3rd era of energy scbd
TRANSCRIPT
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Energy3.0
onthecusp
or
on
the
brink
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Weare
at
the
cusp
of
the
3rd Era
of
Energy
Dawn ofModernManPreHistory ~1759
Energy1.0
ModernEra1760 1944Energy2.0
ContemporaryEra1944 Present ?
Energy3.0
EnergySources Wood,
Fire Hydrocarbons Renewables (?)
Work Man,Livestock Motors&Engines Gasturbines,Diesel,ElectricMotors
Global Economy Agricultural Trade Globalization
Population ? ~800M 800M 2,400M 2,400M 7,000M Planetary
capacity
Transportation Foot,Horse,Sail Auto,Rail,Boats + Planes
Building Mud,Wood,Stone Skyscrapers Sustainable
Technology Manual Mechanical Informationalization
Governance Tribal Monarchy Democracy
CommunismFree Market
&
State
Capitalism
Media Written Printing Press Proliferation
Manufacturing Craftsman MassManufacturing Customization
Global EconomicOutput
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7InvestmentThesesforInvestinginEnergy
3.0
Energy=Life
Energysourcesareessentiallycommoditybased
Newsources
must
be
energetically
and
economically
more
efficient
than
old
energy
sources
thereby
enablingeconomicgrowth Commoditybasedmarketsdefinetheenergylandscape Clearatlowestpossiblemarketrate Costbasedcompetition innovationisnotacompetitiveadvantage Commoditieshaveperfectsubstitutability
Regulatory
engagement
is
not
an
option
Awareness Deepunderstanding Influencer
Maturemarkets alleconomicprofitwassqueezedoutlongago.Regulatedmarketsensurecheap,persistentpowertoallsociety
Sustainabilityiscurrentlyanidealbutwilleventuallybecomeasurvivalenvelope
Informationcontentofenergyisincreasing moredata,moreintelligenceandmoredecisionsavailable
EnergyEfficiency Untilnewenergysourcesemerge,themosteconomicenergystrategiesareenergyefficiency
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WhenWorldsCollide:
Energyvs.
Technology
Energy Technology
PrimeDirective Status
Quo Change
the
World
MarketStructure RegulatedMonopoly Rangefromperfectcompetitiontooligopolistic
Inputs Commodities homogenous IntellectualProperty pursuitoftheunique
CompetitiveAdvantage Cost RegulatoryProtection Innovation
CorporateCulture Compliance Creative,innovative,experimental
ProductLife
Cycles Generational Months
GeographicSpanofinfluence Provincial Global
SpeedtoMarket Decades Months
CoreCompetencies Regulatory "Maintainrulesoverallelse."
Entrepreneurial "Breaktheoldrules,and
makenewones."
Management Conservative Risktaking
CompetitiveEnvironment Nonexistent Hypercompetitive
SalesCycle Years Weeks
PricingPower Low consumeriscostsensitive
High Innovationisrewardedwithoutsized
profits
ConsumerBehavior LowEngagement HighEngagement
EconomicMargin Zero
High
moving
to
lower
CapitalEquipmentLifecycle Decades Years
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TheOld
Guard
is
Good
1. Withoutfurtherreform,spendingonfossilfuelconsumptionsubsidiesissettoreach$660billionin2020,or0.7%ofglobalGDP
2. 2010levels:
$409
billion
for
fossil
fuels
verses
$66
billion
for
renewables
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CapitalInvestmentneededtoMeet
2035Projected
Energy
Needs
Coal$1,100
BioFuels$300
NaturalGas$9,500
Oil$10,000
Power$16,900
$
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
2010USDBillion
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CapitalInvestmentneededtoMeet2035
Projected
Energy
Needs
$9,802
$8,700
$6,745
$5,239
$2,185$1,859
$1,034 $1,000$570
$300 $66
26%
49%
67%
81%
86%91% 94% 97%
98% 99% 99%
0%
20%
40%
60%
80%
100%
120%
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Source:World
Energy
Outlook
2011
USD
Billions
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Venture
Capitals
Goal:(relatedtoenergyinvesting) PrimeDirective:ReturntoPartners
1. Identify,fund
and
bring
to
market
companies
that
aredevelopingnewfuelsourcesthataremoreeconomicalthatcurrentsources(coal,oilandnaturalgas)ornuclear
2. Identify,fund
and
bring
to
market
companies
that
aredeployingnewtechnologiesthatpermitcostsavingsinenergybillswhilemaintaining(or
enhancing)
customer
experience3. Savetheworldbyaccomplishing1and2(sincenooneelseisdoingit.)
