Cleantech: Bright Spot In U.S.-China Cooperation

Despite heated rhetoric from protectionist corners that China and the United States must compete over the massive dollars associated with the clean energy industry, some signs are actually emerging that we’re entering a phase of mutual benefit and collaboration.

It’s a natural fit: the U.S. is an innovation engine short of capital and customers, and China is a commercialization hotspot with lots of money and a major environmental problem. Thanks to interesting new deal structures that allow for commercialization to happen while addressing U.S. intellectual property concerns, cooperation finally appears to be a reality.

In April, Zhongding Group announced a $200 million investment to scale the production of U.S. company EcoMotor’s ultra-efficient motor technology. A new manufacturing facility will be built in China to commercialize a technology that would have otherwise taken years to come to market (if ever) in the United States. Similar deals have started to add up. Wanxiang Holdings acquired faltering U.S. battery company A123 Systems (now renamed B456 – can you say rebrand fail?) for $250 million and also invested $420 million in GreatPoint Energy, a company that turns coal into natural gas. Coal-to-butanol company IGP Energy similarly formed a joint venture with Chinese coal giant Yankuang Group for five facilities. Shanghai steel giant Baosteel also invested in waste-to-fuel company LanzaTech, funding a demonstration plant that is expected to result soon in a fully commercial facility.

All of these deals, and many others, have meant rapid acceleration of technology that may not have otherwise happened. But the benefit isn’t just flowing to U.S. cleantech companies starved for cash. China also desperately needs the technologies to address mounting environmental concerns – air pollution, severe water shortages, food safety and the list goes on and on.

According to Cleantech investor Greg Manuel, there is a 5-plus year “innovation delta” between the clean technologies being developed in the United States and those in development in China (with China lagging behind). Similarly, Manuel says, there will be a $4.5 billion shortfall in capital for U.S.-developed clean technology start-ups in the next three years. “This emerging pattern of cooperation is still in its early stages. But there is a tremendous vector of opportunity when you look at the innovation delta, capital gap and severe environmental and energy challenges facing large Chinese enterprises with large pools of cash,” said Manuel, formerly a special advisor for energy affairs to U.S. Secretary of State Condoleezza Rice and senior vice president for corporate development and strategy at Amyris.

This post originally appeared on Forbes.com

Coal: ‘Clean’ or Otherwise, Get Used to It

I know this POV will upset some folks, but here goes: coal isn’t going anywhere anytime soon. It’s cheap, plentiful and easy to access, so we better start figuring out how to use it in a cleaner way. Of course there is no such thing as “clean coal” (as I’ve noted on my blog several times in the past). For that matter, there is no such thing as 100% clean solar or clean batteries (someone is out there right now extracting silicon, cadmium and lithium from the ground). But there is something as “cleaner” coal. Don’t get me wrong – I think it’s important that people like Al GoreBill McKibben and the folks at Power Shift are out there demanding that the dirtiest coal-fired power generation facilities be dealt with. I agree that we need voices to be demanding an accelerated roadmap to coal alternatives in a loud and unequivocal way (including the tongue-in-cheek voice of the Coen brothers). And apparently, according to this map, Coal Power Death Watch, these voices appear to be gaining traction in the US.

But guess what – there’s an elephant in the room called China. Around 70% of China’s primary energy consumption comes from coal today, and that number, even with the most aggressive forecasts for replacing it with renewables, is going to remain around 35-40% by 2050. And coal replacement has no doubt been prolonged by the current economy, which is keeping alternatives at a higher price point relative to fossil fuels. And don’t blame China. The US is just as much to blame on the coal front, if not more so (according to new analysis, one third of China’s GHGs come from export-oriented industries. Guess who’s to blame for that Wal-Mart shoppers?). Not to mention that China’s government is going gangbusters trying to replace fossil fuels. It’s in its interest to do so – from a public health, economic development, political stability and national security perspective.

But let’s face reality. Beijing is not going to create a domestic economic and political meltdown by shutting the country’s coal plants tomorrow. Nor will it risk that in 2020, or 2030. In fact, the government has already been aggressively shutting down dozens of smaller, dirtier coal-fired plants in recent years, but China’s need for more energy also means it continues to open new plants. So a couple of things are needed: 1. a clear and aggressive mechanism for cooperation between the US and China on reducing the impact of burning coal and an immediate removal of all tech transfer restrictions for dual-use technologies that have the ability to abate coal emissions and 2. a willingness on the part of the replace-coal community, myself included, to work with what we’ve got and make sure that we do everything possible to promote cleaner coal as we transition to more renewable forms or energy.

