As the founder of the Bay Area networking group, Women In Cleantech & Sustainability, I am keenly interested in learning about who the media thinks as being the most influential women in the field. However, it feels like every top ten list for women in Cleantech always lists the same lovely ladies. This is not to say that the women are not contributing massively to the effort of clean technology, they are. And there are so many more women in the field!

Clean technology is ever-changing, with new innovators, particularly among women, making their mark in a traditionally male-dominated field. In this occasional series, we shine the spotlight on the most savvy and accomplished women pioneers in cleantech and sustainability. Some are building their own start-ups, others are climbing the ranks of high-profile companies, and still others are investors. Whether they are on the front lines or behind the scenes, they inspire us to keep striving forward, to break the ever existent glass ceiling, and change how the world lives.

As always we are open to your suggestions of who you feel are the female game-changers. Who do you think should be on the list?

*Special thanks to Shawn Lesser of Watershed Capital for his support and mentorship for this series.

1. Virginia Klausmeier, CEO, Sylvatex

Quite possibly the youngest CEO in the biofuel/Green chemistry industry, Virginia Klausmeier has spent the past five years developing the Sylvatex fuel technology with her late father, Dr. William Klausmeier. Sylvatex is currently commercializing a proprietary renewable fuel for the US diesel and biodiesel markets. The company has won numerous awards at industry conferences and venture funding competitions, including Silicon Valley LAUNCH and PortTechLA, as well as funding and support through San Francisco’s Greenstart accelerator program. Virginia earned her B.S in Chemistry and Physiology and M.S. in Biomechanics at the University of Oregon and has is also active in San Francisco’s BioDiesel Task force and Biodiesel Coop.

2. Kef Kasdin, CEO, Proterro BioFuels

Kef Kasdin is CEO of Proterro, a venture-backed start-up located in Princeton, New Jersey. It develops non-plant-based, noncellulosic fermentation-ready sugar feedstock, which enables the economical and scalable production of biofuels and chemicals. The company, which is transitioning from discovery to the engineering phase, has functioning prototype sucrose-producing organisms and a working model bioreactor system. Proterro’s Protose sugar is a sustainable, inexpensive, geoflexible, feedstock that can be used to produce a variety of commercial scale fuels and chemicals through standard industrial fermentation methods. Before Proterro, Kef spent nine years at 3Com Corp, including managing $1B division. She also spent 10 years as venture capitalist, and is general partner/cofounder of Battelle Ventures and affiliate Innovation Valley Partners, with company-creation, lab-spinout, and energy-market expertise.

3. Lissa Morgenthaler-Jones, CEO and Co-Founder, LiveFuels

Lissa Morgenthalter-Jones leads strategic planning and corporate development for the LiveFuels, a company with the goal of developing the most efficient and scalable algae-based biofuel process. Since 1990, she has also specialized in biotechnology investing since 1990. After learning about turning algae and animal waste into fuel, she started her own clean energy venture capital fund in 2004. She raised $10 million from the Quercus Trust and individual investors in May 2007. To date, her company has established pilot operations across the U.S., generated extensive intellectual property, and is well on its way to producing an economically feasible and sustainable algal fuel.

4. K’ Lynne Johnson, CEO, Elevance Renewable Sciences

K’Lynne is leading Illinois based Elevance, with her 19 years of experience in the oil and petrochemicals industry (Amoco, BP and Innovene). The company is striving to be the first to successfully bridge the renewables and chemicals industries. With its Nobel-prize winning technology the company transforms natural plant-based oils, like soybean, rapeseed (canola), palm, corn, or algae, into specialty high-performance, cost-effective commercial products, such as advanced biofuels, deterents and cleaners, personal care products, and others.

5. Jennifer Case, co-founder and CEO, New Leaf Biofuel

In 2010, co-founder Jennifer Case took the helm at New Leaf Biofuel as CEO. She has helped grow the company to 24 employees and increase its customer base, including US Navy, the City of Chula Vista, Allied Waste, and dozens of other commercial and municipal fleets in Southern California. Jennifer Case obtained a BA in Political Science from UC San Diego, and a law degree from Pepperdine University. In her legal practice, Jennifer represented individuals, business and public entity clients in such areas as general business litigation, real estate, construction and technology. Prior to attending law school, Ms. Case was an administrator of a start-up fiber optics company in the Silicon Valley.

6. Pamela R. Contag, Ph.D, microbiologist, Founder of Xenogen Corp and Cobalt Biofuels

Cobalt Technologies, located in Mountain View, CA, is leading the transportation industry for cleaner, more efficient renewable fuels. It is a venture-backed company that produces biobutanol from renewable feedstock. Xenogen Corp, located in Alameda, CA, was founded in 1998, and is a leader in the field of biophotonic imaging. Pamela R. Contag, Ph.D., is a microbiologist who has been called a “serial entrepreneur,” having founded two biotech and two biofuel startups. She is the founder of Xenogen Corp. and Cobalt Biofuels, Inc. She is also the founder and CEO of Cygnet Biofuels and ConcentRX, Inc., a biotechnology company developing a unique cancer therapy. She founded Xenogen Corporation with two colleagues while at Stanford University, where they invented in vivo biophotonic imaging. Pamela has filed a patent on a process she developed that utilizes algae to produce polysaccharides that can be easily converted to alcohol fuels or to biolipids, and then to biodiesel. She was also named one of the “Top 25 Women in Small Business” by Fortune Magazine.

7. Cynthia (CJ) Warner, President, of Sapphire Energy

Cynthia (C.J.) Warner joined Sapphire Energy in February 2009 as President. She brings more than 27 years of experience in the energy, refining and transportation industries. At Sapphire Energy, Ms. Warner is tasked with driving the company’s initiative to transition technology trials and research into commercial-scale crude oil operations. Using only sunlight, CO2 and non-potable water, Sapphire Energy is one of the world’s largest leaders in algae-based crude oil. A chemical engineer by training and one of the very few senior women in the oil and gas industry, CJ served as an executive with energy industry giants British Petroleum, Amoco Oil Company and UOP. CJ is currently a member of the National Petroleum Council. She is a featured leader in the 2008 book ‘Becoming a Resonant Leader: Develop Your Emotional Intelligence′ (Harvard Business School Press). CJ has a BS degree in Chemical Engineering from Vanderbilt University and an MBA from Illinois Institute of Technology.

8. Dr. Claire Kinlaw, Lead Product Development, TerViva BioEnergy

Claire is an MBA-trained scientist and currently Project Lead for TerViva BioEnergy, a startup commercializing the high oil seed tree pongamia in the US as a feedstock for biodiesel refining. Pongamia pinnata, a nitrogen fixing tree native to India that grows on marginal soils. TerVia is working to commercialize this tree as a renewable source of diesel fuel, planting across the southern USA on pasturelands and other lands not used for food production. Claire leads the R&D effort to improve the underlying asset, the tree for even greater, more predictable oil production and good growth characteristics in US locations. Prior to joining TerViva in 2010, Claire developed commercial strategies for biotechnology startups and small businesses, negotiated and managed research and business agreements, directed the USDA Institute of Forest Genetics, and led life science research projects with molecular genetics and genomic science focus. Claire holds an MBA from UC Berkeley, a PhD in biochemistry from Rice University, and a BA in chemistry from the University of Virginia.

