by Chris Keenan
If you have acne, whether chronic or occasional, it may seem like there's nothing out there to safely help. Acne is often treated with harsh or even toxic medications that do your body no favors. They certainly don't take into account that many acne cases involve lifestyle factors such as diet. Fortunately, there are natural ways to effectively treat acne without harming your body or your wallet.
Clear Up Your Diet
Science has validated what many of us had already observed: diet can trigger acne. According to the Mayo Clinic, eating dairy foods and carbohydrates can cause a flare-up. The culprit seems to be the rise in blood sugar from eating foods made with refined flour. This is yet another reason to favor healthy vegetables, fruits and whole grains over packaged muffins.
If you eat dairy, try cutting back or replacing regular yogurt with Greek yogurt. Plain Greek yogurt has about twice the protein and half the sugar of regular plain yogurt. Also, eat a little fat with your dairy to slow down absorption and keep blood sugar from spiking.
The good news? Oily foods and chocolate don't trigger acne, so enjoy getting some of your antioxidants from dark chocolate.
Boost Your Vitamin A
Even a mild vitamin A deficiency can cause acne. Healthy levels actually help prevent acne by reducing sebum production and strengthening your skin's connective tissues. Eat sweet potatoes, carrots, and spinach to boost your levels. Avoid a supplement, as vitamin A is fat soluble and can be toxic in high amounts. A good multivitamin combined with eating the right foods should be plenty.
Eat The Right Minerals
Our modern food supply is depleted in the minerals that our bodies depend on. Low levels of zinc and chromium can actually cause acne. Zinc has antibacterial properties than can help regulate your skin's oil production and prevent inflammation. Foods rich in zinc include sesame seeds and tahini, lean beef, oysters, and nuts. Chromium fights skin infections. Food sources include whole grains, broccoli, and fish. You can also try a daily chromium supplement.
Release Your Stress
The skin is the largest organ in the body and the ultimate shield protecting you from environmental dangers. Your skin also reacts to inner changes and can literally erupt when you're bottling up stress. Work out your tension in positive ways and you're less likely to find your feelings showing up on your skin. Get regular exercise, whether it's running marathons or winding down with yoga. For maximum mind-body benefits, practice regular meditation as well.
Protect Your Face
Your skin's dirt and oil are trapped on everyday objects that it touches. Change your pillow cases every other day to keep your face free of nightly buildup. Keep your hair back from your face and wash it often, especially after sweating. Choose sunscreens and other skin products that say "noncomedogenic" on the label, meaning they don't block pores and are safe for sensitive skin.
If you spend a lot of time outdoors, wear a broad-brimmed hat to block the sun's rays. Too much sun can make acne worse. Over-the-counter acne medications can also make some people more sensitive to the sun, rendering sunscreen less effective. Your best bet is a hat made for sun protection. They're now widely available and come in a range of styles for the whole family.Reprinted with permission from Green Living Ideas
The first commercial tidal energy project in the US was dedicated last week in Maine, and turbines will begin turning in mid-September.
It's the first grid-tied tidal project in the US and the first to sell the electricity through long term power purchase agreements.
Portland, Maine-based Ocean Renewable Power Co. will soon lower a generator to the sea floor as part of a network of 20 underwater turbines.
"Tidal energy has arrived in America and it just landed right here," says Chris Sauer, Ocean Renewable's CEO to about 200 people gathered at the ceremony.
The small project in Eastport, Maine will provide electricity for 1,200 homes.
The cost is about $21 million for the Cobscook Bay Tidal Energy Project, which includes research and development, design, manufacture and installation of the turbines and environmental monitoring.
Cobscook Bay is one of the world's top tidal sites, where the tide rises and falls 20 feet twice each day.
Earlier this year, Maine regulators directed three utilities to buy 4 megawatts (MW) of tidal electricity in a 20-year contract. The utilities will pay almost double the average electricity price in Maine to support the project.
Regulators looked at what the cost of fossil fuels would be over 20 years and decided they would likely be even higher. In fact, they see tidal energy being cost-competitive in as little as five years.
The International Energy Agency's International Vision for Ocean Energy sets a goal for the technology to be cost-competitive by 2020.
The Department of Energy (DOE) invested $10 million in the this pilot phase of the project, which will supply electricity to 100 homes. It's already injected $14 million in the local economy and supported over 100 jobs. DOE invested as part of its investment in ocean energy research.
The fully completed project will power about 1200 homes and businesses.
