60,000 Green Jobs Projected for NW

newly released report says Washington and Oregon states can assume leadership in five cleantech sectors with the potential to generate up to 63,000 direct jobs by 2025 (up from 11,000 today), and outlines what it says is a plan to be the first US region to achieve 75% of its electricity from carbon-free sources by 2025. By the report’s own admission, there is nothing particularly new about the five presumptive areas of strength (PV manufacturing, wind power development, green building design, smart grid and bioenergy), and the 75% figure is somewhat misleading, given that the two states already get 62% of their electricity from clean hydro and renewable sources (The hydro, of course, has nothing to do with anything we’ve done, but merely the luck of living in a place with lots of mountains and rivers). That said, the report is a very helpful first step for a region that has struggled mightily to get its act together and to find a clear identity and focus amid the clean technology boom in the Bay Area and Boston. It points to a number of signals that point to the potential for future leadership – home to big PV plants from REC and Solar World, home to big wind developments, etc. The report, produced by Climate Solutions and CleanEdge, also proposes a top-level series of 10 actions for the Northwest to achieve its role as a cleantech leader. The top 10 list: 1. put a price on carbon, 2. increase Washington RPS to 25 percent by 2025, 3. implement low carbon fuel standards, 4. pass aggressive green building codes, 5. foster regional cooperation, 6. ensure public funding for clean technology via PERS investments and through targeted clean-tech funds, 7. implement effective tax credits for renewables development, 8. deploy cleantech workforce development programs, 9. establish government procurement policies for cleantech products and services and 10. build out regional smart grids and 21st century transmission backbone.

Oh, is that all? Not to mention that how we achieve all of that in 17 years is still unclear. But it is clear from the report that the proof of Northwest leadership is building in drips rather than torrents. It points out several major weaknesses, including some that make the top 10 actions look easy:

  • Absence of a leading university technology incubator like MIT or Stanford
  • Technology investment climate that pales in comparison to Silicon Valley and Boston
  • Small size of public clean-energy support funds compared to other state leaders
  • Aging electric utility grid system challenged to carry increasing distributed and variable energy sources such as wind, wave and solar
  • Small regional market served by cheap hydro, compared to densely populated markets with high-power prices in other cleantech centers

Another issue that is particularly troubling to me: the lack of synergy between Oregon and Washington. They are working very much in silos, despite the best efforts of Climate Solutions. The one bright spot is the Western Climate Initiative, so that’s hopefully something to build on. And the absence so far of any attempt by Oregon and

Washington’s Fortune 500 companies to be advocates for the region and to work together to bring their influence to bare.

Nevertheless, the report is rather optimistic in its job creation forecasts, with an acclerated forecast of 63,000. The less aggressive target is 40,000. Nearly two thirds of the growth is expected to come from the PV and bioenergy sectors.

Disclosure: I was one of the 50+ people interviewed for the report and I’m a member of the Climate Solutions Business Leaders for Climate Action group. I’ve written about many of these obstacles and opportunities here in the past.

NW RE Events Picking Up

Nice to see Seattle and Portland starting to attract and create some quality cleantech, clean energy events. It starts next week with Oregon’s Green Advantage: Opportunities for Entrepreneurs, which will showcase local companies such asPV PoweredPlas2FuelGreenlite MotorsPowermandShorepower and UV Cleaning (as well as some leading NW multinationals and investors). In addition, there is ACORE’s Renewable Energy Finance Forum (REFF) – West, scheduled for Seattle in October, which promises to be a highlight of the year and already has a solid lineup of speakers. Also, because of the work being done in the region around algal biodiesel by such firms at Bionavitas and Bioalgene, the 2008 Algal Biomass Summit will also be taking place in Seattle in October. Stay tuned as well for the kick-off of the Pacific Northwest chapter of the Renewable Energy Business Network (REBN) in September (you can click on Chapters to find the PNW link and sign up for updates).

(Another) call to action for the NW

Here’s an op-ed that I penned with Dan Rosen that appeared in the Tacoma News Tribune. If you haven’t joined Business Leaders for Climate Solutions, you should.

For a long time, “green” in Washington state has stood for Granny Smith and pine trees. With the Legislature’s passage last session of the Climate Action and Green Jobs bill, the state took a big step in creating a future based on the new green – a vibrant economy based on clean technology (cleantech), the green consumer and green exports.

