What We Think Will Happen

These are fundamental events that we feel will be pivotal in the emerging cleantech sector:

1. Global financial crisis is remaking the world to be “greener.” Climate Change has moved into the mainstream consciousness.

2. Governments, on a global basis, will impose a price on carbon emissions, reflected in a series of bi-lateral, post-Kyoto agreements with the US.  Political opposition by those with high exposure to carbon prices.  Political support will be gained through subsidies for renewable power.

3. Oil prices have entered a new, higher cost supply phase.  A confluence of factors – underinvestment in exploration, accelerating field decline rates and more expensive marginal sources of oil – will result in a highly volatile oil price.

4. The link between oil and transportation makes the internal combustion engine a losing technology.  Electrification of vehicles, not liquid fuels, are the lowest cost per mile option available to consumers.  Implementation speed will depend on the cost of batteries versus the cost of oil.

5. Transmission grid needs to be upgraded to move electricity further, handle intermittent sources, and in two directions (smart grid enabled demand management).  Limitations of the current grid will become increasingly visible as renewable development grows.

6. Clean renewables will grow approximately 100x over the next 50-60 years, from 1.4% of current global energy supply to 140%, replacing most fossil sourced fuels.

7. Multiple fuel sources will dominate the growth in renewables.   Wind is economic now and growing at a 30-40% rate.  Solar (thermal and PV) has the most promise long-term but the current technology is generally still too costly and at risk from a disruptive technology.  Geothermal is the most under-appreciated source; project times are long but provide base-load power at a levelized cost that is on par with “dirty” coal.  Enhanced geothermal has huge potential.  Nuclear’s role is the most unclear as both the cost and politics are difficult to predict.

8. Bio-energy will play a limited role because it does not scale.  Algae has the greatest potential but must lower production costs dramatically and quickly or else it will lose out to the earlier adoption of electric vehicles.

9. Carbon capture and sequestration technology needs major advances for coal to have a future, which is unlikely.

10. Natural gas, cleaner than coal and more abundant than oil, plays the role of “shock absorber” in the transition as it can swing among the major end uses of transportation, generation and heating.

11. Eventually, end use energy costs will decline as the “free fuel” element of renewables is passed along to consumers.