If you want to get arrested for protesting in front of coal plants that’s all fine and good, but once you’re released from custody, start working to help coal plants in China figure out a way to deal with their emissions in as clean a way as possible. They need all the help they can get and time is precious. Whether its sequestering flue gas in building materials, using underground coal gasification, IGCC or something else, it doesn’t matter to me. It just needs to happen.

By the way, I’m more than happy to be convinced otherwise, so if you want to state a different case, I’m all ears.

Frontseat to Cleantech Future: COPENMIND

Cleantech events abound these days, but the organizers of COPENMIND are taking a novel approach – creating a giant shopping mall for the most cutting edge cleantech ideas coming out of academia. Besides having a clever name, COPENMIND will hopefully drive more rapid technology transfer from leading research institutes to the market. In September, the event in Copenhagen will bring together 200 top-notch universities from around the world to provide potential business partners with an inside look at what’s next in cleantech, according to event founder Steffen Moldow. Joining the scientists will be thousands of corporations, as well as investors and leading public figures. It’s no secret that universities are poor marketers, so providing a venue that allows them to get their IP in front of the people who might fund commercialization is key to a more rapid development of the cleantech sector. Pre-event match-making will kick off on May 1 through COPENMIND’s website.

Besides technology transfer, the event will also focus on sponsored research and recruitment. “The event will help solve the issues that are discussed at Davos,” Moldow told me, referring to the World Economic Forum. Cleantech areas of focus include: climate change & air pollution, energy, water, waste & recycling and agriculture & land.

The event will also provide a nice prelude to COP15, the highest body of the UN Climate Change Convention, which is set to take place in Copenhagen in 2009 and will set global climate change direction from 2012.

Global Cleantech Race Quickens: SEZ to LCZ

China’s amazing surge as an economic power started with the creation of special economic zones (SEZs) nearly 30 years ago, as did my “it’s complicated” love affair with the country. The zones provided a blueprint for the rest of the country toward accelerated wealth creation. They also marked the beginning of a catastrophic decline in environmental capital. Now the country may be dusting off the SEZ concept and considering the creation of Low Carbon Zones (LCZs). My involvement in the US-China Clean Energy Forum and JUCCCE has put China front of mind, as has my front-row seat in the international race to see who becomes the superpower of cleantech. In the resource-constrained world of the future, the economies that are most efficient (i.e. best at innovating and adopting clean technologies) will win. First proposed in 2007, the idea of Low Carbon Zones was an outcome of interaction between EU and Chinese think tanks, with the support of the UK Foreign Ministry and China’s National Development and Reform Commission (NDRC). The concept, thumbnailed here and here with even greater detail here, states:

LCZs would aim to stimulate transformational regional political leadership, endorsed at the national level, to create an enabling environment for large-scale innovative low carbon private and public investment. Just as SEZs provided China with a laboratory to shape its participation in the global market economy, the LCZs could pioneer approaches to decarbonisation compatible with Chinese institutions and development approaches.

It appears an initial pilot of the LCZ concept is planned for China’s heavy industrial province of Jilin. I hope the idea flies, as it’s clearly in the global long-term interest. But no doubt questions of IP, tech transfer and ultimately money could create concerns within the industrialized democracies that the West is once again funding China’s development, only to be left holding the bag.

Another seemingly similar initiative in China has recently emerged from the Climate Group, outlined in a new report, which also focuses on developing low carbon cities. According to the Climate Group, the program aims to recruit, motivate, and engage 20 Chinese cities in a five-year campaign to transform and accelerate the local market for energy efficiency and renewable energy technologies. MOUs have already been signed with the cities of Guiyang and Dezhou.  It’s unclear from the materials I’ve read what the specific funding mechanism for either of these concepts will be, although with the backing of groups like the NDRC at the central government level, it’s certainly within the realm of the possible. As I’ve written about before, China’s scale offers the greatest potential for any country (except for maybe India) to drive down costs of cleantech and make clean solutions truly commercially viable.