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Follow
the
Energy
Flows
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Follow
the
Energy
Flows
(keepingitsimple)
Resource
Extraction
Resource
Transformation Energy
Usage
Delivery Delivery
Newandbetterresourceforenergy
Cheapermethodofextractionofoldresources
Abilitytoextendcurrentresources
Moreefficientwaystoidentifyandlocateresources
Moreefficientwaystotransportresourcestotransformationlocation
Eliminatetheneedforintermediatetransformationofresource
Moreefficientwaystotransformresourceintoenergy
Newresourcesthateliminatetheneedfordeliveryofenergy
Energyresourcesthataresustainableorlesscarbonemissive
Moreefficientenergymarkets(adjustthebusinessmodel)
Moreefficientways
todeliver
energy
to
users
Newresourcesthat
eliminatetheneed
fordeliveryof
energy
SmartGrid
Moreefficient
energymarkets(real
timepricing)
Moreefficientwaystouseenergy
Catalogueenergyusesandreviewfornew,betterwaystoaccomplishthesamegoals
Newresourcesthateliminatetheneedfordeliveryofenergy
SmartGrid
Moreefficientenergymarkets(realtimepricing)
IntersectionofITandEnergyindustry
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InvestmentPhilosophy
for
Energy
3.0
Incrementalism or"BlackSwan"approach?
Thelooming
twin
challenges
of
climate
change
and
energy
productionaretoobigtobetackledbyknownsolutionsandtimehonoredtraditions.Incrementalremediesarefineforincrementalproblems,buttheyareinsufficientformonumental,potentiallylifealteringthreats,whichneedtobeapproached
with
a
disruptive
mindset.
There
are
5billion
peoplecovetingtheenergyrichlifestylescurrentlyenjoyedby500millionpeople,mostlyinthedevelopedworld.Incrementaltechnologyprogresswillnotsatisfythiscraving.Weneednon
linear
jumps
in
technologies
Technological
Black
Swans!
We
caninventthesefuturetechnologies.
Source:BlackSwansThesisofEnergyTransformationbyVinod Khosla
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2EndsoftheSpectrumofInvestment
Philosophy
for
Energy
3.0
Edison Incrementalist Tesla BlackSwan
Phonograph IncandescentLighting StockTicker MotionPictures
StorageBatteries
(EVs)
ACGenerator ACMotor ACPolyphase Distribution
System ETC
Moneydoesnotrepresentsuchavalueasmenhaveplaceduponit.AllmymoneyhasbeeninvestedintoexperimentswithwhichIhavemadenewdiscoveriesenablingmankind
tohave
a
little
easier
life.
Geniusisonepercentinspiration,ninetyninepercentperspiration.