9. Nicole Kennard, co-founder and former CEO, New Leaf Biofuel

Nicole Kennard founded New Leaf Biofuel in 2006 with four co-founders, with the aim to be the biggest provider of biodiesel in San Diego County, a dream that involves trucking tons of used fryer grease from 900 area restaurants to New Leaf’s San Diego processing facility and converting it into B99 (99 percent biodiesel fuel), which is then purchased by government and business fleets across the county, such as Sun Diego Charter Co and C & D Towing, and the Regional Transportation Center, San Diego’s only alternative fueling station. She built the company to 10 employees and a company capacity to produce 140,000 gallons of fuel a month. Nicole has BA in Applied Mathematics and Computer Science from UC San Diego and an MS in Mechanical Engineering with an emphasis on Renewable Energy from San Diego State University. Formerly, Nicole was the Coordinator of the Department of Energy’s Industrial Assessment Center (IAC), located at San Diego State University. She is also a renewable energy adviser and biodiesel consultant for the San Diego City School District and a co-founder of the Biofuels Action and Awareness Network, a student action group at UCSD focused on community outreach and education.

10. Susan B. Leschine, Founder and Chief Scientist, SunEthanol

Susan Leschine founded and was the Chief Scientist of SunEthanol, now QTeros. Currently, Dr. Leschine is a senior faculty member in the Microbiology Department at the University of Massachusetts, Amherst. Dr. Leschine is internationally-known as an authority on the biology and diversity of cellulose-digesting microbes. Her research formed the basis for SunEthanol’s Q Microbe biodigesting technology.

Article by Lisa Ann Pinkerton, founder of Women In Cleantech & Sustainability, a networking and career development group dedicated to the advancement of women in various environmental technology sectors. She is also Founder and President of Technica Communications, where she handles public relations and marketing strategies for cleantech and biotech companies. Lisa Ann is a former award-winning broadcast journalist who reported for National Public Radio, PBS Television, WPXI-NBC, American Public Media, and Free Speech TV.

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It’s December again (how did that happen!?) and our annual time for reflection here at Kachan & Co. So as we close out 2011, let’s look towards what the new year may have in store for cleantech.

There are eggshells across the sector for 2012. Global economic uncertainty in particular is leaving some skeptical about the chances for emerging clean technologies. And those who watch quarterly investment data, or who look only in a single geography (e.g. North America) may have seen troubling trends brewing this past year. But the true story, and the global outlook for the year ahead, is—as it always is—more complicated.

As you’ll read below, we predict a decline in worldwide cleantech venture capital investing in 2012. But as you’ll also read below, we believe the gap will be more than made up by infusions of corporate capital. And the exit environment, depending on who you are and where you list, still looks robust in 2012 for cleantech (it may not have felt so, but it was actually surprisingly robust in 2011, according to the data. See below.) All in all, if you’re a cleantech entrepreneur seeking capital, our advice is brush up that PowerPoint and work the system now… while there’s still a system to work.

Because, as we detail below, the largest risk, to cleantech and every sector in 2012 we believe, is the specter of precipitous global economic decline and the systemic changes it might bring. Details below.

Here are our predictions for cleantech in 2012:

Cleantech venture investment to decline
In the face of naysayers then forecasting a cleantech collapse, in our predictions this time last year, we called an increase in global cleantech venture investment in 2011. We were right. At this writing, total investment for the first three quarters of 2011 is already $6.876 billion, with the fourth quarter to report early in 2012. Given historical patterns (fourth quarters are almost always down from third quarters), we expect 2011 to close out at a total of ~$8.8 billion in venture capital invested into cleantech globally. That’d be the highest total in three years, and second only to the highest year on record: 2008.

Total 2011 investment is expected to show growth from 2009’s figures once the fourth quarter (dashed lines, estimated) is added. However Kachan predicts total venture investment in 2012 to decline from 2011’s total. Data: Cleantech Group

Yet in 2012, we expect global venture and investment into cleantech to fall. Not dramatically. But we expect cleantech venture in 2012 as measured by the data providers (i.e. companies like Dow Jones VentureSource, Bloomberg New Energy Finance, PwC/NVCA MoneyTree, and Cleantech Group) to show its first decline in 2012 following the recovery from the financial crash of 2008. Our reasoning? There are factors we expect will continue to contribute to the health of the cleantech sector, but they feel outweighed by factors that concern us. Both sets below:

On one hand: What we expect to contribute to growth in cleantech investment in 2012

* China gets a hold on its economic turbulence – For five years now in our annual predictions, both here at Kachan and when I was a managing director of the Cleantech Group, we foretold the rise of China as cleantech juggernaut. Yet, now with China having become the largest market for and leading vendor of cleantech products and services by all metrics that matter, and now receiving a larger percentage of global cleantech venture capital than at any point in history, there have been recent warning signs. New data just in (for instance, falling Chinese property prices and sluggish export growth because of faltering first world economies, not to mention the first decline in clean energy project financing in China since 2010 as wind project financing declined 14% in the third quarter of 2011 on fears of over-expansion) suggests the Chinese economic engine is slowing. On the face of it, that might look bad for cleantech. But we put a lot of faith in China’s central government and the seriousness with which it views this sector as strategic. Even now, the country has just gone on the record forecasting creating 9 million new green jobs in the next 5 years. Nine million! And China has a good track record in executing its 5-year plans.
* Rise in oil prices – Cleantech is a much wider category than energy. But for many, renewable energy is its cornerstone. And while there’s no question about the long-term markets for renewables, the biggest factor affecting their short-term commercial viability is the price of fossil-based energy. The good news: indications are that oil prices are headed upwards in 2012, which should be expected to help make renewables more economic. Naysayers maintain that a poor global economy will destroy demand for energy, keeping the price of oil artificially low. For much of 2011, the price of oil was relatively low. But we argue the price per barrel will continue its inexorable rise in 2012 given continued growth in the size of the global market for oil, driven by market expansion in the developing world. Further adding to the expected oil price increase is a little-known fact: there’s been a decline in the quality of oil the world is seeing on average. And the poorer the quality of the oil, the more it costs to refine it into the products we require. Oil prices are headed up.
* Corporations’ even stronger leadership role – Corporate venturing was up in 2011, possibly setting new record highs, according to the data providers (4Q data not in yet.) Cleantech corporate mergers and acquisitions globally were up in 2011, again possibly setting new record highs, according to the data. The world’s largest companies assumed the leadership we and others predicted they would last year at this time—and indications are they will continue to do so in 2012, with balance sheets still strong.
* Solar innovation as a perennial driver – Investment into good old solar innovation and projects is still strong, and has remained so for years, while other clean technologies have risen and fallen in and out of investment fashion. And that’s despite most solar companies being in the red and having billions of dollars in market capitalization disappear over the last year. As some solar companies will continue to close up shop in 2012, look for investment into solar innovation to remain strong in 2012 as the quest for lower costs and higher efficiencies continues.
* Persistence of the fundamental drivers of cleantech – The sheer sizes of the addressable markets many cleantech companies target, and the possibilities for massive associated returns, will continue to draw investors to the sector. Why? The world is still running out of the raw materials it needs. Some countries value their energy independence. More than ever, economies need to do more with less. Oh, and there’s that climate thing.

