ehrenpreis said.
The six key drivers, he said, in the transition from a movement to a market are:
Historically, green issues appealed to a narrow demographic. Today they are on everybody’s wish list, including people concerned about the environment, national security, and the economy, he said. “We all want clean, affordable, and secure energy solutions,” Ehrenpreis said.
Once the public is interested, politicians soon follow, he said. Renewable energy suddenly enjoys unusual bipartisan support in Washington. “The fight has turned to which politician can be the greenest,” Ehrenpreis said. “Less than three and a half years ago, the then-chair of the Senate Committee on the Environment went on record saying climate change is ‘the greatest hoax ever perpetrated on the American people.’”
Every region of the world is now focused on clean technology. The governments of China and India, which are projected together to account for half of the increased demand in energy in the next 25 years, recently projected massive increases in clean technology, Ehrenpreis said.
China committed to nearly doubling its use of renewable energy by 2020, when it will spend $200 billion on renewables, Ehrenpreis said. India recently increased its initial commitment to renewables from 8 percent to 10 percent of total energy use by 2010.. By then, India will have increased its energy supply by three to four times current levels and its consumption by five to seven times current levels, he said.
After initial interest from corporate leaders such as General Electric www.ge.com, Wal-Mart www.walmart.com, and Google www.google.com, every remaining sector of the American economy has recently embraced clean technology, he said. Clean-tech stock indexes today outperform other major indexes, Ehrenpreis said. “Wall Street has clearly taken notice,” he said.
The day-long annual Midwest Alternative Energy Venture Form, which represented a partnership with 20 organizations and sponsors, featured three additional speakers, 13 presentations by Midwestern alternative-energy companies seeking venture financing, and discussion panels on the next generation of biofuels, clean coal technology, solar technology, and the wind-energy supply chain.