Finance

Finance | January 2011

FINANCE

Unlocking Innovation

The 6th Revolution足足: Green Tech | BofA Merrill Lynch, Hudson Clean Energy, Element Partners CEDA: clean energy funding | GE Energy Finance, Google

THE INTERVIEWS

Staying competitive | John Dennison, KPCB New financing | Will Coleman, Mohr Davidow

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Making Lasting iMpressions

NEWS FOR BUSINESSES GROWING IN THE GREEN ECONOMY

THIS ISSUE

FINANCE 04. 6th Revolution| Financing the opportunities offered by the technology revolution that has just begun.

09. CEDA | Clean Energy Deployment Administration: the Senate version and why VCs, industrialists and technology companies like it.

12. Interview I | Staying competitive: John Denniston Kleiner Perkins Caufield & Byers.

14. Interview II | Getting to scale: Will Coleman Mohr Davidow Ventures.

THE GREEN ECONOMY Finance 2010

The Sixth Revolution: Leaping the valley of death

By Maryruth Belsey Priebe and A. Tana Kantor

We’re at risk of missing out on some of the most profound opportunities offered by the technology revolution that has just begun. Yet many are oblivious to the signs and are in danger of watching this become a period of noisy turmoil rather than the full-blown insurrection needed to launch us into a green economy. What we require is not a new spinning wheel, but fabrics woven with nanofibers that generate solar power. To make that happen, we need a radically reformulated way of understanding markets, technology, financing, and the role of government in accelerating change. But will we understand the opportunities before they disappear?

Seeing the Sixth Revolution for what it is We are seven years into the beginning of what analysts at BofA Merrill Lynch Global Research call the Sixth Revolution. A table by Carlotta Perez, which was presented during a recent BofA Merrill Lynch Global Research luncheon hosted by Robert Preston and Steven Milunovich, outlines the revolutions—unexpected in their own time— that lead to the one in which we find ourselves.

THE SIX TECHNOLOGY REVOLUTIONS Technology

Start New Technologies and new date or redefined industries

Industrial

1771

Mechanized cotton, wrought Iron, machinery

Canals and waterways, turnpike roads, water power from improved water wheels

Steam & railways

1829

Steam engines and machines for many industries (including textiles), iron and coal mining, railway construction, rolling stock production

Railways (steam engine), universal postal services, telegraph (along railway lines), great ports, depots and worldwide sailing ships, city gas

Steel, electricity and heavy engineering

1875

Cheap steel, steam for steel ships, heavy chemistry and civil engineering, electrical equipment, copper and cables, canned and bottled food, paper and packaging

Worldwide shipping (Suez Canal), railways, and canals; great bridges and tunnels, national telephone, electric networks

Oil, automobile and mass production

1908

Mass produced automobiles, cheap oil and fuels, petrochemicals (synthetics), consumer, defense and industrial use of the Internal combustion engine, home electrical appliances, refrigerated and frozen foods

Networks of highways, ports and airports, networks of oil ducts, universal electricity, worldwide analog telecommunications (analog telephone, telex, and cablegram) wire and wireless

Information and tele-com

1971

Cheap microelectronics, computers and software, telecommunications, control of instruments, computeraided design, biotechnology and raw materials

Cable, fiber optics, radio and satellite world wide digital communications, internet and email, electricity networks that are multiple source and flexible, high speed physical transport links (land, air and water)

Cleantech and biotech

2003

Renewable energy lead by solar, wind and biofules; energy efficiency, energy storage, electric vehicles, nano materials, synthetic biology

Enhanced electricity transmission, decentralized power generation, connection of electric and transportation energy infrastructure, demand response management, increased availability of water and electricity, extensive gene data

First Third Second Fourth Fifth Sixth

New or redefined infrastructure

Source: BofA Merrill Lunch Global Research: Carlotta Perez, “Technological Revolutions and Financial Capital”: Reprinted with permission.

