3rd era of energy scbd

7/31/2019 3rd Era of Energy SCBD

1/29

Energy3.0

onthecusp

or

on

the

brink


2/29

Weare

at

the

cusp

of

the

3rd Era

of

Energy

Dawn ofModernManPreHistory ~1759

Energy1.0

ModernEra1760 1944Energy2.0

ContemporaryEra1944 Present ?

Energy3.0

EnergySources Wood,

Fire Hydrocarbons Renewables (?)

Work Man,Livestock Motors&Engines Gasturbines,Diesel,ElectricMotors

Global Economy Agricultural Trade Globalization

Population ? ~800M 800M 2,400M 2,400M 7,000M Planetary

capacity

Transportation Foot,Horse,Sail Auto,Rail,Boats + Planes

Building Mud,Wood,Stone Skyscrapers Sustainable

Technology Manual Mechanical Informationalization

Governance Tribal Monarchy Democracy

CommunismFree Market

&

State

Capitalism

Media Written Printing Press Proliferation

Manufacturing Craftsman MassManufacturing Customization

Global EconomicOutput


3/29

7InvestmentThesesforInvestinginEnergy

3.0

Energy=Life

Energysourcesareessentiallycommoditybased

Newsources

must

be

energetically

and

economically

more

efficient

than

old

energy

sources

thereby

enablingeconomicgrowth Commoditybasedmarketsdefinetheenergylandscape Clearatlowestpossiblemarketrate Costbasedcompetition innovationisnotacompetitiveadvantage Commoditieshaveperfectsubstitutability

Regulatory

engagement

is

not

an

option

Awareness Deepunderstanding Influencer

Maturemarkets alleconomicprofitwassqueezedoutlongago.Regulatedmarketsensurecheap,persistentpowertoallsociety

Sustainabilityiscurrentlyanidealbutwilleventuallybecomeasurvivalenvelope

Informationcontentofenergyisincreasing moredata,moreintelligenceandmoredecisionsavailable

EnergyEfficiency Untilnewenergysourcesemerge,themosteconomicenergystrategiesareenergyefficiency


4/29

WhenWorldsCollide:

Energyvs.

Technology

Energy Technology

PrimeDirective Status

Quo Change

the

World

MarketStructure RegulatedMonopoly Rangefromperfectcompetitiontooligopolistic

Inputs Commodities homogenous IntellectualProperty pursuitoftheunique

CompetitiveAdvantage Cost RegulatoryProtection Innovation

CorporateCulture Compliance Creative,innovative,experimental

ProductLife

Cycles Generational Months

GeographicSpanofinfluence Provincial Global

SpeedtoMarket Decades Months

CoreCompetencies Regulatory "Maintainrulesoverallelse."

Entrepreneurial "Breaktheoldrules,and

makenewones."

Management Conservative Risktaking

CompetitiveEnvironment Nonexistent Hypercompetitive

SalesCycle Years Weeks

PricingPower Low consumeriscostsensitive

High Innovationisrewardedwithoutsized

profits

ConsumerBehavior LowEngagement HighEngagement

EconomicMargin Zero

High

moving

to

lower

CapitalEquipmentLifecycle Decades Years


5/29

TheOld

Guard

is

Good

1. Withoutfurtherreform,spendingonfossilfuelconsumptionsubsidiesissettoreach$660billionin2020,or0.7%ofglobalGDP

2. 2010levels:

$409

billion

for

fossil

fuels

verses

$66

billion

for

renewables


6/29

CapitalInvestmentneededtoMeet

2035Projected

Energy

Needs

Coal$1,100

BioFuels$300

NaturalGas$9,500

Oil$10,000

Power$16,900

$

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

2010USDBillion


7/29

CapitalInvestmentneededtoMeet2035

Projected

Energy

Needs

$9,802

$8,700

$6,745

$5,239

$2,185$1,859

$1,034 $1,000$570

$300 $66

26%

49%

67%

81%

86%91% 94% 97%

98% 99% 99%

0%

20%

40%

60%

80%

100%

120%

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Source:World

Energy

Outlook

2011

USD

Billions


8/29

Venture

Capitals

Goal:(relatedtoenergyinvesting) PrimeDirective:ReturntoPartners

1. Identify,fund

and

bring

to

market

companies

that

aredevelopingnewfuelsourcesthataremoreeconomicalthatcurrentsources(coal,oilandnaturalgas)ornuclear

2. Identify,fund

and

bring

to

market

companies

that

aredeployingnewtechnologiesthatpermitcostsavingsinenergybillswhilemaintaining(or

enhancing)

customer

experience3. Savetheworldbyaccomplishing1and2(sincenooneelseisdoingit.)


