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Energy Efficiency Firms Lead 'Global Cleantech 100' List

Business

Peter Miller

The new Global Cleantech 100 list of private companies breaking barriers with their clean technology ideas and executions across the worldwide economy finds that energy efficiency companies not only continue to dominate the list, but are growing in influence.   

For the past five years, the Cleantech Group has published an inventory of 100 companies it believes are most likely to have a large commercial impact in the next 5 to 10 years. The recently released  2013 version indicates the world economy is waking up to energy efficiency’s vast business potential, and its reach is spreading.

wenty-seven of the Global Cleantech 100 are energy-efficiency companies, which is seven more than last year. California, which leads the nation in overall clean energy development, is home to eight of the 13 U.S. energy efficiency firms named.

In all, the 2013 Global Cleantech list represents 15 different sectors, including solar, smart grid, transportation, biofuels and biochemical, and even agriculture and waste management. Compiled by 90 industry experts from more than 5,000 nominations, the list includes 56 U.S. companies while the rest come from 18 other nations.

The Global Cleantech 100 list includes 27 energy efficient businesses—seven more than last year. Photo credit: Cleantech Group

ENERGY EFFICIENCY FIRMS DOMINATE

Although the San Francisco-based Cleantech Group has been issuing its list since 2009, the authors note that “energy efficiency’s dominant presence on the 2013 Global Cleantech 100 makes a 42 percent increase in representation since the list’s inception.”

The authors say the growing importance of energy efficiency comes out of “investors’ distinct preferences today for business models that most closely resemble those of traditional capital – lighter and faster-to-market tech and software startups – proven money winners of the past.”

ENERGY EFFICIENCY AND THE ECONOMY

It’s heartening to see more proof that energy efficiency – doing more with less energy –  is an important economic driver as well as saving us money and avoiding pollution. This echoes the findings of NRDC’s new 1st Annual Energy and Environment Report entitled  America’s (Amazingly) Good Energy News. 

The new Cleantech report also underscores the expansion of energy efficiency as a job creator. The clean economy, according to a 2011 Brookings Institution report, employs more people than the fossil fuel industry. Earlier this year, Environmental Entrepreneurs(E2), a business group affiliated with NRDC that tracks new energy efficiency and other clean energy job announcements, launched a Clean Energy Works for US!  website thatshowcases the industry’s broad growth.

And, as Matt Lawson of Graybar Electric explained during an interview at the recent Chicago Energy Efficiency Expo, the efficiency business is growing rapidly, creating jobs of all kinds from installers to complex systems engineers.

EE COMPANIES ARE DIVERSE

The Global Cleantech 100 list also shows diversity within the efficiency industry is expanding. Energy efficiency covers not only high-performing light bulbs but home energy management, waste heat recovery, and green information technology. The top subcategory in the Cleantech 100 list was heating and cooling, which the report says has big appeal “given that the maintenance of indoor climate conditions accounts for 75 percent of the building sector’s energy demand.”

The top-rated North American company was Nest, of Palo Alto, Calif., for showing “the value of design to industrial products and fostering consumer interest in a dull product like the thermostat.”  

Meanwhile, Tendril, a home-energy management firm in Boulder, Colo., made a fifth straight appearance, making it one of only four companies (and the only efficiency one) to appear on every Cleantech Global 100 list.

The other U.S. energy efficiency firms:

  • Alphabet Energy of Hayward, Calif., which manufactures a solid-state semi-conductor that turns heat into electricity, “like solar panels that use heat — instead of light.” A car’s exhaust, for example, could be used to create electrical power and improve fuel efficiency.  
  • Digital Lumens of Boston networks light-emitting diodes and software for commercial and industrial venues. The “Intelligent Lighting System” aims to generate the same amount of light for 10 percent of the energy cost by pinpointing how much light to use and where to put it.
  • Enlighted in Sunnyvale, Calif., develops sensors that can be attached to individual lights to control energy use throughout a building. The system can also be adapted to control heating and cooling.
  • Gridium of Menlo Park, Calif., provides energy efficiency services that use a company’s online utility bill to identify energy savings and maintenance needs.
  • Nexant of San Francisco decribes itself as "an independent provider of intelligent grid software and clean energy solutions." 
  • Next Step Living of Boston offers home energy diagnostics and energy efficiency services.
  • Opower of Arlington, Va., is a developer of a software-as-a-service that utilizes customer engagement and billing analytics for utilities.
  • OSIsoft, San Leandro, Calif., provides real-time data infrastructure solutions for management of resource consumption and process performance.
  • Phononic Devices, Raleigh, N.C., has developed advanced thermoelectric devices that efficiently manage and monetize heat.
  • Project Frog of San Francisco builds energy-efficient component buildings that can be assembled onsite.
  • Transphorm, Goleta, Calif., says it has an efficiency breakthrough with a material known as gallium nitride, which can better process power and energy during the conversion of electricity from one form to another. 

