WorldBank: Financing Energy Efficiency: Lessons from Brazil, China, India, and Beyond

The World Bank has recently published a book, “Financing Energy Efficiency: Lessons from Brazil, China, India, and Beyond”. According to the book, Brazil, China and India will more than double their energy use and greenhouse gas emissions within a single generation if they fail to implement successful energy efficiency efforts.

Alarming figures
China, India and Brazil are three of the world’s top 10 energy consumers. Together these countries are expected to represent 40% of the world’s population and be responsible for well over 50% of all energy demand by developing countries. By 2030, they are expected to account for 42% of growth in energy demand worldwide.

Bob Taylor, a World Bank energy economist, explains his and the other authors’ approach in writing this book, “We dissected the energy efficiency terrain through this study to find out why it’s so hard to get the right incentives in place so that more investment can happen. What we found is enormous untapped potential – especially in Brazil, China and India – but plenty of good solutions that can work as long as the financing and investment environment is in place and there’s plenty of commitment from policy makers.”

Need for action
According to the authors, energy efficiency is critical in these countries “for reasons of energy supply security, economic competitiveness, improvement in livelihoods, and environmental sustainability.” While they see gradual improvement in the three countries, “when you think about the sort of energy demand of even one of these countries in the next decade, the need for action and much faster progress is very clear,” says Taylor.

The authors conclude that implementing energy efficiency projects could - to a certain extent - be cheaper than providing new supplies. However, the development and financing of energy efficiency projects would be impeded by weak economic institutions in these developing and transitional economies. The authors analyze these difficulties, suggest a 3-part model for planning and financing energy efficiency retrofits and present thirteen case studies to illustrate the issues and principles involved.

The Book
Robert P. Taylor , Chandrasekar Govindarajalu , Jeremy Levin , Anke S. Meyer , William A. Ward, “Financing Energy Efficiency: Lessons from Brazil, China, India, and Beyond”; The World Bank (February 2008).

The book is available for a free download or as a hard copy through the World Bank’s Infoshop.

The United Nations Climate Change Conference in Poznań, 1-12 December 2008

The United Nations Climate Change Conference in Poznań on Saturday 13 December with a clear commitment from governments to shift into full negotiating mode next year in order to shape an ambitious and effective international response to climate change, to be agreed in Copenhagen at the end of 2009. Parties agreed that the first draft of a concrete negotiating text would be available at a UNFCCC gathering in Bonn in June of 2009.

At Poznań, the finishing touches were put to the Kyoto Protocol’s Adaptation Fund, with Parties agreeing that the Fund would be a legal entity granting direct access to developing countries. Progress was also made on a number of important ongoing issues that are particularly important for developing countries, including: adaptation; finance; technology; reducing emissions from deforestation and forest degradation (REDD); and disaster management.

A key event at the Conference was a ministerial round table on a shared vision on long-term cooperative action on climate change. Ministers gave a resounding commitment to achieving an ambitious and comprehensive deal in Copenhagen that can be ratified by all. The next major UNFCCC gathering will take place next from 29 March to 8 April next year in Bonn, Germany.

Archive from all days including summaries of the daily press briefings

Hemlock Semiconductor raises US$3 billion to build chip and solar cell materials

Via Venture Beat, CleanTech:

Dean Takahashi | 15 December 2008


Ever since solar cells took off a few years ago, there has been a shortage of silicon in its purest form. That’s because polycrystalline silicon is used to make both semiconductor chips and most solar cells.

Because of that, the Hemlock Semiconductor Group has been able to raise $3 billion to expand the production of polysilicon at two major manufacturing sites. The group will invest that money to build a new factory in Clarksville, Tenn., and to add to another one in Hemlock, Mich.

About $1.2 billion will go toward the new site in Clarksville, and another $1 billion to the Hemlock plant. The rest of the money will fund further expansions. Together, those factories will be able to produce 34,000 metric tons of polysilicon per year. Construction will begin immediately.

The numbers involved give you a sense of the scale of the business and a sense for how much polysilicon is needed to fuel the world’s growing appetite for solar power. Altogether, the Hemlock Semiconductor Group has announced investments of $4.5 billion in the past five years. From 2005 to 2015, the company will have increased its production capacity ten-fold.

The shortage of polysilicon has driven up prices for various kinds of chips and driven a lot of solar start-ups to focus on thin-film technology that doesn’t use polysilicon. The Michigan expansion will add 13,000 tons of capacity to the site, creating 300 permanent jobs and 8u0 construction jobs. The expanded plant is expected to begin production in 2011. In Clarksville, the factory will initially produce 10,000 tons of polysilicon. The site is expected to employ 500 people at first and then 800 at full production of 21,000 tons a year. The construction will create 1,000 jobs.