On the other hand: What worries us about the prospects for growth in cleantech investment in 2012

* Investor fundraising climate tightening – Today, limited partners (i.e. “LPs” – the organizations and/or wealthy individuals that fund venture capital companies) are still bankrolling cleantech worldwide; in its 3Q 2011 Investment Monitor for clients, the Cleantech Group details 34 dedicated cleantech and sustainability-focused funds receiving billions in capital commitments internationally in the third quarter of 2011 alone. But we expect a slowdown in venture fundraising in 2012. Blame Solyndra for negative American LP sentiment. Or blame the lack of rock star returns in cleantech of late. But there are more indications than ever that some LPs are becoming increasingly reluctant to fund cleantech. They’ve been grousing about cleantech for years. But the politicizing of the Solyndra bankruptcy has amped the rhetoric higher than ever, and will foster a self-fulfilling prophesy in 2012, particularly in America, we believe.
* Waning policy support in the developed world – Expected conflicting government policy signals to continue in 2012. Don’t expect cleantech-friendly U.S. policy leadership in 2012, an election year. We wouldn’t be surprised if the ghost of Solyndra and other U.S. Department of Energy stimulus grants and loan guarantees continued to haunt American cleantech through the whole of 2012, making any overt U.S. government support of clean or green industry unlikely. While cleantech is far from solely an American phenomenon, there’s no mistaking that the (now expired) American national loan guarantee program helped loosen private cleantech capital in an immediately post-2008 shell-shocked economy. However, continued uncertainty over the future of the U.S. Treasury grants program and production tax credits is holding the U.S. back. Policy support suffers elsewhere in the developed world. For instance, in the UK, investor confidence was recently dealt a blow by a dramatic drop in solar feed-in-tariff (FIT) rates, and the erosion of renewable policy support in Germany and Spain is well known.
* Lag time of negative sentiment – Even if the sky indeed started falling in cleantech (and we don’t believe it yet has), it would take a few quarters to show in venture or project investment numbers. Remember, deals can take quarters to consummate. Transactions being counted now may have been initiated a year ago. Fear takes several quarters to manifest. Which is why we believe today’s uncertainty will start to show in 2012’s performance.
* VCs still circling their wagons – In 2007, before the financial crash, the percentage of early stage venture investments into new cleantech companies was roughly the same as later-stage venture investments into established companies. Since the crash of 2008, deals have remained skewed—both by number and size of deals—towards later stage companies, illustrating investors’ preference to keep existing investments alive than take risks on new companies. While the exact ratio varies quarter to quarter, and from data provider to data provider, there have been generally fewer early stage companies getting funded. That’s hampering cleantech innovation. We expect the trend to continue into 2012.
* Perennial concern about exits and IRR – Despite the size of its massive addressable markets and near-record amounts of capital entering the space today, on the whole, cleantech investors are still seeking the returns that many of their web and social media tech brethren enjoy. Even now, 10 years into this theme that we started calling cleantech in 2002. That’s not for lack of exits; 2010 saw the largest number of cleantech IPOs on record (93 companies raised a combined $16.3 billion) and 2011 has already had 35 without the last quarter reporting. And cleantech M&A activity in 2011 was strong and significantly higher than last year. No, the concern is for lack of multiples. For instance, 8 of the 14 IPOs of the third quarter of 2011 were trading below their offering price as of the publication of the Cleantech Group’s 3Q 2011 Investment Monitor. Don’t let anyone tell you exits aren’t happening in cleantech. They’re just underwhelming. And/or they’re happening in China.
* Macro-economic turbulence, collapse, or at least, reform – They’re the elephants in the room: The Occupy movement. Arab Spring. Peak Oil. The continued and growing mismatch between overall global energy supply and demand and food supply and demand. Ever-increasing debt and trade deficits. Currency revaluation or political/military developments. Any or all of these could spur another massive global economic “stair-step” downwards of the scale we saw in 2008, or worse. Concern about all of these points and the impact they’d have on the cleantech sector weighs heavy on us here.

Venture dip made up for by rise in corporate involvement
The world’s largest corporations woke up to opportunities in cleantech in 2011, making for record levels of M&A, corporate venturing and strategic investments. General Electric bought lighting and smart grid companies. Schneider Electric bought some 10 companies across the cleantech spectrum. Corporate venturing activity was high, as were minority-stake investments. In just the third quarter alone, ZF Friedrichshafen invested $187 million in wind turbine gearbox and component maker Hansen Transmissions of Belgium, Stemcor invested $137 million into waste company CMA in Australia, and BP invested $71 million into biofuel company Tropical BioEnergia in Brazil. And there were dozens more minority stake transactions like these throughout the year.

Look for even more cash-laden companies to continue to buy their way into clean technology markets in 2012, supplementing the role of traditional private equity and evidencing a maturation of the cleantech sector.

Storage investment to retreat
Significant capital has gone into energy storage in recent quarters. In 3Q11, storage received $514 million in 19 venture deals worldwide, more than any other cleantech category. Will storage remain a leading cleantech investment theme in 2012? We’re betting no. Here’s why.

Storage recently made headlines as the subsector that received the most global cleantech venture investment in the third quarter of 2011, the last quarter for which numbers are available. An analysis of the numbers, however, shows the quarter was artificially inflated by large investments into stationary fuel cell makers Bloom Energy and ClearEdge Power. Do we at Kachan expect more investments of that magnitude into competing companies? No. Why? Even if you believe analysts that assert that stationary fuel cells for combined heat and power are actually ramping up to serious volumes (old timers have seen this market perpetually five years away for 15 years, now), just look how crowded the space currently is. Bloom and ClearEdge are competing with UTC Power, FuelCell Energy, Altergy, Relion, Idatech, Panasonic, Ceramic Fuel Cells and Ceres Power … just some of the better-known 60 or so companies vying for this tiny market today. And many are still selling at zero or negative gross margins.

But the main reason we’re not bullish on storage: Smoothing the intermittency of renewable solar and wind power might turn out to be less important soon. Sure, nary a week goes by without announcements of promising new storage tech breakthroughs or new public support for grid storage (e.g. see these three latest grid storage projects just announced in the U.S., detailed halfway down the page.) But we believe that utility-scale renewable power storage might be obviated if utilities embrace other ways to generate clean baseload power.