This piece originally appeared on NRDC Switchboard.

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Ola Elvestrun, Norway's environment minister, announced Thursday that it is freezing its contributions to the Amazon Fund, and will no longer be transferring €300 million ($33.2 million) to Brazil. In a press release, the Norwegian embassy in Brazil stated:

Given the present circumstances, Norway does not have either the legal or the technical basis for making its annual contribution to the Amazon Fund.

Brazilian President Jair Bolsonaro reacted with sarcasm to Norway's decision, which had been widely expected. After an official event, he commented: "Isn't Norway the country that kills whales at the North Pole? Doesn't it also produce oil? It has no basis for telling us what to do. It should give the money to Angela Merkel [the German Chancellor] to reforest Germany."

According to its website, the Amazon Fund is a "REDD+ mechanism created to raise donations for non-reimbursable investments in efforts to prevent, monitor and combat deforestation, as well as to promote the preservation and sustainable use in the Brazilian Amazon." The bulk of funding comes from Norway and Germany.

The annual transfer of funds from developed world donors to the Amazon Fund depends on a report from the Fund's technical committee. This committee meets after the National Institute of Space Research, which gathers official Amazon deforestation data, publishes its annual report with the definitive figures for deforestation in the previous year.

But this year the Amazon Fund's technical committee, along with its steering committee, COFA, were abolished by the Bolsonaro government on 11 April as part of a sweeping move to dissolve some 600 bodies, most of which had NGO involvement. The Bolsonaro government views NGO work in Brazil as a conspiracy to undermine Brazil's sovereignty.

The Brazilian government then demanded far-reaching changes in the way the fund is managed, as documented in a previous article. As a result, the Amazon Fund's technical committee has been unable to meet; Norway says it therefore cannot continue making donations without a favorable report from the committee.

Archer Daniels Midland soy silos in Mato Grosso along the BR-163 highway, where Amazon rainforest has largely been replaced by soy destined for the EU, UK, China and other international markets.

Thaís Borges.

An Uncertain Future

The Amazon Fund was announced during the 2007 United Nations Climate Change Conference in Bali, during a period when environmentalists were alarmed at the rocketing rate of deforestation in the Brazilian Amazon. It was created as a way of encouraging Brazil to continue bringing down the rate of forest conversion to pastures and croplands.

Government agencies, such as IBAMA, Brazil's environmental agency, and NGOs shared Amazon Fund donations. IBAMA used the money primarily to enforce deforestation laws, while the NGOs oversaw projects to support sustainable communities and livelihoods in the Amazon.

There has been some controversy as to whether the Fund has actually achieved its goals: in the three years before the deal, the rate of deforestation fell dramatically but, after money from the Fund started pouring into the Amazon, the rate remained fairly stationary until 2014, when it began to rise once again. But, in general, the international donors have been pleased with the Fund's performance, and until the Bolsonaro government came to office, the program was expected to continue indefinitely.

Norway has been the main donor (94 percent) to the Amazon Fund, followed by Germany (5 percent), and Brazil's state-owned oil company, Petrobrás (1 percent). Over the past 11 years, the Norwegians have made, by far, the biggest contribution: R$3.2 billion ($855 million) out of the total of R$3.4 billion ($903 million).

Up till now the Fund has approved 103 projects, with the dispersal of R$1.8 billion ($478 million). These projects will not be affected by Norway's funding freeze because the donors have already provided the funding and the Brazilian Development Bank is contractually obliged to disburse the money until the end of the projects. But there are another 54 projects, currently being analyzed, whose future is far less secure.

One of the projects left stranded by the dissolution of the Fund's committees is Projeto Frutificar, which should be a three-year project, with a budget of R$29 million ($7.3 million), for the production of açai and cacao by 1,000 small-scale farmers in the states of Amapá and Pará. The project was drawn up by the Brazilian NGO IPAM (Institute of Environmental research in Amazonia).

Paulo Moutinho, an IPAM researcher, told Globo newspaper: "Our program was ready to go when the [Brazilian] government asked for changes in the Fund. It's now stuck in the BNDES. Without funding from Norway, we don't know what will happen to it."

Norway is not the only European nation to be reconsidering the way it funds environmental projects in Brazil. Germany has many environmental projects in the Latin American country, apart from its small contribution to the Amazon Fund, and is deeply concerned about the way the rate of deforestation has been soaring this year.

The German environment ministry told Mongabay that its minister, Svenja Schulze, had decided to put financial support for forest and biodiversity projects in Brazil on hold, with €35 million ($39 million) for various projects now frozen.

