April 2009
The current economic downturn may be painful but one thing is certain - when it passes, demand for energy will continue to grow and supplies of fossil fuels will continue to dwindle. The need to innovate and diversify our energy landscape won’t have disappeared. Hydrogen fuel cells represent a versatile, clean and highly efficient alternative that can find applications across a range of sectors. No doubt others will have differing opinions as to the most promising clean technologies, but let me first suggest a few broadly-acceptable criteria for new energy players - those that make the grade will need the following characteristics:
- Potential for return on investment - the profit motive will always be the major driver of innovation
- Reliability – an alternative to the status quo must be robust
- Scalability – new technology must be able to be diffused into the lives of millions of people
- Consumer-friendly – how will it make life easier?
Let’s be clear: there is a compelling need for alternatives. Energy diversity is the key to energy security, and we need to investigate as many new technologies and clean power options as possible. Many will fail, but those that pass these litmus tests will find themselves at the heart of huge markets in utilities, transport and portable power. There is precious little excess capacity in the power grids of the developed world and we can’t shrink our way to prosperity. The task facing us now is to provide sustainable growth, and that starts with the energy sector. The future promises an energy mix that draws upon a wide variety of traditional, renewable and clean sources, more so than ever before- what remains to be seen is what these sources are, and how they become integrated into the next generation of energy networks.
A huge investment opportunity
In spite of current economic conditions, the business case for hydrogen and other clean power options remains strong. Few companies will find the trading climate of the next 12 to 18 months easy, but the long term vista hasn’t changed. Oil price volatility will remain, and Shell believes that by 2015, growth in the production of easily accessible oil and gas will not match the projected rate of growth in demand. Indeed, while the debate on the exact timing of Peak Oil – the point at which the maximum rate of global petroleum extraction is reached - continues, there’s no escaping the fact that reserves will expire before many of us do.
BP’s Statistical Review of World Energy for 2008 estimates that the world will run out of oil in 41.6 years, but we can’t afford to wait until August 2049 to take urgent action to fill the gap this will leave. The evidence to date suggests that investors grasp that urgency. Capital investment in US cleantech companies reached a record $1.6 billion in the third quarter of 2008, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource.
Energy-intensive growth in emerging markets, coupled with the accessibility of consumer lifestyles in countries such as India and China, means the global carbon footprint will grow rapidly in the coming years. Add to that the fact that world population is predicted to increase by 40% by 2050. There will be three people on the planet by 2050 for every two today. Investment in clean energy must be maintained if we are to provide for all of them in a sustainable future.
The potential for attractive returns on investment for clean energy has been demonstrated. According to the most recent Clean-Energy Trends report from research firm Clean Edge, which has been tracking the growth of clean energy markets since 2000, revenue for solar photovoltaics, wind, biofuels and fuel cells grew by 40% in 2007, up from $55 billion in 2006 to $77.3 billion in 2007. Meanwhile, the fuel cell and distributed hydrogen market is predicted to grow from a $1.5 billion industry to $16 billion over the next decade.
But numbers like this fail to capture the revenue opportunity of delivering clean energy to consumers – hydrogen can be central to powering our mobile phones and laptops, fueling our cars, and heating our homes. Intelligent Energy’s vision is just that – to be the world’s first consumer clean energy company, embedded into the technology, our partner’s products, which we all rely on in our daily lives. We’ll see it first most likely in portable power; levels of ‘on-body’ energy usage have rocketed in recent years, with the advent of a range of consumer electronic devices harbouring significant processing power. That trend will continue so new means for providing the energy to feed them will have to be found, as battery improvement development can not keep pace with this increasing demand. It’s a huge opportunity that clean power can address in the coming years.
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