Venture Capitalists, China and Green Technology
Venture Capitalists, China and Green Technology
Tina Butler, mongabay.com
May 24, 2006
A Bay Area venture capitalist with a storied past, has set his sights on “green technology” and ultimately China, after some compelling remarks from state representatives at a recent conference. Early this spring, Chinese officials named solar and clean coal technologies as two of their three pre-eminent priorities for investment and development in the near future. For a country with burgeoning energy needs surpassing what power is presently available, this is both realistic and positive news for environmentalists and economists alike. Hoping to capitalize, John Doerr and his associates are now funneling cash into the emergent green technology sector, which he, and an increasing number of other investors believe to be the next big thing.
To say the market potential for green and sustainable technology in China is significant is an understatement. Currently, China is a global economic force to be reckoned with. But the country is on the brink of exhausting the traditional sources of its power so necessary for maintaining rampant industrial and ultimately economic growth. It is becoming ever more clear that the country’s capacity to provide enough energy for sustained growth is limited. The impending shortage of energy in China is finally forcing the country to re-evaluate its energy production methods, and at the same time, capturing the attention of foreign investors.
Modernization of industrial construction and practices is integral to increasing efficiency, and the employment of green technologies may be the solution to this swelling problem. As understanding and acceptance of the inevitable consequences of global warming and dwindling of resources spreads around the world, Doerr predicts clean and eco-efficient technology will ascend to the same economically vital level of information technology and biotech. Green technology is being viewed as the new frontier, and believed to be a highly lucrative one. After an initial investment of $50 million, Doerr’s company is pouring an additional $150 million into new technologies that aim to produce cleaner air, power, transportation and water.
Doerr’s background and past experience has earned him much respect from the venture capital community, and his interest is quickly influencing other investors. Globally, industry is seeing a rise in cost for all traditional forms of energy, and it is becoming increasingly imperative to find new alternatives. Solar and wind energy, biofuels and hydrogen cells are all establishing a stronger presence on the global market. According to one report, the market for clean energy sources is anticipated to quadruple by 2015. Technologies are improving and demand is increasing. Overall, investment in green technology is already up 35% from 2004.
There are signs of change in China as well. On January 1, 2006, the Renewable Energy Law of China went into effect. This law requires real estate developers to consider and make design accommodations for development and use of renewables such as solar energy. In February, China signed an agreement with the European Union to reduce carbon dioxide emissions from coal-burning power plants. The ultimate goal for this agreement is to have zero emissions by 2020. Such reductions in traditional power generation only heighten the necessity of new alternatives.
As China is learning, industry can no longer simply favor progress and profit over the health and functioning of the environment. There is a new sense of responsibility and talk of a move toward more sustainable practices. What is more, in the future, cost-effective may soon be synonymous with eco-efficient. Regardless of China’s fate, all of this new attention is promising to environmentalists and appealing to venture capitalists. The final outcome is unclear, but the potential is obvious.
Renewable energy in China, a strategic future? With a host of environmental and domestic social concerns — and potential future international conflict — China could be well suited to pursue renewable energy sources. China’s failed bid for American petroleum firm Unocal may prompt it to further focus on its development of alternative energy sources. While China has been actively investing in exploration and development operations in Africa, South America, and other parts of Asia over the past five years, China has also significantly expanded its interests in renewable energy sources including wind, solar, biofuels, tidal, and small hydroelectric dams.
Wind turbines could power China says expert Wind could become China’s second-largest source of electricity according to a Chinese energy expert. Wang Weicheng, an energy professor at Tsinghua University in Beijing, told reporters that China has the potential to install up to 100 gigawatts of wind power. “By 2020, wind power capacity is predicted to reach 30 gigawatts,” said Wang in a meeting at China’s annual parliament. “Around the mid-21st century, wind power is very likely to take the place of hydropower as the second-largest source of electric power generation after coal.” He added that wind power could surpass nuclear stations as a source of energy within 20 to 30 years.
China and India Key to Ecological Future of the World, Says Report Earth lacks the energy, arable land and water to enable the fast-growing economies of China and India to attain Western levels of resource consumption according to a new report released by the Worldwatch Institute. In it’s “State of the World 2006” the environmental think tank says China and India, are becoming not only economic powers, but “planetary powers that are shaping the global biosphere” and affecting world economic policies. “The world’s ecological capacity is simply insufficient to satisfy the ambitions of China, India, Japan, Europe and the United States as well as the aspirations of the rest of the world in a sustainable way,” says the report.
China and India show rapid increase in global warming emissions Carbon dioxide (CO2) emissions continue to rise with a mix of old and new polluters, according to the Little Green Data Book 2006, launched today on the occasion of the Fourteenth Session of the United Nations Commission on Sustainable Development (CSD-14). An annual publication of the World Bank, according to this year’s edition, CO2 emissions worldwide have now topped 24 billion metric tons (the most recent comprehensive data are for 2002), an increase of 15 percent compared to the 1992 levels.
US has low-cost alternatives to oil; peak oil frenzy and human-induced climate change avoidable says Columbia University report Surging oil prices have fueled calls for the United States to develop new sources of affordable and secure domestic energy. While renewable energy — especially biofuels, wind power, and solar technologies — is an area of particular interest, researchers from the Earth Institute at Columbia University say that the U.S. already has relatively low-cost alternatives to imported oil, including coal, tar sands, and oil shale. These resources can be extracted and used at a lower cost to the environment than some might expect.
High oil prices fuel bioenergy push High oil prices and growing concerns over climate change are driving investment and innovation in the biofuels sector as countries and industry increasingly look towards renewable bioenergy to replace fossil fuels. Bill Gates, the world’s richest man, has recently invested $84 million in an American ethanol company, while global energy gluttons ranging from the United States to China are setting long-term targets for the switch to such fuels potentially offering a secure domestic source of renewable energy and fewer environmental headaches.
China announces wave power station technology advancements China announced that it has developed typhoon-resistant technologies for the world’s first experimental wave power station. The announcement comes two months after a Norwegian firm signed an agreement to construct a commercial wave farm to harvest electricity from sea swells off the coast of Scottland.