1771: Mechanization and improved water wheels

Times have not changed that much. It’s 2010 and many of us face a similar disconnect with the events 1829: Development of steam for industry and occurring around us. We are at the equivalent of railways 1986—a year on the cusp of the personal computer 1875: Cheap steel, availability of electricity, and and the Internet fundamentally changing our world. the use of city gas 1986 was also the year that marked the beginning 1908: Inexpensive oil, mass-produced internal of a major financial shift into new markets. Venture combustion engine vehicles, and universal Capital (VC) experienced its most substantial financeelectricity raising season, with approximately 1971: Expansion of $750 million, and the NASDAQ was The clean information and teleestablished to help create a market energy sector communications for these companies. can be a 2003: Cleantech and Leading this charge was Kleiner dynamic growth biotech Perkins Caulfield & Beyers (KPCB), a

The Vantage of Hindsight

engine for the US economy, but not without thoughtful government support for private capital formation. [Government policy] promises to serve as a valuable bridging tool to accelerate private capital formation around companies facing the challenge, and can help ensure that the US remains at the forefront of the race for dominance in new energy technologies.

firm that turned technical expertise into possibly the most successful IT venture capital firm in Silicon Valley. The IT model looked for a percentage of big successes to offset losses: an investment like the $8 million in Cerent, which was sold to Cisco Systems for $6.9 billion, could make up for a lot of great ideas that didn’t quite make it.

Looking back at 1971, we know that Intel's introduction of the microprocessor marked the beginning of a new era.

But in that year, this meant little to people watching Mary Tyler Moore and The But the VC model that worked Partridge Family, or listening so well for information and to Tony Orlando & Dawn and telecommunications doesn’t work Janis Joplin. People would in the new revolution. Not only is remember humanity’s first steps the financing scale of the cleantech on the Moon, opening relations Neil Auerbach, Managing Partner at revolution orders of magnitude between US and China, perhaps Hudson Clean Energy Partners. larger than the last, this early in the the successful completion of game even analysts are struggling the Human Genome Project to to see the future 99.99% accuracy—and possibly the birth of Prometea, the first horse cloned by Italian Steven Milunovich, who hosted the BofA Merrill scientists.

Lynch Global Research lunch, remarked that each Flying beneath our collective radar was the first floppy disk drive by IBM, the world’s first e-mail sent

by Ray Tomlinson, the launch of the first laser printer

by Xerox PARC and the Cream Soda Computer by Bill Fernandez and Steve Wozniak (who would found the Apple Computer company with Steve Jobs a few years later).

Staying competitive: John Denniston Kleiner Perkins Caufield & Byers.

Page 12

revolution has an innovation phase which may last for as long as 25 years, followed by an implementation phase of another 25. Most money is made in the first 20 years, so real players want to get in early. But the question is: Get in where, for how much and with whom?

There is still market scepticism and uncertainty about the staying power of the clean energy revolution. Milunovich estimates that many institutional investors don’t believe in global warming, and adopt a “wait and see” attitude complicated by continuing government impasse on energy security legislation. For those who are looking at these

markets, their motivation ranges from concerns about oil scarcity, supremacy in the “new Sputnik” race, the shoring up of homeland security and, for some, a concern about the effects of climate change. Those who see that we are in the midst of a fundamental change in how we produce and use energy are sometimes looked at askance. Milunovich, for all these reasons, is “cautious in the short term, bullish on the long.”

The Valley of Death The Valley of Death, as a recent Bloomberg New Energy Finance whitepaper, “Crossing the Valley of Death” pointed out, is the gap between technology creation and commercial maturity.

But some investors and policy makers continue to hope that private capital will fuel this gap, much as it did the last.

They express concern over the debt from government programs like the stimulus funds

interests are concerned that their investment might not see fruition—get to commercial scale.

Understanding The Valley of Death requires an understanding of how new technologies radically different from the computer revolution.

Infrastructure complexity

“The events of the past few years confirm that it is only with the public sector’s help that the Commercialization Valley of Death can be addressed, both in the short and the long term. Only public institutions have ‘public benefits’ obligations and the associated mandated risk-tolerance for such classes of investments, along with the capital available to make a difference at scale. Project financiers have shown they are willing to pick up the ball and finance the third, 23rd, and 300th project that uses that new technology. It is the initial technology risk that credit committees and investment managers will not tolerate.”

This revolution is highly dependent on an existing— but aging—energy infrastructure. Almost 40 years after the start of the telecommunications revolution, we are still struggling with a communications infrastructure that is fragmented, redundant, and inefficient. Integrating new sources of energy, and making better use of what we have, is an even more complex—and more vital—task.

Everything runs on fuel and energy, from our homes to our cars to our industries, schools, and hospitals. Most (American Recovery of us have experienced the Bloomberg New Energy Finance and Reinvestment disconnect we feel when Whitepaper, “Crossing the Valley of Death.”