In 2012 or soon thereafter, we expect those clean baseload options will start to include new safer forms of nuclear power (don’t believe us? Read Kachan’s report Emerging Nuclear Innovations—U.S. readers, don’t worry: nuclear innovation won’t apply to you.) Or NCSS/IGCC turbines powered by renewable natural gas delivered through today’s gas distribution pipelines (see The Bio Natural Gas Opportunity). Or even geothermal (gasp!) or marine power (see below). All of these promise to be less expensive than solar and wind when you factor in the expense of storage systems required—incl. electrochemical, compressed air, hydrogen, flywheel, pumped water, thermal, vehicle-to-grid or other—if solar and wind are to be relied on 24/7.

Marine energy to begin coming of age
I’m a closet fan of marine energy, despite today’s extraordinarily high cost per kilowatt hour. We started covering wave, tidal and ocean thermal energy conversion equipment makers in 2006. Anyone who’s heard me talk publicly on the subject has had to suffer through hearing how I’d much prefer invisible kit beneath the waves than have to gaze upon solar and wind farms taking land out of commission.

In 2006, the lifetime of equipment from then-noteworthy companies like Verdant Power and Finavera (which since exited marine power after a failed test with California’s PG&E) in the harsh marine environment could sometimes be measured in days. The designs just didn’t hold up. Even Ocean Power Delivery, now Pelamis Wave Power, with its huge, snakelike Pelamis device, had hiccups in early onshore grid testing. Back then, the industry clearly had a long way to go.

Today, six years later, we think it’s time to start taking marine energy seriously. A high profile tidal project is now underway in Eastern Canada’s Bay of Fundy. Several weeks ago, Siemens raised its stake in UK-based tidal energy developer Marine Current Turbines from less than 10% to 45%, because it liked the predictability of ocean energy, and Voith Hydro Wavegen handed over its first commercial wave project to Spain. And last week, Dutch company Bluewater Energy became the latest vendor to secure a demo berth at the European Marine Energy Centre at Orkney, Scotland—the most important global R&D center for marine energy. Things are going on in marine power. Still, its major hurdle is the large variation in designs and absence of consensus on what prevailing technologies will look like.

2012 won’t be the year marine power becomes cost-competitive with coal, or even nearly. But you’ll hear more about marine power in 2012, and see more private and corporate funding, we predict.

Increased water and agricultural sector activity
Look for increased venture investment, M&A and public exits in water and agriculture in 2012.

At one point, only cleantech industry insiders championed water tech as an investment category (and, frankly, at only a few hundred million dollars per year on average, it still remains only a small percentage of the overall average $7B annual cleantech venture investment.) Industrial wastewater is driving growth in today’s water investment, with two of the top three VC deals of the last quarter for which data is available promoting solutions for produced water from the oil and gas industry, and the largest M&A deal also focused on an oil and gas water solution. Regulations aimed at making hydraulic fracturing less environmentally disruptive to will spur continued innovation and related water investments in 2012.

Where water was a few years ago, agriculture investment appears to be today. There was more chatter on agricultural investment than ever before at cleantech conferences I attended around the world this past year. Expect it to reach a higher pitch in 2012, because of:

* Growing awareness of the complex interrelationship between water, energy and food
* Increased awareness of the math underlying the planet’s current population growth rate and how that’s going to impact our ability to feed the world, and
* Our reliance on inexpensive oil and gas, petroleum-based fertilizers and hybrid seeds for today’s crop yields

Investing in farmland is even resurfacing, in these uncertain times, as a private equity theme.

Remember the food crisis three years ago, when sharply rising food prices in 2006 and 2007, because of rising oil prices, led to panics and stockpiling in early 2008? Brazil and India stopped exporting rice. Riots broke out from Burkina Faso to Somalia. U.S. President George W. Bush asked the American Congress to approve $770 million for international food aid. Those days could return, and they represent opportunity for micro-irrigation, sustainable fertilizer and other water and agriculture innovation.

And so concludes our predictions for 2012. What do you agree with? What do you disagree with? Leave a comment below.

Article by Dallas Kachan, appearing courtesy Kachan & Co.

A former managing director of the Cleantech Group, Dallas Kachan is now managing partner of Kachan & Co., a cleantech research and advisory firm that does business worldwide from San Francisco, Toronto and Vancouver. Kachan & Co. staff have been covering, publishing about and helping propel clean technology since 2006. Kachan & Co. offers cleantech research reports, consulting and other services that help accelerate its clients’ success in clean technology. Details at www.kachan.com.

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With the emergence of China as the globe’s cleantech powerhouse (see Why China has already overtaken the U.S. in cleantech), it’s become fashionable for cleantech companies with products to sell to target China seeking large purchase orders.

What’s not been so popular is to go to China seeking investment capital.

We and a handful of companies did both last week. And we learned a bit about the current state of cleantech in China in the process.

The latest installment of the Northern Cleantech Showcase, Kachan’s event series that matches leading cleantech companies with investors and large enterprises around the world, presented seven of the most interesting Canadian cleantech companies seeking linkages with China to teeming invitation-only rooms in Beijing and Shanghai. But more on that in a moment.

Venture alive and well in China
Why go to China for capital? Selling into China makes sense, but equity investment? While not yet a genuine nexus of VC like North America or Europe, there’s been a potentially important upswing in cleantech venture capital deals in China in recent months.

Industry observers take note: At $176 million as tracked by cleantech data provider the Cleantech Group, more cleantech venture capital was invested in China in the second quarter of 2011 (the latest quarter for which numbers were published as of this writing) than any other country except the U.S. This is potentially significant, as China has historically trailed as one of the least active jurisdictions for cleantech investment since the category’s inception in 2002.

That said, quarterly analyses should always be taken with grains of salt—as one or two quarters do not always meaningful trends make—but China, in this latest quarter, dramatically pulled ahead of Canada and the U.K., traditionally strong countries after the U.S. So it was timely that we were in China asking for money.

The rise of Chinese corporate capital
Venture capital aside, in the two years since I last visited mainland China, another dramatic change seemed the level of interest from state-owned and other businesses in clean technologies. It’s indicative of China’s new green order: the country’s latest five year plan places a strategic emphasis on clean and green technologies as a cornerstone of China’s economic growth and improvement in standard of living. And what its five year plan articulates, the country implements. Fast.

For instance, China’s ENN—the largest private clean energy solution provider in China, which sent someone to meet our Northern Cleantech Showcase companies—just announced that it intends to invest $8 billion in clean energy overseas in the next decade. That’s one company earmarking eight times the amount the Canadian government (through its arms-length cleantech investor SDTC) has committed for venture-style investment into cleantech innovation. Other state owned enterprises sent people to meet with our companies. Corporate China has been told to get into cleantech, so expect it to do so in a very big way, very quickly.

It’s easiest to appreciate just how fast China can react to central government decrees by comparing before-and-after pictures of places like Shanghai.

Cleantech companies featured in China
I was in China last week presenting seven companies selected by a jury of partners and venture capitalists. In some cases, the companies were seeking investment. In others, they sought joint ventures and partnerships. Having done cleantech business in China for many years, we invited appropriate investors, state-owned enterprises, multinationals, potential joint venture partners and others most likely to propel our delegate companies. And like our last event to the Bay Area (see Seven cleantech companies Silicon Valley just learned about), the formula worked; the presenting companies got quality leads.

