funding innovation in the nordics - erik olsson - swedish energy agency - april 2010

Nordic Green II,

Funding Innovation in

the Nordics

Erik Olsson

Department of Business

Development and New Venture

Projects

The Swedish Energy Agency

The Swedish Energy Agency

• Established in 1998

• Main Swedish Government Agency for implementing energy policy

• Facilitates the transformation towards a sustainable energy system

• Promotes new energy technology and energy efficiency, administers Energy R&D programs and disseminates knowledge and information

• Mission is to promote the development of Sweden’s energy system so that it will become ecologically and economically sustainable… a smarter use of energy.

• 250 employees at the Agency.

• Budget 2010: 2.5 Bkr (~ 350 M$)

International

• The Swedish Energy Agency is working to promote development in the fields of energy and climate in selected countries

• Through bilateral agreements the Agency cooperates, among others, with Brazil, China, India, Ukraine, Poland and the United States on research in the field of energy

• ”SAGA”, the Swedish-American Green Alliance

• MOU with California

Six Focus Areas

Swedish Energy Agency

Policy

Research

Innovation

Primary Energy Resources

Energy Carriers

Energy Recycling

Energy

Transformation

Distribution

and storage

Energy Services

The Energy System Sustainable use

Policy incentives for energy technology development in Sweden

• High carbon taxes for heating since 1991

• Deregulated electricity market since 1996

• Trading certificates based on quotas for use of electricity from renewable production sources since 2003

• Tradable emission permits for CO2 since 2005

• A high system know-how from a policy and technology perspective

• Technology solutions that are based on integrated system thinking

BNP in relation to emissions

0

20

40

60

80

100

120

140

160

1990

1991

1992

1993

1994

1995

1996

1996

1998

1999

2000

2001

2002

2003

2004

2005

2006

Year

Ind

ex y

r 1990=

100 CO2e

GDP, fixed prices

SO2

NOx

VOC

GDP in relation to emissions

SOLOUTIONS

FOR FINANCE

MARKET &

ECONOMY

Our offer to the start-up companies

Offer

• Financing

• Business Development

• Network

• ”Packaging”

Tools

• Soft loans

• Competence

• Network

TEAM

Financing of Energy Innovations

• Supports Research & Development & Demonstration

• International mechanisms like emissions trading and CDM/JI

• Public procurement

VERIFIED

UNIQUE

TECHNOLOGY

Good early dealflow

- 100 Companies/year - DD

- About 15 investments/year

Results - Examples

Tanks for your attention!

Erik Olsson

www.energimyndigheten.se

www.swedishenergyagency.se

Three of the major challenges in Sweden today:

• “The Swedish Paradox”

• Lack of VC Capital for

early stage companies

• The need of larger

amount of money in a

early stage

1. “The Swedish Paradox”

• The Good News:

– Sweden tops the Innovation

Capacity Index Rankings 2009-

2010 (Innovation for

Development Report)

• Huge investments in R&D and

high tech companies do not lead

to more innovation, productivity

or profit

- “The Swedish Paradox”

• R&D is only one of many factors underpinning the

knowledge based society

• R&D is important, but the objective must be

company learning, not more R&D in and for itself

• Companies that are able to find, understand and

make use of new technology successes

• Policy makers must scrutinize all policies that

influences learning and innovation in firms,

including general framework conditions

2. Lack of VC capital for early stage companies

Critical sector

Close the gap!

EBAN -“Business Angel investing across Europe”, 2009-11-21

Capital Needs

RiskFriends,

Family &

Founders

Business

Angels

Venture

Capital

Funds

IPO

Early stage

and seed

venture

funds

The Agency’s soft loans

Later stage and

less investments!

Concentrate

on!

- Finding other investors!

3. The need of larger amount of money in early stage

• <1 M$ for lab verification

• >10 M$ for full-scale demonstrations

- The call for second-generation biofuels and other energy technologies

• ~ 40 applications

• 5 companies assigned (Chemrec, Södra Cell, GoBiGas, Volvo, Seabased)

• Governmental funding total ~100 M$

- Continue the education of the investment community

• Hosting seminars and investment forums

• Branch building/Networking

• Risk sharing initiatives

• Publications