Venture capitalists — the daredevils who invest in promising start-up companies for profit — are investing heavily in cleantech companies. "In the future, clean technology will be as popular as information technology and biotechnology," prophesies Charles Jia, Professor in University of Toronto's Chemical Engineering and Applied Chemistry department.
Clean technologies turn conventionally environment-unfriendly practices, like creation of electricity and fuels, into green-friendly processes.
The reasons for the rising interest in clean technologies are simple. With the rising price of oil, increasing fear of global warming and skyrocketing demand for energy worldwide, entrepreneurs realise that clean technologies have up-and-coming markets. It is clearly the energy of the future, and both industries and governments are focusing on research and development of these technologies.
For instance, the conventional process of extracting oil from tar sands has an adverse impact on the environment. For every barrel of synthetic oil (bitumen), more than 80 kg of greenhouse gases (GHGs) are released into the atmosphere. Moreover, intense jets of steam are used in the extraction process and this involves burning fossil fuel.
The N-Solv process, a clean technology developed by Sustainable Development Technology Canada — an Ottawa-based Government of Canada not-for-profit organisation — uses propane, which, like steam, effectively liquefies synthetic oil and accelerates its extraction.
Last year, over $1.6 billion was invested in US-based companies that promote clean technologies — a 35 per cent increase over 2004, according to Cleantech Venture Network, an environmental research and advisory organisation based in Ann Arbor, Michigan, USA.
Profit with responsibility
Prospects in Canada seem equally promising. And Toronto-based Zerofootprint Inc appears to understand this perfectly. It works on the mandate of reducing the environmental footprints of big energy consuming businesses by encouraging clean technology innovations and practices. Zerofootprint is prompting homeowners to switch to geothermal energy for heating and cooling their houses, an environment-friendly, renewable alternative.
Geothermal systems do not depend on oil or gas and maintain favourable temperature inside houses by relying on the constant temperature of the earth.
In summer, the geothermal system takes heat from the house and emits it into the earth, while returning cool air. In winter, it does the reverse.
In August 2006, Zerofootprint decided to look for its first batch of customers in the Little Italy area of Toronto. After some word-of-mouth advertising, it organised a neighbourhood meeting.
Toronto millionaire and founder of Zerofootprint, Ron Dembo, explained the benefits of geothermal energy which included reduction in power bills. Contractors and engineers took up questions from interested residents on the practicalities of setting up such units.
"The response from residents was phenomenal," said Peter Howard, Energy and Offsets Manager at Zerofootprint. While 10 families committed themselves to setting up a geothermal system in their homes, 30 others said they would like to find out more about this system. "Our aim was to start a grassroots movement for this environment-friendly system and we started that," he said.
"The feel-good factor is definitely at work and people want to do their bit for the environment."
Not `tree huggers'
However, not all clean technology entrepreneurs lay claim to altruistic motives. In fact, they take pains to say they are not `tree huggers'. Silicon Valley's venture capitalist Vinod Khosla, for example, has been emphasising just that.
Researchers on his team are applying bioengineering to produce ethanol in an environment-friendly manner from agricultural waste. In the past, ethanol was made from corn through an energy-intensive process. According to Khosla, the agricultural waste-based ethanol will cost less than conventional ethanol and petrol.
Khosla predicts a readymade market for this clean technology and says automakers will soon be manufacturing cars that run on ethanol or a blend of ethanol and gas.
The message they give investors is: We are not opting for economic suicide by opting for clean technologies. Their goal of creating sustainable energy alternatives is consistent with making money. In company balance sheets, clean technology options do end up as being profitable for everyone.
Profit is not the only reason that makes clean technologies saleable. The icing on the cake is that clean technology helps companies capture feel-good marketing benefits.
"Companies that promote clean technology are recognised as responsible, eco-friendly employers," says Jia.
Source: The Hindu Business Line