In alphabetical order, companies that presented at Northern Cleantech Showcase China 2011 included:

Delaware Power Systems: Technology for EV and PHEV battery systems – Electric vehicles require advanced battery systems to provide reliable power. Delaware is focused on developing scalable smart battery modules for EVs. Its technology promises to make EV battery systems safer, more reliable and last longer while reducing cost.

EnerMotion: Waste heat recovery from vehicle engines – EnerMotion improves energy efficiency in current and future vehicle technology, provides environmental benefits, maximizes existing transportation infrastructure and offers a fast payback for customers.

Enovex: Carbon capture with lower capital cost and energy requirement – Today, the best carbon capture solutions impose 30-35% energy penalties on power plants. Enovex has developed a system only requiring half that, and has attracted interest from large energy companies.

Eve Innovations: Coal-like fuel replacement from waste – By converting almost all organic waste to a commercial fuel product for industrial or retail markets, Eve Innovations removes the need to dispose of the waste, thereby reducing costs and logistics involved with waste disposal.

exchangenergy: Geoexchange expertise – exchangenergy designs and installs high efficiency and site specific geoexchange and geothermal systems. The company is seeking international expansion into China, offering project and international best practice expertise for residential developments.

Remco Solid State Lighting: Power & thermal breakthrough for high power LED lighting – Key barriers have held back the use LED lighting for high power lighting applications. Remco has developed and patented technologies aimed at power control and thermal management. The company’s LED street light tests suggest it can reduce street light electrical energy consumption by up to 70%.

Vizimax: Automation systems for power grid modernization – Vizimax’s products help the electric grid reduce network outages by automating substations and the interconnection of renewable energy to the grid. Customers include Siemens, Alstom Grid, Schneider Electric, National Grid, NYPA, PowerGrid of India and others.

Leading Chinese VCs attended the Northern Cleantech Showcase presentations, and presenting companies were well received. “The presentations were informative and we made connections to interesting new companies,” said Qiyong Cao, director of research for leading Chinese cleantech venture investor Tsing Capital.

Delegate companies were awed by the scale, speed and commitment in China for embracing clean and green products and services. “Where North America has subdivisions of single family homes, Beijing and Shanghai have built subdivisions of high-rises,” noted Jeremy Jacob, CEO of Vancouver-based exchangenergy, seeking to share his company’s experience at the Showcase in building high end geoexchange systems.

The Northern Cleantech Showcase China 2011 events were produced with the support of Ernst & Young, the Greentech Exchange and Jiaxing Xiuzhou New Area—the business development arm of a new business park in Jiaxing, a city just southwest of Shanghai.

Jiaxing officials took Northern Cleantech Showcase delegates on a tour of the area, impressing them with logistical prowess and commitment to manufacturing scale. Large companies like ProLogis and Wal-Mart chose the Jiaxing area for distribution centers because of rail, highways and deep sea port connections.

Cleantech companies like Silicon Valley’s Sunpreme are choosing the area because of significant labor, tax, rent and facility incentives aimed at cleantech companies. And, of course, then there’s what’s increasingly referred to as “Chinaspeed”: Northern Cleantech Showcase delegates toured a Sunpreme factory in Jiaxing that had been assembled from scratch less than 5 months from when the company’s contract had been signed in April. Delegates couldn’t believe that the factory, with its spotless, polished floor and freshly painted offices, had just been built.

More information on Jiaxing’s Xiuzhou business park can be found here.

Article by Dallas Kachan, appearing courtesy Kachan & Co. Blog.

A former managing director of the Cleantech Group, Dallas Kachan is now managing partner of Kachan & Co., a cleantech research and advisory firm that does business worldwide from San Francisco, Toronto and Vancouver. Kachan & Co. staff have been covering, publishing about and helping propel clean technology since 2006. Kachan & Co. offers cleantech research reports, consulting and other services that help accelerate its clients’ success in clean technology.

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• Ian Thomson

After decades of venture capital investment, growth and exit, the traditional focus areas of venture capital (such as IT, web and software) have developed strong entrepreneurial ecosystems. A high percentage of start-ups in these traditional areas come to market with one or more experienced entrepreneurs or with a strong and active network of investors/advisors who have “been there, done that.” They know what it takes to raise capital and to build a great fast-growing business. Cleantech companies, however, are much more likely to be led by first-time entrepreneurs who often struggle to create an ecosystem of experience people around them.

As a venture capitalist, I review hundreds of business plans each year and physically meet with roughly a hundred entrepreneurs seeking capital. I have the advantage of doing this through the eyes of someone who has been on the other side of the table, having raised venture capital for my own start-up before becoming a VC. And while there are certainly numerous exceptions, there are themes I see across cleantech start-ups that are not specific to their technology or market but which nonetheless impede their ability to raise capital. Here is the top five…

Technology is necessary, but not sufficient.
Many cleantech entrepreneurs are engineers or scientists. Although not the result of a formal survey, my perception is that many more have PhDs than what you find in internet start-ups. I don’t know if it’s a symptom of having achieved such a lofty degree, but many seem to believe that their phenomenal technology and their outstanding technical skills alone should justify an investment in their company. It isn’t. Weak entrepreneurs can take the most game changing technology in the world and drive it into the ground. Conversely, outstanding ones can take a good, but not great, technology and make a world-class business out of it (anyone heard of Microsoft?). So… in scientific terms, having compelling technology is a necessary but not sufficient condition for entrepreneurial success. Human capital must always precede venture capital.

Your 50-page business plan is a waste of time.
Will someone please tell all the college business professors that the traditional business plan is a dinosaur! No VC has time to read such a tome. Nothing ever turns out completely as expected, so writing a long document as if it will prescribe the future is silly. And by the time you finish investing the time to create such a detailed document it is most assuredly out of date.

Conversely, too little time is invested into building a robust spreadsheet financial model. Not a static five-year P&L – that is almost useless. Rather, what an early stage company needs is a financial model that can be used to run “what-if” scenarios, e.g. “What if our margins are less?” “What if it takes us a year longer to get to market?” A tool like this accepts that the future is uncertain and that entrepreneurship is about taking risk. As an entrepreneur, which would you rather have, a 50-page wish or a model of your potential risks?

The thought process that goes into fleshing out the basic elements of a business plan (e.g, market, competitive advantage, go-to-market strategy, financial model, etc.) is what is paramount. Entrepreneurs that recognize this look at their business strategy and financial model as planning tools more than as fund-raising tools. And they realize that communicating the results of that thinking must be done concisely.

Eisenhower once said, “In preparing for battle I have always found that plans are useless, but planning is indispensable.” Start-up businesses are no different.

A real advisory board isn’t just a list of cool names.
Some cleantech entrepreneurs get advice along the way that they should form an advisory board: Get some people with cool experience and ask them if you can slap their names in your business plan. That’s not an advisory board – it’s just a list of cool names.