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Edisons&TeslasPortfolios(If
they
were
VCs
today)
Low BigdataMeetsEnergy(EMS,etc) EfficientEnergyGenerationEnergyMgtSystems EnergyStorageBuildingMaterials BloomBoxes MoreEfficientElectricMotorsLEDLightingthatREALLYworks LightweightAutoBodies
MoreEfficientCombustionEngines
LightingNetworking Alternative
Vehicles
(PEHV,
etc)
HighlyEfficientTransistorsOrderofMagnitudeEfficientHVAC
MassiveBuildingRetrofit
RobustCyberSecurity(Incl.ICS)
DistributedPVCarbonCapture
UtilityScalePV BioFuelsUtilityScaleWind UtilityScaleTidalPower
ZeroNetEnergyBuildingsSmartGridTechnology Thorium
High RegulatoryBodyEnergyEfficiencyPrograms Fusion+
Low High +Conservative&Incremental "BlackSwan" FundamentallyAltersIndustryEconomics
RiskinessofInvestment(asmeasuredbyprobabilityoffailure)
Policyand
Reg
ulatoryInfluence
Q1 Q2
Q3 Q4
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DemandSide
Energy
Investing
Deliveryof
Power
PricingofPower UsageofPower
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EnergyEfficiencyGWh ProjectedSavings
20102030
(Western
Region
US)
Lighting1,748
Lighting17,772
Lighting27,089
HVAC
7,868
HVAC16,685
ConsumerElectronics
8,324
ConsumerElectronics
16,222
Pump/Motors6,237
Pump/Motors10,070
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2010 2020 2030
Other
WaterHeating
BuildingShell
Appliances
Refrigeration
Pump/Motors
ConsumerElectronics
HVAC
Lighting
GWh
2,470GWh
45,152GWh
79,936GWh
Source:EPRI,AssessmentofAchievablePotentialfromEnergyEfficiencyandDemandResponseProgramsintheU.S.(20102030),ChrisMontao
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FundamentalTechnologies
for
Demand
Side
Lighting71%
Lighting39% Lighting
34%
HVAC9%
HVAC17% HVAC
21%
ConsumerElectronics6%
ConsumerElectronics
18%
ConsumerElectronics
20%
Pump/Motors14%
Pump/Motors
14%
Pump/Motors
13%
Refrigeration3% Refrigeration4%
Appliances4% Appliances4%
BuildingShell2% BuildingShell3%WaterHeating2% WaterHeating2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2020 2030
Source:EPRI,AssessmentofAchievablePotentialfromEnergyEfficiencyandDemandResponseProgramsintheU.S.(20102030),ChrisMontao
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Lighting
HVAC
ConsumerElectronics
Pump/Motors
Refrigeration Appliances
BuildingShell
WaterHeating
0%
20%
40%
60%
80%
100%
120%
PredictedCAGR2010
2020
RealisticEnergySaved(KWh)
DemandSide
Technology
InvestableOpportunity
EnergyEfficiencyGWh CAGR
20102020
(Western
Region
US)
Source:EPRI,AssessmentofAchievablePotentialfromEnergyEfficiencyandDemandResponseProgramsintheU.S.(20102030),ChrisMontao
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Workingmore
Efficiently,
not
Harder
8 Applicationsofenergyefficiencydeliver43%ofestimated$3.7Trillioninresource
savingsby
2030
Source:McKinsey&Co.,MobilizingforaResourceRevolution
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CustomerEnergyIntelligence
HighValueSoftware
Applications
Data/ITSystems
Communications
CustomerEnergyPlant
CustomerEngagementfromROI
CustomerDriven(lowregulatory)
DirectChannel
IntuitivetoUnderstand
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CustomerEnergyIntelligence
MicroGridDistributedGeneration
ControlSystems
Sensors Transformers Meters Storage
Servers Database Internet Transactions ModelingControlSystems
ERP
EnergyPlant
Communications
ApplicationLayer
BuildingEnergyManagement
EnergyMonitorin
g
EnergyReporting
ContinuousCommissioning
Diagnostics
AssetManageme
nt
BuildingEnergyAutomation
ControlSystem
Interface
Demand
Respon
se
Loadlimiting
FaultPrediction
OutageManagem
ent
Micro
grid
BuildingEnergyPerformance
InterfacetoAcco
untingSystem
PredictiveAnalyt
ics&Modeling
OptimizationAlgorithms
CarbonReporting
Compliance&As
surance
PowerQualityManagement
FaultDetectiona
ndAlerting
CyberSecurity
