Monday, August 27, 2007

Book review: The Clean Tech Revolution

The Clean Tech Revolution premiered earlier this summer, so I know I’m a bit slow reviewing it. It initially wasn't my idea of breezy summer reading, but I have to say it was a pretty fast read.

Authors Ron Pernick and Clint Wilder hail from Clean Edge, a clean tech research and publishing firm. Their writing is not too technical, not too bland. At times I thought some of the topics were a bit over-generalized, but the clean tech movement is a fast-moving beast and the book is a good primer for learning the basics.

“Clean tech” is boiled down to eight essential areas: Solar power, wind power, biofuels and biomaterials, green buildings, personal transportation, smart grid, mobile technologies, and water filtration. Each chapter concludes with a recommended list of ten companies to watch, and the book ends with a chapter on how companies can successfully market clean tech (hint: don’t lead with “Save the Planet!”).

Although I’m not a newbie to clean energy, I am a beginning investor in it. Here are some points that I found most compelling:

  • Solar energy business is an electronics business. Electronics giants in the solar industry - like Sharp, Sanyo, and SunPower - are likely to be the big winners, rather than the energy giants like BP and Shell. For example, Sharp has targeted 20 percent of its revenue from its solar division by 2010. Semiconductor equipment manufacturers like Applied Materials are other good prospects.
  • Wind turbine manufacturers are looking at nanotechnologies to strengthen and improve the durability of turbine blades and gears, especially with a worldwide shortage of steel. GE, Mitsubishi, NRG, and Vestas are exploring these new technologies. In general, the authors are "very bullish on wind power now."
  • Pernick and Wilder are really excited about plug-in hybrid vehicles. While we need improved batteries to store the electricity to power the car in its initial all-electric mode, the infrastructure (the grid) is already there. They expect Toyota to have the first plug-in on the market. Companies like Germany's OScar and the Society for Sustainable Mobility are tapping into engineering brains around the world to create a fuel-efficient, next-generation plug-in hybrid vehicle. It's the collaborative, open-source process that many of us are familiar with on the web, but now taken a step further.
  • The creation of a smarter electric grid could also take advantage of an open-source process. Rather than a grid that is thrown together piecemeal as it is now, the authors argue that a more thoughtful, purposeful grids should be designed as the Internet was designed. It should anticipate disruptions, redirect spiking currents, and automatically power down noncritical appliances (like dishwashers) during peak demand. Organizations like the Electric Power Research Institute (whose business members generate more than 90 percent of the electricity in the U.S.) are working towards open standards and guidelines for how a smart grid would operate.
  • The U.S. military is a major developer, user, and driver of clean tech. The Pentagon committed $30 million to doubling the efficiency of solar cells, and the U.S. Air Force is the largest consumer of green power in the country. The military's constant and growing need for lightweight and efficient mobile technologies could help drive portable, clean technologies along even faster. Pernick and Wilder recommend watching companies like 3M (called a "nanotech powerhouse" by the Motley Fool) and SkyBuilt Power (self-described "Dell of renewable energy systems").
  • I admit that water filtration does not come to mind when I think of clean technologies. But with increased population, global warming impacts, and the global water market only trailing electricity and oil in market size, the need for clean drinking water is going to become more critical and more profitable. Keep an eye on California-based Energy Recovery with its super-efficient water treatment process.
I recommend the book as a good starting point for investors, techies, students, and advocates of clean energy.

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