A real advisory board not only has relevant experience and business contacts but also is actively engaged in the business, albeit on a very limited basis. They meet regularly with company leaders, have provided concrete material assistance to the company and they have a specific personal interest in the company. Such personal interest can take many forms, such as a stock option, a direct investment, a future executive role, prior significant personal relationship with a founder or clear strategic interest for their current employer.

Volunteer advisors who have no economic, business or personal connection to the company are cute. They are like the parsley on your breakfast plate – they make it look nice, but add little substance and… at least for this VC… leave a bad taste in my mouth!

25% gross margins and growth to $20M in seven years aren’t exciting
At the highest level, there are three types of start-up companies. There are high-growth businesses with venture potential. There are downright bad businesses. And there are steady growth businesses, which are not “bad” businesses – they just aren’t great venture investments.

Venture capital funds are mostly 10-year partnerships. We need to target businesses that we believe can generate huge multiples (typically 10x or more) on our investment in less than that timeframe so we get both liquidity and sufficient returns to make up for those investments that aren’t as successful. That means companies that can use our capital to drive extraordinary growth, unfair competitive advantages and healthy margins yielding an exit return far beyond a simple discounted cash flow analysis on the business.

My second cousins are billionaires. They built one of the first mail-order office supply companies to a dominant leader in its industry over 40 years (you can read their story in this book). They never raised a penny of equity capital. It was a great steady growth business that made them extraordinarily wealthy. Steady growth businesses can lead to phenomenal personal wealth, but that doesn’t make them good venture capital investments.

Last, but by no means least…raising capital is a social sport.
Quick quiz: What is the single most important element of raising venture capital? Your pitch deck? Your technology? No, no… your management team’s experience, right? Wrong… it’s your relationships with potential investors. Who you know is often more important than what you know in business.

The classic fund-raising mode for most cleantech entrepreneurs is to send their business plan to lots of funds, pitch at various cleantech business plan events and then wait to see who pursues them. They let the VCs drive the process. Few look at this as the sales process that it is. Don’t spam slews of potential investors. Rather, identify the funds that should be your top targets based on the investment interest they describe on their website. Pursue them like you should a prospective customer: qualify them, identify their hot buttons and always be closing on a time-bounded next step with them. And, as all great sales people know, getting an introduction is infinitely better than a cold call.

So, does that mean that only entrepreneurs who already have VC relationships can get funded? No, but that sure as heck helps a lot! And in this day and age, if you can’t get an introduction to me or another VC, you then you aren’t a very good entrepreneur. There are almost 500,000 people who know somebody who knows me on LinkedIn and can get you an introduction. Many VCs are equally well-connected – it’s part of what we do. So, which business summary do you think I take more seriously — the one that comes in from our website without an introduction or the one referred to me by someone I know?

And with that, you now have as a perk for reading my blog, a free roadmap for increasing your odds of raising capital from me!

David Gold heads up cleantech investments for Access Venture Partners. He is also the author of the GreenGoldBlog.

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Here in Boulder, Colorado the mood is impatient when it comes to the future of energy in the United States. The pace at the national level is not quick enough to deliver the clean-energy future that many Coloradans view as crucial to the future viability of our economy and environment. As a result, the city has taken matters into its own hands, attempting to create a locally owned municipal utility. The future of this effort is still unclear—two questions on the issue will be on the November ballot, and utility Xcel is mounting a well-funded campaign against them—but this sort of frontier spirit epitomizes Colorado’s progressive approach to shifting away from fossil fuel dependency. The state sits atop a wealth of cleantech resources, which appear to be just as vital as the natural resources the state possesses as well.

There will be no single ground-breaking technology that will change the energy sector or provide a panacea for the economy. Colorado is nurturing a diverse cleantech sector that covers everything from biofuels to smart grid, and includes young companies like Power Tagging and Eetrex along with more seasoned veterans like Vestas. In the mix is a supportive body of lobbyists, industry associations, and legislators who believe in an integrated energy future in which cleantech works along-side conventional technologies.

The Ft. Collins-Boulder-Denver corridor along the Front Range is home to renowned centers of innovation, test-beds for commercialization, and well-established technology and service providers for the power industry, not to mention the University of Colorado and its Leeds School of Business, which runs several programs around sustainable business and technology. The traditional oil and gas industry remains strong, but growth in cleantech areas is even more remarkable. Ft. Collins has developed a Colorado Clean Energy Cluster that is pooling local expertise across the cleantech sector to recruit more research and businesses to the area.

Through collaborative efforts, Northern Colorado was able to recruit wind turbine manufacturer Vestas, which put their North American headquarters in the city of Windsor, Colorado. The Cluster continues to pursue international connections for the state’s local products and services. The activities in Northern Colorado are staged to address some of the looming uncertainty in the cleantech sector, domestically and internationally. In the West, we understand the issues of natural resources, high-tech research, venture capital, and commercialization, intimately.

Energy efficiency is another critical piece of the puzzle. The Colorado Governor’s Energy Office has dedicated significant resources to this end. Much of the American Recovery and Reinvestment Act (ARRA) money that came to Colorado focused on efforts like weatherization in rural and low-income areas. This well-rounded approach to the cleantech sector has been nurtured by legislators who are keen to see all of the state’s resources developed in equal measure. Policymakers from around the world travel to Colorado to consult with our international trade offices as well as business leaders. Northern Colorado is also home to public-sector heavyweights including the Rocky Mountain Institute and the Department of Energy’s National Renewable Energy Laboratory.

With all the changes taking place in the cleantech sector, here in the United States and abroad, the technologies and business models coming out of Colorado continue to offer solutions for issues around the world. And as the sector continues to forge an integrated approach to the future of the electricity sector, expect to see more good things out of Colorado. It’s no accident that Pike Research’s world headquarters can be found in the center of it all.

Article by Brittany Gibson, appearing courtesy the Matter Network.

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The energy efficiency sector has had a healthy injection of venture capital over the past 18 months. In Q2, investment in energy efficiency accounted for almost a quarter of cleantech venture capital commitments (Cleantech Group).

It is an increasingly appealing sector for VCs in the ongoing difficult economic climate: asset light business models and more predictable return over shorter time-frames – with some compelling growth drivers.

In Europe, the European Commission has mandated a 20% reduction in energy consumption by 2020, but the biggest impact on the sector has been the disaster in Fukushima and the subsequent decision by the German government to close down all nuclear power stations by 2022.

Swiss-based VC firm Mountain Cleantech, which is focused on the DACH region (Germany, Austria and Switzerland), says this factor alone is now the most significant driver of investment in energy efficient technology, and more specifically in the smart grid, in the region. Reducing and managing consumption will be key to its successful transition to cleaner and safer sources of energy.

Mountain Cleantech says this fundamental change in the energy market has forced the region to rethink how it produces and consumes energy. Efficient energy utilization, energy saving and the expansion of renewable energies must now all be driven forward concurrently – and quickly.