"The Eastport tidal energy project represents a critical investment to ensure America leads in this fast-growing global industry, helping to create new manufacturing, construction, and operation jobs across the country while diversifying our energy portfolio and reducing pollution," says Energy Secretary Steven Chu.
DOE's early investment was critical in bringing Ocean Energy's tidal energy device from the lab to commercial deployment. The devices and many of its components are being manufactured in the US.
Earlier this year, DOE released a nationwide tidal energy resource assessment, identifying large areas along the East Coast, Hawaii and Alaska that have potential.
The other tidal project moving forward is Verdant Power's in New York City's East River. Siemens invested in a tidal company and the world's largest tidal project is moving ahead in Scotland, a 10 MW plant.
Learn more about the project and Ocean Renewables:
Image by ORPC
Reprinted with permission from SustainableBusiness.com
by Christopher DeMorro
Unlike many other also-rans, Tesla Motors is succeeding where other electric car companies have failed. And by succeeding, we mean Tesla is actually selling cars, with the Model S sedan reportedly receiving over 10,000 $5,000 deposits to date. At $50,000 after tax credits though, the Model S is still well beyond what most people can afford. So what is Tesla planning to build next? From the sounds of it, an all-electric BMW 3-series rival.
An Electric Rivalry
Talking to AutoCar, Tesla's chief designer Franz von Holzhausen said that after the Model X SUV (which has also received plenty of deposits), the electric automaker would focus on bringing an event cheaper vehicle to market. The targeted price range is around $30,000, which judging from Tesla's record on pricing so far, probably includes the $7,500 Federal tax credit.
So far, Tesla's recipe for success has been simple; produce good-looking electric cars with enough range to justify a premium price tag. The result is a long waiting list for Tesla vehicles, and CEO Elon Musk has always intended to work his way into the lower price brackets. And going after the BMW 3-series only makes sense; it is the dominant luxury sedan in the $30,000-$40,000 price range. Considering that the average new car sells for over $30,000 these days anyways, Tesla might be able to move quite a few reasonably-priced electric luxury sedans with more range for more money.
I still have my doubts about Tesla's ability to survive on its own. Selling cars is serious business, and selling electric cars is risky business on top of it. But Elon Musk and Tesla Motors are making a good run at it so far. The question is, will they be around long enough to bring an electric 3-series rival to market?
Reprinted with permission from Gas 2.0
The Obama administration has identified 17 sites on public lands across six Southwestern states that officials say are most suitable for utility-scale solar projects. In a report, federal officials vowed to expedite applications for solar projects on these sites - located in Arizona, California, Colorado, Nevada, New Mexico, and Utah - which were targeted because of access to existing or planned transmission lines, minimal resource conflicts, existing development incentives, and solar potential. The sites,covering a total of 285,000 acres, have the potential to produce nearly 5,900 megawatts of energy, enough to power 1.8 million homes, according to the U.S. Interior Department. While the government also created a process for quicker approval of "well-sited projects" on another 19 million acres outside these zones, the plan excluded more than 78 million acres of public land from solar development.Photo by Green Prophet/flickr/Creative Commons
Reprinted with permission from Yale Environment 360
by Tina Casey
Lockheed Martin has been collaborating with a Seattle-based company called LaserMotive to "refuel" electric aircraft in flight using laser beams that charge batteries wirelessly, and the latest round of testing not only met but beat expectations. The test took place indoors but if wireless laser battery charging can prove successful in the field, it would lay the groundwork for a new generation of electric aircraft as well as vehicles and robotic systems, too.
Green Jobs for Rechargeable Robots
Before we get into the nitty-gritty of LaserMotive's wireless system, consider the implications of wireless recharging for vehicles as well as aircraft and also for the next big thing: robots.
Robotic devices are already commonplace in factories and warehouses, and they are being eyeballed for widespread application in the health care field, too. A wireless recharging system would have obvious benefits in terms of cord-free, flexible performance, and the practical elimination of down time.
Wireless recharging could also have an impact on green jobs for robots, for example in wind turbine and solar panel maintenance where robotic devices can relieve human workers from performing routine or hazardous tasks.
Wireless Laser Charging
According to a recent article in optics.org, LaserMotive's initial goal was to develop a laser-charging system for a cable-climbing robot, which dovetails with the green jobs angle. However, the immediate aim of Lockheed's involvement with wireless in-flight recharging has little to do with our sparkling green future and more to do with creating an infinite-flight drone.