9/29

Follow

the

Energy

Flows


10/29

Follow

the

Energy

Flows

(keepingitsimple)

Resource

Extraction

Resource

Transformation Energy

Usage

Delivery Delivery

Newandbetterresourceforenergy

Cheapermethodofextractionofoldresources

Abilitytoextendcurrentresources

Moreefficientwaystoidentifyandlocateresources

Moreefficientwaystotransportresourcestotransformationlocation

Eliminatetheneedforintermediatetransformationofresource

Moreefficientwaystotransformresourceintoenergy

Newresourcesthateliminatetheneedfordeliveryofenergy

Energyresourcesthataresustainableorlesscarbonemissive

Moreefficientenergymarkets(adjustthebusinessmodel)

Moreefficientways

todeliver

energy

to

users

Newresourcesthat

eliminatetheneed

fordeliveryof

energy

SmartGrid

Moreefficient

energymarkets(real

timepricing)

Moreefficientwaystouseenergy

Catalogueenergyusesandreviewfornew,betterwaystoaccomplishthesamegoals

Newresourcesthateliminatetheneedfordeliveryofenergy

SmartGrid

Moreefficientenergymarkets(realtimepricing)

IntersectionofITandEnergyindustry


11/29

InvestmentPhilosophy

for

Energy

3.0

Incrementalism or"BlackSwan"approach?

Thelooming

twin

challenges

of

climate

change

and

energy

productionaretoobigtobetackledbyknownsolutionsandtimehonoredtraditions.Incrementalremediesarefineforincrementalproblems,buttheyareinsufficientformonumental,potentiallylifealteringthreats,whichneedtobeapproached

with

a

disruptive

mindset.

There

are

5billion

peoplecovetingtheenergyrichlifestylescurrentlyenjoyedby500millionpeople,mostlyinthedevelopedworld.Incrementaltechnologyprogresswillnotsatisfythiscraving.Weneednon

linear

jumps

in

technologies

Technological

Black

Swans!

We

caninventthesefuturetechnologies.

Source:BlackSwansThesisofEnergyTransformationbyVinod Khosla


12/29

2EndsoftheSpectrumofInvestment

Philosophy

for

Energy

3.0

Edison Incrementalist Tesla BlackSwan

Phonograph IncandescentLighting StockTicker MotionPictures

StorageBatteries

(EVs)

ACGenerator ACMotor ACPolyphase Distribution

System ETC

Moneydoesnotrepresentsuchavalueasmenhaveplaceduponit.AllmymoneyhasbeeninvestedintoexperimentswithwhichIhavemadenewdiscoveriesenablingmankind

tohave

a

little

easier

life.

Geniusisonepercentinspiration,ninetyninepercentperspiration.


13/29

Edisons&TeslasPortfolios(If

they

were

VCs

today)

Low BigdataMeetsEnergy(EMS,etc) EfficientEnergyGenerationEnergyMgtSystems EnergyStorageBuildingMaterials BloomBoxes MoreEfficientElectricMotorsLEDLightingthatREALLYworks LightweightAutoBodies

MoreEfficientCombustionEngines

LightingNetworking Alternative

Vehicles

(PEHV,

etc)

HighlyEfficientTransistorsOrderofMagnitudeEfficientHVAC

MassiveBuildingRetrofit

RobustCyberSecurity(Incl.ICS)