The increase in energy from more costly and inconsistent renewable sources means utilities need data on overall energy demand to efficiently perform load management and energy consumers need to reduce energy consumption due to rising energy costs. Mountain Cleantech believes the biggest potential will be found in the areas of smart metering and smart home, green IT and demand response.

The German Corporate Energy Efficiency Initiative outlined that EUR250 million and 1.4 terawatt hours of potential savings could be realized in the DACH region per year through energy efficient IT alone.

Equally important, they say, is the risk of blackouts due to bottlenecks in energy supply. As renewable energy sources do not deliver energy consistently, being able to manage the energy demand is crucial for energy suppliers. Companies delivering reliable and scalable technologies for demand response have huge potential.

This potential, as always, is not without its risks. In the area of smart metering and smart home, in particular, there are several problems that have been causing development to stall. It could now be held back further by the recent withdrawals of a few big names.

Mountain Cleantech highlights a lack of standards and regulatory parameters, hype around smart meters and the lack of economic incentives for the end user as a few of the issues that may delay the adoption of technologies that are critical to a secure energy future.

But as more and more cheap nuclear power comes offline, innovative and scalable technologies should have a pretty good shot at early success in DACH.

Having set the standards in engineering and renewables, Germany now looks well positioned to take the lead on energy efficiency too.

More on the risks and opportunities of investing in energy efficiency along with many other topics will be explored in a free report The LEIF Brief: Energy Efficiency which will be published in September. The report will feature the insights of Mountain Cleantech along with several other VCs focused on the sector.

Article by Tom Whitehouse. Tom is the Chairman of the London Environmental Investment Forum (LEIF) and the Founder and CEO of LEIF’s Initiating Partner, Carbon International, the cleantech fund-raising and communications consultancy. Tom has been an advisor on political risk to large energy companies, including Shell and BHP Billiton, a foreign correspondent for The Guardian and a reporter for the BBC. Tom has a BA in Politics, Philosophy and Economics from Oxford University in the UK.

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No doubt, a few eyebrows were raised when Gamesa, one of the world’s largest manufacturers of utility-scale wind turbines, recently invested in a company that builds micro-solar photovoltaic (PV) systems and mobile microgrids that are being deployed in Afghanistan by the U.S. military. This is rightly so, since it shows that Gamesa is looking at the small picture and seeking to broaden its horizons within the clean energy technology continuum.

Gamesa’s investments in SkyBuilt Power, which has also attracted support from the Central Intelligence Agency’s (CIA) venture capital fund, In-Q-Tel, appear to be an extremely canny move, given that this company has taken the concept of micro power to whole new levels. In fact, products include solar blankets that can literally fit into a suitcase and could be carried on an airplane!

For its part, Gamesa is determined to ensure its long-term growth both in the wind turbine supply business, where it just now launching even larger wind turbines for the burgeoning offshore market in Europe’s North Sea, but also in a broad array of other renewable and sustainable technologies. To channel this new strategy, Gamesa has established Gamesa Venture Capital, a corporate venture capital fund, through which it will invest up to 50 million euros in the next five years to buy stakes, initially minority holdings, in startup or growth companies engaged in the development of technologies promising the highest potential for future growth. In return, Gamesa will offer the companies its market position, manufacturing, finance, and local supply chain to achieve greater market competitiveness. Perhaps after five years or so, Gamesa will consider taking the companies over as new business lines or as sources of enhanced value via spin-off sales.

Gamesa has targeted six key technologies for venture capital investments: ocean energy technologies such as tidal currents, next generation solar energy devices such as concentrated solar PV, energy storage to firm up variable renewables at the bulk and distributed level of service, green mobility options such as electric vehicles, energy efficiency, and off-grid micro-power. The first two investments related to the last category are a 28.7 percent equity stake in SkyBuilt Power and a 25 percent equity stake in WorldWater & Solar Technologies, both firms with solar PV products positioned for developing nations.

SkyBuilt Power is particularly interesting because of its sales channels with the U.S. military, a market that Gamesa is still trying to figure out. But with goals of obtaining 25 percent of total power supplies from renewables by 2025, the U.S. Department of Defense is obviously a good business target. Along with potential new business in the mobile military microgrid sector, which is also being looked at closely by military agencies in the United Kingdom, Canada, Australia and France, Gamesa believes micro-solar technologies have other intriguing applications.

“SkyBuilt Power could open the door to business with remote telecommunications sites initially interested in on-site solar PV, but perhaps also purchasing wind and storage technologies as a second stage,” acknowledged David Mesorero, director of Gamesa Venture Capital. “With the decline of feed-in tariff rates in Europe, I think Gamesa is seeking out new markets and game-changing technologies. We at SkyBuilt Power look at Steve Jobs and what he did to the laptop computer as a model. Our goal is to package instant solar and wind products that are dumber and dumber, plug-and-play systems ideal both for combat missions or village power in the developing world,” added David Muchow, President of SkyBuilt Power.

SkyBuilt Power’s portfolio is robust and in constant search of “transformational” elements. Among its current products are the following:

- SkyStation: Containerized system offering solar, wind, batteries, or other generators to be used for tactical operations centers, clinics, disaster relief, telecom power, and rapidly deployable micro-grid power
- SkyTrailer: Provides a mobile renewable power on trailers and can be set up in as little as 45 minutes
- SkySkid: Provides lightweight power on skids for remote communications and other uses
- SkyCase: A portable power station that fits into a case with high-efficiency solar blankets three times more efficient than any other product on the market
- SkyWater: Combines highly efficient water treatment technology with the mobile or fixed power solar systems
- SkyStructures: Insulated, fire resistant, panels that are rapidly deployable structures that feature renewable energy power systems designed to cut power use in the field

SkyBuilt is both a product purveyor and a system integrator, which makes it unique. The company’s impressive track record is to date been based on its portfolio of extremely modular solar PV products. While its portable solar PV products have obvious appeal for Forward Operating Base (FOB) mobile microgrids, the company is shifting market focus to stationary base microgrids, sensing a shift in priorities at the DOD with recently announced pullouts from Afghanistan. The investment by Gamesa will also allow the company to develop larger-scale projects.

As an integrator, the company’s forte is the ability to develop hybrid solutions, getting diverse technologies to work in concert as a system, the very essence of the microgrid vision. From small microgrid-in-a-suitcase for platoons, to larger scale solutions more relevant to a stationary base, SkyBuilt Power is building upon its work with Lockheed Martin and others to become a more expansive power service provider. Gamesa’s investments are critical to making this transition happen.

Article by Peter Asmus, appearing courtesy the Matter Network.

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In the venture capital community, one hears a great deal about “technology risk.” In my most recent meeting with Ray Lane, Managing Partner at Kleiner Perkins a few months ago, he told me: “We want all technology risk removed before we put more than a few million dollars into a deal.”

OK, but what exactly does that mean? To illustrate the point, let me tell you about a company I came across at the Energy Storage show in San Diego last week, that appears to me to be the poster child for technology risk. Check out “Gravity Power.”

