Cleantechinvestor.co.uk, Renewable Energy, Biofuel, Investment - Editor's Letter

OOPS. Your Flash player is missing or outdated.Click here to update your player so you can see this content.

Cleantech magazine, a Cleantech Investor publication

Editor's Letter - May 2008

Dear Reader,

Oil prices are rarely out of the news. Royal Dutch Shell CEO, Jeroen van der Veer, expects the world to approach the point of ‘peak easy oil’ within the next ten years. Goldman Sachs energy strategist Argun Murti is forecasting that crude oil could reach the $200/barrel level this year. As drivers in the search for alternatives to fossil fuels, environmental factors are increasingly being supplemented by economic factors.

As well as high oil prices, the world is also experiencing record prices for agricultural commodities. High crop prices have filtered through to food prices and many countries are reported to be facing food crises. The surge in agricultural commodity prices has been the result of a combination of factors, which include decades of underinvestment in the agriculture industry and growing demand for meat (necessitating increasing fodder for animals) in emerging economies such as China and India.

Food, in contrast to oil, is not a finite resource. There may come a day when the world approaches a scenario of ‘peak arable land’, but that day is in the very distant future. In the meantime, there is potential for significantly higher returns to be generated from the land which is available. On page 6 of this issue of Cleantech magazine we discuss a group of companies with innovative green chemistry solutions for improving plant yields, optimising the potential returns and permitting the use of lower quality land.
The biofuel industry has played a part in pushing crop prices higher. The use of certain biofuel feedstocks, in particular corn (for ethanol) and palm oil (for biodiesel), potentially poses ethical dilemmas in some situations. However, investment in biofuels – undertaken responsibly – has to be part of the solution, not part of the problem. This issue contains a special supplement (pages S1-S16) on jatropha – a tropical oil seed producing plant which is attracting much attention as an alternative biodiesel feedstock on the grounds that it can be grown on degraded land and is inedible, so does not impinge upon food supplies.

The next issue of Cleantech magazine will investigate the potential for clean technology to address the challenge of ‘peak water’ – a scenario which also has implications for the agriculture industry. Fresh water resources are increasingly scarce. However, sea water is plentiful – and ocean power offers scope to contribute to energy generation in a significant way in the future. This issue contains a feature on marine energy financing by Estelle Lloyd of VBR (page 8).

The prospect of ‘peak easy oil’ and $200/barrel crude may force even die-hard petrol heads to consider alternative vehicles. Electric vehicles – with zero emissions of environmental pollutants – running on renewable energy (perhaps marine power?) are an increasingly viable alternative as battery technology improves. Jon Mainwaring looks at electric bike manufacturers (page 24) and Jamie Borwick, founder of electric van manufacturer, Modec, discusses the future for electric vehicles in the Cleantech Interview on page 26.

Elsewhere, Tim Chapman rounds up his series of features on next generation solar technologies with a discussion of the more exotic materials being used for solar cell development (page 17). And Simon Bennett’s series of features on biorefinery technology continues with a look at ‘green biorefineries’ (page 15).

In the current economic environment, stock market conditions for early stage cleantech companies are difficult. Cleantech IPOs on AIM have dried up this year after the bumper conditions last year, and some companies are finding it tough to raise funds. However, the long term fundamentals for the sector remain positive for those companies with strong business models. Dean Cooper of Ambrian Capital discusses opportunities for investors (page 10) based upon Ambrian Capital’s investment criteria for the alternative energy sector.

Cleantech magazine aims to identify the clean technology investment opportunities emerging as a result of global movements in commodities and stock markets, macroeconomic factors and geopolitical trends – as well as the legislation which is being put in place in response to climate change and other environmental factors. As this issue of Cleantech magazine demonstrates, clean technology straddles many sectors and is increasingly making inroads into established industries.

Anne McIvor

May 2008