Last year, I suggested the key to understanding technology and innovation trends was to follow the money. Well, the money is pouring into clean technology. Clean technology has grown from three percent to over seventeen percent of venture capital investments in the last five years.
I think there’s a bigger story here than these investment figures. There is no available data for the internal investments made by big corporations in their own research on these technologies. However, from my experience in working with various companies, it seems to me that those investments are growing enormously. I think that hidden corporate spending is going to drive a remarkable competition between the U.S., Europe, and China about who is going to supply the world with new technologies. In 2008, we likely will see some of the first results of these investments. Even before the U.S. imposes a price on carbon, the technology pipeline is full of innovation.
It is frequently reported that solar technology is not yet economically viable. However, central-station solar power plants with concentrating technology are now competitive with conventional electricity plants in regions with significant sun exposure. There are now 5,800 megawatts of concentrating solar plants in operation and there were significant investments in 2007 in many countries, with Spain and the U.S. leading the way. Concentrating solar power is now growing almost as fast as wind power, and growth will accelerate in 2008.
Also emerging will be second-generation biofuels technology. Range Fuels, a project of venture capitalist Vinod Khosla will begin to produce cellulosic ethanol in 2008. Five other projects are in the pipeline with U.S. Department of Energy participation. Three of them utilize thermal-chemical processes and three fermentation processes. DuPont and BP will break round either in late 2008 or early 2009 on a biobutenol plant. These technologies will all produce far more CO2 reduction per gallon of biofuel than the current corn-based ethanol.
It is worth watching Syngenta and Delphi, both of which are playing a role in creating the engine technology necessary for U.S. automobiles to burn 85 percent ethanol. General Motors and Ford, who are building the cars, may get into the fuel business.
FutureGen recently announced that Illinois will be the site for its new carbon-capture and storage (CCS) facility. It will capture CO2 from coal combustion and inject it underground for permanent storage. This will be the first demonstration plant in the United States. It’s an interesting partnership with companies from four countries and eight U.S. states. Several more projects are in the pipeline in the U.S., and there’s going to be a very interesting competition between the U.S., Australia, and the United Kingdom to see who breaks ground on the first plant. By 2010, there will be at least four CCS demonstrations in construction, and they will be in operation by 2012 or 2013.
Many people call CCS technology of the polio vaccine for global warming. If only we had it in place already.
In 2008, we expect the cost estimates for CCS to shoot up as the reality of designing and constructing these plants becomes evident. I hope that after 2012, as we see more facilities beginning operation, the costs will come back down.
Carbon-capture is a key part of the strategy for the world to use coal without accelerating warming. Imagine a carbon-capture scenario for biofuels. It could work by pulling CO2 out of the atmosphere to make the cellulose which could then make energy. The CO2 from the process would be disposed of underground. In theory, this would be a CO2-reduction machine. Nobody is proposing this commercially, but the idea is appealing.
