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Trends And Challenges In Clean Technology Chapman

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This presentation provides the latest trends and challenges in the complex world of clean technology

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Trends And Challenges In Clean Technology Chapman

  1. 1. TRENDS AND CHALLENGES IN CLEAN TECHNOLOGY By James C. Chapman Partner, Foley & Lardner LLP 975 Page Mill Road Palo Alto, CA 94304 650.251.1120 [email_address]
  2. 2. INTRODUCTION <ul><li>“ Clean Technology” – “A diverse range of products, services, and processes that harness renewable materials and energy sources, dramatically reduce the use of natural resources, and cut or eliminate emissions and wastes.“ </li></ul><ul><li>Clean Edge, a leading cleantech research firm </li></ul>
  3. 3. Question???? <ul><li>Which contains more energy? </li></ul><ul><ul><li>Kwh of electricity </li></ul></ul><ul><ul><li>Gallon of gas </li></ul></ul><ul><ul><li>Cubic foot of natural gas </li></ul></ul><ul><ul><li>Pound of coal </li></ul></ul>
  4. 4. MARKET SIZE <ul><li>Bio-fuels, windpower, and solar voltaics ALONE combined to create a $188.1 billion industry in 2010. Projected to grow to $349.2 billion in 10 years. </li></ul>
  5. 5. WHAT DOES A CLEAN TECH ATTORNEY DO? <ul><li>Helps companies get started </li></ul><ul><li>Helps companies build their legal infrastructure </li></ul><ul><li>Helps companies attract financing </li></ul><ul><li>Helps companies navigate the complex regulatory environment </li></ul><ul><li>Helps companies grow and prosper </li></ul><ul><li>Helps founders and investors exit – M&A, IPO </li></ul>
  6. 6. CURRENT WORLD-WIDE TRENDS <ul><li>Since 2000, the developing world has contributed 90% of the total increase in green house gases (exempt from Kyoto Accord) </li></ul><ul><li>Since 2000, green house gases in the developing world have increased 50% </li></ul><ul><li>Coal consumption will double between 2005 and 2030 (China and India will comprise 80%) </li></ul><ul><li>There are 45 nuclear power plants under construction (none in the U.S.) </li></ul>
  7. 7. U.S. TRENDS <ul><li>Top three investment sectors for clean technology - Investors are looking to companies with proven, capital-efficient technologies that are ramping up revenue and achieving profitability </li></ul><ul><ul><li>Energy efficiency – Top sector for venture capital </li></ul></ul><ul><ul><li>Energy products tied to cloud computing </li></ul></ul><ul><ul><li>Building controls and consumer efficiency </li></ul></ul>
  8. 8. U.S. TRENDS - Continued <ul><li>A renaissance in LED Lighting – Limiting factor is Consumer confusion over phase out of incandescent bulbs, efficacy of CFL’s, and which actions actually lead to energy savings. Consumers tend to pick the feel-good alternatives rather than actions that lead to real savings such as changing light bulbs. </li></ul>
  9. 9. U.S. TRENDS - Continued <ul><li>Increased role of natural gas – Clean safe alternative will be increasingly intertwined with solar and wind projects </li></ul><ul><li>Increased use of bio-fuels for commercial and military aviation – Hedge against rising oil prices </li></ul><ul><li>Challenge over “rare earth” materials – China is the leading producer and limits export </li></ul>
  10. 10. CALIFORNIA TRENDS <ul><li>California energy policies and realities are in conflict. Goal is 33% renewables by 2020, yet developing alternative energy facilities will get harder. </li></ul><ul><li>Energy will become more expensive in California. Siting power plants in California will become even more difficult. </li></ul><ul><li>Increased use of renewables and natural gas, less coal and no nuclear </li></ul>
  11. 11. CALIFORNIA TRENDS - Continued <ul><li>Innovation and consumer products are difficult in a regulated environment. Standards, not the marketplace, will drive demand for clean tech products and services (buildings, appliances, renewables, fuels, storage, etc.). </li></ul><ul><li>Renewables are a very expensive way to reduce carbon dioxide. </li></ul>
  12. 12. CHALLENGES WITH CLEAN TECHNOLOGY <ul><li>Tremendous technology risk, i.e. ethanol, energy storage, etc. </li></ul><ul><li>High capital requirements </li></ul><ul><li>Customers that are very conservative, risk averse, and late adopters of technology </li></ul><ul><li>Human resources –Lack of domain expertise </li></ul><ul><li>Highly regulated environment </li></ul>
  13. 13. CRITICAL CHALLENGES FOR THE NORTH AMERICAN ENERGY INDUSTRY (By Order of Importance) <ul><li>Environmental regulation </li></ul><ul><li>Aging infrastructure </li></ul><ul><li>Non-environmental regulation </li></ul><ul><li>Aging industry workforce </li></ul><ul><li>Need for new pricing mechanisms </li></ul><ul><li>*Survey of over 100 Canadian electric and natural gas utility executives. </li></ul>
  14. 14. THANK YOU <ul><li>James C. Chapman </li></ul><ul><li>Partner </li></ul><ul><li>Foley & Lardner LLP </li></ul><ul><li>975 Page Mill Road </li></ul><ul><li>Palo Alto, CA 94304 </li></ul><ul><li>650.251.1120 </li></ul><ul><li>[email_address] </li></ul>

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