Most of the production will go toward solar cell production, but both factories will be able to make polysilicon for electronics as well.

Hemlock Semiconductor and Hemlock Semiconductor LLC are joint ventures of Dow Corning and two Japanese firms, Shin-Etsu Handotai Co. and Mitsubishi Materials Corp.

Green-tech Startups

Via EE Times Asia:

11 December 2008
Small is beautiful for green-tech newbies

Green Tech

Les Fritzemeier heads up a tiny solar-energy start-up that most people have never heard of, Wakonda Technologies. But rather than worry about being steamrolled by the sliding economy, he feels like he's in a great spot.

"In a lot of respects, the best time to start a company is in the middle of a recession, assuming you've got money," he said. "Our target is to go to market when most people expect the economy to turn around."

Without a doubt, the recession and lower oil prices are hurting many companies in clean tech, a situation likely to slow what has been a frenzied pace of innovation.

But investors and entrepreneurs say that so far, smaller green-tech firms appear to weathering the storm the best, allowing them to continue developing new energy technologies.

To a large degree, that's simply because younger firms, in general, demand less capital to operate. Those green ventures most vulnerable are the ones that need late-stage funding--the tens or hundreds of millions of dollars to build a biofuel plant or solar-manufacturing line, they said.

Across the board, though, investors and entrepreneurs report that the valuations of green-tech start-ups—once considered in bubble territory—are going down, and there is a growing emphasis on having cash.

"What's out there is a level of nervousness in every business," said Mitch Tyson, CEO of Advanced Electron Beams, which makes equipment to make industrial processes more energy- and water-efficient. "People still don't have a good sense of where the bottom is."

Seeking new sources

As a result, green-tech entrepreneurs—after being lavished with money and attention for the last three years--need to get creative with how they fund their ideas.

Consider Qteros, a young firm with a potential breakthrough process for making ethanol from agricultural waste, such as corn stover. One of its initial investors, ethanol maker VeraSun Energy, declared bankruptcy, shutting it out of any follow-on round.

Other sources of money, including BP and George Soros' fund, filled the void. But the added work—compounded by cautious lenders—strung the process out from six months to nine.

"This Wall Street meltdown is having effects on early-stage green-tech companies getting the money they need to grow," said Jonathan Gorman, the manager of business development at Qteros. "There was a huge due diligence process, with outside scientists, as we looked for money, which they probably wouldn't have done before."

In another case of Wall Street colliding with green-tech garage start-ups, one newly formed firm nearly lost an investor when he lost half a million dollars on the stock market.

Late last month, SunRun, which installs and finances consumer solar-panel purchases, secured a $105 million commitment from U.S. Bank, but it wasn't as easy as it would have been a few months ago: one investor said getting a bank to sign on to a tax equity fund was like getting on "the last helicopter leaving Saigon."

Fritzemeier of Wakonda Technologies seems have gotten the timing right too: he was fortunate enough to raise money in July, before the financial markets' meltdown.

He's optimistic about the future because demand for technology that reduces the cost of solar electricity will remain strong, even in a down economy. The company is trying to develop disruptive solar-cell technology by combining low-cost, thin-film manufacturing techniques with very efficient cells.

Like most people in clean tech, he's eager to see the shape of the Obama administration's energy and green-job initiatives.

"The continued emphasis on renewable energy and economic development from the incoming (Bush) administration may put additional support in place to accelerate our efforts," Fritzemeier said.

Flight to quality
Certainly, being in the right industry helps a small company's chances. While biofuels are closely tied to falling commodity and gasoline prices, products that save energy can appeal to cost-cutting businesses or utilities looking to make the electricity grid more efficient.

"We feel better that we're in the efficiency business selling to businesses," said Robert LeFort, the CEO of Ember, a wireless-networking firm that has shifted its focus to smart-grid products. "That's better than putting something on the shelf at Wal-Mart, and hoping the consumer picks it up. It's the lesser of two evils."

As more bad economic news comes out seemingly every day, many predict that the best companies—with paying customers —are the ones that have the best chance of thriving. A number of successful companies, including Google and Cisco Systems, were founded during an economic downturn.

Nicholas Parker, executive chairman of the Cleantech Group research firm, said the difficulty in getting financing in the coming year will thin the ranks of clean-tech start-ups and, from an investment point of view, result in a "flight to quality."

