Sorry, I can’t say I know yet where clean tech is heading in 2010. I’m still getting reoriented after the holiday. But early signs are that, as usual, both the hype and the backlash against the hype, are a bit overblown.
The Economist had a nice assessment of the post-Copenhagen landscape: mixed, essentially.
On the downside, the article said, a lack of firm mandate to cut emissions should have a chilling effect (pun accidental) on investment in clean tech. The article quoted VC Vinod Khosla as saying, “Almost all areas of clean technology will get a little less investor interest because there is no mandate.” And it said that German power company E.ON would back away from plans to accelerate plans to cut its emissions, which it had announced when it expect a firmer result out of Copenhagen.
On the upside, India and China have made important commitments to improve energy efficiency and rich countries have promised billions in green-investment support to poor countries. The article also rightly points out that a lot of the clean tech action to date has been driven by national, regional and local mandates and regulations, not international deals, and those were unaffected (so far) by Copenhagen. Finally, it’s worth noting that climate change mitigation is not the only driver of clean tech. Efforts to develop alternative energy supplies that are more secure than fossil fuels are an important driver as well. The recent period of volatile oil prices and geostrategic natural gas games in Eastern Europe (despite burgeoning global gas reserves) is a persistant motivator of investment in some cleantech subsectors. Chris Nelder is worth a close read for his take on the impact of resource scarecity on investment trends. He foresees a bull market in renewable energy investments. See his take on energy-related investment themes for the next decade here and here.
Some observers have taken note of a slow-down in venture investment in clean tech. Greentech Media tallied 2009 clean tech venture investments at around $5 billion in 2009, down from $7.6 billion in 2008. But in the broader context of overall VC, that decline doesn’t look so bad. According to the National Venture Capital Association, U.S. total VC investments in the first three quarters of 2009 were $12.2 billion, down from $22.1 billion during the same period of 2008. That’s a sharper decline than clean tech alone experienced.
What are the key questions facing clean tech and energy in 2010? I’d love to hear your thoughts and take some suggestions of what to dig into next on this blog.
Happy New Year.