Rob Day: The Blair/Schwarzenegger climate talks & what we can do

Rob Day

Today may prove a big moment in California’s role to start the dominos falling toward a new international regime capping greenhouse gases. At a meeting in Los Angeles in a few hours, British Prime Minister Tony Blair and California Gov. Arnold Schwarzenegger may announce the creation of a joint market for greenhouse gases.

With that as a backdrop, here is a “guest post” by Rob Day, a San Francisco venture capitalist with Expansion Capital Partners who specializes in clean technologies. Here is his bio, and his well-written blog, and below is his argument about what we can do now:

With our ever-growing appetite for energy, some people say that we can’t afford to address climate change. But it’s clear that we’re going to need to make some big changes in response to this serious threat. And soon.

What a lot of people don’t recognize is how much progress could be made simply in doing one thing: Conserving energy, by exploiting the technology we already have to become more efficient. When you consider the potential devastation of climate change, and the fact that a lot of what we could do would actually reduce costs, not increase them, you realize: We can’t afford NOT to address climate change.

Conservation, in fact, is probably the most profitable clean energy technology. It may not be a sexy message, but it’s a no-brainer.

Lost in all the hype about solar and fuel cells and such is the fact that there are a lot of energy-saving opportunities out there that businesses aren’t capturing. To give just one small example: Warehouse owners can save 50 percent of their lighting expenses, and get better lighting in the bargain, simply by getting rid of those old yellow round lights we all remember from our high-school gyms and replacing them with fluorescent lighting with specially-designed fixtures. Not exactly rocket science. Those who’ve made the switch not only tell me they’ve seen 1 year payback periods — they’ve also gotten better productivity since the lighting’s better. Such lighting is a huge energy user, and this would make a big difference in the Bay Area during these heat waves and energy shortages. And yet…only a minority of such building owners has made the switch so far.

Furthermore, we should apply the technology of “intelligent networks ‘ to the problem. This doesn’t require any big breakthroughs, we just need to take advantage of all the capital already spent commoditizing telecom and IT solutions. Add communications to that warehouse’s lighting fixture so that you can remotely turn the light on and off when no one’s working in that section, or so that you can turn it down a small amount when it makes sense, without the workers really noticing. Then connect the fixture to an intelligent system that talks to the local utility and knows when they need to free up some capacity, and sell them back that capacity by adjusting the lights — it’s cheaper for the utility than buying power on the spot market. Connect the whole thing to a bigger system that’s connected to the building’s refrigerators and other energy using equipment, and use an automated agent that makes intelligent usage trade-offs when appropriate. Introduce daylighting. Put low cost, next-gen solar PV up on the roof, and connect that to storage which is also plugged into this intelligent network, so you can sell power back into the grid when it’s most needed. Finally, give customers the incentive to save by charging them more when electricity demand is higher (mid-day), and less when it’s lower (evenings). The complexity of this system is really not that great,.

For much of my job as a cleantech investor, it’s not about invention, it’s really about execution. It’s not about reinventing whole economic systems (although such creative destruction is steadily going on regardless, we just don’t need to try to guide it). It’s not about betting on changes in regulations and policy. It’s simply about finding solutions that customers tell me work well and for which there’s a clear market need. And identifying strong management teams that have proven they can sell like crazy.

There are a lot of solutions out there that do make a lot of sense. And that’s why things are so exciting in cleantech right now.