Act) which have caught in a blackout: “The invested millions in air-conditioner won’t work new technologies in the so I guess I’ll turn on a fan,” only to realize we can’t clean energy sector, as well as helping states with do either. rebuilding infrastructure and other projects. They Because energy is so vital to every aspect of our question why the traditional financing models, economy, federal, state and local entities regulate which made the United States the world leader in almost every aspect of how energy is developed, information technology and telecommunications, deployed, and monetized. Wind farm developers can’t be made to work today—if the Government face a patchwork quilt of municipal, county, state and would just get out of the way. federal regulations in getting projects to scale.

But analysts from many sides of financing believe Incentives from government sources, as well as that government support—of some kind—is essential utilities, pose both an opportunity and a threat: the to move projects forward, because cleantech and market rises and falls in direct proportion to funding biotech projects require a much larger input of capital and incentives. Navigating these challenges takes in order to get to commercialization. This gap not time and legal expertise: neither of which are in only affects commercialization, but is also affecting abundant supply to entrepreneurs. investments in new technologies, because financial

Development costs

But even with such help, venture capital and other private investors are needed to augment costs that cannot be bourn alone. These investors look to some assurance that projects will produce revenue in order to return the original investment. So concerns over the Valley of Death affects even early stage funding.

Though microchips are creating ever-smaller electronics, cleantech components—such as wind turbines and photovoltaics—are huge. They can’t be developed in a garage, like Hewlett and Packard’s first oscilloscope. A new generation of biofuels that utilizes nanotechnology, isn’t likely to take place out of a dorm room, “Every as did Michael day, we see Dell’s initial American business selling companies customized with computers. What promising this means for technologies that sixth revolution projects is that are unable to deploy their they have much larger funding products because of a lack needs, at much earlier stages.

of debt financing. By filling

Time line to completion So many of us balk at two year contracts for our cell phones, that there is talk of making such requirements illegal. But energy projects, by their size and complexity, look out over years, if not decades. Commercial and residential customers look to spread their costs over ten to twenty years, and contracts cover contingencies like future business failure, the sale of properties, or the prospect of renovations that may affect the long term viability of the original project.

Stepping up and supporting this gap, the government will innovation, universities—and ignite the mass deployment increasingly corporations— of innovative technologies— are partnering with early allowing technologies ranging stage entrepreneurs. They from industrial waste heat are providing technology to pole-mounted solar PV to resources, such as laboratories prove their economics and Michael Holman, analyst for and technical support, as well gain credibility in the debt Lux Research, noted that a $25 as management expertise markets.” million investment in Google in marketing, product Ben Weinberg, Investment Professional at morphed into $1.7 billion 5 development, government Element Partners years later. In contrast, a leading processes, and financing. energy storage company started Universities get funds with a $300 million investment, from technology transfer and 9 years later valuation remains uncertain. arrangements, while corporations invest in a new These are the kinds of barriers that can stall the technologies, expanding their product base, opening drive we need for 21st century technologies. n new businesses, or providing cost-benefit and riskanalysis of various approaches.

Images from Creative Commons. tmaioli: Biolab phileNordulund: High jumper jurveston: Biofuel bubbles danielfoster: Chinese man and silk factory bsabarnow: Car tire bert k: Electric tower-looking up iboy daniel: Telecommunication tower extranoise: Steel factory D.L.: Colourful bio tubes Professor Bob: Steam engine Steve&Jemma Copley: Waterwheel

SAFE LANDING

CEDA: Clean Energy Deployment Administration Looking to help bridge the gap in new cleantech and biotech projects, is a proposed government-based solution called the Clean Energy Deployment Administration (CEDA).

There is a house and senate version, as well as a house Green Bank bill to provide gap financing.

Recently, over 42 companies, representing many industries and organizations, signed a letter to President Obama, supporting the Senate version, the

“21st Century Energy Technology Deployment Act�.

Both the house and senate bills propose to create, as an office within the US Department of Energy (DOE), an administration which would be tasked with lending to risky cleantech projects for the purpose of bringing new technologies to market. CEDA would be the bridge needed to ensure the successful establishment of the green economy, by partnering with private investment to bring the funding needed to get these technologies to scale.

Both versions capitalize the agency with $10 Billion (Senate) and $7.5 Billion (House), with an expected 10% loss reserve long term.

By helping a new technology move more effectively through the pipeline from idea to deployment, CEDA can substantially increase private sector investment in energy technology development and deployment. It can create a more successful US

21st Century Energy Technology Deployment Act The Senate summary of CEDA, includes the following.