LocalAreaNetwork RFMesh HomeAreaNetwork(HAN)BroadbandWWAN 3G/4GCellularOtherProtocoltobeNamed
SystemsLayer
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CustomerEnergyIntelligence
MicroGridDistributedGeneration
ControlSystems
Sensors Transformers Meters Storage
Servers Database Internet Transactions ModelingControlSystems
ERP
EnergyPlant
Communications
ApplicationLayer
BuildingEnergyManagement
EnergyMonitorin
g
EnergyReporting
ContinuousCommissioning
Diagnostics
AssetManageme
nt
BuildingEnergyAutomation
ControlSystem
Interface
Demand
Respon
se
Loadlimiting
FaultPrediction
OutageManagem
ent
Micro
grid
BuildingEnergyPerformance
InterfacetoAcco
untingSystem
PredictiveAnalyt
ics&Modeling
OptimizationAlgorithms
CarbonReporting
Compliance&As
surance
PowerQualityM
anagement
FaultDetectiona
ndAlerting
CyberSecurity
LocalAreaNetwork RFMesh HomeAreaNetwork(HAN)BroadbandWWAN 3G/4GCellularOtherProtocoltobeNamed
SystemsLayer
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ProfiledFirms:CustomerEnergyIntelligence
CompanyBigProblem
SolvedMarket
OpportunityLast Round Customer Competitors
PaidIn Capital
SCIenergyBuildingenergymanagementsolution
Massive C
Industrial,commercial,
buildingowners(Intel)
BuildingIQ,SeriousEnergy,Cimetrics,FirstFuel Software
$37.6M
BuildingIQBuildingenergymanagementsolution
Massive
Seed
(currently
fundraisingorundisclosedround)
Industrial,
commercial,buildingowners
BuildingIQ,SeriousEnergy,Cimetrics,FirstFuel Software
$?(undisclosed)
OPower
Energy customer
engagement Large C
Residential,
Commercial
eMeter,GridPoint,KEMA,Silver
SpringNetworks,
Tendril$66.5M
C3
Large,geographicallydiverse enterpriseenergy
management
Lage ? PG&E
AMEE,BrighterPlanet,CloudApps,ENXSuite,EPSCorporation,Hara,LocusTechnologies,Noveda Technologies,Verisae
$111.9M
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ProfiledFirms:EnablingEfficientTechnologies
Sector CompanyBigProblem
SolvedMarket
OpportunityLast
RoundCustomer Competitors
PaidIn Capital
LightingRedwoodSystems
Lightingcontrols Large B
AtSite,EdCampus
AduraTechnologies,
DigitalLumens,
Enlighted,Lumenergy
$22.5M
Lighting XicatoLEDlightingfortodaysneeds
Large A?Multipleluminairevendors
DigitalLumens,NovaLED
Unannounced
ElectronicsEnergy
SuVolta Power usedin
ICsLarge B? Fujitsu
AZZURROSemiconductor, iWatt
$62.1M
ElectricMotors
CompactPowerMotors
EfficientElectricMotors
Massive A
Rieju
(MIUS
electric
scooter)
EVOElectric,KLDEnergyTechnologies,PermMotor,Remy
$13.8M
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FreeMarketsAbhoranEconomicVacuum:
UnaddressedOpportunities
Sector BigProblemSolvedMarket
OpportunityEntrants?
CyberSecurity CyberSecurity forPowersystemsand
controlsis
very different
than
IT.
As
the
SmartGrid conntcts IT/ComminfrastructuretotheGrid,therewillbesignificantgapsinthecybersecurity oftheinfrastructureanditscontrols.Thereareanumberofcomplexitiesthatmakesthisaparticularlydifficultmarket
to
attack.
ElectricGrid,EMS,
OilRefineries,
ChemicalIndustry,Waterutilities
EMC/RSA
AlionWizNucleusInvensysBentleyDevonWayAlertEnterprise
GameChanging HVAC Oneofthelargestapplications ofenergyusageintheworld.Asurbanizationcontinuesthiswillonlyincrease.Therearescantoriginalapproachesthathavebeenvalidatedby3rd partytesting.
Allbuildingsacrosstheglobe.
unknown
Fusion LLNLhas
a
Fusion
effort
underway
that
theyclaimisdesignedtodeliver$0.05/KWhby2030.This couldchangeeverything.
None.
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Appendices&AdditionalSlides
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Megatrend:
Urbanization
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GlobalBuildingStock2010 2020
Source:PikeResearch
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GlobalBuildingStock2010 2020(by
Region)
Source:PikeResearch
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Sources
Websites(for
Reports,
etc)
ThoughtLeaders
Resources&
References