SUPPORTING ROLL-OUT OF INNOVATIVE SOLUTIONS

Transcription

1 SUPPORTING ROLL-OUT OF INNOVATIVE SOLUTIONS The Venture Capital Perspective John McKiernan, Partner, Greencoat Capital SET-Plan Conference 2013 Royal Hospital Kilmainham, Dublin Wednesday, May 8 th, 2013

2 the old Renewable growth model will Generation be selfdefeating. Trying to pursue resource-intensive growth will bring growth to a stop. It is simply not an option. Adviser to ESB Novusmodus Cleantech Fund Energy Efficiency Scotland Dublin Energy Management Investing in innovative companies This is why we put forward proposals to support the innovation that is required for the transition to with more new sustainable energy growth. solutions Together for with the my colleague low carbon Máire economy Geogheghan-Quinn, we put forward proposals for Horizon 2020, the EU s new programme for research and innovation, to dedicate around 60 % of its resources to sustainability, environment and climate change.

3 Cleantech Funding 5 Point Overview 1 The Funding Challenge Current Status Market Trends Funding Options Why Cleantech investors might choose Ireland?

4 4 Funding Gap

5 Cleantech Funding 5 Point Overview 1 The Funding Challenge Current Status Market Trends Funding Options Why Cleantech investors might choose Ireland?

6 Current Funding Status A lot slower to exit/ IPO market weak Reserve funds locked up Difficult to raise new funds Uncertainty in regulation Only highest quality making it Utilities reviewing own funding Strategic investments suffering 6

7 Cleantech Funding 5 Point Overview 1 The Funding Challenge Current Status Market Trends Funding Options Why Cleantech investors might choose Ireland?

8 Strong Renewable Energy Growth Global renewable energy sector has seen a 5X growth over the past decade to $269bn, despite the global economic slowdown Over 40% of new generation capacity investment worldwide in 2012 was renewable Annual renewable investment greater than fossil in Europe Significant renewable energy investment continues

9 USA Private Equity/VC Cleantech Experience Cleantech has emerged as one of the Top 3 Sectors along with Software and Biotech Venture Capital investment in US Cleantech $3.3 billon invested in US Cleantech in 2012 Overall VC investment down 9% on 2011; Cleantech down 28% Cleantech share of total venture capital investment $1 in every $8 invested in Cleantech in Source NVCA / PWC

10 Saving energy is more cost efficient than generating it Cost per tonne of CO2 abated is key Consider move away from grant based focus 10 Supplier obligations are big UK push driver *Does not count for renewable target Source: McKinsey/SEAI Ireland 2030 GHG abatement cost curve reference scenario July

11 Industry Trends GOOD CHALLENGES Renewable penetration increasing Solar PV costs halved China embracing renewables Large Corporates entering the market New legislation IT and telecoms players converging on Big Data opportunity in Smart Grid Electrification of heat & transport commencing ESCO s funding energy efficiency Low carbon price Low natural gas price Political, Regulatory & Support Uncertainty Credit Crunch Recession led demand reduction Reduced investment in 2012 Utility divestment programmes Weak exit record Increasing funding challenge 11

12 Cleantech Funding 5 Point Overview 1 The Funding Challenge Current Status Market Trends Funding Options Why Cleantech investors might choose Ireland?

13 Funding Options Equity Angel Investment HBAN BES/ EIIS (Employment & Investment Incentive Scheme) Venture Capital / Private Equity/ VCT Crowd Strategic Corporate Energy Technologies Institute GIB / KFW / EI Listing AIM Infrastructure Funds Pension Funds 13

14 Cleantech Funding 5 Point Overview 1 The Funding Challenge Current Status Market Trends Funding Options Why Cleantech investors might choose Ireland?

15 1. S WHY IRELAND? 1. Top tier onshore wind resource 2. Top tier offshore wind resource 3. Top tier wave energy resource 4. Leading tidal technology exemplar 5. Ideal storage and export 6. Single market, TSO and DSO 7. EV infrastructure leadership 8. Clear Government targets 9. Agency Support SEAI, EI, EPA & IDA 11. Emerging Irish cleantech companies 12. Seed and VC Funding 13. Tier 1 FDI IBM, United Technologies 14. Asset development expertise 15. Asset Management - Green IFSC 16. R&D Centres ERC, Tyndall, UL, DIT 17. Cleantech clusters - The Green Way 18. NDRC Sand Box 19. IT & Telecoms expertise Irish global cleantech industries 20. Smart grid leadership recognised by IEA