Thursday, 22 May 2008

All-Energy - and on the second day...

Day two of the UK's largest renewables event, with some weary faces after the previous night's big football game. Delegates who'd been off to enjoy Aberdeen's famously boisterous nightlife didn't seem too disappointed.

The morning saw some events directly addressing some of the issues we regularly look at here on Clean Ventures, beginning with the plenary session.

David Clarke, the head of the UK's new Energy Technologies Institute in Loughborough, gave an overview of what it's all about. The ETI taking a collaborative public/private approach, with the government providing £550m over 10 years to be matched by a bevy of heavy industries. Ideally, the ETI wants 11 companies providing £5m pa each - some big boys such as Rolls-Royce, Shell, BP and E.On are already on board.

The focus is on moving tech from R&D into the demonstration phase, and validating the complete system. Project funding will typically be in the £5-25m range, with the ETI potentially providing the entire costs as well as access to the industrial partners. Echoing the previous day's themes, Clarke emphasised the need for a massive scale-up in production of renewables capital equipment, and a new supply chain. Everyone needs to take more risk than they're used to, he noted.

Then came the much-awaited private equity perspective, courtesy of Anne Quinn from energy specialists Riverstone Holdings. Riverstone already has investments of around $1bn in renewables companies and is gearing up for more - Quinn noted that it's a great time to be an investor but also a difficult and challenging time.

The renewables sector likely to be entering consolidation phase very soon, she predicted - some might say it's already started, of course. Quinn also noted that the scarcest resource for renewables firms is management talent, a common complaint from the PE people in most sectors.

A later session, sponsored by the Carbon Trust, focused on the road to commercialisation for new renewables technologies. Not much new, but solid stuff from spin-out entrepreneurs Win Rampen of Artemis Intelligent Power and Clive Dyson of St Andrews Fuel Cells, Dave Raval of the Carbon Trust's TTP Incubator, and IP expert Roger Gill of ITI Energy.

Ken Bruder of research stalwarts New Energy Finance closed the panel by presenting his views on trends in clean energy finance. There's a lot of money looking for clean energy investment, Bruder said, but people still complain they can't access it. He also noted that lots of people were stopping by NEF's booth to ask about raising finance, on the assumption they were some kind of VC outfit. Maybe that's why the real VCs stay away.

Bruder observed that the smart money is moving back into earlier stage VC, especially for tech which takes account of demand-side efficiency. I asked him for his thoughts on the continuing question of whether there's a bubble in cleantech at this level - his answer was yes there is, in some sectors at least. In particular, a lot of solar investments are going to come to earth with a bump next year when new silicon production unblocks that constraint - "We'll go from a situation of high under-supply to high over-supply almost overnight," he said.

With no attention-grabbing sessions tabled for the afternoon, I took another circuit of the exhibition floor, and a chat with the guys who are actually developing this stuff. A lot of the most interesting homegrown tech is in marine, such as the alarming-looking Anaconda and the Manchester Bobber (a name change is in the pipeline for that one, thankfully). Of the bigger companies, StatoilHydro drew a lot of attention by unveiling plans for its prototype deep-water floating wind turbine.

An interesting couple of days in all (even if I did skip out early to enjoy the rather unAberdonian sunshine and see a bit more of the city). The over-riding impression was the scale of the challenge in making the necessary move to a low-carbon economy - but there is reason to be at least cautiously optimistic.

No comments: