Fri Sep 11, 2009 9:17pm EDT
By Poornima Gupta
SAN FRANCISCO (Reuters) – U.S. infusion of federal funds into clean technology projects has prevented the collapse of many green firms, revived enthusiasm and is now generating optimism for the emerging sector in 2010.
The impact of the aggressive stimulus from the U.S. government’s Department of Energy (DOE), which has promised nearly $100 billion for a number of green projects, will begin having a visible impact on the sector next year, industry executives and venture capitalists told the Reuters Global Climate and Alternative Energy Summit in San Francisco.
But the stimulus also had an unintended impact on the sector. It slowed the pace of activity this year, given the rigorous and lengthy process of applying for the U.S. government funds.
“I think it’s basically set the stage for a great 2010 and beyond,” said Steven Chan, chief strategy officer of Chinese solar panel maker Suntech Power Holding Co Ltd. (STP) “I think in 2009, it had the interesting effect of maybe even slowing the market.”
“In the short term, it’s a little bit of a negative, but it’s a long-term positive for the market and the industry,” Chan added.
Investment in green technology — which includes everything from renewable energy, electric vehicles and energy storage to effective transmission of power — dropped in the last nine months following the economic recession and plunge in oil prices.
Both venture capital funds into the sector and financing for green projects, including solar, were hit hard by the economic downturn and financial crisis.
With the DOE funding, the sector is already seeing some activity. The department announced more than $2 billion in funding for 48 advanced battery and electric car projects about a month ago.
With the first $535 million loan guarantee awarded under a 2005 U.S. program for advanced clean energy, privately held Silicon Valley solar company Solyndra began construction on its second solar panel manufacturing plant.
Where’s the next boom? Maybe in `cleantech’
Energy breakthroughs could be the next big thing, but how many jobs can they generate?
By Jordan Robertson, AP Technology Writer
9:33 pm EDT, Tuesday October 6, 2009
SAN FRANCISCO (AP) — Our economy sure could use the Next Big Thing. Something on the scale of railroads, automobiles or the Internet — the kind of breakthrough that emerges every so often and builds industries, generates jobs and mints fortunes.
Silicon Valley investors are pointing to something called cleantech — alternative energy, more efficient power distribution and new ways to store electricity, all with minimal impact to the environment — as a candidate for the next boom.
And while no two booms are exactly alike, some hallmarks are already showing up.
Despite last fall’s financial meltdown, public and private investments are pouring in, fueling startups and reinvigorating established companies. The political and social climates are favorable. If it takes off, cleantech could seep into every part of the economy and our lives.
Some of the biggest booms first blossomed during recessions. The telephone and phonograph were developed during the depression of the 1870s. The integrated circuit, a milestone in electronics, was invented in the recessionary year of 1958. Personal computers went mainstream, spawning a huge industry, in the slumping early 1980s.
A year into the Great Recession, innovation isn’t slowing. This time, it’s better batteries, more efficient solar cells, smarter appliances and electric cars, not to mention all the infrastructure needed to support the new ways energy will be generated and the new ways we’ll be using it.
Yet for all the benefits that might be spawned by cleantech breakthroughs, no one knows how many jobs might be created — or how many old jobs might be cannibalized. It also remains to be seen whether Americans will clamor for any of its products.
Still, big bets are being placed. The Obama administration is pledging to invest $150 billion over the next decade on energy technology and says that could create 5 million jobs. This recession has wiped out 7.2 million.
And cleantech is on track to be the dominant force in venture capital investments over the next few years, supplanting biotechnology and software. Venture capitalists have poured $8.7 billion into energy-related startups in the U.S. since 2006.
That pales in comparison with the dot-com boom, when venture cash sometimes topped $10 billion in a single quarter. But the momentum surrounding clean energy is reminiscent of the Internet’s early days. Among the similarities: Although big projects are still dominated by large companies, the scale of the challenges requires innovation by smaller firms that hope to be tomorrow’s giants.
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