Advanced Electron Beams' Tyson is out, trying to raise another $20 million to $25 million Series C round, and he's gotten a commitment from existing investors and a good reception from others. The interest could well stem from the fact that the company already has customers using its product.

"I say to potential investors, 'We have a product in the field now and look at the customer base—the market risk is low,'" he said. "Knock on wood. So far, my experience, has been typical of normal times."

- Martin LaMonica is a senior writer for CNET's Green Tech blog.

LDO Regulator adds efficiencies to energy-sensitive systems

Via Thomasnet.com

Fairchild Semiconductor's 300mA Low VIN LDO Offers Higher Efficiency in Less Space for Digital Applications

SAN JOSE, Calif. - December 2, 2008 - Fairchild Semiconductor (NYSE: FCS) offers designers of energy-sensitive systems a 300mA low-dropout (LDO) solution balancing efficiency, transient response, and footprint size. The FAN2564 is a low VIN LDO offering the efficiency of a switcher-based solution but in the footprint of an LDO. Traditional LDO regulators create low voltage supplies for digital processors. These LDO regulators are connected directly to the battery, resulting in poor efficiency. The FAN2564 regulator has a dropout of 100mV and operates from supplies as low as 1.8V, allowing the device to post-regulate from existing low voltage supplies in the system. By operating from a low VIN, the voltage drop across the LDO is reduced, resulting in high efficiency linear power conversion.

This LDO consumes low quiescent current (45µA at no load) and delivers a fast transient response enabling the application to be more resilient to fluctuations in load. To accommodate the space-constrained challenges of applications with a digital load such as portable, medical, computing and computer peripherals, the FAN2564 is packaged in either compact 0.93mm x 1.41mm WL-CSP or 2mm x 2mm ultra-thin MLP packaging. In addition, the FAN2564 uses industry-standard 0402 capacitors that are quite small (1.00mm x 0.50mm), reducing board space in the overall design.

The FAN2564 is the latest addition to Fairchild's comprehensive portfolio of LDOs, featuring low quiescent current, minimal noise and fast transient response. Integrated functions and innovative packaging allow Fairchild to deliver high-performance in the smallest footprint possible, which are important for portable applications where small size is critical.

The FAN2564 utilizes lead-free (Pb-free) terminals and has been characterized for moisture sensitivity in accordance with the Pb-free reflow requirements of the joint IPC/JEDEC standard J-STD-020. All of Fairchild's products are designed to meet the requirements of the European Union's Directive on the restriction of the use of certain substances (RoHS).

Price:
FAN2564 in UMLP packaging: US $0.63
FAN2564 in WL-CSP packaging: US $0.69

Availability: Samples available now

Delivery: 8 weeks ARO

Contact Information:
To contact Fairchild Semiconductor about this product, please go to: http://www.fairchildsemi.com/cf/sales_contacts/.

For information on other products, design tools and sales contacts, please visit: http://www.fairchildsemi.com.

For a datasheet in PDF format, please go to:
http://www.fairchildsemi.com/ds/FA/FAN2564.pdf

About Fairchild Semiconductor:
Fairchild Semiconductor (NYSE: FCS) is a global leader delivering energy-efficient power analog and power discrete solutions. Fairchild is The Power Franchise®, providing leading-edge silicon and packaging technologies, manufacturing strength and system expertise for consumer, communications, industrial, portable, computing and automotive systems. An application-driven, solution-based semiconductor supplier, Fairchild provides online design tools and design centers worldwide as part of its comprehensive Global Power ResourceSM. Please contact us on the web at www.fairchildsemi.com.


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Ecological Engineering Viable Alternative to GM

Via SciDev.net:

9 December 2008

Ecological engineering could offer cheaper, more efficient long-term strategies for pest control than genetically modified (GM) crops, say Josef Settele and colleagues in Nature.

Ecological engineering in irrigated rice — controlling insect pests through landscape management — has almost eradicated insecticide use in the field sites of the International Rice Research Institute in the Philippines.

The authorsargue that, unlike GM rice, ecological engineering does not undermine the independence of farmers in developing countries by relying on big business for pest control.

In such a well-studied crop as rice, ecological engineering could be implemented immediately, they say. Future research should focus on developing sustainable management schemes for other key crops.

