Venture capital investments in the clean energy sector surged 22% in 2008 from $2.7 billion in 2007 to $3.3 billion, according to a report published this week by Clean Edge. But given the deep economic crisis, don’t expect a repeat performance in 2009, warned the West Coast market research firm. Authors of the Clean Edge report — Joel Makower, Ron Pernick and Clint Wilder — described 2009 as “a year of refocus, consolidation, or retrenchment.”
As GER wrote last week, the ongoing credit freeze has jump started a wave of consolidation with cash-rich companies snatching cash-hungry ones — for more on this, see here. But with stimulus funding taking a while to reach market and credit still hard to come by, some companies have also had to cut staff.
On Thursday, Advanced Energy Industries, a maker of power conversion and control system, said it would lay off 330 workers or 22% of its total workforce.
While Clean Edge’s Pernick warns that the transition to the “green economy” won’t be easy in an environment he’s described as “the most dire economic landscape since the Great Depression,” long-term he remains confident that wind and solar-companies will become major employers with jobs in those sectors likely to reach 2.65 million by 2018.
One key pillar to the clean tech job boom are government funds. This week Vice President Joe Biden and Energy Secretary Steven Chu allocated $8 billion of these funds for a weatherization program that is expected to create 87,000 jobs. Energy efficiency for building is probably one of the best way to cut a building’s energy consumption for a relatively low cost. According to DOE data, $1 invested returns $1.65 in energy-related benefits, including lower energy bills.
There were some other notable announcements, including from Royal Dutch Shell, increasing its investment in Codexis, a developer of a unique, enzyme-based biofuel. The Shell investment will help Codexis scale research both in Europe and in the U.S. and quicken the eventual commercialization of its biofuel product.
Also, just a few weeks after announcing a $10 million investment in Geneva-based biofuel developer Principal Energy Limited, Cleantech fund Craton Equity Partners announced a new — undisclosed — investment in smart grid developer, GridPoint. On Monday, Element Partners also closed on a $486 million fund — more than the $400 million it had originally set out to raise. The firm’s current portfolio companies include: biodiesel maker BioFuelBox and solar tech company Petra Solar. The fact that it raised more than it had originally intended is a positive sign in a sector that like the rest of the economy is experiencing a slowdown.
This week also saw key appointments including a White House announcement that author and green activist Van Jones would join the administration as a green jobs adviser. Jones will work in the White House Council on Environmental Quality. Jones, which in 2007 launched Green For All, a national organization that leverages the green economy to lift people out of poverty by providing training in the construction, energy efficiency and renewable energy sectors, helped draft Obama’s green jobs policy.
In New Haven, Conn., Yale University said Rajendra Pachauri, the Chairman of the United Nations Intergovernmental Panel on Climate Change (I.P.C.C.), would join the Ivy League to head its newly established Climate and Energy Institute. The institute will provide analysis and policy propositions on climate change related issues. Also worth a highlight was Scott DePasquale, a senior vice president at GE Energy Financial Services, joining Braemar Energy Ventures as a principal and executive -in-residence in the firm’s Boston office.
The week ended with Massachusetts regulators granting environmental approval to Cape Wind’s wind farm project, located on the Nantucket Sound off Cape Cod. The project was close to falling off the cliff back in 2007 when a local Cape Cod permitting body denied the project a permit. The greenlight by the Massachusetts Energy Facilities Sitting Board overrides this earlier decision and breathes new life into the project. Cape Wind hopes to begin construction on the wind farm by 2010.