Mission

10

Encourage deployment of technologies that are perceived as too risky by commercial lenders. The agency is encouraged to back riskier technologies with a higher potential to address our climate and energy security needs. The agency will use a portfolio investment approach to mitigate risk, with the goal of become self-sustaining by balancing revenues from investments and services with a wide range of risk profiles.

Form CEDA would be an independent administration within DOE. A Board of Directors and an Administrator would be appointed with the advice and consent of the Senate. A permanent Technology Advisory Council will oversee the technical aspects of new technologies and to set goals for the administration.

Functions The agency will provide credit to support deployment of clean energy technologies including loans, loan guarantees, and other credit enhancements. The agency can also provide secondary market support by developing products such as clean energy-backed bonds that would allow less expensive lending in the private sector.

Oversight There would be various levels of financial oversight, including audits by the Comptroller General and unfettered access to the books of CEDA by the Secretary. The bill sets out a process for goal-setting in the various technology areas and mandates numerical targets for achieving the goals, against which the performance of CEDA may be judged.

White paper with comparisons of financial impacts, differences in goals and financial impacts.

clean energy industry, with all the attendant economic and job creation benefits.

Who Benefits?

that is needed to push us out of a stagnating economy will be supported by innovation coming from the cleantech and biotech sectors.

Google’s Dan Reicher, Director of Climate Change and Energy Initiatives, has been a supporter from the inception of CEDA. He has testified

CEDA funding could be seen as beneficial for even the most unlikely corporations. Ted Horan is the Marketing and Business Development Manager for Hycrete, a company that “GE Energy sells a waterproof Financial Services concrete. Hardly a supports the company that springs creation of CEDA to mind when we or a similar think about clean institution because technologies, he it would expand recently commented the availability of on why Hycrete CEO, low-cost capital Richard Guinn, is to the projects a signatory on the and companies in letter to Obama: which we invest,

“

before both houses of Congress, and was a signatory on the letter to President Obama.

The allocation and it would help of funding expand the market for emerging for technology clean energy supplied by other Google’s technologies GE businesses.” interest in clean and through CEDA Kevin Walsh, managing renewable energies director and head of Power is an important dates back several and Renewable Energy at GE step in solving years. The company Energy Financial Services our energy is actively involved in and climate projects to cut costs challenges. of solar thermal and Companies expand the use of on the cusp of large-scale plug-in vehicles, and has developed commercial deployment the Power Meter, a product which will benefit greatly and help brings home energy management to accelerate the adoption anyone’s desktop—for free. of clean energy practices Financial support includes throughout our economy.” corporations like GE Energy In his opinion, the Financial Services, Silicon Valley manufacturing and construction Venture Capital such as Kleiner, Perkins Caulfiled and Byers, and Mohr Davidow Ventures, and Energy INTERVIEW Capital including Hudson Clean Getting to scale: Will Energy and Element Partners.

Coleman, Mohr Davidow Ventures.

Page 14

Can the senate version of CEDA save the sixth revolution from the Valley of Death?

As Will Coleman [see interview] from Mohr Davidow Ventures, said, “The Devil’s in the details.”

The Senate version has two significant changes from previous proposals: an emphasis on breakthrough as opposed to conventional technologies, and political independence.

Breakthrough technologies

“

The government itself taking on the responsibility of deciding what technologies to back isn’t likely to work—it’s an approach with a dreadful track record. That said, it is important for the federal government to lead – the current financing model for bringing new energy technologies to market is broken, and new approaches are badly needed.”

For many, the senate bill has many advantages over the house bill, in providing for a decision making process that includes is technologists and private sector experts.

“Our investment team putting money to work in green energy technology companies as well as clean energy projects.

By helping a new technology move more effectively through the pipeline from idea to deployment, CEDA can substantially increase private sector investment in energy technology development and deployment. It can create a more successful US clean energy industry, with all the attendant economic and job creation benefits.”