The ministry explained why: "The Brazilian government's policy in the Amazon raises doubts whether a consistent reduction in deforestation rates is still being pursued. Only when clarity is restored, can project collaboration be continued."

Bauxite mines in Paragominas, Brazil. The Bolsonaro administration is urging new laws that would allow large-scale mining within Brazil's indigenous reserves.

Hydro / Halvor Molland / Flickr

Alternative Amazon Funding

Although there will certainly be disruption in the short-term as a result of the paralysis in the Amazon Fund, the governors of Brazil's Amazon states, which rely on international funding for their environmental projects, are already scrambling to create alternative channels.

In a press release issued yesterday Helder Barbalho, the governor of Pará, the state with the highest number of projects financed by the Fund, said that he will do all he can to maintain and increase his state partnership with Norway.

Barbalho had announced earlier that his state would be receiving €12.5 million ($11.1 million) to run deforestation monitoring centers in five regions of Pará. Barbalho said: "The state governments' monitoring systems are recording a high level of deforestation in Pará, as in the other Amazon states. The money will be made available to those who want to help [the Pará government reduce deforestation] without this being seen as international intervention."

Amazonas state has funding partnerships with Germany and is negotiating deals with France. "I am talking with countries, mainly European, that are interested in investing in projects in the Amazon," said Amazonas governor Wilson Miranda Lima. "It is important to look at Amazônia, not only from the point of view of conservation, but also — and this is even more important — from the point of view of its citizens. It's impossible to preserve Amazônia if its inhabitants are poor."

Signing of the EU-Mercusor Latin American trading agreement earlier this year. The pact still needs to be ratified.

Council of Hemispheric Affairs

Looming International Difficulties

The Bolsonaro government's perceived reluctance to take effective measures to curb deforestation may in the longer-term lead to a far more serious problem than the paralysis of the Amazon Fund.

In June, the European Union and Mercosur, the South American trade bloc, reached an agreement to create the largest trading bloc in the world. If all goes ahead as planned, the pact would account for a quarter of the world's economy, involving 780 million people, and remove import tariffs on 90 percent of the goods traded between the two blocs. The Brazilian government has predicted that the deal will lead to an increase of almost $100 billion in Brazilian exports, particularly agricultural products, by 2035.

But the huge surge this year in Amazon deforestation is leading some European countries to think twice about ratifying the deal. In an interview with Mongabay, the German environment ministry made it very clear that Germany is very worried about events in the Amazon: "We are deeply concerned given the pace of destruction in Brazil … The Amazon Forest is vital for the atmospheric circulation and considered as one of the tipping points of the climate system."

The ministry stated that, for the trade deal to go ahead, Brazil must carry out its commitment under the Paris Climate agreement to reduce its greenhouse gas emissions by 43 percent below the 2005 level by 2030. The German environment ministry said: If the trade deal is to go ahead, "It is necessary that Brazil is effectively implementing its climate change objectives adopted under the [Paris] Agreement. It is precisely this commitment that is expressly confirmed in the text of the EU-Mercosur Free Trade Agreement."

Blairo Maggi, Brazil agriculture minister under the Temer administration, and a major shareholder in Amaggi, the largest Brazilian-owned commodities trading company, has said very little in public since Bolsonaro came to power; he's been "in a voluntary retreat," as he puts it. But Maggi is so concerned about the damage Bolsonaro's off the cuff remarks and policies are doing to international relationships he decided to speak out earlier this week.

Former Brazil Agriculture Minister Blairo Maggi, who has broken a self-imposed silence to criticize the Bolsonaro government, saying that its rhetoric and policies could threaten Brazil's international commodities trade.

Senado Federal / Visualhunt / CC BY

Maggi, a ruralista who strongly supports agribusiness, told the newspaper, Valor Econômico, that, even if the European Union doesn't get to the point of tearing up a deal that has taken 20 years to negotiate, there could be long delays. "These environmental confusions could create a situation in which the EU says that Brazil isn't sticking to the rules." Maggi speculated. "France doesn't want the deal and perhaps it is taking advantage of the situation to tear it up. Or the deal could take much longer to ratify — three, five years."

Such a delay could have severe repercussions for Brazil's struggling economy which relies heavily on its commodities trade with the EU. Analysists say that Bolsonaro's fears over such an outcome could be one reason for his recently announced October meeting with Chinese President Xi Jinping, another key trading partner.

Maggi is worried about another, even more alarming, potential consequence of Bolsonaro's failure to stem illegal deforestation — Brazil could be hit by a boycott by its foreign customers. "I don't buy this idea that the world needs Brazil … We are only a player and, worse still, replaceable." Maggi warns, "As an exporter, I'm telling you: things are getting very difficult. Brazil has been saying for years that it is possible to produce and preserve, but with this [Bolsonaro administration] rhetoric, we are going back to square one … We could find markets closed to us."

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