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 8th, 2013
Adviser to ESB Novusmodus Cleantech Fund
Scotland
Dublin 2012
2013
Renewable
“…the old
growth
Generation
model will
be selfdefeating.
Energy
Efficiency
Energy
Management
Trying to pursue
resource-intensive
growth will bring
growth to a stop.
It is simply not an
option.”
Investing
in toinnovative
companies
…“This is why we put forward
proposals
support the innovation
that is required for the
transition towith
more new
sustainable
growth.
Togetherfor
withthe
my colleague
Máire economy
Geogheghan-Quinn, we
energy
solutions
low carbon
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.”
Cleantech Funding
5 Point Overview
1
The Funding Challenge
2
Current Status
3
Market Trends
4
Funding Options
5
Why Cleantech investors might choose Ireland?
Funding Gap
4
Cleantech Funding
5 Point Overview
1
The Funding Challenge
2
Current Status
3
Market Trends
4
Funding Options
5
Why Cleantech investors might choose Ireland?
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
Cleantech Funding
5 Point Overview
1
The Funding Challenge
2
Current Status
3
Market Trends
4
Funding Options
5
Why Cleantech investors might choose Ireland?
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
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%
 $1 in every $8
invested in Cleantech
in 2012
Cleantech
share of total
venture
capital
investment
- Source NVCA / PWC
Saving energy is more cost efficient than generating it
Cost per
tonne of CO2
abated is key
Consider
move away
from grant
based focus
Supplier
obligations
are big UK
push driver
10
*Does not count for renewable target
Source: McKinsey/SEAI Ireland 2030 GHG abatement cost curve – reference scenario July 2009
1
0
Industry Trends
GOOD
• Renewable penetration increasing
• Low carbon price
• Solar PV costs halved
• Low natural gas price
• China embracing renewables
• Political, Regulatory & Support
• Large Corporates entering the market
Uncertainty
• New legislation
• Credit Crunch
• IT and telecoms players converging on
• Recession led demand reduction
Big Data opportunity in Smart Grid
• Electrification of heat & transport
commencing
• ESCO’s funding energy efficiency
11
CHALLENGES
• Reduced investment in 2012
• Utility divestment programmes
• Weak exit record
• Increasing funding challenge
Cleantech Funding
5 Point Overview
1
The Funding Challenge
2
Current Status
3
Market Trends
4
Funding Options
5
Why Cleantech investors might choose Ireland?
Funding Options
Equity
•
•
•
•
•
•
•
•
•
•
•
13
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
Cleantech Funding
5 Point Overview
1
The Funding Challenge
2
Current Status
3
Market Trends
4
Funding Options
5
Why Cleantech investors might choose Ireland?
1.
15
S
WHY IRELAND?
1. Top tier onshore wind resource
11. Emerging Irish cleantech companies
2. Top tier offshore wind resource
12. Seed and VC Funding
3. Top tier wave energy resource
13. Tier 1 FDI – IBM, United Technologies
4. Leading tidal technology exemplar
14. Asset development expertise
5. Ideal storage and export
15. Asset Management - Green IFSC
6. Single market, TSO and DSO
16. R&D Centres – ERC, Tyndall, UL, DIT
7. EV infrastructure leadership
17. Cleantech clusters - The Green Way
8. Clear Government targets
18. NDRC – Sand Box
9. Agency Support – SEAI, EI, EPA & IDA
19. IT & Telecoms expertise
10. Irish global cleantech industries
20. Smart grid leadership recognised by IEA