Coleman said that Quoting Coleman: “breakthrough” includes I think both sides [of the aisle] the first or second understand this is an important deployment of a new program, and must enable the approach, not just the government to be flexible and employ game changing sciencea number of different approaches. The fiction solution that Senate version empowers CEDA to take finally brings us limitless a portfolio approach and manage risk energy at no cost. The over time, which I think is good. In the Bloomberg New Energy House bill, CEDA has to undergo the white paper uses the annual appropriation process, which runs term “First of Class.” the risk of politicizing every investment Bringing solar efficiency decision in isolation and before we have up from 10% to 20%, or a chance to see the portfolio mature.” bringing manufacturing Michael DeRosa, Managing Dan Reicher, costs down Director of Climate Director of Element Partners added, by 50%, Change and Energy would be a The framework must ensure the Initiatives, Google, Inc. breakthrough selection of practical technologies, that would optimization of risk/return for help us begin taxpayer dollars, and appropriate to compete oversight for project selection and with threats spending. Above all, these policies must from China be designed with free markets principles in and India. Conventional technologies, those that are mind and not be subject to political process.” competing with existing commercialized projects, If history is any indication, rarely are those in the would get less emphasis. middle of game-changing events aware of their role in what will one day be well-known for their sweeping influence. But what we can see clearly now is the Political Independence gap between idea and commercial maturity. CEDA Political independence is top of mind for many certainly offers some hope that we may yet see the who spoke or provided an analysis of the bill. Michael cleantech age grow up into adulthood. But will we Holman, analyst at Lux Research, expressed the act quickly enough before all of the momentum and strongest concerns that CEDA doesn’t focus enough hard work that has brought us this far falls flat as other on incentives to bring together innovative start-ups countries take leadership roles, leaving us in the with larger established firms. dust? n

“

“

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BUSINESS GREEN

12

| INTERVIEW I Financing New John Denniston: Technologies: Kleiner Perkins Facing the China Caufield & Byers Challenge Partner

US competitiveness in the 21st Century, how we’re falling behind and what we can do about it.

Is cleantech catching on?

I

t’s doing much more than catching on. World-class entrepreneurs are sprinting into the greentech sector from all walks of life: large companies, small companies, academia and public service.

What’s the green tech opportunity?

T

aken together, the energy and transportation industries are the world’s largest, roughly $6 trillion annually. Beyond energy and transportation, entrepreneurs are seizing opportunities to improve an enormous range of industrial processes. Simply put, the greentech opportunity is to substitute sustainable green technologies and products for the incumbent brown sources and methods.

The high cost of renewable energy sources, relative to the incumbent fossil fuel and nuclear competition, is a challenge to the more rapid adoption of clean power. Why does green still cost more? Primarily because it’s still so new, meaning innovators have only just begun to work on cost-reducing breakthroughs, and production volumes are still so low that providers have yet to benefit from economies of scale. In other words, these cost-down and scale-up phenomena are still in their infancy in the renewable energy industries. In contrast, most fossil fuel plants were constructed many years ago, have already achieved the benefits of cost reductions, and are now fully amortized, meaning their owners no longer need to pass on these costs to ratepayers.

economy, including greentech, the credit markets are fundamentally broken. Renewable energy projects and factories for breakthrough greentech products have historically been financed with a combination of equity and debt. However, the financial crisis has severely weakened the debt markets, and debt is now generally scarce, and in many cases, nonexistent.

CEDA enables clean energy loans, and in so doing, promises to provide not only strong environmental leadership, but also will help boost our struggling economy and international competitiveness.

If America fails to establish a strong greentech leadership position, I fear our future prosperity is at risk, and here I speak from personal experience.

As I’ve traveled on business to Asia and Europe, I’ve watched other governments strive, Simply put, and often succeed, America is trailing in the in emulating in the race to build renewable renewable energy sector the technology energy industries – the very industries that offer innovation that has been a hallmark of us our best hope of job the U.S. economy. creation and a rising Determined public standard of living. policy has given overseas entrepreneurs The news is advantages, including sobering: Only four financial incentives and U.S. companies appear large investments in among the international research and education.

lists of the top-ten firms producing solar modules, wind turbines and advanced batteries.

Just the same, the greentech set of industries have made enormous progress in just the past few years.

For example, the solar industry was very small only 5 or 6 years ago. This year, the global solar market will exceed $50 billion in size, which will surpass the size of the global online advertising market. The wind market this year will also exceed $50 billion worldwide. And the advanced battery and electric transportation markets are now poised for growth.

Why is CEDA needed?

C

EDA directly addresses a central challenge to the faster adoption of breakthrough greentech solutions: the longstanding unavailability of loans for breakthrough technologies, now aggravated by our financial crisis. For many segments of our

Here’s an example: just about five years ago, China’s central government decided that renewable energy was missioncritical to its future, and aggressively rolled out ambitious policies and huge investments to support it. It granted subsidies, free land, and cash for research and development.

