Cleantech venture investment expected to decline even further, corporate involvement to increase, and long-term risks coming in solar, wind, electric vehicles and elsewhere, says company
SAN FRANCISCO, CA - Dec 4th, 2012 – Developments in 2013 will call into question some of cleantech’s traditional leading indicators of health, and risks will develop with the sector’s stalwart solar, wind and electric vehicle and other markets while others will grow, according to cleantech analysis and consulting firm Kachan & Co.
The company, with offices in San Francisco, Toronto and Vancouver, has just published its latest annual set of predictions for the cleantech sector for the year ahead.
In brief, the predictions include:
Cleantech venture investment to decline – Kachan expects worldwide cleantech venture capital investment in 2013 to decline even further than it did in 2012, never to return to the previous highs it achieved before the financial crisis of 2007-2008. Among the factors cited are departure of many venture investors from the sector because of disappointing returns, poor policy support worldwide and a lag time in the pullback of equity and debt investment.
But this doesn’t mean the sky is falling in cleantech, according to the firm.
“Family offices, sovereign wealth and corporate capital are now having more significant roles in cleantech, filling gaps where traditional VC has played in recent years. It’s a sign the sector has matured,” said Dallas Kachan, Managing Partner, Kachan & Co. “Fewer VC cooks in the kitchen may impede innovation, but deep pocketed corporate capital should help clean technologies that are already de-risked reach meaningful levels of scale.”
Long term risk emerges for solar and wind – The solar and wind markets suffer today from margin erosion, allegations of corruption, international trade impropriety and other challenges. In 2013, Kachan believes poor progress in grid-scale power storage technology will also put downward pressure on solar and wind growth figures.
“Prices per kilowatt hour are falling, but the cost of flow batteries, molten salt, compressed air, pumped hydro, moving mass or other storage technology needs to be factored in to make intermittent clean energies reliable and available 24/7,” said Kachan. “When also considering continued progress in cleaner baseload power from new, emerging nuclear technologies, natural gas and cleaner coal power, the growth rates for solar and wind appear at risk.”
Clean coal technologies gain respect – Kachan predicts 2013 will be the year a new set of technologies will emerge aimed at capturing particulate and CO2 emissions from coal fired power plants and help the sector begin to shed its negative positioning.
The barrier to capturing coal emissions has been cost and power plant output penalties. Kachan research has identified encouraging new technologies without such drawbacks, and predicts the world will begin to see them in 2013. China is expected to target domination of the clean coal equipment market, like it does already in many other cleantech equipment categories.
The internal combustion engine strikes back, putting EVs at risk – Important innovations quietly taking place in internal combustion engines (ICE) could further delay the timing of an all-electric vehicle future, says Kachan. In 2013, unheard-of fuel economy innovations in ICEs will enter the market, including novel new natural gas conversion and heat exchange retrofits of existing engines aimed at dramatically lessening fuel needs. Some of these technologies, when combined, claim to be able to reduce fuel costs by 90%.
Cleantech adoption in mining – Notoriously conservative mining companies and their shareholders are starting to realize that the capital expenses of new clean technologies can be offset by reduced operating costs and the potential for new revenues. In 2013, Kachan predicts more adoption of cleantech innovation in areas such as tailings remediation, membrane-based water purification, sensors and telematics, route optimization software intended to lower fuel and equipment maintenance costs, and low water and power hydrometallurgical and other novel processes for mineral separation.
Big ag steps up and cleans up – Kachan estimates that 2013 will be the year the world’s leading agricultural companies embrace new innovation in significant ways. Expect accelerated corporate investment, strategic partnership and agricultural M&A in 2013, the firm predicts, as agricultural leaders race to meet consumer demand for cleaner, greener ways of producing food, having weathered intense consumer GMO-related and other backlash.
Read Kachan & Co’s predictions for cleantech/greentech in 2013 in their entirety.
About Kachan & Co.
Kachan & Co. is a cleantech research and advisory firm with offices in San Francisco, Toronto and Vancouver. The company publishes research on clean technology companies and future trends, offers consulting services to large corporations, governments, service providers and cleantech vendors, and connects cleantech companies with investors through its Hello Cleantech™ programs. Kachan staff have been covering, publishing about and helping propel clean technology since 2006. More information at www.kachan.com.
For more information or to arrange an interview, contact:
Dallas Kachan, Kachan & Co.
+1-415-390-2080 x5 office
+1-604-366-3910 mobile
Email via our contact form.