Archive for Business/Finance

Cement and lumber will never be as sexy as an electric sports car, but there are still plenty of business opportunities in developing innovative materials for the growing green building market. A report published this week by NextGen Research estimates the global green building materials market will grow about 5 percent per year to reach $571 billion by 2013, up from about $455 billion last year. The sweet spots in this growth are cement, engineered wood and insulation products.

“This is the way the market is going,” said Larry Fisher, research director for NextGen. “Increasingly when people are forced to make a choice on which building materials to use, they are going toward the more environmentally responsible approach.”

The study assessed the worldwide outlook for the use of greener building products, which the report defined as those having less of an environmental impact than standard building materials. Fisher said the drivers behind the trend were many: shifting attitudes among builders and consumers, government mandates, and the higher prices that green buildings often fetch on the market. The study didn’t look at the prices for green materials relative to their conventional competitors. But Fisher said he believes the cost savings — from recycling waste materials or using less energy-intensive manufacturing processes — in making greener products will often offset higher costs elsewhere in their production.

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Ever since the Wall Street Journal reported last week that IBM was in talks to buy Sun Microsystems for $6.5 billion in cash, the tech media has tried to dissect every potential reason for — and outcome of — such a deal. But little mention has been made as to how it could affect the two companies’ green initiatives. IBM and Sun both have jumped into the green IT fray over the last few years, albeit from different angles. So would a combined company double their efforts in the world of green IT, or halve them?

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In the economic downturn, “green jobs” has become one of the hottest political catchphrases. President Barack Obama has promised 5 million new green jobs as part of his energy and stimulus plans. Here in California, the mayors of Los Angeles and San Francisco, as well as the governor have made green jobs a priority. And states across the country, from Indiana to Washington, are considering bills to develop more green jobs.

This week as the sold-out Good Jobs, Green Jobs National Conference kicks off, and Congress sits down to vote on a new, pared-down stimulus package that includes billions for jobs in energy efficiency and clean power, “green jobs” are at the forefront of everyone’s minds. But the cleantech industry hasn’t proved to be recession-proof, and layoffs and hiring freezes are leading would-be green employees to question just how soon the jobs will arrive, and what kind of cleantech companies will be hiring. Here’s what we see:

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You might think the investment world is pinning some hope on cleantech to perform better than the rest of the market, but that doesn’t seem to be the case. In fact, only half of the investors and analysts focused on alt-energy seem to be feeling bullish on it at all.

The survey (via AltEnergyStocks) was conducted by PR giant Waggener Edstrom, which polled 81 people around the world: 47 institutional investors, 26 sell-side analysts, and another 8 who were independent researchers or others in the industry. The results suggest that the climate for alt-energy companies may improve this year, but their stock prices may not outpace the broader market.

A survey from a PR firm sounds a little suspicious on the face of it – especially since these kinds investor-sentiment surveys are often regarded by some as a contrarian indicator for stocks. But it’s worth noting because Waggoner filtered out individual investors and because there is already a sense that the whole stimulus rally may be passing already.

According to the results, just “50 percent of respondents expect alternative energy stock to outperform the broader markets in 2009, largely due to the expected impact of the Obama Administration’s energy policies. Respondents also overwhelmingly expect oil and gas prices to stabilize or increase in 2009.”

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Office buildings account for 17 percent of CO2 emissions in the U.S., or about 1-billion tons per year, according to the U.S. Environmental Protection Agency. Thanks to an agreement between property manager Cushman & Wakefield and the EPA, some of those emissions could get cut over the next few years. Using energy efficient technologies and practices, Cushman & Wakefield is aiming to reduce energy consumption 30 percent at its managed properties — currently more than 3,000 buildings — by 2012. The total square footage of those buildings was not available.

Cushman & Wakefield plans to work with EPA initiatives such as Energy Star to analyze its buildings’ energy use and to look at energy-efficiency solutions. Energy Star is a voluntary program, with Cushman & Wakefield getting technical assistance, as well as some public recognition, by partnering up with the EPA on cutting emissions.

The announcement didn’t list specific technologies, but getting to that 2012 target will likely take a wide range of cleantech systems covering lighting, heating and cooling, and smart devices.

