19Nov-EG1-Pernick ron

CONFIDENTIAL NOT FOR DISTRIBUTION

Emerging Clean-Energy Trends & Business Innovation NOVEMBER 2013

Ron Pernick Co-Founder and Managing Director, Clean Edge, Inc.

Co-Author, Clean Tech Nation


TECHNOLOGY

POLICY CAPITAL

Claiming the Future

• Remember the Three-

Legged Stool: Tech, Policy,

Capital all Integrally Linked

• Level the Regulatory/Policy

Playing Field

• Focus on Real-

World Project Deployment

• Leverage Private Capital

by Keeping Public Funding

for the "Edges”

• Embrace Standards,

Standards, Standards


Five Laws of Clean Tech

• Global markets for solar PV

and wind reached $153

billion in 2012, up from $6.5

billion in 2000

• Brazil now gets more than

half its transportation fuels

from bioethanol

• In Denmark, Portugal, and

Spain wind contributes

more than 15% of

electricity supply

• Renewables now provide

more of total U.S. energy

supply than nuclear

1 CLEAN TECH CAN SCALE


• Unlike China and India, in

most of the developed

world you do not need to

pursue all energy sources

to meet future demand

• New nuclear is untenable

for many nations, especially

Japan

• Caveat: Germany could be

major exception relying on

new coal as it phases out

nuclear assets

• U.S. model: efficiency +

renewables + natural gas

DEVELOPED WORLD DOES NOT NEED NEW NUCLEAR OR COAL

Five Laws of Clean Tech 2


• Nanotech lies at core of

many clean-tech

innovations

• Everything from porous

membranes for water

filtration to new materials

for lithium-ion batteries to

biomimicry

• Big breakthroughs coming

in nanotech, 3D printing,

and biomimicry

• On demand “minimal”

manufacturing more

sustainable?

“SMALL TECH” WILL PLAY A CENTRAL ROLE



• Clean tech is sprouting

from dozens of hubs:

Hyderabad, Vancouver,

Shanghai, Copenhagen,

Frankfurt, Tokyo, Boston,

and San Francisco

• We’re talking renewables,

efficiency, smart grid, water,

advanced materials and

more – no one place will

own the market

• Massive need requires all-

hands-on-deck approach

• All energy is local

IT WILL BE A DISPERSED REVOLUTION



• We are in the midst of the

de-carbonization of energy

• Stakeholders must

embrace “long view”

• Long-term policy and

business planning required:

− China 5-year plans

− Japan corporate 50-

100 year plans

− U.S. Northwest 5-year

conservation and

electric power plans

ENERGY TRANSITIONS TAKE DECADES



SMART GRIDS AND THE "UTILITY" OF THE FUTURE

• Major 2012 outages from

India to Washington D.C.,

point to need for

emboldened grid

• A big key: energy storage

• Distributed solar generation

challenges utility model

• Emerging models, such as

using buildings as “backup

storage,” could ease

renewables integration

Clean-Tech Developments Reshaping the World


VEHICLE ELECTRIFICATION: HYBRIDS - EVS


• Hybrids in near term

• Electrification, from hybrid

enhancements to EVs,

required to meet stringent

fuel efficiency standards

• EV charging infrastructure

development in medium

term

• Achilles Heel: battery tech

advances needed

• What will be role of fuel

cells, if any?


DEEP RETROFITS TO NET ZERO BUILDINGS

• Efficiency is still a low-

hanging fruit

• Buildings represent around

40% of U.S. energy

consumption

• Breakthroughs in advanced

materials to LED lighting

• Living buildings (Bullitt

Center in Seattle)

• Stronger standards and

new financing models



WASTE TO RESOURCE


• Waste, as in nature, is

increasingly being seen as

a valuable resource

• San Francisco, Seattle,

and Portland, OR recycling

food waste – targeting

recycling rates at/above

70%

• Big breakthrough: Carbon

as a feedstock

• Magic Hat brewery turning

beer by-products into

biogas

http://www.novomer.com/?action=main


• Renewable energy accounted for 49 percent of new electricity capacity in 2012 –

its largest share ever. Largely a story of renewables, efficiency, and abundant,

low-cost natural gas

• Clean-tech deployment in the U.S. is largely being driven by state and metro-level

activity: Feds are mired in partisanship and budgets have been decimated

• Leadership at state and metro levels

integrally linked.

