WHAT INNOVATION WILL EACH REGION LEAD GLOBALLY? IS THIS A ZERO SUM GAME, CAN THERE BE EQUITABLE REWARDS, CLEANTECH FOR ALLCAN THE MARKET, WITH THE RIGHT PRICE SIGNALS DELIVER?
Nicholas Parker, Cleantech Group LLC - Water and the Future of the Canadian Economy: Cleantech and the Water Sector
Cleantech for the Water SectorCanadian Water Summit, TorontoNicholas ParkerExecutive ChairmanCleantech Group, LLCJune 16 2010
Cleantech Group: Experts on cleantech innovation - globallyWe convene the industry’s most dynamic events, deliver cutting edge market research, and provide high impact advisory services EVENTS RESEARCH ADVISORY24 Cleantech Forums® worldwide Industry’s most extensive and Skilled team of advisors helps since 2002 in San Francisco, widely cited data on cleantech global enterprises and Boston, New York, Toronto, investments and news locks us institutions decipher the Washington DC, Paris, London, onto the pulse of innovation cleantech landscape andFrankfurt, Brussels, Copenhagen, capitalize on opportunitiesShanghai, Beijing, Delhi, Mumbai
Urban Infrastructure Needs Makeover The World’s Urban Infrastructure Needs a $40 Trillion Makeover.
Framing our water focus• Water risk exposure is reality for businesses – in a world where water demand outstrips supply, businesses must improve their water productivity and learn to do more with less!
Framing our water focus cont’d• By some estimates, it could require $50 billion to $60 billion annually over the next two decades to close the gap between supply and demand.• And technology improvements to water productivity or efficiency cuts across all industry value chains! Agriculture Industry Municipal/Domestic Automated Improved power production and other Improved water irrigation and heavy-water use industrial processes. treatment and crop yield distribution enhancing productivity technologies to improve Inputs/ Process/ Delivery/ Product/ agriculture’s Raw Producti Distributi Service Dispositi on Materials on on Use heavy water use
Where there is opportunity, there are challenges!• The price of water does not reflect its scarce nature and ultimately betrays its value.• Holistic water policies and regulatory structures that incentivize water efficiency or improved water productivity are slowly emerging.• The water sector is currently a diffuse array of businesses including: – Steel & concrete pipe manufacturers, specialty chemical producers, measurement, monitoring & testing firms, tank manufacturers, manufacturers representatives, Consultants and engineers and various other new technology developers, etc.• Buyers of water related goods & services ranging across public and private sectors have very different needs!All of which make for a challenging investment environment!
Describing water sector winners• Successful water services providers will migrate from selling equipment and components to selling solutions aimed at helping business customers reduce their water and energy use.Key Takeaways from 2009 Venture Investments in Water Energy water relationship heats up. Traditional ‘mousetrap’ technologies have been replaced by energy efficient treatment technologies that fundamentally aim to improve the productivity of water treatment and distribution. Water reuse is another twist on the energy efficiency play. Reducing water conveyance has an energy component built into its purchase cost making another attractive energy efficiency twist for venture investors. To that end, alternative sources of water supply are top of mind for industries facing water risk exposure. Water analytics are the safe bet. As the saying goes, you cannot manage what you do not know. The water sector has a clear need for the collection and analysis of water data at both the industry and government levels. And water analytics are proving critical for businesses across all sectors and geographies.
Commodity tradeoff debates intensify• Watch for these tradeoffs to hit the headlines in 2010 – Water-energy – Land-energy – Land-water – Carbon-water• Growing recognition of tradeoffs – The internal combustion engine is far more water efficient than fuel cell or biofuel alternatives – Solar thermal plants require large amounts of water – Environmentalists beginning to object to wind and solar farms for land use reasons• Water is going to be an increasingly important variable in energy production economics – In some places, such as Alberta and Australia, water for coal and oil mining may soon compete with that for food production
Water innovation surges despite drop in venture dollars • 2009 deal activity reached a record high of 50 deals, raising a total of $149 million. • 1Q10 venture investments is the largest 1Q total next to 2007.
Water innovation surges despite drop in venture dollars • 2009 deal activity reached a record high of 50 deals. • The share of early-stage deal activity reached a 60 percent record high in 2009 continuing an increasing trend since 2007.
Select Venture-Backed Water Companies Raw Water Treatment Distribution Smart Water/Analytics Use Wastewater Treatment & Reuse Seed/Early Stage Late Stage
Water M&A activity on pace for a record year 1 2 3 • Canada-based H20 Innovation is the most active water company acquirer with 6 acquisitions since 2005 followed by Aqua America (3) and Siemens (3).
China leads the pack in 2010 ytd water IPO activity • All 5 IPOs to date in 2010 are Chinese companies: Beijing Water Business Doctor, Zheijang Weixing New Building Materials, Jiangxi Sanchuan Water Meter, Chongqing Water Group and Beijing Origin Water Technology.
Select Public Water Companies Other water services players:
Building a green recovery: USD521bnAsia leads the way with almost 2/3rd of green stimulusTotal Package- $32bnGreen- 9%CC-39%, EE-51%, WW-10% Total Package- $537bn Total Package- $649bn Total Package- $712bn Green- 10% Green- 34% Green- 6% CC-30%, EE-68%, WW-2% EE-84%, WW-16% CC-32%, EE-67% Total Package- $977bn Green- 12% CC-33%, EE-50%, WW-17% Total Package- $76bn Green- 79% CC-51%, EE-25%, WW-23% CC- Low carbon power EE- energy efficiency WW- water & waste Total Package- $8bn Total Package- $44bn Green Component- 11% Green- 23% EE-88%, WW-12% CC-35%, EE-65% Source: HSBC estimates, government websites, others 16
Cleantech: The First Global Innovation Revolution Mathematics Gunpowder Industrial IT Cleantech Innovation Centre(s) Initial Spread The Present Day: Multiple regional sources of cleantech innovation are rapidly spreading globally.
Thanks! Access our Services to Participate in the Emerging Clean Economy www.cleantech.com email@example.com See you at Cleantech Forum XXVIII, New York, October 12-13