The growth of ICT innovation in

cleantech: smartening up dumb assets

“Nine for 2009” (Cleantech Group’s annual predictions) December 2008

Prediction 1 - Energy efficiency infrastructure boom initiated The Cleantech Group sees a quadruple bottom-line benefit driving a global focus on energy efficiency in 2009. Energy efficiency drives job creation, boosts secular competitiveness, addresses the need for carbon reduction and reduces the demand for imported energy.

“Ten for 2010” (Cleantech Group’s annual predictions) November 2009

Prediction 6 - Energy efficiency, driven by ICT, eclipses solar

The digital revolution and the clean economy imperative will converge even more dramatically in 2010. In the

coming year, software-based innovations are going to make-up a much larger proportion of cleantech

venture and PE investment than they currently do in a wide range of areas .....

Richard Youngman, VP, Global Research & MD Europe, Cleantech Group

richard.youngman@cleantech.com

Cleantech Group: Experts on cleantech innovation - globally

EVENTS RESEARCH ADVISORY

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since 2002 in San Francisco,

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locks us onto the pulse of

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cleantech landscape and

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We deliver leading market research, convene the industry’s most

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investors, corporations, service providers, and entrepreneurs

ENERGY Energy Generation, Storage, Infrastructure and Efficiency

TRANSPORTATION Vehicles design and technology,

fuels and logistics

AIR & ENVIRONMENT Remediation, emission control,

trading and offsets

RECYCLING & WASTE Various recycling services and

waste treatment services

WATER Filtration, purification, water conservation and wastewater

treatment

MANUFACTURING Monitoring/control appliance

and smart production industries

MATERIALS Nanotech, biotech, chemical

materials

AGRICULTURE Land management, natural

pesticides, natural fertilizers, irrigation

…Covering A Broad and Global Spectrum of Innovation

Cleantech Group tracks innovation across covers the widest cleantech spectrum, with particular focus on some key areas: energy efficiency, the smart grid, transportation and water (areas where IT intersects industry)

3

Our Clients Include Sector Leaders

4

Diversified Industrial

Utilities & Energy

Investors

ICT

Water, Waste & Transport

Governments & Education

Business Services

The growth of ICT innovation in cleantech: smartening up dumb

assets

• Smart ICT’s Innovation: In context

• Smart ICT’s today: In the Built Environment & In the Grid

• Smart ICTs tomorrow: Towards Digital Water and Smart

Mobility

Cleantech has become the largest innovation theme - measured

by the proxy of venture capital $’s (Over $20bn in last 4 years)

Sources: Cleantech Group, PWC/NVCA MoneyTree Report

Energy Efficiency emerged in 2009 as the most active

cleantech innovation area – by deal count

Source: Cleantech Group

Energy Efficiency =

Capital efficiency.

Less than 10% of all

capital raise, but

>20% of deal count

The growth of ICT innovation in cleantech: smartening up dumb

assets

• Smart ICT’s Innovation: In context

• Smart ICT’s today: In the Built Environment & In the Grid

• Smart ICTs tomorrow: Towards Digital Water and Smart

Mobility

Most of the innovation investment activity to date has been around the

enablers and the measurers – and lighting. Optimising the status quo

Ballasts & Controls 1%

Building Envelope & Insulation

9% Glass

5%

Efficient Motors 5%

ESCOs 3%

Chips & Energy-Saving Enablers

26% Building Automation 5%

Home Automation 9%

HVAC_R 4%

Monitoring, Metering & Control

8%

Sensors & Controls 2%

Smart Lighting Systems 7%

Solid State Lighting 16%

0%

VC Investment by Energy Efficiency Subsector 2009-2010

Source: Cleantech Group

The U.S. market

alone for energy

efficiency in

buildings is

approximately

$236 billion

annually, and is

expected to triple

by 2030

Retrofit is creating

demand for ICT-based

solutions that can give

visibility into current

energy use, optimize

the timing of energy

consumption, and build

the foundations for the

enablement of future

control and

automation systems

(to make reductions

based off user

preferences).

Low-cost and market-ready solutions are being

implemented. The game-changers are still to come.

US

$B

Distribution Grid Management

Advanced Metering

Demand Response

TOTAL

(4) $2.75B in 2010 Smart Grid Product Sales

Distribution Automation

Substation Automation

Meters

Communication

MDM DR Technology

DMS Software

Source: Cleantech Group Analysis

Just the

communications

portion is expected

to be worth $20

billion a year over

the in 5 years,

according to

Cisco.