• Expiration of incentives (wind and solar)

loom large

• Key challenges to measures like RPS have

failed across the country. But other battles

rage on (like net metering in AZ)

• Valley of death issues for clean-tech

startups with VC retreat from early-stage

deals

U.S. Markets: State of Clean-Tech Industry Overview


California remains the top-ranked state, leading the nation in almost every

measure of market expansion including new wind and solar capacity, deployment of

hybrid and all-electric vehicles, and registration of new green buildings.

Massachusetts took the number 2 spot from Oregon in 2013. Long a leader in

clean-energy policy, a champion of energy efficiency, and an innovation hub for

technology and finance, the state is moving up in the ranks.

Oregon moved down to third place, but retains its position as a green center with

strong consumer-driven demand for clean-tech products and services. The state is

a leader in HEVs, renewables, green buildings, efficiency, among other areas.

New York broke into the top five for the first time, a result of its exceedingly

energy-efficient economy, supportive policy structure driven by Cuomo and

Bloomberg, and increases in corporate and investment activity.

Colorado once again comes in at #5. The state continues to accelerate its clean-

tech infrastructure build out, particularly in green building, wind, and solar PV.

1

3

4

5

2

State Clean Energy Index 2013 Index Top 5 States


Metro Clean Tech Index


• Commercial PACE – After complications with residential PACE programs, attention has

shifted to the commercial PACE model to finance energy efficiency improvements.

Programs have sprung up in dozens of states including CA, CT, FL, NY, and TX.

• State-Level Green Banks – As the nation’s first “green bank,” Connecticut’s Clean

Energy Finance and Investment Authority (CEFIA) is working to finance large-scale

clean energy and efficiency projects across the state. New York has just launched its

own Green Bank, and with $1 Billion in backing should have even greater impact.

• Metro-Level Built Environment – Chicago Mayor Rahm Emmanuel’s Commercial

Buildings Initiative is conducting extensive energy retrofits to some of the city’s biggest

and most recognizable buildings. Public-private NYCEEC doing similar in New York City.

• Energy storage standards and rulings, namely in CA, position distributed assets for

further growth. Companies like newcomer Stem and solar-provider SolarCity looking to

enable leasing of energy storage systems.

U.S. Markets: Beyond RPS - New State & City Level Financing/Policy Models


Tools for Enabling Clean Energy Innovation

1 Establish Aggressive Targets for Renewable Electricity and Energy Storage

2 Create and Fund Smart Infrastructure Banks (city, regional, national)

3 Leverage Proven Investment Tools from other Sectors (MLPs, REITs, Asset-

Backed Securities, etc.)

4 Phase Out All Energy Subsidies within 10 Years – Starting with Fossil Fuels

5 Establish and Streamline Open Standards (Building Codes, Charging Stations,

PV Installations, etc.)

6 Unleash Crowd Sourcing for Innovative Ideas and Capital

7 Enable New Utility Models like Green Tariffs and Third Party Competition


Thank You.

Ron Pernick Co-Founder and Managing Director

Clean Edge, Inc.

Co-Author, Clean Tech Nation [email protected]

www.cleanedge.com


Copyright and

Disclaimer

This publication is the copyright of

Clean Edge, Inc. No portion of this

document may be photocopied,

reproduced, scanned into an electronic

system, transmitted, forwarded, or

distributed in any way without the prior

consent of Clean Edge.

Information contained in this document

is not intended to be investment advice

or used as a guide to investing.

www.cleanedge.com

Technology

19Nov-EG1-Pernick ron