China’s state-owned banks are now bankrolling green exports, a brilliant means of deploying its foreign exchange reserves as a competitive weapon at a time when the rest of the world is short of cash. Just last weekend, the Chinese government announced a $5 billion to ONE if its solar companies. The Chinese government is also finding ways to provide lowcost loans to companies in other greentech sectors, including wind and advanced lighting.

The results of these policy innovations have been stunning. In the blink of an eye, China has built an industry basically from scratch to become the world’s largest solar producer. Three years ago, China 16

13

BUSINESS GREEN

| INTERVIEW II

14 Building New Industries

by Reinforcing Our Strengths

Will Coleman: Mohr Davidow Ventures

Both sides of the aisle recognize we are at a point of industrial transition, and government must play a role of some kind. There’s an artificial cost base in incumbent technologies, so there is a need to help these newer technologies get to scale.

How do you see the cleantech revolution?

W

e’ve been reliant on the same industrial platforms for almost a century in some cases and it leaves a lot of room for innovation. We’ve seen many investors investing as an extension of what they know and are good at: solar investing by semiconductor folks; biomass by biotech; energy management from software investors. But it’s complicated.

We’re competing with hundreds of years of development and cost reductions in the energy sector.

In some ways in the U.S. we’re a victim of our own success. We have a huge amount of legacy infrastructure in this country which can hold us back. China, India and others are able to leapfrog because they don’t have the same sunk costs. Investors and entrepreneurs need to contend with pretty efficient incumbents and a whole new set of players who control the distribution channels and manage the networks. In most cases the successful ventures will figure out how to engage with these players as customers, investors, and partners.

How do you see CEDA?

I

t can offer enormous public benefits. Private capital will invest in solutions that solve the macro problems: climate change, oil dependence, and energy security. But we [Venture Capital] have to balance risk and return and those returns don’t factor in the public benefits. Venture capital has always been fairly good at investing in new technologies, but to prove some of the more industrial cleantechnologies at scale often outstrips the capacity of venture capital. So we must attract private capital into these industrial value chains early.

Both sides of the aisle recognize we are at a point of industrial transition, and government must play a role of some kind. There’s an artificial cost base in incumbent technologies, so there is a need to help these newer technologies get to scale.

It’s not that we need this forever. It’s that we really need a vehicle today that gives investors a reliable way to bridge the funding gap, and ultimately helps attract private institutions to fill that gap themselves.

Do you prefer one bill over the other?

W

e like the senate language better because the structure is more focused on innovation.

I think both sides understand this is an important program, and must enable the government to be flexible and employ a number of different approaches. The Senate version empowers CEDA to take a portfolio approach and manage risk over time, which I think is good. In the House bill, CEDA has to undergo the annual appropriation process, which runs the risk of politicizing every investment decision in isolation and before we have a chance to see the portfolio mature. This will likely skew investments toward less risky and less needy technologies.

The thing about CEDA is that the devil is in the details. It needs to complement rather than compete with private capital. CEDA needs to be focused on filling the funding gaps that exist for new technologies first and foremost. This is really at the 1ST or 2ND commercial plant phase.

We’d like CEDA to be self sustaining. But for CEDA to be useful it has to take on risk that private capital won’t and it has to be given the latitude to do that.

The classical venture model is that you expect that 20% will return 80% of the fund, and 30-40% will fail. For CEDA if the loss rate exceeds 10% then they want to re-evaluate. The rate doesn’t have to be as high as for venture capital, but we have to be ready to accept some failures. We don’t want to see CEDA have such aggressive financial demands that it gets watered down, and doesn’t support the new technologies that are most needed. n

At Mohr Davidow Ventures, Will Coleman brings a background in energy-related technology, development, and policy.

He focuses on cleantech investments, and supports MDV portfolio companies. He is on the Venture Fund Advisory Board for the ASE, which operates the National Renewable Energy Laboratory, and is on the advisory committee for the California Energy Commission’s Alternative and Renewable Fuel and Vehicle Technology Program, an $840m fund to stimulate deployment of low carbon transportation technologies. Will has also served on the advisory committee for the Western Governors’ Association.

What’s Missing from Your WindMissing Project?from Your Wind Project?