The website does a far better job than the description I’m about to provide, but imagine a hole 30 meters in diameter and 2000 meters deep, filled with water, in which a huge stack of pancake-shaped concrete disks rises and falls. The concrete, which is heavier than the water by a factor of 4 to 1, is driven upwards by energy coming in beneath it pushing it up, or falls, releasing that stored energy. In the energy generation mode, as the concrete falls, it pushes water up through a return pipe connected to the main hole. In the charging mode, water is pushed down the pipe, forcing the concrete to rise.

Is this theoretically possible? Of course. But has anything like this ever been built? Sort of. Anything of this scale? No, and the first deployment will cost $600 million. Now that’s what I call risk.

And yes, most of the risk is associated with technology. What if you can’t fabricate a huge concrete pancake with seals sufficient to do the job? What about earthquakes — and hundreds of other issues that I can’t even imagine?

But let’s acknowledge that there are other forms of risk here as well. What happens if a better form of energy storage comes into play in the years that it takes you to get your first implementation in place? What happens if energy storage is taken over by vehicle-to-grid connected EVs — or somehow doesn’t turn out to be the big deal that most people expect?

I can find you people who will risk $6 million on an idea like this that has the potential to impact the world of energy storage as we currently conceive it. But $600 million? That’s some real risk.

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In an important development on the intellectual property front, but with particular import for Israeli clean tech companies targeting the U.S. market for strategic partnerships and licensing, the Israel Patent Office (ILPO) and the United States Patent and Trademark Office (USPTO) recently announced a Patent Prosecution Highway (PPH) pilot project between the two offices.

The PPH provides that an applicant receiving a ruling from the ILPO that at least one claim in an application is patentable may request that the USPTO expedite examination of corresponding claims in corresponding applications and vice versa (see USPTO PPH info here).

This pilot project, like other PPH agreements already in place between the USPTO and patent offices in other countries, promises to accelerate and improve the patent prosecution process for patent applicants with interest in procuring both U.S. and Israeli patents on their inventions.

While the potential benefits of the program are not limited to clean tech innovations, this pilot project provides a particular potential boon to Israeli clean tech companies and their investors, especially if such companies also leverage the existing “green patent” programs in force in both the USPTO and the ILPO. Israel remains a hotbed of clean tech innovation and development, while the US market continues to be one of the markets of choice for Israeli technology, along with China and India.

Combining the PPH pilot project with existing “green” patent programs in the ILPO and USPTO opens up exciting possibilities for clean tech innovators.

Savvy Israeli clean tech companies, and the burgeoning Israel clean tech venture capital (“VC”) community that finances those companies, should work with patent counsel and determine whether their innovations qualify for inclusion in either the ILPO’s “green patent” program (allowing priority examination from the ILPO for applications classified as “green” via applicant request by letter, without the need for extra fees) or the USPTO’s Green Technology Pilot Program (offering successful petition filers expedited first Office Actions for “green” inventions).

For strategically important inventions, inclusion in either program could allow for quicker patent issuance, thereby increasing the attractiveness of the technology to later-round investors, strategic partners, and potential licensing or enforcement targets.

As an example, a hypothetical Israeli clean tech company could accelerate an existing pending patent application in the ILPO, by requesting classification in the “green patent” program, and then see that patent issue with reduced pendency. The company could then take the newly-issued “green patent” and utilize the PPH pilot project to get expedited examination and potential issuance in the USPTO.

This approach could shave years off the patent prosecution lifecycle for such a company, and thereby open up intellectual property monetization opportunities earlier in the investment lifecycle as well.

The USPTO has not been shy about touting the benefits of PPH agreements, like the one it just entered into with the ILPO. Among the benefits highlighted by the USPTO for these types of arrangements are: (1) cost savings to applicants, on the legal and administrative fee front at least, because of shorter pendency and fewer Office Actions, (2) quicker examination of PPH applications, usually within a few months of acceptance of the PPH request, and (3) a much higher allowance rate (>90%) for PPH applications over that of non-PPH cases (<50%).

Israeli companies, of all stripes, including clean tech companies, targeting U.S. patents can now avail themselves of the aforementioned benefits, subject to the minimal requirements of the PPH pilot project.

The pilot project started July 1, 2011 and is scheduled to run for one year. If successful, there is a possibility that the term of the pilot project will be extended. Alternatively, if the pilot project is underutilized or proves a burden on resources, it can be terminated early at the discretion of the respective patent offices.

Clean tech companies interested in procuring U.S. and Israeli patents would do well to consider use of the PPH, and where possible an expedited “green” patent examination scheme, in order to obtain those patents in a shorter time at reduced cost. Similar strategies have been discussed with respect to other patent offices that host both PPH agreements with the USPTO and “green” patent programs – it is now Israel’s turn to get in the game.

Article by Gaston Kroub, a partner in the New York office of Locke Lord Bissell & Liddell LLP. Gaston serves as the co-chair of the Greentech Committee of the NYSBA’s IP Section and has been accredited as a LEED Green Associate. Gaston is a registered patent attorney whose practice focuses on intellectual property litigation and counseling.

Article appearing courtesy Green Patent Blog.

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Earlier this month, Tendril Networks and Siemens Energy, Inc. announced a strategic alliance to market the Tendril Connect platform to utilities. Tendril Connect, the core of Tendril’s home energy management offering, is one of the most comprehensive home energy management solutions available. The Siemens partnership could do big things for Tendril by connecting it with a new set of potential utility customers.

With its Tendril Connect platform, Tendril is aiming to get into the home for the benefit of both the utility and the consumer. It consists of a suite of energy management applications that will not just collect and analyze data but enable remote control of home systems on behalf of the utility and the consumer. The platform will enable personal energy use visualization, demand response, load control, energy efficiency, electric vehicle charging, and on-site renewable energy integration.

With deregulation and competitive retail electricity markets on the rise in the United States and abroad, Tendril is also setting its sights on competitive electricity suppliers by offering customized services that will match customers with the best suppliers and pricing plans given their energy usage behaviors.

Siemens, by virtue of its deep presence in the U.S. utility sector and its project management and implementation capabilities, is in a position to take Tendril’s technology to the next level. Tendril already counts over 30 utilities as customers, ranging from small municipal utilities to major investor-owned utilities such as SCE, ComEd, and National Grid and competitive suppliers such as Reliant and Green Mountain. Through its partnership with Siemens, Tendril will be on the fast track to landing new customers with larger footprints and, with any luck, selling them more fully-fledged versions of its platform.

In addition to augmenting these existing utility relationships, Siemens’ venture capital wing, SVC, will help sharpen Tendril’s market strategies and support its financial and operational planning efforts. The size of SVC’s investment into Tendril was not disclosed, however.

In the United States, the near-term path to success for home energy management players will be through partnerships with utilities. In other countries, such as the United Kingdom, home energy management companies such as AlertMe and PassivSystems are making a play by selling straight to the consumer. While Tendril’s long-term ambitions are international, it’s focusing on the United States today, and its partnership with Siemens will help cement the relationships it needs to expand its uptake in the United States.

Article by Eric Bloom.

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