Wednesday, July 22, 2009

Samsung Makes $4 Billion Investment To Become Green Leader

Samsung will invest over $4 billion to develop energy efficient products and reduce its carbon emissions 50% by 2013. Under its Eco-Management 2013 plan, it will spend $2.5 billion to improve the energy efficiency of its products, including TVs, refrigerators and air conditioning units. The remaining $1.8 billion will be invested in reducing carbon emissions from the company’s manufacturing plants.

The question is what is Samung's motivation? Samsung’s move may reduce manufacturing costs. Taking a lesson from the retail industry, perhaps Samsung’s motivation should be to enhance its marketing and public relations image. According to a Retail Systems Research and Retail Industry Leaders Association survey, retailers with above average growth emphasize the brand image aspect of green practices more than the cost saving aspect. Besides focusing on the energy efficiency of the stores, survey participants spend considerable time and effort on efficiency in information technology, and optimization of operations and supply chains.

Samsung’s announcement does not state whether the emphasis is on cost savings or brand image. However, the company wants to make the most energy efficient products in its product lines.

Wednesday, July 8, 2009

Pickens' Texas Sized Wind Plans Delayed

Wind energy has suffered a minor setback. Maybe a major setback.

T. Boone Pickens, an advocate of wind energy, has announced that he is delaying a 667 turbine wind farm he was planning to develop in Texas. The question is how long will the delay last.

Four factors worked against the plan.

1. The falling price of natural gas and oil made wind energy less attractive.

2. Pickens’ hedge funds have lost almost $1 billion dollars.

3. The plan was tied to Pickens’ plan to sell water. He owns the rights to more water than anyone else in the US. At the same time that Texas landowners objected to the plan, the Department of Justice batted down the law that would have allowed Pickens to use the power of eminent domain to lay his water lines and electricity lines. The water plan was probably the deal breaker for many landowners.

Despite his considerable financial backing, Pickens’ involvement may have doomed the project from the beginning. Many critics saw the plan more as way for Pickens to cash in on his water rights than to create jobs or benefit the state. When economic conditions are better, Pickens should try again without tying his wind ambitions to his water rights. He might have much better luck.

Tuesday, July 7, 2009

Google's Smart Grid Software For Plug-In Hybrid Electric Vehicles

In the contest between battery hybrid electric hybrids (BHEV) and plug in hybrid electric vehicles (PHEV), Google is placing a big bet on PHEVs. Google is developing software to deal with the additional load PHEVs will put on the smart grid. Not only the software aim to minimizes energy demand spikes, it also helps take advantage of solar and wind power. Both solar and wind, as inconsistent and lumpy sources of energy, can increase volatility to the electricity supply and prices.

PHEVs may overload the grid if consumers recharge their cars around the same time. Google believes that the grid must be able to handle this additional demand for PHEVs to become widely adopted. The company has a fleet of Toyota Priuses that have been converted to PHEVs.

Monday, July 6, 2009

Cleantech Investments Up, Especially In Autos

Good news on the cleantech investment front. Cleantech Group reports that investments in green technologies increased worldwide in the second quarter of 2009. Compared to the first quarter of 2009, investments increased by 12%, but were down 44% from the same quarter of 2008.

Investments in solar remain down, while investments in utilities and cars have risen. Automotive related companies drew the biggest percentage of clean-tech investments. Cleantech Group attributes this to the government's stimulus package for the automotive sector.

If correct, this is interesting given that some VCs have expressed the view that startups that receive stimulus funding are not “stand alone” ventures. See my post on the views of VCs toward cleantech here. Could it be that these VCs are wrongheaded? Clearly, some of the heavy hitters in the VC world are investing heavily in cleantech, including Kleiner Perkins, Khosla Ventures, and Draper Fisher Jurvetson.

Wednesday, July 1, 2009

Yahoo! Moves From Carbon Offsets To Energy Efficiency

In its efforts to be green, Yahoo! has decided to dump carbon offsets and focus on energy efficiency. The company has designed its new data center to be energy efficient rather than carbon neutral.

For companies like Yahoo, Microsoft, and Google, data centers are centerpieces of the business and consume large amounts of energy. The decision to emphasize energy efficiency is an important one. Yahoo! believes that energy efficiency will have a greater impact on the environment than a carbon neutral strategy would.

While that point is debatable, there could be other reasons for the switch. A carbon neutral strategy may be more expensive than an energy efficiency strategy. Yahoo! can maintain great control over its internal operations through an energy efficiency strategy. The company cannot control the green projects that carbon offsets fund, and those green projects are not internal to Yahoo!