***

Link to full article in Nature

Nature 456, 570 (4 December 2008) | doi:10.1038/456570a; Published online 3 December 2008

Switch to ecological engineering would aid independence

Josef Settele¹, Jacobus Biesmeijer² & Riccardo Bommarco³

1. UFZ, Helmholtz Centre for Environmental Research, Theodor-Lieser-Strasse 4, 06120 Halle, Germany
   Email: Josef.Settele@ufz.de
2. Institute of Integrative and Comparative Biology and Earth and Biosphere Institute, University of Leeds, Leeds LS2 9JT, UK
3. Department of Ecology, Swedish University of Agricultural Sciences, 75007 Uppsala, Sweden

Sir

In your News Feature 'Is China ready for GM rice?' (Nature 455, 850–852; 2008), you consider the merits of using genetically modified (GM) crops for pest control. But don't overlook the potential of ecological engineering, which can provide an important and undervalued approach to tackling agricultural problems.

Biological control in irrigated rice is a prime example of how increasing biodiversity can offer a key service to humans. Insect pests in rice are efficiently controlled by appropriate reduction of pesticide application together with landscape management (see, for example, M. J. Way and K. L. Heong Bull. Ent. Res. 84, 567–587; 1994). This strategy has led to almost complete abolition of insecticide application in places such as the research fields of the International Rice Research Institute (IRRI) in the Philippines.

It was the strikingly successful example of biodiversity and ecosystem services management by IRRI that persuaded us to recruit the institute into a large international research network (J. Settele et al. Nature 453, 850; 2008), with a view to developing sustainable land use on a global scale and refining ecological-engineering approaches.

Employing GM rice for pest control overlooks services available from natural resources that are not so dependent on big business and so do not undermine the independence of farmers and developing nations. Switching investment of resources from GM crops and pesticides to ecological engineering could be a more efficient long-term and low-cost strategy.

In such a well-studied crop as rice, ecological engineering could be implemented immediately. Research efforts should focus on developing sustainable management schemes for ecosystem services for other key crops, in China and worldwide.

Contributions to this page may be submitted to correspondence@nature.com. Please see the Guide to Authors at http://tinyurl.com/373jsv. Published contributions are edited.

Book: The Art of Sustainable Investing

Via Renewable Energy World:

8 December 2008
Cary Krosinsky & Nick Robins, Authors

Our new book, Sustainable Investing: The Art of Long-Term Performance, published by Earthscan in the UK on November 10, and Stylus Publishing in the U.S. on December 8, was conceived in the early summer of 2007 before credit markets crunched and the world economy experienced perhaps the worst financial shock since the Great Depression.

Its scope and purpose were also designed in advance of the UN Bali conference, which after years of inertia, laid the groundwork for a global deal to confront climate change. These two apparently unconnected developments symbolize the need for patterns of finance and investment that are truly focused on long-term value creation, and away from the short-term focused vision that has arguably led us to the immediate financial crisis we face.

Fortunately, a shift in this direction is already underway with the rapid growth in sustainable investing practice over the past two decades. Today's rendition of sustainable investing covers all asset classes and all regions of the world. It has strong links to the pioneering ethical and socially responsible investment communities, but goes a number of steps further by placing the pursuit of financial returns in the context of the world's economic, environmental and social challenges.

Over the past 30 years, a range of terms, notably social, ethical, green, responsible, socially responsible and sustainable — have been used to describe the emerging practice of incorporating extra-financial factors into investment decision-making. One woman's "ethical investing" is another man's "socially responsible investing," and one firm's "responsible investing" is another manager's "sustainable investing."

On reflection, this embarrassment of semantic richness is perhaps understandable for a rapidly evolving approach, where the final form has yet to be settled. In such a fluid field, we are well aware of the dangers of false precision.

Indeed, one of our contributors, Rod Schwartz, when trying to pin down socially responsible investment, revived John Morley's dictum that "if you want a platitude, there is nothing like a definition."

Yet it is also our strongly held view that not resolving these terminology disputes has led to a misperception that investing with one's values inevitably leads to underperformance by definition, which could not be further from the truth, as our book details in greater depth.

Sustainable investing in our experience combines two profound appreciations. The first is that the best way of generating risk-adjusted returns in the 21^st century is to fully incorporate long-term environmental, social and economic trends into investment and ownership decision-making. The second is that achieving global sustainability requires the full recasting of the world's capital markets.

If the first speaks the language of financial value at the micro-level, the second refers to the imperative of structural reform at the macro-dimension. Sustainable investing thus provides an agenda for action for purely financially motivated investors eager to mitigate risk and benefit from upside opportunities, as well as for civil society organizations aiming to achieve social and environmental progress.