To that end, initial testing of the system was conducted on a Stalker UAS (unmanned aerial system), a small surveillance drone that first saw military use in 2006.
As relayed by LaserMotive President Tom Nugent, the laser power system was tested in a wind tunnel and extended the Stalker's flight time to 48 hours, an improvement of about 2,400 percent.
The flight could have gone on longer but it was halted after the system passed its expected endurance limit, and the battery was found to have store more energy at the end of the test than it had in the beginning. The next step will be a field test outdoors.
Wireless Laser Charging: How it Works
LaserMotive's system shares some basic characteristics with a solar power array. Instead of sunlight, a high intensity laser beam strikes the photovoltaic cells, which then convert the light to electricity.
The beam could travel to the PV cells through a vacuum or fiber optic cable as well as through plain air.
As for the electricity needed to create the laser beam, that could be generated by conventional fossil fuels or any other source including solar power as well as wind, geothermal, hydropower or any other renewable form of energy.
Among the benefits of wireless charging is the elimination of power lines and the practical elimination of a power transmission infrastructure.
Flexibility can be layered onto the system by designing transmitters to be mobile or transportable, too.
Reprinted with permission from Cleantechnica
Post from: Traveling the Green Way
Post from: Traveling the Green Way
Post from: Traveling the Green Way
Post from: Traveling the Green Way
Post from: Traveling the Green Way
The company I recently began working for, Energy Roofing Systems, is committed to reducing our energy consumption today while keeping an eye on the horizon. We sell an Energy Star rated energy efficient metal roof that will not only reduce household energy bills 30-40% but is also fully recyclable.
The problem with today's asphalt/shingle roofs is that they eventually end up in landfills, polluting our water systems and our Earth. Our roof is warranted to be the last roof you ever put on your home. Additionally, shingles provide no heat resistance from the sun. Our roof reflects 90% of sun rays away from your roof.
Sure, you can install solar panels on top of shingle roofs, but what happens when your roof needs to be replaced or repaired after a hail storm? You'll have to incur extra charges to deinstall the solar array followed by even more charges to reinstall the panel on top of your new roof.
Install one of our solar ready roofs today and as the price of solar technology becomes more affordable in the near future you can easily have a solar array installed.
More than 10,000 climate change professionals from around the world have been invited to participate in ?The 2010 Greenhouse Gas/Climate Change Workforce Needs Assessment Survey.? Results of the survey are expected to be released by late summer.
?Our focus is to acquire valuable data for the industry,? said Sequence Vice President Frank DeSafey. ?This will help the international community better understand and quantify today?s complex needs for trained personnel measuring emissions and managing related climate change data throughout the world.?
Last year?s precedent-setting survey, ?The 2009 Greenhouse Gas & Climate Change Workforce Needs Assessment,? made national headlines when the climate change experts polled indicated that the world?s carbon trading markets are extremely vulnerable to accounting scandals like those symbolized by Enron, WorldCom and Tyco.
This year?s survey will ask the climate change professionals to assess the industry?s projected growth, its training requirements and its capacity to meet the growing global need for professional greenhouse gas monitoring.
?Sequence is proud to help sponsor these groundbreaking surveys because they aid us in learning what the concerns are for leading professionals in the field and provide keen insight in the future course of our recruiting needs,? DeSafey said.
?As the leading executive search firm in the climate change field for more than 15 years, we have pioneered the way scientific and environmental communities have attained their talent, long before it became trendy and ?green,?? DeSafey said.
The new survey will poll industry professionals, including Nobel laureates and other leading scientists, consultants, gas emissions accounting personnel and economists for clients requiring technical expertise in the climate change field, according to DeSafey.
The Greenhouse Gas Management Institute, a registered nonprofit organization, trains and networks a global community of experts who account, audit and manage GHG emissions, working on all aspects of climate change, based on world-class training and professional standards. Based in Washington, D.C., the institute partnered with Sequence Staffing because of the firm?s extensive experience recruiting scientific and technical professionals in the climate change field.
Sequence is a premier executive search and staffing firm for the environmental, climate change, engineering and construction fields, the core industries that build and maintain the world?s infrastructure, natural resources and environment.
