Energy and the Process of Innovation
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Presented by Stephan Dolezalek of VantagePoint Venture Partners, April 8, 2010 at the Spring 2010 Energy Management and Innovation Center, McCombs School of Business, The University of Texas at ...

Presented by Stephan Dolezalek of VantagePoint Venture Partners, April 8, 2010 at the Spring 2010 Energy Management and Innovation Center, McCombs School of Business, The University of Texas at Austin

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  • Presentation Title Goes Here Insert Version Number Here © 2003 Citrix Systems, Inc.—All rights reserved.
  • About the Natural Edge Project, who produced this image: (from http://www.sourcewatch.org/index.php?title=The_Natural_Edge_Project) The Natural Edge Project (TNEP) "is an independent Sustainability Think-Tank based in Australia. TNEP operates as a partnership for education, research and policy development on innovation for sustainable development. "TNEP's mission is to contribute to and succinctly communicate leading research, case studies, tools, policy and strategies for achieving sustainable development across government, business and civil society. Driven by a team of early career Australians, the non-profit Project receives mentoring and support from a range of experts and leading organisations in Australia and internationally. "TNEP's main activities involve undertaking research, creating education material and curriculum, and developing industry and economic policy. This research is supported by a range of grants, sponsorship (both in-kind and financial) and donations.
  • Presentation Title Goes Here Insert Version Number Here © 2003 Citrix Systems, Inc.—All rights reserved. Instructions for applying a different slide master to a specific slide: Go to the desired slide. Click Format | Slide Design. Hover cursor over the desired slide master (name will appear in popup text). Right-click on slide master and then choose Apply to Selected Slide. Do not perform a regular left click on the slide master; that will apply it to every slide in the deck. If you do that, press Ctrl+Z promptly.
  • Presentation Title Goes Here Insert Version Number Here © 2003 Citrix Systems, Inc.—All rights reserved. Instructions for applying a different slide master to a specific slide: Go to the desired slide. Click Format | Slide Design. Hover cursor over the desired slide master (name will appear in popup text). Right-click on slide master and then choose Apply to Selected Slide. Do not perform a regular left click on the slide master; that will apply it to every slide in the deck. If you do that, press Ctrl+Z promptly.

Energy and the Process of Innovation Energy and the Process of Innovation Presentation Transcript