DistributedPVCarbonCapture

UtilityScalePV BioFuelsUtilityScaleWind UtilityScaleTidalPower

ZeroNetEnergyBuildingsSmartGridTechnology Thorium

High RegulatoryBodyEnergyEfficiencyPrograms Fusion+

Low High +Conservative&Incremental "BlackSwan" FundamentallyAltersIndustryEconomics

RiskinessofInvestment(asmeasuredbyprobabilityoffailure)

Policyand

Reg

ulatoryInfluence

Q1 Q2

Q3 Q4


14/29

DemandSide

Energy

Investing

Deliveryof

Power

PricingofPower UsageofPower


15/29

EnergyEfficiencyGWh ProjectedSavings

20102030

(Western

Region

US)

Lighting1,748

Lighting17,772

Lighting27,089

HVAC

7,868

HVAC16,685

ConsumerElectronics

8,324

ConsumerElectronics

16,222

Pump/Motors6,237

Pump/Motors10,070

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2010 2020 2030

Other

WaterHeating

BuildingShell

Appliances

Refrigeration

Pump/Motors

ConsumerElectronics

HVAC

Lighting

GWh

2,470GWh

45,152GWh

79,936GWh

Source:EPRI,AssessmentofAchievablePotentialfromEnergyEfficiencyandDemandResponseProgramsintheU.S.(20102030),ChrisMontao


16/29

FundamentalTechnologies

for

Demand

Side

Lighting71%

Lighting39% Lighting

34%

HVAC9%

HVAC17% HVAC

21%

ConsumerElectronics6%

ConsumerElectronics

18%

ConsumerElectronics

20%

Pump/Motors14%

Pump/Motors

14%

Pump/Motors

13%

Refrigeration3% Refrigeration4%

Appliances4% Appliances4%

BuildingShell2% BuildingShell3%WaterHeating2% WaterHeating2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2020 2030



17/29

Lighting

HVAC

ConsumerElectronics

Pump/Motors

Refrigeration Appliances

BuildingShell

WaterHeating

0%

20%

40%

60%

80%

100%

120%

PredictedCAGR2010

2020

RealisticEnergySaved(KWh)

DemandSide

Technology

InvestableOpportunity

EnergyEfficiencyGWh CAGR

20102020

(Western

Region

US)



18/29

Workingmore

Efficiently,

not

Harder

8 Applicationsofenergyefficiencydeliver43%ofestimated$3.7Trillioninresource

savingsby

2030

Source:McKinsey&Co.,MobilizingforaResourceRevolution


19/29

CustomerEnergyIntelligence

HighValueSoftware

Applications

Data/ITSystems

Communications

CustomerEnergyPlant

CustomerEngagementfromROI

CustomerDriven(lowregulatory)

DirectChannel

IntuitivetoUnderstand


20/29


MicroGridDistributedGeneration

ControlSystems

Sensors Transformers Meters Storage

Servers Database Internet Transactions ModelingControlSystems

ERP

EnergyPlant

Communications

ApplicationLayer

BuildingEnergyManagement

EnergyMonitorin

g

EnergyReporting

ContinuousCommissioning

Diagnostics

AssetManageme

nt

BuildingEnergyAutomation

ControlSystem

Interface

Demand

Respon

se

Loadlimiting

FaultPrediction

OutageManagem

ent

Micro

grid

BuildingEnergyPerformance

InterfacetoAcco

untingSystem

PredictiveAnalyt

ics&Modeling

OptimizationAlgorithms

CarbonReporting

Compliance&As

surance

PowerQualityManagement

FaultDetectiona

ndAlerting

CyberSecurity

LocalAreaNetwork RFMesh HomeAreaNetwork(HAN)BroadbandWWAN 3G/4GCellularOtherProtocoltobeNamed

