Energy Efficiency

Energy efficiency refers to investments in energy demand reduction and more efficient energy delivery, aimed at extending the productive work performed by a fixed amount of energy.

Increased productivity of energy use offers reduced costs, increased profitability, and reduced risk to businesses and society. The US power grid is overburdened, outdated, and poorly suited to meet the demands placed on it by a modern digital economy. Efficiency improvements – largely but not entirely enabled by advances in information technology – represent the most capital-efficient and effective means to make up the projected gap between supply and demand and avoid power shortages and blackouts. Similar opportunities exist to use efficiency to reduce costs and improve the competitiveness of US manufacturers and other businesses relative to lower-cost foreign companies. In addition, efficiency offers the best means of reducing dependence on foreign supplies of energy and thereby improving energy security. The total energy efficiency market size is in the hundreds of billions of dollars.

Drivers

• High energy prices and long-term concerns about depletion of conventional energy supplies

• Increased competition from emerging economies for economic dominance as well as raw materials – making increased productivity of resource use a business imperative

• Significant potential for increased productivity of energy use – due to maturation of applicable technologies, a track record of their successful implementation, and business models to deliver them in ways that suit the needs of target customers

• The power grid suffers from both supply and quality problems, and distribution of power is suboptimal and insecure. A power grid upgrade will require massive capital investment but entails political risks – energy efficiency enables better use of existing infrastructure at lower cost

• Increasing government efficiency standards for vehicles and appliances, and regulations on carbon emissions – will increase costs of using dirty and inefficient technology

Areas of Investment Interest

• Industrial Efficiency – waste heat capture, energy management software, motors, pumps, lighting, cooling

• Smart Grid – advanced conducting cables, large-scale energy storage, advanced transformers, grid monitoring and management software and hardware, demand response, smart meters, “intelligent” appliances

• Green IT – data center efficiency (cooling, design, server efficiency), power supplies, semiconductors and other electronics, etc

• Commercial and residential energy use – lighting, heating, air conditioning

• Building Materials – opportunities to “re-invent” materials related to the entire building envelope, including insulation, windows, concrete, drywall, home design, etc.

• Transportation – technologies or systems providing incremental efficiency gains for auto/truck, rail, air, and marine applications including motors, fuels, power storage, electronics, new structural materials and coatings, etc

Institutional Quality Investment Vehicles

• Specialist Venture Capital Funds

• Private Equity Funds

• Direct/Co-Investments