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Even though NYC is considered the ultimate concrete jungle, you be pleased to find that nature exerts her influence by sprouting thriving green enterprises amid the urban sprawl. Along with Eco-friendly bars and restaurants, you?ll find the Big Apple?s actually
Phthalates Linked with Childhood Asthma, and Many Other Health Problems Phthalates cause health problems. The evidence continues to come in. Here?s the latest: a study from the University of Columbia reports that exposure to phthalates in personal care products and
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Overwhelmed by Which Cosmetics are Safe and Which Aren?t? You Don?t Have to Be a Chemist ?5 Easy Steps for the Everyday Person I?ve done several presentations now to help people reduce their toxic exposure in life. I talk
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Two years ago, I heard today, at the NVCA Annual Meeting the Cleantech session had 200 participants.
At today's, it had around 30.
And yet I walked away very encouraged. Why? Because in a room that probably had something like 200 or so collective years of cleantech venture experience, so many smart minds were focused on the basic question that we're wrestling with these days: "What will the next wave of cleantech venture capital look like?"
The panel session quickly turned into a full-room discussion on the subject, with lots of fodder for future columns (I'll get to them eventually, I promise). But perhaps the biggest takeaway for me from the conversation was Josh Green's suggestion that there will be two separate cleantech categories. "Energy/Industrial", and what I'll generally call "Market Reinvention" (while continuing to think of a better way to describe a wide range of consumption-facing business models and technologies -- suggestions welcomed).
"Energy/Industrial" would be the cleantech that many VCs and others seem to instinctively think of when they think about "cleantech": Hardware innovations, production processes, physical innovations. And this always seems to be what VCs gravitate toward. If you get more than two VCs together in the same room to talk about "cleantech", I guarantee you that within 5 minutes the conversation will have skewed over into the difficulties of getting venture returns from materials science or bio-chemistry innovations. (It was fun to watch the cleanweb investors like Mitch Lowe from Greenstart smile and go silent when that happened today.) There are a lot of reasons for this dynamic, including that many of the original cleantech venture investors came out of such hard-engineering disciplines, as well as the fact that cleantech markets are inherently about the physical world and thus there's no escaping the significant needs for such physical world based innovations. But clearly, a lot of venture investors, LPs, pundits, etc., tend to have a primary image of "cleantech" as being all about this subcategory, not just sometimes about this subcategory...
And the other category, as regular readers will no doubt recognize, is about business models and system integration (sometimes financial-oriented, sometimes web-oriented, sometimes software and controls oriented, sometimes deployment-oriented, sometimes just plain services). In large part, these are innovations focused on accelerating the adoption of the increasingly-attractive physical innovations and other resource efficiency improvements that the last decade of cleantech venture capital has done so much to bring about. They can create competitive advantage through proprietary IP, but as often they utilize brand, network effects, captive value chains, etc. to create their competitive advantages.
The point of the conversation, as it dwelled on this division, is that these two subcategories are really very, very different. Very different in terms of the skills required by the entrepreneurs and investors; different in terms of capital requirements; different in terms of time to market; different in terms of which strategic partners are critical, and what roles they need to play.
I happen to personally believe (and am investing around the thesis) that the current investment opportunity is in the Market Reinvention subcategory. Because there's a backlog of ready-for-prime-time physical innovations that aren't being adopted nearly as fast as their economic value propositions would suggest, so there are rapid growth opportunities to be found in figuring out how to unleash accelerated adoption.
Indeed, when Cambridge Associates put out a recent analysis of cleantech venture returns, the differences in performance between these two strategies was quite stark. From 2000-2011, they found that the pooled IRRs of bets in "Renewable Power Development" (basically, deployments/finance/etc. downstream of powergen) and "Energy Optimization" (lighting, efficiency, etc) were relatively more attractive at 11.4% and 8.9% respectively, whereas IRRs for "Renewable Power Manufacturing" (at 4.6%) and "Resource Solutions" (at 1.5%) were significantly less attractive.
But the point isn't to argue that one of these subcategories is better or more attractive than others. That will likely be cyclical. If Market Reinvention is successful, in fact, it will create both increased demand for and more rapid adoption of new Energy/Industrial innovations and thus create the opportunity for superior returns there. It's analogous to when corporate America got to a point of prioritization of and dependence upon new IT innovations that CIOs became prevalent -- when corporate America starts hiring "Chief Energy Officers" we'll all be much better off and physical innovations may find more rapid paths to market adoption and exits. And heaven knows, as a society we need much significant progress in these innovation areas -- a need that may well lend itself to tremendous investment returns for investors with the right strategies and in the right market conditions.
No, the point isn't to advocate for one of these subcategories or the other; the point is that these subcategories are indeed very different and thus require very different investment strategies and skill sets. In any rethinking of the cleantech venture category (and perhaps leading to some rebranding efforts), it's important to acknowledge these differences, and indeed embrace them.