SystemsLayer


21/29


MicroGridDistributedGeneration

ControlSystems

Sensors Transformers Meters Storage

Servers Database Internet Transactions ModelingControlSystems

ERP

EnergyPlant

Communications

ApplicationLayer

BuildingEnergyManagement

EnergyMonitorin

g

EnergyReporting

ContinuousCommissioning

Diagnostics

AssetManageme

nt

BuildingEnergyAutomation

ControlSystem

Interface

Demand

Respon

se

Loadlimiting

FaultPrediction

OutageManagem

ent

Micro

grid

BuildingEnergyPerformance

InterfacetoAcco

untingSystem

PredictiveAnalyt

ics&Modeling

OptimizationAlgorithms

CarbonReporting

Compliance&As

surance

PowerQualityM

anagement

FaultDetectiona

ndAlerting

CyberSecurity

LocalAreaNetwork RFMesh HomeAreaNetwork(HAN)BroadbandWWAN 3G/4GCellularOtherProtocoltobeNamed

SystemsLayer


22/29

ProfiledFirms:CustomerEnergyIntelligence

CompanyBigProblem

SolvedMarket

OpportunityLast Round Customer Competitors

PaidIn Capital

SCIenergyBuildingenergymanagementsolution

Massive C

Industrial,commercial,

buildingowners(Intel)

BuildingIQ,SeriousEnergy,Cimetrics,FirstFuel Software

$37.6M

BuildingIQBuildingenergymanagementsolution

Massive

Seed

(currently

fundraisingorundisclosedround)

Industrial,

commercial,buildingowners

BuildingIQ,SeriousEnergy,Cimetrics,FirstFuel Software

$?(undisclosed)

OPower

Energy customer

engagement Large C

Residential,

Commercial

eMeter,GridPoint,KEMA,Silver

SpringNetworks,

Tendril$66.5M

C3

Large,geographicallydiverse enterpriseenergy

management

Lage ? PG&E

AMEE,BrighterPlanet,CloudApps,ENXSuite,EPSCorporation,Hara,LocusTechnologies,Noveda Technologies,Verisae

$111.9M


23/29

ProfiledFirms:EnablingEfficientTechnologies

Sector CompanyBigProblem

SolvedMarket

OpportunityLast

RoundCustomer Competitors

PaidIn Capital

LightingRedwoodSystems

Lightingcontrols Large B

AtSite,EdCampus

AduraTechnologies,

DigitalLumens,

Enlighted,Lumenergy

$22.5M

Lighting XicatoLEDlightingfortodaysneeds

Large A?Multipleluminairevendors

DigitalLumens,NovaLED

Unannounced

ElectronicsEnergy

SuVolta Power usedin

ICsLarge B? Fujitsu

AZZURROSemiconductor, iWatt

$62.1M

ElectricMotors

CompactPowerMotors

EfficientElectricMotors

Massive A

Rieju

(MIUS

electric

scooter)

EVOElectric,KLDEnergyTechnologies,PermMotor,Remy

$13.8M


24/29

FreeMarketsAbhoranEconomicVacuum:

UnaddressedOpportunities

Sector BigProblemSolvedMarket

OpportunityEntrants?

CyberSecurity CyberSecurity forPowersystemsand

controlsis

very different

than

IT.

As

the

SmartGrid conntcts IT/ComminfrastructuretotheGrid,therewillbesignificantgapsinthecybersecurity oftheinfrastructureanditscontrols.Thereareanumberofcomplexitiesthatmakesthisaparticularlydifficultmarket

to

attack.

ElectricGrid,EMS,

OilRefineries,

ChemicalIndustry,Waterutilities

EMC/RSA

AlionWizNucleusInvensysBentleyDevonWayAlertEnterprise

GameChanging HVAC Oneofthelargestapplications ofenergyusageintheworld.Asurbanizationcontinuesthiswillonlyincrease.Therearescantoriginalapproachesthathavebeenvalidatedby3rd partytesting.

Allbuildingsacrosstheglobe.

unknown

Fusion LLNLhas

a

Fusion

effort

underway

that

theyclaimisdesignedtodeliver$0.05/KWhby2030.This couldchangeeverything.

None.


25/29

Appendices&AdditionalSlides


26/29

Megatrend:

Urbanization


27/29

GlobalBuildingStock2010 2020

Source:PikeResearch


28/29

GlobalBuildingStock2010 2020(by

Region)

Source:PikeResearch


29/29

Sources

Websites(for

Reports,

etc)

ThoughtLeaders

Resources&

References

3rd era of energy scbd

Documents