Energy efficiency is hot, hot, hot in 2010

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The spotlight’s widening on energy efficiency this year. Called “sexy” by President Obama last fall, energy efficiency also attracted the attention of clean tech venture capitalists in a big way in 2009.

The general term “energy efficiency” embraces a wide range of technologies designed to cut energy use. When these technologies are employed by an industrial complex, a college campus, a manufacturing facility or a large building (such as a hospital, for example), the savings, and the easing of demand on the electrical grid, can be measured in savings to the consumer/prosumer and the utility alike.

Clean tech venture capitalists obviously agree. In study results released earlier this month by The Cleantech Group and Deloitte, venture capital investment in energy efficiency hit a new record in 2009 with at least 115 deals worth around $1 billion, up 39 percent from 2008.

As expected, solar investment topped the list, at $1.2 billion, or 21 percent of 2009 clean tech venture capital investment. (Energy efficiency accounted for 18 percent of the total investment, falling just behind solar and transportation, which included electric vehicles, advanced batteries and fuel cells.)

In late December, I spoke with Mark Ascolese and Kevin Meagher, chief executive officer and chief technology officer, respectively, of EDSA Power Analytics. I was interested in knowing more about power analytics, and how the model and technologies can assist in energy efficiency endeavors. The “dashboard” they showed me allows building managers to model and predict in real-time what powering down electricity usage in certain areas, at certain times, could do to improve the entire enterprise’s energy efficiency. In essence, the operator has the ability to model the changes, and see the results, before instructing the system to make the changes “for real.”

These kinds of advanced technologies (being pursued by other companies, in other ways, as well) offer “behind the meter” control essential to complete  the two-way consumer communication circle. Meagher and Ascolese went on to discuss how this kind of microgrid control is an essential component of the smart grid, a concept with which I am extremely comfortable, though some others are not. This coming year’s advancements, and continued investment, will truly tell the tale in this area. 

An interesting side note: smart grid venture capital investment for 2009 came in fifth, at $414 million, or 7 percent of the clean tech venture capital investment for the year. Measured against energy efficiency’s $1 billion, it really does seem quite puny, the poor relation arriving at the table. However, it became clear very quickly last year that once federal smart grid funding opportunities were announced in the year’s early months, venture capital investment remained in more of a holding pattern (Silver Spring Networks and Landis+Gyr were two notable exceptions). 

So, where will smart grid and energy efficiency fall this year? We’ll be following the money closely. 

I look forward to discussing this and other issues with all the players in the emerging intelligent utility. If you'd like to let me know what you think of this article, I encourage you to use the Comment link below. I welcome your insights -- informed dialogue, and an important part of the solution. If you have a story idea for me, please contact me by e-mail at krowland@energycentral.com [3] or by telephone at 720-331-3555.