THE GREEN STATE: California needs to hustle to stay ahead
- Tom Abate, Chronicle Staff Writer
Friday, September 1, 2006
The Golden State is poised to recolor itself green.
That was the sentiment in high-tech circles Thursday as lawmakers sent
Gov. Arnold Schwarzenegger a historic bill to reduce greenhouse gas emissions.
His expected signature is being seen as a boon for some already fast-growing
fields such as solar energy, wind power and environmental remediation.
"What this does is underscore that climate change and clean tech are
transforming from movements into markets," said Joel Makower, co-founder of
Clean Edge in Oakland, a research firm that tracks the emerging fields that
fall under the rubric of clean technologies.
Investment data collected by the Cleantech Venture Network in Brighton,
Mich., capture the accelerating interest in green technologies. In 2005, it
recorded $1.6 billion of investments in clean-tech startups. In just the first
six months of this year, nearly $1.4 billion has already poured into this
field, with much of that money flowing to startups in solar, wind or other
renewable energies.
Silicon Valley venture capitalist John Doerr said clean technology could
be as big tomorrow as computer chips, biotechnology and the Internet were
yesterday -- a bet that he and his partners at Kleiner Perkins Caufield &
Byers backed up in February when they announced a $100 million clean-tech fund.
"We're in the very early stages in this mother of all markets,'' said
Doerr, calling California's greenhouse gas bill "the most important legislation
of this year and quite possibly of the decade."
Even before passage of the greenhouse bill, solar energy startups were
sprouting in Silicon Valley. Firms such as SunPower Corp. are already making
what are among the world's most efficient solar energy systems, and startups
like Nanosolar -- which in June announced plans to build a $100 million plant
in the Bay Area -- are pioneering new ways to turn sunlight into electricity.
Margaret Bruce, with the Silicon Valley Leadership Group, whose 200 member
firms include the current high-tech and biotech leaders, voiced the optimistic
opinion that dealing with greenhouse gases would offer business opportunities
for this region and for California.
"As we develop the tool bag to respond to global warming, we'll have the
tools to sell to the rest of the world," she said.
Even as the Assembly was putting its final stamp Thursday on the bill that
had earlier cleared the state Senate, software-industry pioneer Bob Epstein,
who organized a network of environmental entrepreneurs, was buttonholing
lawmakers and making the case that the greenhouse bill would be a boon to the
state by, among other things, encouraging clean-tech companies to come to
California.
But while the high-tech community is excited by the business opportunities
of going green, and many Californians will want to pat themselves on the back
because they appear to be once again leading the way on environmental issues,
clean-tech insiders know that California has to hustle. Makower, the clean-tech
watcher in Oakland, said other states -- including Oregon, Florida, Texas,
Massachusetts -- and nations -- from Germany and Japan to India and China
-- have also awakened to the potential for green industry.
"California is a leader," Makower said, "but our competitors are
everywhere."
Craig Cuddeback, senior vice president with the Cleantech Group in
Michigan, said the venture capital investments in this emerging field show more
money flowing to regions like the Northeast, Southeast and Midwest --
suggesting that California and Silicon Valley are going to have to work harder
to satisfy their ambitions of being the world's green tool makers.
Indicative of this ferment elsewhere is Dyadic International, a Florida
firm that is adapting biotech enzymes to break down rough plant material and
turn it into ethanol. So far, virtually all the ethanol produced today comes
from the sugar-containing portions of crops like corn. That has raised
questions about whether it's worth the effort. But Dyadic is among the firms
vying to turn what today is waste material -- like cornstalks -- into a
domestically produced replacement for imported gasoline.
"We're not there yet, but we're getting closer,'' said Dyadic chief
executive Mark Emalfarb.
Wind power is another clean technology that gets less attention than solar
energy, and where many developments are occurring outside California.
East Bay businessman Eric Thompson is a vice president with a Nevada-based
startup called Nordic Windpower, which is trying to popularize in the United
States a giant new turbine developed in Sweden. It stands taller than the wind
generators Bay Area residents might see while driving over Altamont Pass on
Interstate 580, and its blades spin slower, two factors that are supposed to
lessen the chances of bird kills that have been among the knocks on wind power
today.
Figures from the California Energy Commission show that wind power
produces roughly seven times more of the state's electricity than solar, which
tends to get far more attention.
If California has embarked on a race to lead the world into a new energy
future, it's going to have to fight many skirmishes on many fronts.
In July, for instance, the American Wind Energy Association reported that
"Texas for the first time supplanted historic leader California as the top
state in cumulative wind power capacity," ending the bragging rights that the
latter first earned 25 years ago when it built its first wind farms.
E-mail Tom Abate at tabate@sfchronicle.com.
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