Improving the efficiency of the U.S.

electricity grid by 5% would alone be

the equivalent of eliminating the fuel

use and carbon emissions of 53

million cars.

Smart Grid market set to rise dramatically in the next 5-10 years

US Market Only

Product Sales

2010 est.

Total: $1.68B in Venture Spend

Smart Grid Venture Capital Spending; 2007-2010

Source: Cleantech Group Venture Data

Innovation activity is on the rise, specially around metering and management

Company Category

Mapping of Smart Grid vendors in the US shows relationship

between ICT and US “Venture States”

% o

f co

mp

anie

s in

cat

ego

ry in

a h

igh

ve

ntu

re s

tate

(C

A, M

A, N

YC)

Total C

ou

nt o

f com

pan

y by catego

ry

Source: Cleantech Group Analysis

The growth of ICT innovation in cleantech: smartening up dumb

assets

• Smart ICT’s Innovation: In context

• Smart ICT’s today: In the Built Environment & In the Grid

• Smart ICTs tomorrow: Towards Digital Water and Smart

Mobility

Water Use Efficiency is a big opportunity – waiting to happen

Water Treatment

Distribution Use Collection WWT / Reuse

System, Monitoring &

Control

(Analytics and

instrumentation providers for

water quality, energy and

system management.)

System, Monitoring &

Control

Storm Water

Management

Efficiency Technologies

Leak Detection / Efficient

Pumps

Digital Water

Smart Irrigation is a Big Opportunity – starting to happen

• Agricultural irrigation accounts for 70 percent of global water use while 58 percent

of commercial and residential water is used for landscape irrigation.

ICT is poised to transform water use. Increases in the price of water

in parallel with reductions in water allocation will necessitate water

analytics that not only calculate demand and track use, but control

demand .

Smart irrigation investments pay back in under two years today.

Some companies (profiled in this briefing) are exhibiting payback

periods in the range of three to 24 months.

Greening the supply chain is growing in importance. At the

moment the measurement focus remains largely on efficiency in carbon

and energy terms. We believe the emphasis on water use and water

efficiency will grow, especially within the food and consumer goods

world. Smart irrigation solution vendors have the opportunity to benefit.

Electric cars to take a (future) back seat to smart mobility?

• Electrification of cars will accelerate a broader shift,

towards a new convergence of transport, energy, and

urban/industrial systems

– Shipping and ports begin to embrace smart mobility

(e.g. LA and Rotterdam already making moves)

– Increased greening of industrial supply chains

– Transportation costs rise again as recession

recedes, sparking focus on inefficiencies of current

systems and interest in new notions of mobility

• Growth in manufacturing and consumption in

developing nations will lead to increased market

opportunities for efficient third party logistics providers.

It has been estimated that underdeveloped trade and

logistics infrastructure conversely affects the GDP in

Western Europe and North America by less than 10%.

In India, the estimated impact on GDP is as high as

13%.

Case Studies: ICT innovation in Transport/Logistics today

RouteMatch reduces energy use and carbon emissions through a computer-assisted data management

system to automate trip scheduling and routing, and gives dispatchers the ability to electronically

assign trips and send schedule changes to vehicles instantly. RouteMatch’s offering is comprised of

multiple software modules that can deliver results of 10% to 20% increase in schedule and route

efficiency.

Green Road Technologies’ brains are in the vehicle, a friendly backseat driver with a remarkable mind for

calculating risk and a keen ability to cut your fuel use and emissions by improving driver behavior through

real-time feedback.

Driving behavior contributes up to 33% of fuel consumption due to subtle decisions that drivers make.

In addition, driver behavior leads to over 90% of vehicle crashes, with an estimated annual cost of $200

billion in the U.S. on physical losses alone.

GreenRoad employs sensors to monitor up to 120 separate driving events in five categories: speed

handling, cornering, land handling, braking, and acceleration. to calculate the relative risk of different

driving maneuvers, then communicates that to the driver by illuminating either a red, yellow or green light.

The technology analyzes a driver’s maneuvers, recognizing unsafe or inefficient movements. The in-

vehicle display provides immediate feedback and coaching to the driver, and seeks consistent patterns of

behavior.

The technology is initially being adopted by medium and large fleets, which range from several hundred to

thousands of vehicles, because fuel efficiency has a great impact on profitability. GreenRoad reports that it

currently has 90 fleets as customers, in sectors such as trucking, public transit, telecommunications,

service delivery, passenger transportation and public safety. 10% average fuels savings reported ($1500

per vehicle per annum)

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