Gov. Chris Gregoire deserves congratulations for requesting and championing the bill. But we all still have more work to do. The window for establishing leadership in the cleantech economy is fast closing. The opportunity to have a strong voice in shaping federal climate policy is closing fast, too. According to the Cleantech Network, while the total amount of venture capital invested in clean technology grew explosively in the last year, the Northwest accounted for just four percent of the total. The Northwest’s share was $261 million out of a national total of $6.4 billion, barely placing it in the top 10 regions. And that’s not just Washington state, but Oregon and British Columbia as well.

 

Discount the investment in the local biodiesel company Imperium Renewables in 2007, and Washington easily trails the Vancouver, B.C., cleantech cluster and is arguably far behind Oregon, where business leadership has articulated a much clearer vision for establishing an industrial base around the theme of sustainability. California and the Northeast have taken significant leads, and places like Austin, Texas, and Chicago are mobilizing civic leadership around this sector.

 

 

 

 

As members of Business Leaders for Climate Solutions, we are proud to have supported the Climate Actions and Green Jobs bill. We were joined by 32 other state business leaders, representing cleantech entrepreneurs, investors, energy consultants, service providers or simply business people passionate about sustainability.

 

 

 

 

But if the Evergreen State is going to emerge from the ongoing cleantech boom with a significant piece of the green that is being created, the broader business community must rapidly and definitively elevate its game.This is not a niche issue; the challenge of using energy more efficiently and developing sustainable products and services affects every sector of the economy and will provide both opportunities for leadership and tremendous risks for the laggards. A recent survey found 61 percent of business executives around the world expect climate change solutions to boost company profits. That’s why the major corporations that provide Washington’s economic backbone and their executive leadership need to bring their vitally important participation to the table: It’s of great economic interest to all of us.

 

 

 

Washington state arguably has several characteristics that will help us as we strive for a piece of the green economy. Our assets include: unrivaled branding as a center of “green” ideas; a consumer base that is highly sophisticated and demands truly sustainable products and services; and strong trade and economic ties with China and the Far East, which is fast emerging as a leading consumer of cleantech products and services. We applaud Sen. Maria Cantwell’s efforts to make Seattle the center for the dialogue with

China about these issues.We also have a vibrant green building-and-design industry, which is one of the key pillars of the green economy. And we have the potential to become a power in providing integrated design solutions that will be needed to reduce energy usage worldwide, including “green software” and smart-grid applications. 

 

 

Along with these strengths, we need to find sustainable and verifiable ways to leverage our vast forestry and agricultural resources as sources of renewable fuels and carbon sinks as regional and international markets take root.

 

 

 

 

 

 

But key pieces are missing. Specifically, for Washington to compete and lead in the cleantech economy, the business community must demand and achieve three things:

• Legislation next year that commits Olympia to put a price on carbon through a regional cap-and-trade system, along with complementary policies that promote clean energy, sustainable development, transportation and land use, energy efficiency and training for the green-collar workforce;

• Pressure on the federal government for strong climate policy that achieves reductions in global warming pollution that is science-based and beneficial to the economy;

• And we need a business community that is focused on and organized around the vision of making the region an international leader in the coming cleantech transformation.

We have a chance to truly be Evergreen. Now let’s seize it.

VC Activity Picks Up in NW

I spend a lot of time with investors. No secret that people with innovative ideas need capital and I’m always interested in innovative ideas. In a post from last fall that also appeared in the Puget Sound Business Journal, I lamented that VC activity in the NW around cleantech was glacial. That has since changed. Coincidence, or are people actually paying attention to my blog? (Hey, I can dream… ). Here’s evidence of positive momentum:

  • Equilibrium – OVP alum Dave Chen is definitely someone to watch. His new fund will focus on the NW and clean/green. Growth capital is its focus.
  • Ignition - Internal resources have been dedicated. Expect them to focus more on the IT aspects of cleantech given their roots. Also interesting potential with their China JV fund - Qiming.
  • Maveron - I mentioned them in my earlier post. One investment in Terrapass.
  • Nth Power - Technically a Bay area shop, but because Nancy Floyd is based in Portland, they have deep ties to the area. 

