Clean energy 2011: Musk, Crane, Khosla and Jurvetson brighten gloom

This year ends on a downbeat note amid the gloom of the US debt and eurozone crises. In 2011, financial commitment to renewable energy stood at £2.5bn. Although the Department of Climate Change and Energy tried to spin this as a boost to the UK economy, it's a sharp fall from the £7.1bn invested in 2009. It is also a long way off from the £200bn required to stimulate the development of low carbon energy generation and tackle the perhaps more pressing energy capacity gap facing the UK.

This is also more than the entire global investment of $185.1bn in wind, solar and biomass according to Bloomberg New Energy Finance figures cited in Ernst & Youngcountry attractiveness indices (CAI) for national renewable energy markets.

Take a look at Ernst & Young's polls on pages nine and ten, which show where investor confidence has been undermined the most. It would seem that the $50trn budget deficit is small beer compared with the eurozone crisis.

The UK still holds it own at joint fifth (dubiously with Italy) in the top 10 all renewables index. E&Y report quarterly. I can't help but feel these rankings will change again come the next report for the UK and its European neighbours.

Figures soon to be published from the Cleantech Group show that $8.398bn was invested globally in cleantech VC last year. That's a drop from 2008's high point of $9.556bn but it's still an improvement on the past two years.

Most of that VC money is being spent in the US, with investment levels in Israel, India and China dwarfing those in Germany, Britain and France in the last quarter.

These are the kinds of figures I quote at people when I tell them that I report on clean energy - most of the time they exhale in sympathy, assuming the worst in the industry given the difficulties facing the renewables industry in the US, UK, Spain, Italy and Germany.

But such pessimism is not necessary - it's a bit like diagnosing terminal cancer in a patient with a broken leg. At some point, the broken economy will recover. We should be reassured that there is less capital in the industry - discipline and due diligence have to be more stringent than ever. The last thing the energy industry needs is a dotcom boom and bust cycle.

Companies such as Vestas might wax and wane on its commitment to manufacturing in the UK and feed in tariff schemes are being trimmed across Europe.

But venture capitalists such as Vinod Khosla and Alan Salzman are not about to give up on clean energy. Capital invested has a forcing effect on the rest of the industry - investment in innovations is where energy technology begins. For example, without Elon Musk and the success of Tesla, I'm pretty certain that the Volt and Ford's electric Focus would still be in the R&D lab.

Musk's optimism is well founded, even though his claim that Tesla's new Model S would be profitable by 2013, just months after the first deliveries of the $49,900 car.

But for Musk, the success of Tesla is a more earthly reward than his ambition of populating other planets with life which he dreamt about at college, before founding PayPal with Peter Thiel.

Musk's optimism is earned despite not quite turning a profit at Tesla, although its stock trades higher than the traditional automakers.

But Musk is not unique. He kicked off last year's west coast clean energy conference season at the Cleantech Summit. These conferences offer flashes of optimism that flare brightly amid the economic gloom.

If you'd like to cheer yourself up, spend some time listening to what these upbeat "thoughtleaders" have to say about their industries.

In this first one, Musk compares starting a company with "eating glass staring into the abyss of death…" but predicts that electric transport will be widespread - cars, trains and even planes.

In April, NRG Energy's David Crane explained how electric vehicles would take off in the US - and why as an electricity generator and retailer, it made sense for his company to stay ahead of the curve.

In August, Jesse Berst gave the best explanation I've seen so far as to why the US needs smart grid at the National Clean Energy Summit. Secretary Chu and Mabus are also worth listening to …

At the Going Green Conference in September, Vinod Khosla talked about his $1bn in profits so far from advanced biofuels, and Steve Jurvetson gave an almost evangelical exposition on synthetic biology.

However you end the year, hopefully these clean energy visionaries will be a source of inspiration for 2012.

Honda FIT for US roads but leaves European twin to make up mileage

Most aspects of American life - eating, heating and driving - take more energy than the same activity anywhere else in the world. That explains the carbon footprint of the average American (19 tonnes of CO2) and that of the average Briton (9 tonnes of CO2).

But I know that it doesn't have to be this way. Easily. Improved fuel efficiency standards for America's 250m passenger cars could cut US dependence on foreign oil, while cutting transport emissions and cleaning the air of pollutants that cause cancer and asthma. The Environmental Protection Agency estimates that transport contributes approximately 27% of total U.S. greenhouse gas emissions and is the fastest-growing source of emissions. In the EU, transport (excluding air and maritime) accounts for 19% of emissions.

After five months of enduring transport paralysis - even though we only a couple of miles from San Francisco - my partner caved in and got her own car. A Toyota Prius was out of her price range, and the Japanese earthquake interrupted supply, making deals less attractive. So she opted for a less expensive, but less economical Honda Fit. The same model is called the Jazz outside the US. But although they are the same models, they are far from identical.

Obama's Sputnik moment boosts clean energy in state of the union

The bed had barely grown cold from Hu Jintao's visit to Washington and Chicago, than Barack Obama has invoked China's enthusiasm for renewable energy technology in his state of the union address. After comparing Google and Facebook to other innovators such as the Wright Brothers and Thomas Edison, he said:

"This is our generation’s Sputnik moment. Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race. In a few weeks, I will be sending a budget to Congress that helps us meet that goal. We’ll invest in biomedical research, information technology, and especially clean energy technology – an investment that will strengthen our security, protect our planet, and create countless new jobs for our people."

Clean tech California flexes muscle under Schwarzenegger but Michigan pumps ion after Granholm

Arnold Schwarzenegger is about to step down as governor and has vowed to continue his "green activism". Although Schwarzenegger is a Republican, any criticism of his push for climate change action in the state probably came from his own party, rather than the Democrats. At his last Governors' Global Climate Summit, he talked so much about flexing muscle against big oil special interests and used metaphors that normally belong in the gym I felt like I'd had a work out myself after his 30-odd minutes on the podium.


Californians will be sad to see him go, but only when they're not talking about the $25bn budget deficit he's left behind. But who will flex the climate muscle and take his place as "climate action hero" among America's governors?