1. "Cleantech" is not one opportunity. It is lots of completely different opportunities in completely different markets, built upon completely different technologies. It is more of a lens through which to view a wide range of innovations by entrepreneurs, some of whom may not even consider themselves "cleantech". And that's okay.
2. Not all of these opportunities will be a fit for the venture capital model, with its exceptionally high returns expectations and relatively short time to exit expectations. And the boundaries of that will vary over time. And that's okay.
3. And even within these subcategories, there will be very different strategies and skillsets required. Smart investors will move away from "checklist investing" as so many of us have engaged with in the past ("I still don't have an advanced battery company in my portfolio, let me go get one of those") and start to focus on particular areas (skill-wise and/or market segment focused) where they have particular access and expertise. And that's okay.
Lest we forget, these are markets that add up to trillions of dollars of revenue opportunity per year that are practically screaming out to be overtaken by new, more efficient technologies and market processes. Clearly, only a subset of this opportunity will be applicable to venture capital returns. But even that subset will be hugely attractive, when we can figure out how to crack it open.
Let's go crack it open.
Consolidation in an industry sector can be a good or a bad sign.
The waves of consolidation in the PV manufacturing sector for example, presaged (when it was vertical consolidation to lock up access to demand for panels) and then highlighted the overcapacity in that industry. Much of the ongoing consolidation upstream in the solar value chain at this point is opportunistic consolidation of IP on the cheap. Not exciting at all from an investor's perspective.
But the looming consolidation in the "intelligent energy" (ie: IT applications in energy efficiency) sector is, I believe, a very different story. One that is positioning the sector to start showing some really exciting growth stories.
There is a paradox at the heart of the building energy efficiency opportunity.
Many venture investors have shied away from the sector because it doesn't lend itself to what they consider "proprietary technology" that has massive scale -- because it is a highly fragmented market, when you get down to ground level. A home in Nevada behaves very differently and has very different energy costs than a home in Connecticut; much less trying to compare either building to an office building in Chicago, or a foundry in Idaho. So the matrix of optimal lighting, HVAC, etc. solutions ends up looking quite different from customer to customer.
And yet conversely, many of the basic solutions do have commonalities; and many customers end up having some of the same space-driven needs in common. That foundry in Idaho does have an attached office that's smaller than, but has similar needs to, that Chicago office building. Those homes both have opportunities to participate in automated demand response programs and voluntary efficiency programs.
As we've discussed here before, one of the challenges for "single solution" vendors is figuring out how to scale up in the face of such a fragmented market. It's tough to navigate through that matrix of potential customers to find the ones that need your particular solution AND have budget, authorization and motivation to act. One solution we've discussed is to cast a very wide net, and harvest the scattered "easy wins" out there.
But an alternative approach is to offer a full solution set. If you have a full suite of solutions, it's more likely that any single customer will have a need you can satisfy. And that's what the looming consolidation in the intelligent energy sector is shaping up to look like. An early mover in this wave, EnerNOC, acquired several ancillary businesses in energy procurement, carbon accounting and wireless demand control for small commercial facilities -- acquisitions with mixed results, but clear intent. And then yesterday's announcement of Nest's acquisition of MyEnergy. These were acquisitions to provide more completeness of offering to customers who want a single vendor to solve their overall energy issues, not just offer one particular solution. They don't complete that aspiration, of course, but they're pointed in that direction.
While there have been and will continue to be opportunistic acquisitions of distressed assets, of course, I believe this is going to be a healthy consolidation wave in this sector. Why? Because the most strategically-valuable acquisitions will be the ones that customers are already experienced with and are proven out in the marketplace, not distressed assets. Acquisition targets that already have some additional strategic value beyond any proprietary technology, such as customer/user networks, brand recognition, etc. This will be real companies buying real companies, and if done right, will end up with even faster sales growth. And in intelligent energy in particular, it is relatively easier (stress: relatively) to integrate different offerings into a consolidated single platform for customers.
What this likely means is that we're going to start seeing the emergence of several acquiring platforms that could eventually challenge the incumbent sleepy technology providers in these markets (the Johnson Controls, Honeywells and Rockwell Automations of the world). These acquirers will increasingly look to offer a full-service solution set to a particular category of customers -- utilities on the one hand, and on the demand side likely different platforms for different major categories like residential, retail, manufacturers, etc. Some solutions will be outright acquired, others will be licensed or otherwise brought into the solution set without an acquisition. But for major categories, the offer will be "one stop shopping" for their energy needs.