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Following in the footsteps of U-Haul and Enterprise, Hertz rental cars is rolling out its car-sharing program in December, starting with New York, London and Paris. Unlike Enterprise or U-Haul, though, Hertz will be going after consumers.

“Hertz’s car sharing is located in city environments and is available directly to consumers. In addition, it is going after B2B business as well as B2C, government and universities,” says Paula Rivera, a spokeswoman for the company.

Called Connect by Hertz, the Hertz car-sharing service will mimic existing car-sharing services by providing access to cars in lots throughout cities as opposed to merely offering the service through its existing rental lots. “We’re starting out in neighborhood parking locations, specifically parking garages and on-street parking areas,” Rivera says.

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While most of our bovine-related energy coverage tends toward the scatological, the world of cow power is not limited to manure. Food and beverage giant Kraft, in a delicious bit publicity move, says it will be converting cheese into energy at two of its dairy plants in New York. The waste-to-energy programs will convert whey, as in Ms. Muffet’s “curds and…”, into bio-methane which will supplant about a third of the plants’ fossil natural gas.

Previously, Kraft had to ship the whey, a byproduct of cheese making, off-site to be used as animal feed or fertilizer. Now, Kraft saves on transport costs by feeding the whey into an anaerobic digester, an on-site waste-treatment system. The result, company execs say, will be enough bio-methane to heat about 2,600 homes.

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Even if you’ve got a fully developed electric car, it still takes a lot of capital to get it on the road. The latest news is that Think Global AS, maker of the highway certified two-seater electric car TH!NK city, is looking to raise a third round of funding in the neighborhood of $80 million to increase production capacity, VentureWire reports (via PEHub.)

Of all electric car startups, Think has had some of the biggest names circling its little electric cars. Once owned by Ford, the company was bought by Norwegian investors from solar giant REC, and it has since partnered with GE to help put A123 lithium-ion batteries in their cars. Think also brought on Porsche Consulting to help design its manufacturing plant.

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While the voluntary carbon trading economy is booming (it tripled in 2007 to $331 million) the power of free-market economics has yet to directly connect our own personal actions with carbon emissions. This week, the UK nixed plans to get people to reduce their emissions via an exchange of personal emissions permits. Citing issues of practicality, the ministry said implementing the system would be excessively expensive and that the idea is “ahead of its time.”

The idea was based on the system used in the EU’s emissions trading scheme whereby industrial emitters can buy permits for the right to pollute and players who reduce their emissions can sell excess permits on the open market. The system has proven itself effective in combating sulfur dioxide emissions in the United States and is growing in popularity as a way to regulate carbon emissions from industrial players around the world.

However, making the jump to a personal exchange is quite ambitious. The biggest barrier is simply measuring one’s personal emissions. This would include home energy costs, travel, food and other goods purchased. British supermarket giant Tesco had plans to list the carbon footprint of the good it sells but has discovered how hard it is to calculate the carbon cost of individual grocery items.

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We talk a lot about new energy opportunities and technology breakthroughs here on Earth2Tech, and less about the high risks involved in developing new cleantech markets and commercializing unproven technologies. But at the Berkeley-Stanford CleanTech Conference this week, there was a lot of discussion over the tensions between venture capitalists backing new technologies and the utilities, regulatory and industry groups in charge of bringing the clean power to the people.

Sue Kateley, executive director of the solar industry group California Solar Energy Industries Association, said she was concerned about venture capitalists flushing money into companies that promise to offer and install solar for free (no up-front costs) to consumers. “The free reckless solar thing can kill the industry,” Kately said, explaining that she saw similar business models that went under in the energy boom decades ago.

Utilities’ motivations can come into conflict with those of venture capitalists when it comes to the price of contracts for utility-scale renewable deals like solar thermal power plants. Roy Kuga, VP in the energy supply division of California utility PG&E, said that while the company would like to deliver the most competitive price for customers, venture-backed startups are looking for higher-priced contracts in order to deliver the kind of financial returns that venture firms want (startups Ausra, BrightSource, eSolar and Infinia are all venture-backed).

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