Rewards and Risks of “Green” - Foley & Lardner · global clean energy investor ... Capital and...

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©2010 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500

Rewards and Risks of “Green”

Web Conference Series

Where Innovation is Meeting Investment

May 11, 2010

©2010 Foley & Lardner LLP

Featured Guest Speaker

Greg Kats

Senior Director and Director of Climate Change Policy, Good Energies, a multi-billion dollar global clean energy investor

Served as the Director of Financing for Energy Efficiency and Renewable Energy at the U.S. Department of Energy

A founder of the New Resource Bank and the American Council on Renewable Energy

Author, Greening Our Built World: Costs, Benefits, and Strategies (available on Amazon.com)

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FeaturedFoley Speakers

Presenter:

Edouard C. LeFevre, Partner and member, Private Equity & Venture Capital and Transactional & Securities Practices

Series Moderator:

Leon Radomsky, Partner and Chair, Nanotechnology Industry Team, and member, Green Energy Technologies Team

Presenter:

John M. Lazarus, Senior Counsel and Chair, Green Energy Technologies Team


Today’s Program

Innovation landscape — white space versus over-saturation How investors assess investment opportunities Which green technology sectors appear likely to attract investment in the near to mid-term Financing and IP strategies for green technology companies at different life cycle stages

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Innovation Landscape –Investment

Good Energies Investment Portfolio

Solar6N Silicon; Konarka; NorSun; Q-Cells; Resolar; Solarcentury; Solarfun; SolarReserve; XJet; Endurance Energies; Enecsys; Enviromena; Agile Energy

Turbine-Based Renewables3TIER; C-Free; CWP; Dummuies Wind Farm; Eolectric; Geilectric; Jasper Wind; Relight; Second Wind; Sequoia Energy; Western Bio-Energy

Energy Efficiency and Green BuildingsAlertMe; Ice Energy; Microstaq; SAGE Electrochromics; Tendril; Nexamp

Investments in the Developing WorldEmergence BioEnergy

Research and Development / Game ChangersActaCell Innovation Landscape


Additional cost to build green: Evidence from 146 green buildings

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%

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Range of reported premiums

Median in the data set: < 2% added cost

Public misperception: 17% added cost*

*2007 opinion survey by World Business Council for Sustainable Development

Cost of Building Green

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Costs and Benefits of Green Buildings: Present value of 20 years of estimated impacts based on study data set and

synthesis of relevant research*

$0

$2

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addit

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bene

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upan

t

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ty

$/Sf

increased building costhealth water savingsenergy savingsindirect energy savingsemploymentemissions

Green School Green Office

Additional benefits not estimated:+Productivity and student performance+Property value impacts+Indirect water systems impacts+Brand improvements+Operations and maintenance savings+Embodied energy savings

*There is significantly greater uncertainty, and less consensus around methodologies for estimating health and societal benefits.

Costs and Benefits of Green Buildings


Advanced energy savings and green premium: 18 buildings from the study data set

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Building ID #

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reen

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energy savings (yellow bars indicate the use of onsite renewables)

green premium

Energy Savings

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FERC REPORT: Demand Response Potential

source: source: FERC FERC Assessment of Demand Response & Advanced Metering Assessment of Demand Response & Advanced Metering 20092009assumptions: assumptions: smart meters, dynamic pricing default, enabling technologiessmart meters, dynamic pricing default, enabling technologies


SageGlassSageGlass®® ECEC

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Visible Light Transmission

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Tinted LowTinted Low--e2e2

TintedTinted

LowLow--e2e2

Performance Comparison

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Innovation Landscape – Technology Trends

2010 Cleantech Energy Patent Landscape Report

– Focused on all U.S. utility patents that issued in 2009 and weredirected to one of eleven different cleantech energy categories

SolarWindHydro / wave /tidalHybrid vehiclesFuel cells for vehiclesGeothermalBiomass / biogas / biofuelNuclearUtility meteringSmart grid technologiesCO2 storage or sequestration

– 823 U.S. patents studied


Innovation Landscape

In 2009, the three sectors that produced the most patents and the most claims were solar, wind, and hybrid vehicles