  • Energy and The Process of Innovation Stephan Dolezalek VantagePoint Venture Partners April 8, 2010
  • VPVP CleanTech Portfolio Page Electrification of Transport Energy Storage Grid Management LED Lighting and Building Efficiency Power Generation Bio-chemical Waste to Energy Solid oxide fuel cell Li-ion batteries Utility grade storage Advanced nanosilicon cathodes Electric vehicle enablement Electric vehicle Energy control systems Home energy solutions – North America Home energy solutions - Europe LED light bulb LED arrays Utility-scale solar thermal Municipal waste conversion Wastewater recovery Energy from Black Liquor CIGS panels BIPV 3rd generation solar cells High efficiency windows Bio butanol Algal biofuels Cellulosic ethanol LED wafers Next-gen LEDs Digital Controls Next-gen turbine design
  • Global Strategic Partners Page (PG&E affiliate)
    • Meaningful Contributions
    • Formal partnership agreement
    • Investors in VantagePoint; co-investors in portfolio companies
    • Technical and market diligence
    • Industry sector insights
    • Deal sourcing
    • Engagement with portfolio companies
      • Commercialization and scale-up
      • International expansion
      • M&A
    • Current engagements with Adura, Better Place, Bridgelux, BrightSource, Tendril, Premium Power, SuperBulbs
    To be announced …
  • Innovation Drives Economic Growth Renewable Energy Electric Transport LED Lighting Energy Storage Energy Efficiency Smart Grid Water Technologies Biomaterials and Biochemicals (with edits to 6 th wave)
  • What it takes to build one transformational company INVENTION AND INNOVATION ENTREPRENEURSHIP GROWTH CAPITAL MANAGEMENT PARTNERSHIP EXECUTION….. $ valuation
  • Page 1990’s European Entrepreneur Today’s American Entrepreneur The New Global Entrepreneur Perspective Matters Those things would be great as long as I still get my pension I don’t have to give up on a good salary to get these stock options do I? I want everything they want and I don’t need much to pay the rent and for food
  • Page
    • Well Intentioned Means of Protection vs Loss :
    • Sarbanes Oxley
    • Accounting Treatment of Stock Options
    • SEC Regulatory Changes
    • Taxation of Carried Interest
    • Attempts to Decrease Volatility
    • Corporate Taxation Hikes
    • Can We afford the Consequences?
    • Fewer US IPO’s
    • Job Losses
    • Fewer Companies Created
    • Fewer Venture Firms
    • Protection of Incumbents
    The Land of Equal Opportunity ‘ New jobs come from new companies, not from small or big business’ 2009 Kaufman Foundation Study Result
  • Page So how did we get from here…
  • Page To here (in less than 5 years)? Now Everyone has an Electric
  • Example of rapid industry transformation Page 2005 2006 2007 2008 VPVP invests in Tesla Motors GM begins working on the Volt GM’s Bob Lutz on Tesla: “That tore it for me,” says Lutz. “If some Silicon Valley startup can solve this equation, no one is going to tell me anymore that it’s unfeasible.” VPVP invests in Better Place 2009 2009 Frankfurt Auto Show Electric vehicles: From “dead” to industry-wide in less than 5 years “ Who Killed the Electric Car” documentary released, profiling the short-lived EV experiments of the 1990s From the Credit Suisse October 2009 “Electric Vehicles” report:
    • “ Electric vehicles offer one of the fastest growth stories over the next 20 years”
    • “ Nearly every auto-maker has plans to develop electric vehicles, with many models targeted to launch in 2010”
    GM CEO Rick Wagoner’s speech opening the 2007 L.A. Auto Show: “At the end of the day, the transformation from mechanical automobiles to vehicles that run on electricity will be as important as the transition from horses to horsepower.” 2004 2003 GM’s Bob Lutz to Newsweek: “The electrification of the automobile is inevitable." * GM’s Bob Lutz proposes that GM pursue an electric vehicle again – but the idea "bombed" inside GM, he says. "I got beaten down a number of times.” * Tesla announces it will release a sports car using the same Li-Ion batteries GM declined to use when Lutz pushed in 2003 GM’s new Volt is showcased at the 2007 Detroit Auto Show GM had produced the EV1 from 1996 to 1999 (for lease only), but then shut down the production line and pulled the cars off the road. From Automotive News: “ Virtually every automaker is displaying an electric vehicle or plug-in hybrid .” * Newsweek, Jan. 8, 2008. “Bob Lutz: The Man Who Revived the Electric Car.” VPVP proposes strategic partnership with Ford and Chrysler (unsuccessful) Renault and Better Place commit to bring 100,000 Fluence ZE EVs to market (Tracing the experience of GM and VantagePoint) Better Place in talks with other major automakers
  • Page Try to buy one of these recently? Remember how hard TV manufacturers fought the requirement to cross over to digital broadcasting; saying customers would never switch in time?
  • LED’s are changing more than just TV Page
  • Moore’s law for Lighting – Haitz’s Law Page
  • Costs Decline as New Technologies Achieve Scale Page Source: DisplaySearch; First Solar company website LCD Televisions Solar PV
  • Fresh off this morning’s press Page
  • LED’s meet Solar Innovation Merges Light Absorption and Generation Page
  • Modernization is the Ultimate Driver of Change Page 1879: Edison incandescent light bulb 1901: First GE alternating current power coal plant 1885: First internal combustion engine automobile produced 1930s: Build- out of today’s electricity grid 1850 1925 1950 1875 1900 The Stone Age Didn’t End Because we Ran Out of Stones We’ve seen this movie before: Technological innovation yields better and cheaper ways of doing things
    • Horse to Automobiles
    • 1900 – >200k horses in NYC/automobile introduced
    • 1912 – More automobiles than horses
    • 1917 – 0 horses
    • Landlines to Mobile
    • 1991 – 16M mobile phones globally
    • 1996 – 100M mobile phones globally
    • 2000 – 740M mobile phones globally
    • 2010 – 4.6B mobile phones globally
  • Page Telecom: from landlines to mobile Photography: from film to digital Energy: from fossil fuels to renewables History has taught us that once industry-transforming tipping points are reached, there is no looking back. In 2008, renewables represented nearly half of all net new capacity installed. Source: US OECD Source: PMA Marketing Research ; Source: EIA
  • With every major wave of innovation, only a small number of winners emerges early on 1990 2000 1980 Personal computers Software Networking Biotech Internet Wind Solar (PV) Electric vehicles (EVs) EV infrastructure Solar-thermal Smart grid Power storage Biofuels Major winners in CleanTech are now starting to emerge 2010 Internet 2.0 2020
  • CleanTech Industries are Large, Diverse and Global Page Electricity $1.9 trillion on traditional generation Biofuels $442 billion on fuel energy spend Water $480 billion on water infrastructure sales Smart Grid $6.0 trillion on commercial and residential energy spend Storage $374 billion on peak load energy Buildings & Materials $665 billion on concrete and packaging EVs $1.1 trillion on car sales Lighting $115 billion on electricity and fixtures 2008 Spend 2008 Spend Source: McKinsey
  • How does the development of clean energy technologies compare to past transformations? Similarities Differences
    • Use Technology to transform industries that have barely changed in decades
    • Substantial venture capital invested in the most promising ideas
    • Corporate partnering is essential, as it was for biotech
    • The utilities are critical gatekeepers , as were the major carriers for telecom
    • Challenges:
      • Much larger scale industries
      • Higher capitalization requirements
      • Intense international competition from others who have “seen this movie before”
    • Opportunities:
      • Cross-pollination of key technologies
      • Greater capital availability (e.g., global funds)
      • Highly experienced managers and investors
      • Availability of outsourced manufacturing
      • Leading incumbents have seen successful partnering models (e.g., in pharma/biotech)
  • A venture capital view of Natural Gas Page
    • Co-fired solar thermal and natural gas to produce 24 by 7 base-load and variable power using shared infrastructure
    • Treatment of frac water for re-use in fracturing and other activities
    • Natural gas fed fuel cells and reformers for retail electricity