It encompasses the growing numbers of individual investors who wish to ensure that social and environmental factors are included in the ways they allocate their savings. It also draws on the rising tide of institutional investors who appreciate the growing financial materiality of environmental, social and governance (ESG) factors.

Added to this are cleantech investors who identify major potential for capital growth in companies providing solutions to mounting environmental constraints. And alongside these are investors explicitly seeking social as well as financial returns from new avenues such as microfinance. What unites these apparently disparate groups is an acknowledgment that value can now only be created on a long-term basis through fresh approaches to financial analysis, fiduciary duty and capital market regulation.

Currently, we observe five distinctive investment styles:

• Ethical Investing: described as "an approach to investing driven by the value system of the key investment decision-maker." and drawn from The Social Responsibility of the Investment Profession by Julie Hudson. In many cases, this equates to traditional social investing in the U.S. as well as to much of current socially responsible investing, and applies mostly to individual investors as well as to charities and foundations that have values as part of their mission.

• Responsible Investing: described as "an approach adopted by institutional investors to start taking ESG factors into account in pursuit of their fiduciary duties to clients and beneficiaries."

• Cleantech investing: defined as the surge in investment into environmental sectors such as energy efficiency, pollution control, renewable energy sustainable transport, as well as waste and water management. Linked to this is the fast-growing practice of "climate change investing," which may supplement clean tech with allocations to sustainable forestry, as well as in some cases to nuclear power.

• Social investing: described as "an approach to investing that seeks to generate social as well as financial returns." While ethical investing tends to focus on the consistency of investments with the investor's value system, social investing examines outcomes in light of the impact on others, often those most disadvantaged in society.

• Sustainable investing: described as "an approach to investing driven by the long-term economic, environmental and social risks and opportunities facing the global economy." What distinguishes current practitioners of sustainable investing from the other approaches is the conviction of their commitment to systematically integrate environmental, social and economic factors into the valuation and choice of assets and the exercise of ownership rights and duties. [For example, Joe Keefe of Pax World defines sustainable investing as the "full integration of environmental, social and governance factors into financial analysis and decision-making." See Keefe, J. (2007) ‘From SRI to Sustainable Investing', Green Money Journal, Summer 2007]

In the book, we use these distinctions to compare the financial performance of different types of funds.

Sustainable investing is also distinct from the investment mainstream, not least in its approach to time horizons. We would describe the mainstream as "an approach to investing that applies conventional financial theories to the valuation and selection of assets and the exercise of ownership rights."

Clearly, as the importance of environmental and social factors becomes part of the conventional wisdom, so the investment mainstream will adopt aspects of the sustainable investing agenda. Indeed, a growing share of the world's capital assets is already incorporating at least parts of the sustainability agenda.

The McKinsey Global Institute has calculated that the value of public equities, as well as corporate and government bonds, amounted to some US $120 trillion in 2006.

Our "rule of thumb" estimate is that at most between one-tenth and one-quarter of this figure is now on a sustainable investing trajectory, but with the bulk of this limited to early stage shareholder engagement rather than active deployment of capital.

[The upper band of this estimate is drawn from the 2008 assets under management supporting the Carbon Disclosure Project of US$67 trillion. To deal with the issue of double counting, we have simply halved this figure and then compared it with the overall total given by McKinsey. The lower band is derived from the assets under management supporting the UN Principles of Responsible Investment, which in May 2008, amounted to some US$13 trillion.]

One final clarification. SRI started out standing for "socially responsible investment." More recently, it has begun to spell out "sustainable and responsible investment." For us, the evolution of this acronym describes the generational shift that is now underway, and when we use SRI as a catch-all, we mean it to cover the five investment styles we have identified.

To date, sustainable investing has proved itself as a powerful addition to the investment landscape. The years ahead, however, are set to be increasingly dynamic as sustainability emerges from a niche to transforming the rest of investment management, in the process becoming the new mainstream.

Cary Krosinsky is Vice President for Trucost Plc as of June 2008. Trucost has built the world's most extensive database of more than 700 emissions and pollutants of more than 4200 public companies around the world and uses this data to help portfolio managers understand their carbon footprints, helping lower them while maintaining and enhancing performance.

Nick Robins (left) is Head of the HSBC Climate Change Centre. Nick has 20 years experience in promoting sustainable development and corporate responsibility in financial markets, business and public policy research.

Nick Robins and Cary Krosinsky are authors of Sustainable Investing: The Art of Long-Term Performance.