Energy is one of the biggest industries on the planet. Innovation at this scale doesn't happen at the rate entrepreneurs and VCs typically expect, but once it takes effect, the results can be profound. What are the opportunities and challenges competing for a piece of the energy pie? What role should government play? According to Dan Adler, president of the California Clean Energy Fund (CalCEF), energy is the largest and most complicated thing that society undertakes. "It's fundamental to everything we do," he said. This translates to the need for scale capital the likes of which we've never seen. Matt Scullin, founder and CEO of Alphabet Energy, Inc., sees the overall energy industry as a textbook commodity market driven by very basic economics. Innovation comes mostly from technical advances rather than product markets. Silicon Valley is a great place for technical innovation to happen, but here we're a bit spoiled by industries like semiconductors, biotech, and software, where technical innovation can translate into rapid societal change. A key challenge is in "managing expectations around innovation cycles and how those can be linked between Silicon Valley and other areas that are very conservative and don't adopt technology very quickly." Following that, Cathy Zoi, partner at Silver Lake Kraftwerk, stated that an energy pilot project has to run for a number of years, go through approvals-something for the smart grid, for example, could have an eight-year sales cycle. Unlike an iPhone, "it has a different time horizon because it's an essential service that you can't mess up." Jeff Byron, vice chair of the Clean Tech Open, pointed to government regulations. "Everything having to do with energy has a regulatory aspect to it," he said, adding, "The institutional incumbents really do control the game." "The last wave of venture interests, starting in the last decade, was the non-specialist venture capitalist," said Adler. "Now we're coming back to the specialist investor who actually understands the dynamics of this industry best." The innovation piece is essential, but we have to get to infrastructure scale. Zoi sees a great future for the sector because of vital international markets, particularly emerging economies such as India and China. "In China they view this as a strategic competitive investment." Byron added that it's not just the institutional policies of China, but also the climate policies of Europe. Whether the markets are here or there, Zoi pointed out, there are around 135 U.S. companies in this sector advertising for jobs, "and if they hire all those people, there will be 46K new jobs." To that, Adler added, "Nationally, over the last seven years, there's been a 12% increase in employment in clean tech. Compare that to job development and job growth at the macro level. Pretty astounding." What's hot today? Adler sees energy storage as "the holy grail for clean energy." Particularly batteries, he said. For Zoi, solar is exciting. She pointed to Germany's recent news that half of the electricity that entered the market the last weekend of May was from solar. Regarding the rapid entry of cheap natural gas onto the market, Adler provided a long-term view: If you're a utility planner and you have to build something that will last, are you going to bet on today's $3 natural gas, or are you going to bet on free, renewable resources?
- Lucy Sanna
Dan Adler is President of the California Clean Energy Fund (CalCEF), a nonprofit, evergreen venture capital fund created to accelerate investment in California’s clean energy economy. CalCEF Fund I, employing a fund-of-funds model, is invested in 40 young companies covering the full range of clean energy technologies. In 2006 CalCEF founded the nation’s first university center on energy efficiency, the Energy Efficiency Center at the University of California at Davis, and in 2008 launched the CalCEF Clean Energy Angel Fund and an affiliated public policy and market intelligence organization, CalCEF Innovations. Prior to joining CalCEF, Mr. Adler was a senior analyst in the Division of Strategic Planning at the California Public Utilities Commission, where he was responsible for the design and implementation of California’s Renewables Portfolio Standard and was senior staff for climate change policy. In addition to energy issues, Mr. Adler has professional experience in international trade policy and socially responsible investment. He has a B.A. in Political Science from the University of California at Berkeley and an M.A. in Public Policy from Harvard University.
Jeff Byron is the former Commissioner of California Energy Commission.
Gregory Dalton is chief operating officer at the Commonwealth Club of California and Director of The Club's Climate 1 Initiative. He previously was international editor at The Industry Standard magazine, an editor for the Associated Press in New York, and a correspondent in China and Canada for the South China Morning Post, a Hong Kong newspaper.
Proficient in both Mandarin and Cantonese, he is a former term member of the Council on Foreign Relations.
A proven leader who has hired more than 30 world-class executives, engineers, and professionals, one of the first to implement "lean" practices in energy/cleantech, and combine advances in operational science via cycle time reduction and metrics tracking with both semiconductor development and thermal product engineering. He is one of the world's leading experts on waste-heat recovery.
He has licensed patents, led product marketing, successfully planned and executed technology development strategies, secured business contracts, and brought revenue into an early stage company. He has expertise in startup corporate law and technology and manufacturing scale-up.
Ms. Zoi joined Silver Lake in 2011 and is a Partner of Silver Lake Kraftwerk. She has more than 25 years of experience in energy and resource development and deployment in both the public and private sectors. Prior to joining Silver Lake, Ms. Zoi was a senate-confirmed senior executive in the U.S. Department of Energy, serving as Acting Under Secretary for Energy and Assistant Secretary for Energy Efficiency and Renewable Energy (“EERE”). She oversaw a broad energy portfolio, including the Offices of Electricity Delivery and Reliability, EERE, Fossil Energy, Nuclear Energy, and Environmental Management. She managed over $30 billion of American Recovery and Reinvestment Act funding, as well as over $10 billion in applied research and development and nuclear waste management. In this role Ms. Zoi led the research, investment, and commercialization activities for solar, biofuels, wind, geothermal, water, nuclear, smart grid, transmission, building, and industrial energy efficiency, next-generation vehicles, energy storage, and carbon capture and sequestration. She oversaw the evaluation and award of hundreds of energy technology development proposals from entrepreneurs, corporations, universities, and national laboratories; and helped design research partnerships to accelerate game-changing breakthroughs in photovoltaics, biofuels, and building technologies. Ms. Zoi also spearheaded policy discussions related to a national clean energy standard, appliance efficiency standards, ‘Home Star’ legislation, utility regulation, and building codes.
From 2007 to 2009, Ms. Zoi was the founding chief executive officer of the Alliance for Climate Protection, which was established and chaired by former Vice President Al Gore. From 2003 to 2006, she served as the group executive director at Bayard Capital (renamed Landis+Gyr Holdings), which through a ‘buy and build’ strategy became a world leader in energy measurement technologies and systems. During Ms. Zoi’s time at Bayard, the firm acquired Landis+Gyr, Cellnet, Email, Ampy, Hunt Technologies, and Enermet. In May 2011 Toshiba announced it would buy Landis+Gyr Holdings for $2.3 billion. Previously, while living in Australia, she was the assistant director general of the New South Wales Environmental Protection Agency and the founding chief executive officer of the Sustainable Energy Development Authority -- a $50 million fund to commercialize greenhouse-friendly technology. Prior to moving to Australia, Ms. Zoi served as the Chief of Staff in the White House Office on Environmental Policy in the Clinton-Gore Administration and as a manager at the U.S. Environmental Protection Agency, where she pioneered the Energy Star Program. Ms. Zoi also worked as an energy economist at Pacific Gas and Electric Company, and as a senior associate advising utility clients of ICF International. She has served on boards and advisory committees of a variety of companies in the clean technology sector. Ms. Zoi holds a B.S. in Geology from Duke University (magna cum laude) and an M.S. in Engineering from Dartmouth College.