Controls providers will be well-positioned, if their solutions can be easily integrated into a wide range of other vendors' equipment. Network effects really come to the fore when you're looking to consolidate control of a very fragmented user equipment base onto one platform.
This also likely means that owning the customer relationship, is going to become even more valuable. Those who own the customer interactions are going to want to be such consolidation platforms; startups that can aggregate a significant customer or user base and aren't planning on driving consolidation will themselves become prime acquisition targets.
The rapid proliferation of new, intelligent solutions for the building energy efficiency market has therefore opened up an opportunity for some new, big players to emerge. And for the incumbent providers to also therefore need to drive strategic acquisitions of their own so that their offerings to their customer base also don't develop gaps.
This feels like the launch of an arms race in intelligent energy, in other words. And investors who are building and selling into it should be pretty excited right about now.
As I sit here at the jam-packed BNEF Summit listening to Senator Murkowski express her frustration about unrealistic political rhetoric on energy, I'm reflecting upon all the recent discussion among clean energy advocates here in the U.S. about priorities.
There's a recognition that in this policy environment, at a federal level this sector won't be able to enjoy all the policy support it should. But upon recognizing this the three major camps of clean energy policy advocates immediately fall upon each other, arguing that their camp deserves the most attention and support.
Advocates of deployment argue for implementing today's energy efficiency and renewable energy technologies at scale, as the best way to affect ongoing carbon emissions and build a stronger sector that can provide fertile ground for future generations of technology. Advocates of breakthrough innovation argue that today's technologies aren't sufficient so it's more important to emphasize R&D for the future solutions that can actually be full solutions. And those of an economic bent still advocate for putting a price on carbon as the biggest overall piece of the puzzle, but they tend to be more quiet these days, with a few stalwart exceptions.
They're all correct. But they all too often insist the other camps are wrong.
We need as much deployment as possible of RE and EE today where the economics make sense, and increasingly they do. The bigger the installed base, the more simple cost curve dynamics drive down prices. And the more people employed and making profits off of clean energy, the bigger voice we have in politics. Momentum matters. Forgoing momentum today to attempt an end-around via breakthrough innovation that solves everything down the road seems improbable, and also unrealistically assumes that a weak market with non-existent channels, etc., could even rapidly scale up such innovation when it becomes ready. And as for carbon tax advocates, it's unrealistic to expect a price on carbon to be politically acceptable if the alternatives aren't evidently at scale.
So I'm encouraged to see the efforts of Sens. Coons, Moran, Murkowski and Stabenow and others to put in place policy changes like MLP treatment for renewable energy that could help unlock deployment capital. These and other policy changes are possible (if still not probable) even in this broken political climate, and could make a significant impact. At a local level, movements to promote PACE and EE financing and feed in tariffs are all also welcome. I love the "race to the top" model for state-level energy policy encouragement outlined in the Obama budget. Furthermore, I've also talked here in the past about non-budgetary ways the White House could do a lot more to focus corporate America on making energy efficiency a shareholder-pleasing priority. If something like these kinds of efforts gets momentum, clean energy advocates of all camps should throw their weight behind it, and not whinge about how their individual camp is being left out.
Similarly, we clearly need to support more R&D spending on clean energy technologies. The Obama budget underlines this need and asks for significant more resources -- this may well not happen when Congress gets around to their own budget versions. But again, it's worth all clean energy advocates fighting for, arm in arm. Even among later-stage deployment folks, the emergence of alternative cheaper energy solutions would only enhance future economics. And to be blunt, as human beings we also need this type of breakthrough innovation, eventually.
Finally, we need a price for carbon. I see deployment advocates and innovation advocates pooh-pooh this basic fact way too often, arguing that a patchwork quilt of incentives for their pet priorities are sufficient. And there's a somewhat defeatest attitude presented along the lines of "oh, Americans will never go for that, so stop distracting yourself with the concept." But let's remember that the climate challenge is at its root a challenge of externally-priced damages. When dumping carbon into the atmosphere is free, no one internalizes these externalities and thus any patchwork of policies will find loopholes exploited, key solutions left out, arguments against "government picking winners", etc. Thus, an overarching policy solution is an inevitability, frankly.
