for years we only had one model: the ESCO…which had limited adoption. last year we saw the roll-out of one of the first next gen models: PACE.  this year we see continued innovation with several new models including the eePPA.

download the new equilibrium capital report on energy efficiency market oppties, size of market, and emerging finance models.

energy efficiency: monetizing the negawatt

coming soon: the public policy white paper examining the leading energy efficiency leading legislation and states.

released today as part of our Sustainability Investment Reports” is “Energy Efficiency, Turning Negawatts into Marketable Securities.”

the 2nd paper co-written with a leading think tank, due end of may, will be address the public policy of ee; it looks at state by state level analysis of best practices in regulations, legislation & policy to scale energy efficiency based power resources.

info@eq-cap.com : ask for the ee white paper

second article on china, spain and germany policies:  http://www.americanprogress.org/issues/2010/03/pdf/out_of_running.pdf

a great set of presentations and articles on forest based carbon.  one positive aspect of COP15 was the inclusion of forest carbon (REDD) into the carbon protocols.

lets not get confused between china’s position on “climate change & carbon” at COP 15 with what they are doing in their economy.

•While the European Union is aiming to produce 20 percent of its energy from renewable sources by 2020, and the U.S. Congress considers adopting a 20 percent renewable electricity standard by the same year, China produced fully 16 percent of its electricity from hydropower and wind power alone by the end of 2009—numbers that will increase over the next decade. Nonfossil fuel sources are expected to account for as much as 30 percent of China’s overall power supply by 2020. The country expects to meet a big portion of this new market by building seven wind megabases of at least 10 GW each strategically sited across the country. Supported by a wind energy feed-in tariff of 7-9 cents per kwh, and is considering a similar program for solar energy.

•City and provincial governments are creating low-carbon development zones to catalyze clean-energy technology manufacturing. In these regions, clean-energy industries are the backbone of economic development, creating jobs through innovation, manufacturing, and assembly activities. [ Baoding in Hebei province, Tianjin municipality, Wuhan city in Hubei province, The ‘solar belt’ of cities found throughout Jiangsu province. ] The hope is that this type of cluster-based approach to economic development can lead to higher rates of innovation and entrepreneurship and better wages.

•China’s Ministry of Science and Technology (MOST) targeted three technologies: 2-3 MW wind turbines; High-voltage electricity transmission technologies;& Energy savings technologies.

•China already produces a third of the world’s solar panels. It is currently the world’s leading supplier of solar PV panels and solar hot water heaters, and until recently more than 90 percent of Chinese-made solar PV panels were shipped overseas for export markets.

•China Investment Corp. (CIC), China’s sovereign wealth fund is aggressively investing in clean energy: In November 2009, it announced investments of $400 million in China Longyuan Power, China’s largest wind energy generator, and $700 million in GCL-Poly, a diversified energy company specializing in cogeneration, wind, and polysilicon production. In the same month CIC also invested $1.6 billion in AES, a U.S.-headquartered global utility with one of the largest foreign operations in China, including investments in hydro and wind power projects.

•The China Energy Conservation Investment Corporation (CECIC), China’s version of a “green bank” plans to reach total assets of ~$15 billion in energy efficiency, renewable energy & pollution controls by 2012.

•National energy efficiency plan: 20% decrease in energy intensity from 2005 to 2010. “One major national energy conservation program that sets energy efficiency standards for the top 1,000 energy consuming enterprises in China, achieved its stated goal of reducing energy use by 100 million tons of coal equivalent two years ahead of its 2010 target date. In the process of fulfilling this target, some $7.3 billion in energy efficiency technologies & measures was invested in 2007, and another $13.2 billion was invested in 2008.”

Finally, approximately $100 billion of the $586 billion economic stimulus package China implemented in 2008 is dedicated to building transmission lines and railways. China already leads the world in ultrahigh-voltage grid transmission technology—its line between Shanxi and Hubei boasts the highest capacity in the world and is able to transmit 1,000 kilovolts over 400 miles. China is also embarking on the largest railway expansion in history and plans to spend almost $300 billion expanding its railway network from 48,000 miles today to 75,000 miles in 2020. Of this, 8,000 miles will be comprised of high-speed, long-distance rail. China is poised to have the world’s largest network for intracity urban rail transit. Eleven cities currently have urban rail routes totaling 520 miles. By 2015 approximately 1,300 miles of railway lines will be laid and operational in 19 cities.

[ source: Center for American Progress white paper ]

• Net net: we see execution on all fronts

 (1) Industrial and public policy (laws, regs & gov’t) + investment strategy & industrial development (business & capital) = execution with direction

 (2) building the next generation of infrastructure & industry: Renewable energy infrastructure, renewable energy industry, low carbon transportation, & energy efficiency “culture”

(3) can “new urbanization be far behind”…in fact china is executing the concept of eco-districts

where is our answer to this: “FDR’s new deal” meets “Kennedy’s apollo man-on-moon.”

more data on the implications of use of ESG factors on long term risk reduction in portfolio selection/mgmt — considering social + environ in corporate performance does matter.

windows & doors aren’t sexy, but they’re practical technologies with tangible impact on ee. DoE & the secr have turned their focus to simple ee measures + innovative financial instruments (now viewed to be as important an innovation as technology) in order to scale implementation.

it’s been a thrill developing & teaching this class. we’ve introduced the students to the many many investment funds and asset classes that are employing ESG and climate change factors in their fund investment strategies…from real estate funds, to timber funds, to hedge funds, to public equities portfolios, to private equity, to the pioneers in wind/renewables project development. we exposed the students to a world of sustainability investment beyond “cleantech VC.”we’ve given the students an exposure to some of the world’s leading fund managers in their respective asset categories, many of whom pioneered their field and are now managing $100M’s in their portfolios.

one insight i got was how important it was to not only provide the students with access to these leaders, but also to capture the IP in their dialogue…it made me realize the need to embed a facebook or blog like function in the class as a medium of dialogue and “thought logging” between the students and the speakers.

the students had a final project: they developed and presented their ideas for a fund or financial instrument focused on sustainability trends, outlining the investment thesis, the returns model, the target investment returns, the targeted investor type…these 4 teams developed very real ideas that ezach had real world money manager oppty.  one team is pretty serious about taking this project and turning it into reality…a hard asset fund targeted at distributed water assets.

another one of the equilibrium capital group team members started his class last week, teaching the same thesis at U.Michigan Ross School.  one class at a time…we’re making our small dent…and maybe finding that one passionate new associate each year.