What’s

16

When Competitive Power Ventures Inc. (CPV), a power generation When Competitive Power Ventures Inc. (CPV), a power generation development and asset management company with extensive development wind energy development experience, decided to sell Phase I of its and asset management company with extensive wind energy development experience, decided to sell Phase I of its Keenan wind farm project to Oklahoma Gas & Electric Company, CPV turned to Dickstein Shapiro’s experienced windKeenan energy and wind farm project to Oklahoma Gas & Electric Company, corporate counsel to structure, negotiate, and document the CPV turned to Dickstein Shapiro’s experienced wind energy and transaction. CPV continues to rely on Dickstein Shapiro’s energy corporate counsel to structure, negotiate, and document the transactional and regulatory attorneys in connection with all transaction. CPV continues to rely on Dickstein Shapiro’s energy aspects of its wind energy development program to help ensure transactional and regulatory attorneys in connection with all that it remains a significant player in the North American wind aspects of its wind energy development program to help ensure energy sector.

that it remains a significant player in the North American wind energy sector.

“In today’s ever-changing energy market, the success of our power generation development program requires a unique mix of regulatory and transactional experience, and Dickstein Shapiro “In today’s ever-changing energy market, the success of our excels in both.”

power generation development program requires a unique mix of Doug Egan Chairman, Competitive Power Ventures regulatory and transactional experience, and Dickstein Shapiro CEO, CPV Renewable Energy Company excels in both.”

Doug Egan Chairman, Competitive Power Ventures CEO, CPV Renewable Energy Company

Larry Eisenstat, Energy Practice Leader

John Denniston is a Partner with Kleiner Perkins Caufield & Byers (KPCB). John was a member of the KPCB Partner team that many years ago conceptualized and launched KPCB’s Greentech investment initiative. He is an active participant in KPCB’s Greentech Innovation Network, a network of business, academic and policy leaders who meet regularly to identify, and then pursue, the most important green technology and public policy innovations.

He is also actively involved in Greentech public policy issues, having testified before several Congressional committees.

(202) 420-2224

I

eisenstatl@dicksteinshapiro.com

WASHINGTON, DC | NEW YORK | LOS ANGELES | IRVINE Prior results do not guarantee a similar outcome. © 2010 Dickstein Shapiro LLP. All Rights Reserved.

Larry Eisenstat, Energy Practice Leader

1825 Eye Street NW, Washington, DC 20006 (202) 420-2200 | dicksteinshapiro.com

(202) 420-2224

I

eisenstatl@dicksteinshapiro.com

WASHINGTON, DC | NEW YORK | LOS ANGELES | IRVINE Prior results do not guarantee a similar outcome.

held merely 2% of the solar panel market; today, that share has skyrocketed to nearly 50%. During the same 3 year period, U.S. market share has gone in the opposite direction, plunging from 43% to 16 %.

Nor has China’s progress been limited to solar power; it is also the world’s #1 wind producer, and an emerging leader in the advanced battery sector, among others.

Simply put, America is trailing in the race to build renewable energy industries – the very industries that offer us our best hope of job creation and a rising standard of living. The news is sobering: Only four U.S. companies appear among the international lists of the top-ten

1825 Eye Street NW, Washington, DC 20006 (202) 420-2200 | dicksteinshapiro.com

firms producing solar modules, wind turbines and advanced batteries. That’s four out of the top thirty companies in those crucial industries, a paltry 13% market share, and a far cry from the dominant position American companies enjoyed during the information technology much as revolution.

© 2010 Dickstein Shapiro LLP. All Rights Reserved.

As we’ve already fallen behind, however, I’m convinced there’s still time for the United States to catch up, and once again lead a global technological revolution.

In my view, if adopted, CEDA will be a key catalyst for our country’s success.

If we fail to reverse this equation, we’ll forfeit our hope of achieving energy security. In that case, future Americans will still be dependent on foreign energy imports—the only difference is they’ll be importing innovative green technologies instead of crude oil.

As much as we’ve already fallen behind, however, I’m convinced there’s still time for the United States to catch up, and once again lead a global technological revolution. In my view, if adopted, CEDA will be a key catalyst for our country’s success. n

Not what you know today.

It’s what’s in the

future.

Yesterday was to

it

enough know

accelerated depreciation, EBITDA, earnings per share, capital ratio. Today, leading companies are reporting carbon risk, developing the ROI for efficient energy and resource management, and looking at ESI statistics. With all these new initiatives, how do you measure the opportunities and avoid the risks in new investment strategies?

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