In 2009, the three sectors that produced the least patents and the least claims were smart grid, geothermal and C02 storage

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Innovation Landscape

In 2009, the top five innovation categories in which the most patent claims were granted:

1. Photovoltaic solar cell construction and/or materials (remains in first place from 2008)

2. Control systems for hybrid vehicles 3. Blade/rotors for wind turbine generators4. Automated meter reading and/or load control

systems5. Wind turbine generator operational control


Low Cost & Power Density: Low Cost & Power Density: BroadStarBroadStarWindWind

• The AeroCam Type I turbine is a low-noise, low vibration 12kW cycloidial turbine that can be deployed on a rooftop or ground mounted at point of use

• Unlike many small wind systems, self-starting The AeroCam’s technological advantage is that it maximizes aerodynamic lift forces that provide driving torque and power production

• Superior power density in relation to other distributed generation turbines and solar PV

• Power Density = Amount of Power Produced X Length of Turbine’s Frontal Cross Section

• Footprint of AeroCam turbine is 1/4 that of a same-sized solar array

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High Capacity Factor

Ice Bear® Distributed Energy Storage

Low Capacity Factor

•6 hour on peak resource

•Insulates Utility Assets From Hot Weather Related Events


CO2 Impact

Green Scenario EmissionsWith Additional Policy Actions

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2010 2015 2020 2025 2030 2035 2040 2045 2050

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1990 Building CO2Emissions

BAU CO2 Emissions

Green - Efficiencyand All Renewables(50% offsitereduction)Green - Efficiency andRenewables (Full)

Green - GreenerConventional EnergySupply

Obama AdministrationGoal

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Investment Opportunities

VC Investment CriteriaMarket positionClear IP differentiationOutstanding management teamInvestor/Company “fit”Attractive valuation Active contribution to management Strong growth potential



Cleantech Patent Venture Capital Index: Ratio (multiplied by 100) of (a) the percentage of VC investment in a Cleantech technology category to (b) the percentage of patents granted for the Cleantech technology category

Example: in 2009, 29.3% of cleantech VC investments were made in Solar and 31.3% of patents were granted in Solar – Patent VC Index is 93.6 (29.3 divided by 31.3 multiplied by 100)

Higher patent VC Index may reflect higher value placed by VC’s in a technology category

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2009 Cleantech Patents and Related VC Investment


Hot Investment Sectors

In 2009, the three sectors that had the highest Patent VC Index were biofuels, smart grid, and fuel cells for vehicles

In 2009, the three sectors that had the lowest Patent VC Index were nuclear, wind and geothermal

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Hot Investment Sectors

2009 Cleantech Patent Activity by Patent VC Index — Geographic Comparison


Greening = Wealth and Jobs Creation

NPV of Net Benefits of BAU and Green

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($200)

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energy

Plusw ater

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Plussocietalenergy

Plussocietal

CO2

Bill

ions

BAU

Green

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Financing and IP Strategies

Strategies at different life cycle stagesStartupProduct DevelopmentCommercializationGrowthProfitabilityExit


ConclusionWhile solar, wind, and hybrid vehicles continued to be the top three innovations 2009, investment and licensing opportunities may arise in new areas throughout 2010:

– Geothermal– Biomass / Biofuel– Utility Metering

Geographically, the West Coast dominates in solar; the East Coast dominates in wind, hydro, geothermal, nuclear, and smart grid; the mid-U.S. dominates in hybrid vehicles and biofuels. The three sectors that had the highest Patent VC Index in 2009 were biofuels, smart grid, and fuel cells for vehicles.

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Contact Information

www.goodenergies.com

Greg Kats -- [email protected]

www.foley.com

Edouard C. LeFevre – [email protected]

John M. Lazarus – [email protected]

Leon Radomsky – [email protected]

Attending TechConnect / CTSI in Anaheim on June 21 - 24, 2010? To meet with Ed LeFevre at the conference, please email him in advance at [email protected] to schedule a time.


Rewards and Risk of “Green”- Next Session

Safeguarding against questioning by the FTC and competitors on the basis of unfair trade or false advertising as a green technology company

Details will be announced soon

Rewards and Risks of “Green” - Foley & Lardner · global clean energy investor ... Capital and...

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