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Cleantech Forum Diary Day Two: Opportunities for Emerging Markets

Day Two’s prevailing themes focused on implementation of local and worldwide engagement and advocacy. A packed lunchtime session on solving emerging market energy challenges yielded 45 minutes of questions for the panel, which included disruptive renewable energy companies Off Grid Electric and Bboxx, investment firms DBL Partners and Sunfunder,  and moderator Justin Guay from the Packard Foundation. Off Grid Electric’s CEO Bill Lenihan and Bboxx’s CEO Mansoor Hamayun highlighted their efforts in emerging countries, especially in East Africa.

Emerging Market Opportunities for Cleantech

Certain developing regions are primed for significant cleantech business opportunities, partly because such regions have leapfrogged the grid stage and moved to widespread robust smartphone networks, which in turn has become key to commerce in these areas. New business practices include online bidding for small farm produce, ensuring farmers an optimum price without the need to go to market to sell. All they have to do is arrange for drop-off of the product.

Off Grid Electric fronts solar systems to residential customers, as well as energy efficient appliances such as TV and radios that leverage the electricity generated in order to help improve lives and economic mobility. They already have an installed base of 100,000 off-grid customers. Bboxx, while providing a range of plug-and-play solar energy products for off-grid customers across 35 countries, sees itself as a company involved in a data revolution. Their products enable remote monitoring through IoT — sending maintenance, customer usage, and billing data back to a server that can optimize service visit routing or turn a customer system on or off based on payment status.

All the members of the panel stressed that emerging markets offer a solid investment opportunity. Nancy Pfund of DBL Partners (Tesla, Solar City, Off Grid Electric) sought to debunk 3 myths. First, that distributed solar is expensive and cannot scale. In actuality, solar costs have declined 70% over 7 years and will continue to do so. Compared to fossil fuel costs of $147 per megawatt/hour, solar is already at just $42 per megawatt/hour.

Second, that distributed electricity systems are not a strong solution. She cited a Lawrence Berkeley Labs report published this week that solar resources contribute to a highly effective grid infrastructure, and that the data support it. Our old fashioned power plants are not optimal for the 21st century, and we need more flexibility.

Last, that this region (east Africa) is not of interest to anyone except NGOs. While “the area is not a household name,” the same was true for Tesla early on. Results don’t happen overnight and the investment is not for the faint of heart, but a transformation is indeed happening and the rewards are great. In fact, DBL was able to bring in EDF as a major co-investor for Off Grid Electric’s Ivory Coast business. Their cost of capital was lower.

Lenihan of Off Grid Electric commented that financing can be unbelievably challenging but that the market opportunity is at least $2.2B.

Emerging Market Technology From Sweden

Following the panel, we met with with Sigvald Harryson, CEO of Innoventum AB in Sweden. The company offers wind, solar and hybrid wind solar products using wooden support structures for increased sustainability. The firm’s Giraffe 2.0 wind product combines a deflection surface of solar panels that direct the wind upwards to the turbine. The system is capable of generating 10,000 to 20,000 kW hours of energy depending on windspeed and solar exposure. The company has installations in Sweden as well as the Philippines, Sri Lanka and Madagascar. For developing countries it offers significant capabilities made with sustainable materials at a low cost of entry.

hybrid wind solar

Innoventum AB Giraffe 2.0 (Photo credit: Innoventum AB)

Canadian Cleantech Confronts the Elephant in the Room

Canadian cleantech investor Tom Rand of Arctern Ventures (formerly MaRS Cleantech Fund) delivered a blunt talk in the afternoon on how he expects Canada to respond to new US administration action (or lack of it) on climate and cleantech. “I’ll try to find the silver lining given that the EPA just removed all mention of climate change on its website,” he joked. He discussed a split over policy direction in Canada but said that Prime Minister Trudeau is going to bat for cleantech, not just on an environmental stance but using an economic justification.

The country is taking a lead on carbon pricing and promoting cleantech job creation. Rand said that if Canada was able to garner just 1.8% of global cleantech market share, the country would have a highly competitive base and jobs growth. He pointed to two Canadian companies, Hydrostor (advanced compressed air storage) and Woodland Biofuels, who are building strong products domestically for export, nurtured by policy at home while having a global effect.

And if the new US administration doesn’t support cleantech R&D? “We will scour U.S. national labs for cleantech IP if the American government decides to cede its leadership.” He added that of course Canada could go it alone if needed but that together the two countries are stronger in cleantech, and could be especially effective on climate change.

 

About Tom Breunig (63 Articles)
Tom Breunig is principal at Cleantech Concepts, a market research firm tracking R&D projects in the cleantech sector. He is a technology industry veteran and former international marketing and communications executive who has worked with organizations in semiconductor design, water monitoring, energy efficiency and environmental sensing. He has spoken at numerous technology and energy conferences.
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