Welcome to the March edition of G.E.R.’s Top Ten Players in Green Energy. This month Chevron and its pragmatic green strategy takes the lead. Our ranking looks back over the previous month and� takes into account a player’s ability to influence the cleantech industry, whether it be because of a forceful policy position, access to funding or a combination of the two.
Over the last decade, some oil and gas majors jumped right into the green energy revolution, hoping to leverage their considerable cash and energy expertise into a profitable sideline in renewables. That tactic has not weathered the recession well, as BP has shown in the last year. Enter Chevron with a new approach. The California-based company has been easing into green energy with an eye towards making its core oil and gas business less energy intensive. In March, The company opened Project Brightfield, an 8-acre facility to test solar panels under different conditions and compare the performance against benchmark technologies. Chevron is also testing concentrating photovoltaic technology at a mine in New Mexico and solar steam technology in Central California. It�s not a strategy that�s going to save the world, but it is moving green energy forward.
2: Steven Chu, Energy Secretary
Every day, there is one thing you can be sure Energy Secretary Chu thinks about: China, and how can the U.S. beat the rising green power to lead the global green economy. These days, the Secretary is not mincing words, reminding anyone who’ll listen that failure is not an option. He’s blunt and says that� right now, void of any climate change law and paralyzed by the loud voices of climate change deniers, the U.S. is losing that race! At a press briefing last month, Chu told reporters that on China, “the U.S. should sit up and take notice.” He added: “The [Chinese] leadership increasingly sees economic opportunity in cleantech� Having missed the industrialized revolution and the semiconductor revolution, they do not want to miss this opportunity.”
3: Old-school Techies Become Cleantechies
Comparisons are often made between the innovation that drives Silicon Valley companies and the kind of game-changing ideas that cleantech companies need to succeed. It�s not surprising, then, that the two industries have started to share some brainpower. In March, we saw Geoff Tate, formerly of chipmaker AMD and Rambus, take over at Nanosolar, a solar cell maker. A week later, Tony Fadell, the not-quite-James-Brown-but pretty-good-anyway �Godfather of the iPod,� announced that he was leaving Steve Jobs� kingdom to work with consumer greentech companies. Another former chips guy, John Van Scoter of eSolar, that the solar markets today are reminiscent of the semiconductor industry 25 years ago. Things are ready to take off and the techies know how to achieve ignition. Let�s hope so.
The aluminum giant looked at its aluminum raw product and saw cash. Last month, the company rolled out an innovative aluminum-based concentrating solar power (CSP) parabolic trough, that could act as the company’s entry-point into the trillion-dollar global cleantech business. The parabolic trough is being tested at the National Renewable Energy Laboratory’s (NREL) Colorado campus. If test results are good, Alcoa would be well-positioned to turn its budding CSP technology into a full-fledged business. The move by the Pittsburgh-based company in some ways is reminiscent of General Electric�s own entry into the wind turbine business more than a decade ago.
5: Dalton McGuinty, Premier of Ontario
Ever heard of Dalton McGuinty? He’s the Premier of Ontario and these days, probably one of the most effective (and low-key) green politician in North America. As Washington endlessly debates climate change and carbon pricing, McGuinty and his left-leaning government have passed some of North America’s most effective (and investor-friendly) climate change regulations. The regulations have helped attract� billions in new investments, creating the types of green-collar jobs that gets a lot of political airplay south of the border. Over the past year, shepherded by McGuinty, Ontario has debated, passed, and implemented a province-wide feed-in tariff. A couple of years earlier, it launched the RESOP program, an effective system that links renewable energy power projects with long-term power purchase agreements. Ontario is plowing ahead, laying the foundation of a green economy.
6: The Blackstone Group
In the end,� the New York buy-out fund wasn’t willing to spend its much needed political capital defending an unpopular (and potentially lucrative) coal-fired power project. Not when Congress was set to debate crucial legislation that could have severely impacted its bottom line. The plant in question was also going to be in Senate majority leader Harry Reid’s back yard. Not a good idea, when you’re trying to make friends on the Hill. Instead the fund portfolio company, Sithe Global,would convert the 750-megawatt coal-fired Toquop energy project into a 700-megawatt natural gas-fired power plant with a 100-megawatt solar photovoltaic power plant. Blackstone is going green to literally save its green…
“It’s just business….”� That’s in short how BP Chief Executive Tony Hayward justified his company’s decision at the end of March to close its Maryland photovoltaic panel manufacturing facilities, arguing that with the price of PV at an all times low, it just didn’t make business sense to operate a U.S. plant. Instead, BP is relocating� its U.S. production to Chinese and Indian joint-ventures. The company is testy when pressed to tell whether it is scaling back its cleantech business in general, and points out that in the past four years, it’s invested about $1 billion a year in clean energy and plans to invest about the same amount in the next two years. What is undeniable is that Hayward has shelved his predecessor Lord Browne’s “Beyond Petroleum” strategy that sought to transform BP into a forward-looking pan-energy company (at least in the public consciousness). Under Hayward, BP is an old-fashioned oil and gas business with cleantech investments.
8: UK, Wind Tidal
The United Kingdom has been on a green energy spree without precedent this winter and spring. First came the offshore wind plan worth tens of billions of Sterling (UK’s Energy and Climate Change Ed Miliband #1 in the January Top 10). Now, the Crown Estate, which manages public land, has awarded development rights for 1.2 gigawatts of wave and tidal projects around the Scottish coast. The tender is the first step in making Scotland the �Saudi Arabia of marine power,� a laudable goal. Of course, there is a great deal of uncertainty in this project. � a comparison that is a little bit harsh, but points out that marine power is largely untested on a utility scale. We at G.E.R. � perhaps a bit predictably � respond that risk is good and, yes, even failure is good. Government and industry needs to invest in these large-scale energy programs to see if they work. There�s no sense in waiting for the perfect technology.
Here at G.E.R., we love R&D and we really love it when oil and gas or industrial majors invest heavily in R&D. This month, General Electric (# 3 in the December Top 10) really turned our windmills with announcements about its work on thin film photovoltaic solar cells and �340 million ($453 million) investment in offshore wind turbines in Europe. The offshore turbine manufacturing plant and testing facilities are an obvious move. The U.K. alone will provide a multibillion Sterling market in the coming decades, so it makes sense to develop the best new offshore technology nearby. GE is betting on its 4-megawatt wind turbine, designed with technology from recent acquisition ScanWind of Norway, and will open offshore testing facilities in Norway and Sweden. GE�s research into cadmium telluride solar cells is more of a gamble, since it has long been invested in traditional silicon for its s
olar cells. First Solar dominates the cadmium telluride market space right now, but GE is working with another acquisition, PrimeStar of Colorado, to barge into the market. The chances of failure are greater here and that�s partly what makes the effort great. GE is following the advice of its own slogan by being innovative.
10: France Folds Carbon Tax Plan
When Nicolas Sarkozy (#7 in the December Top 10) took over the French presidency nearly three years ago, he vowed to make climate change one of his cornerstone policies and moved quickly. After a few months in office, he called together a national conference for government officials, industry leaders and policy makers. Fast forward to this year, and Sarkozy, much like his American counterpart, is learning the tough realities of climate politics. His administration recently announced it would fold its plan for a first-of-its-kind carbon tax, calculating that the unpopular administration wouldn’t have the political capital to pass the legislation. The French parliament had actually already voted the tax into law, but a few hours before its implementation, the country’s highest court deemed it unconstitutional, ruling that the law’s many loopholes to the country’s carbon-dependent industries rendered it infective.