But that doesn’t mean other countries aren’t trying to compete. Less developed ideas seem to be emerging in the US and Europe. Cities like Seattle and Boston have been floating the idea of cleantech innovation hubs. Various states are also vying to attract cleantech investment and economic stimulus money, including Colorado, Pennsylvania, New Mexico and Michigan. In Europe, efforts are also under way to create the region’s first cleantech incubator, which if successful, might be followed by others. And of course, there is the Oz-like effort in MASDAR in Abu Dhabi (“pay no attention to that man behind the curtain”), where the Wizard is oil money.

It’s great to see a growing understanding that low carbon leadership will mean future political and economic leadership in the world. I just hope that those in the emerging Cleantech Great Game keep in mind the lessons of the original Great Game – that the fight for supremacy over a largely unmapped, strategic territory often leads to unnecessary pain and suffering at the expense of the common good. Let’s hope that the newly announced International Renewable Energy Agency (IRENA) can play a role in fostering the needed collaboration and help us put aside the myopia often caused by financial gain.

A Cleantech World for Poor is Possible (and Profitable)

The distributed and micro nature of cleantech means that it has an important role to play in helping the world’s poor, especially in the areas of energy and water. In fact, cleantech in the developing world is increasingly seen as aneconomic opportunity for local communities (for example, solar water heaters in China). Perhaps just as important, the introduction of clean energy into the developing world, if successful, could have a hugely ameliorating effect on global climate change as those economies expand, people are pulled out of poverty and consumption increases. Solutions for the poor are often lower tech, but higher inspiration. Take the group of six African students who came up with a method of using the sun’s energy to take humidity from the air and turn it into potable water. Or the compost toilet that came out of the Interprofessional Projects Program (IPRO) series appropriately called Developing Extremely Affordable Products for the Rural Poor of the World. More recently, the Sahara Forest Project was announced, with the goal of using concentrated solar power and seawater greenhouses to produce clean energy and water in Africa on a much greater scale. Other great examples that are also equally inspiring have been built around small scale wind, solar cooking, micro hydro, PV-powered water distillation and pumping, biogas, rainwater harvesting, etc  My closest association with the growing momentum in this area is my work with clean-emission cookstove company Envirofit, which is trying to end indoor air pollution, a silent and largely unknown killer in the developing world that results from the burning of dirty cooking and heating fuel in cramped quarters. Envirofit, although a non-profit, is taking a business approach to the problem. Traditionally, the failed top-down philanthropic model was built on spending money to buy clean-burning stoves, giving them away and hoping they didn’t break. Instead, Envirofit is letting the market lead from the ground up – its building a sales, distribution, financing and service infrastructure around the stoves so that locals, starting in India, can actually own the process, as opposed to simply being recipients of charity. This market approach is gaining ground across the donor and NGO world, and initial results from the Envirofit approach in India are very promising.Dr. E.F. Schumacher was one of the earliest proponents of what he called “intermediate technology“, a belief that there are cheaper, more appropriate ways of addressing problems in the developing world other than the capital- and resource-intensive ways of the West. Although motivated by different reasons, more and more for-profit companies are working to improve the development of clean water and energy technology in poor countries. Some companies, like Coke and others in the food and beverage industry, are simply involved because they have no choice (they only remain in business if there is clean water). At the international level, the World Bank, after signing on to support the Clean Energy for Development Investment Framework, announced it would raise a $5 billion cleantech fund for the developing world earlier this year, and Japan has also committed to $10 billion for its Cool Earth Partnership. Some influential private funding organizations are working increasingly in this area as well, including the Acumen FundBill & Melinda Gates FoundationLight up the World Foundation and Shell Foundation. If you are looking to make an individual contribution, consider INVESTGreen MicrofinancePractical ActionGlobal Green and Global Giving.

Ultimately its going to have to be a combination of private sector innovation and capital, and public sector support to bring the might of cleantech to the poor in places that lack basic infrastructure and are often remotely situated. Of course, poverty is not the exclusive domain of the developing world. Action is also being taken in the United States and other richer countries to bring clean energy to the poor.

Here’s a list of 12 technologies and initiatives with potential to help solve the clean energy and water conundrum for the world’s poor. Additional programs focused on the use of solar to alleviate poverty and health issues can be found here and here.

LifeStraw - Lighting Africa - Watel - Envirofit - Sahara Forest Project - Warm Winter Challenge -  World Clean Energy Awards - Global Network on Energy for Sustainable Development - Grameen Shakti - Architecture for Humanity -SELCO - REN21

This post is my contribution to Blog Action Day.