    Nancy put money into Propel Biofuels and Imperium.

  • OVP - Made an initial investment in M2E Power, a mobile power company that came out of Idaho’s national lab.
  • Pivotal Investments - A new fund focused on early stage out of Oregon that’s already made one investment in SeQuential Biofuels.
  •  Phoenix - an original investor in Verdiem
  • Polaris - they now have someone in Seattle focusing more time on Cleantech. My sense is that they are initially looking for lower technology risk investments in the space.
  • Second Ave - Apologies to Pete Higgins for omitting him from my last post on this subject. He was actually one of the earlier NW investors, having put money into ICE Energy.
  • Vulcan Capital - Has invested in stirling engine/solar company Infinia, wireless energy controls Ember and Imperium.

Again, biggest credit goes to our brethren north of the border for being the most proactive. ChrysalixYaletownKyoto Planet - they have always been ahead of the curve in the region.Even so, some good deals are still passing us by. Local Seattle geothermal start-up AltaRock Energy - funded by Kleiner and KhoslaVerdiem - funded by Kleiner (although Seattle firm Phoenix was an initial backer). Powerit Solutions - funded by @ventures. Come on fellas, we can do better than that. Time to step it up. Who’s going to step up and lead funding in V2GreenBrammoCooler PlanetPV PoweredBionavitas and Sokets to name but a few?

There is also a good I-bank in Seattle called Cascadia Capital. Half of their shop is devoted to Cleantech, so if you are a Cleantech entrepreneur with some traction in your business and want a personal shopper, these are your guys. I should probably also mention the NW Energy Angels and the Keiretsu Forum, which are both active as well in the angel stages.

NW Needs a Cleaner Vision

In the same way the Northwest has imagined and innovated its way to success with endeavors now synonymous with the region – be it coffeesoftwareoutdoor gearaerospace or microchips – our region can help write the operating instructions for what might be the most important opportunity for the next two generations – cleantech.   The time is now, not to walk but to fly. The land grab has started as different regions – inside the US and out – move to stake their claim as the leaders of the cleantech revolution. The companies and people of the Northwest are uniquely positioned to be among the leaders. The intellectual capital is here. The political will is here. The consumer culture and public sentiment needed to support a cleantech economy are also here.  Tech heavyweights like the San Francisco Bay Area are already way ahead, investing heavily in starting clean technology companies and churning out patents from their universities.   Yet here in the Northwest, local venture-capital money is still trickling into cleantech - Chrysalix and Yaletown in BC are the notable exceptions. Entrepreneurial enthusiasm has been relatively muted. Where is the Bill Gates, the Jeff Bezos, the Paul Allen, the Howard Schultz of cleantech? Cleantech is ripe for great, local visionaries. It is also ripe for another key component of success: a clearly identifiable brand. What does the Northwest stand for? Where does it have a competitive advantage in cleantech that is sustainable over the long haul? What can we get excited about as a community and rally around? The jury is still out, but here is an attempt to crystallize the focus of our region and my candidates for where the Northwest has a real chance to stake a claim, not as “the” world leader, but as “a” legitimate leader with the proof to back it up: The Frontrunners

The Maybes

  • Consumer Cleantech – We have some of the best consumer brands in the world, and there is no reason to believe that we cannot create more in cleantech, whether it’s a consumer-facing biofuels brand (SeQuential or Propel), a family-friendly home energy saving software or a venture capital firm like Maveron that takes its consumer knowledge and puts it to work in the cleantech space. But top talent is being drawn to the Bay, so we need to incubate locally and aggressively.
  • Smart Grid – The Northwest appeared to have an edge here several years ago, with relatively progressive utilities and Itron dominating the metering market, but does it anymore? Not so sure. Other regions have caught up and probably passed us.
  • Renewable Energy Gateway to China – Senator Maria Cantwell certainly would like to see that happen, and efforts are underway to organize a bilateral forum in Seattle of top business leaders to advise the US-China inter-government Strategic Economic Dialogue. The Northwest also exports a lot of engineering knowledge, environmental consulting, green building and design toChina.
  • Power Storage – Between fuel cells in British Columbia and a national lab in Idaho that knows power storage, there is some critical mass here, but can we recover from the disappointment of Ballard?