Which is where I take issue with the White House (sorry, Mike and David). I agree that a price on carbon is probably unrealistic in this Congress, and I agree that the President's bully pulpit role will be insufficient to change that fact due to entrenched obstacles, and I understand that this White House is looking for battles they can win right now. But that's such a terribly short-sighted perspective on the President's role. Addressing climate change is going to be a decades-long struggle more akin in its political dynamics to civil rights progress than to near-term economic policy debates. And seen through this lens, the President should take every opportunity to simply utter the phrase "There will eventually be a price for carbon emissions". Just say that. Yes, the President talks about climate change and yes there are some good efforts being done by the Administration such as those mentioned above and many others. But eventually we need a price on carbon. And the President of the United States cannot be cowed into silence on that fact, even if it's politically impossible to push any specific legislation during this particular Congress. Repetition of this phrase, by this President and future presidents, helps shape the expectation that it will happen. It keeps the sense of inevitability that powers long-term political fights. It reminds everyone that, even if it's not a top three priority at any given time, it remains a long-term priority. It's too important to leave to patchwork half-solutions and short-term political silence. And just talking about climate change is not enough. People need to hear that there is an inevitable long-term solution. Or the inevitable keeps getting pushed back.
And along those lines, advocates of clean energy innovation and deployment need to stop their own reticence to engage in this inevitability. I've seen studies talking about how, for instance, dollar for dollar a direct subsidy to deployment results in more deployment than a broader carbon tax. Well duh. If all you care about is deployment of certain technologies, then put your dollars directly into that. But a) this type of argument only serves to illustrate how a broader approach to ALL carbon-reducing options is important, because dollar for dollar internalizing externalities will be more efficient for reducing carbon emissions than any subsidy; and b) a price on carbon can be made partially or entirely revenue neutral, and thus "dollar for dollar" should actually serve multiple economic purposes and have even broader benefit. But that's not to argue that a price on carbon is more important than supporting deployment or R&D -- it's absolutely true as well that if carbon emissions were priced but no support was given to emerging technologies or innovations, barriers to entry and lack of R&D capital would slow down necessary progress.
In short, we need all three: Innovation, Deployment and a Price on Carbon. The right answer isn't one or two of these policy areas. Appropriate and comprehensive clean energy policy is a three-legged stool. I recognize that policy advocates are incentivized to be contrarian and thus divisive. And I agree that we can't do everything, so some prioritization is necessary. But please, stop arguing that your leg should be longer than the others. Let's all get behind whichever of the three has a window of opportunity at any given moment. And let's all speak loudly at all times about the importance of all three; now if possible, later if necessary. We're too small of a community to be able to afford being so internally divided and riven with cynicism.
The traditional utility model is under threat. Industry leaders like Jim Rogers and David Crane are talking about this publicly. It's becoming harder and harder to make profits managing wires that distribute centrally sourced kilowatt-hours to end customers on demand. The aging T&D workforce, new potential significant loads like PHEVs, intermittent and distributed generation sources, an increasingly complex array of technologies on the demand side and on the grid for utilities to be on top of -- it's not surprising that utilities are finding it a daunting challenge to profitably manage their businesses with their existing wires-based revenue models.
But what I'm surprised about is that utility managers and their boards aren't taking advantage of the unique positioning and branding they have with customers, and their big balance sheets, to tackle other emerging profit pools. In fact, they're letting other players come in and chip away at them, even though they are in a strong position to capture a lot of shareholder value here.
Ultimately, I believe that the wires-management portion of the electric utility business will be used by investor-owned utilities (IOUs) to enable other, unregulated profit centers.
There's already a strong history of IOUs running unregulated subsidiaries. This practice has waxed and waned over the past couple of decades, but I've seen IOUs that have run outsourced billing services divisions, energy trading shops, and even fuel cell businesses. In many cases, those unregulated subs weren't designed to take advantage of the market position of the regulated T&D business unit actually managing wires, etc., but there's no reason they couldn't be if structured appropriately.
Let's look at the business opportunities on the demand side right now. Utility customers are looking to take on energy-efficiency projects, distributed generation installations, inclusion in demand response and ancillary services and other load control programs, backup power and combined heat and power systems, etc. But what holds back these activities from scaling up even faster than they are today? Lack of capex, and lack of buyer information (which vendors to work with, which systems actually work, what other options are there, etc.).
What are utilities uniquely well suited to provide to the customers they literally touch, via managing the wires? Financing of capex, and access to buyer information. How?
Utilities have big balance sheets, thanks to all of their T&D assets. They can tap into that to get very low-cost capital, which they could then offer as financing to interested customers. If done through an unregulated sub, they couldn't maintain an exclusive financing opportunity to customers -- naturally, other third-party financiers would also be hitting up these same customers. But utilities have a primary advantage of likely lower-cost capital because of the balance sheet, and also more accessibility to customers. On-bill financing has demonstrated that it can be dramatically more effective at unlocking customer purchases than third-party leases and other third-party financing -- customers just find it much easier to pay their financing fees on their existing utility bill. It's not another vendor or a new relationship, it's a bill they're already used to paying each month. IOUs could conceivably make significant high-margin, very stable income by becoming a financier to customers for demand-side projects, or, in a lighter form, by charging a fee to third-party financiers who want to offer customers "on-bill repayment" via the utility billing system. Even in a competitive financing market (so as to not take unfair advantage of the natural monopoly of managing T&D wires), utilities could have enough competitive advantages to grow big businesses here.
Utilities, thanks to their brand and existing connections with customers, are well positioned to be a more effective channel for solutions providers. They have the data to be able to show customers how a specific project would affect their energy spend. Plus, utility-approved vendors and systems (akin to Rockwell Automation's Encompass program) would be given more credence by end-users who don't have time to do an exhaustive investigation of all of the proliferating options available to them (which would make it easier for the utility T&D department to better manage all the more variable inside-the-meter load and generation effects). Utilities could even leverage new or existing unregulated service/channel subsidiaries to compete for this work themselves.
What's necessary? IOUs would need to have a major strategic shift, away from treating the distribution of kilowatt-hours through managed wires as being their primary profit center. They would need to embrace that the grid will be the source of kilowatt-hours of last resort in many cases, and stop trying to make their margin off of the kilowatt-hours thus sold. They would need to embrace that the ability to have that T&D role with end-consumers is worth much more than that, because of the above-named businesses, and bring in strong managers to launch/expand such unregulated subs -- and let them take senior leadership positions within the utility, which as yet never seems to happen. And they would need to educate PUCs as to how this ends up lowering costs for ratepayers, without endangering reliability.
So clearly, it won't happen soon.
But it's going to happen to them if they don't get out in front of it. They need to eat their own lunch before someone else does. And it wouldn't require any major regulatory shifts. So I'm surprised I haven't seen more IOUs starting to talk about a future business model that looks more like the above, rather than just lamenting that the existing business model is in trouble. This could actually be a big win for the shareholders of IOUs, but for now, such shareholders must instead just sit back and watch as other financiers and startups (and increasingly, bigger companies like NRG) take advantage of IOU inaction.
It's been quite a while since we did a roundup of recent news items here on the Cleantech Investing blog, but a few smaller news items have caught my eye and are worth discussing.
First of all, some housekeeping issues -- at my firm, we have made the decision to change the name of our firm to address a surprising amount of confusion out there in the marketplace. After receiving numerous business plan submissions addressed to "Black Corral Capital," we've determined it makes sense to change the firm's name to match apparent expectations. Of course, by that logic we also could have renamed the firm "Blackstone" or "Black Rock," but those are already taken. As we believe strongly in partnering with the best entrepreneurs and following their lead into new investment opportunities, it became awkward to be constantly replying to investment submissions with corrections about our company's name. So we've decided to make the change. Please adjust your contact databases accordingly.
Furthermore, we and many other investors in this sector have begun to rethink the "cleantech" phrase as a good descriptor, as it appears to now be out of favor among limited partners and Sand Hill Road types. Unfortunately, many other potential phrases have also become stale or are just silly, and it's even been suggested that the simple term "green" is now too politicized. So a big hat tip to Walt Frick of BostInno for recently coming up with the very pithy "Sustainnovation Greenruption" moniker. It finally captures all the key aspects of the investment thesis at work in this sector, and also should be difficult for extremist politicians in Congress to politicize, because it is so challenging to pronounce. At Black Corral Capital, we now will be shifting our communications to incorporate this new descriptor for the sectors and subsectors we seek to invest in.
Now onto some news items that caught my eye recently:
I wish I could also include news of forward progress toward comprehensive federal energy policy, but then readers would probably just assume this was a silly April Fool's Day post, and we wouldn't want that. So for now, here's to all the greenruptors out there. Keep on sustainnovating.
[Editor's note: Rob asked us to post this tomorrow but since it seemed to include sensitive information of a timely nature, we decided it would be prudent to publish it today instead, as a public service.]