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ETI Dynamics, NZ’s Greenhouse Capital team up for $100m in Kiwi clean-tech exports

ETI Dynamics, NZ’s Greenhouse Capital team up for $100m in Kiwi clean-tech exports

Via National Business Review

Two clean-tech investors, London-based ETI Dynamics and Auckland-based Greenhouse Capital, have joined forces to invest $100 million in exporting New Zealand clean technologies into India, Asia and Africa.

The partnership was announced at the pair’s first bi-annual clean tech investment forum in Auckland today, which included discussions with companies seeking funding for offshore growth. Greenhouse Capital will also be a key partner for one of eight regional clean-tech innovation hubs that ETI Dynamics is setting up.

The partnership was a step forward for the Kiwi clean-tech sector and trade relationships with India, Greenhouse director Duncan Stewart said in a statement. He said ETI Dynamics had a large portfolio of projects in India and other regions could benefit from New Zealand’s technologies in this area.

ETI Dynamics has released a prototype solar electric hybrid scooter in India, which can travel 50 kilometres on a single charge at a top speed of 45 kilometres an hour. The company has said it’s planning to extend the concept to auto-rickshaws, buses and golf carts.

In March, ETI Dynamics, whose technology and engineering hub is in India, participated in two roadshows in Auckland and Christchurch as part of a trade and investment delegation.

It’s website says it signed eight memorandums of understanding on that trip with various Kiwi organisations including Lincoln University and the Canterbury Development Corporation.

It signed an MoU with Intelligent Green Energy NZ to develop utility-based and community oriented projects in New Zealand and the Pacific Islands in energy, drinking water, sanitation, and waste management. VR Power Dynamics, a joint venture between ETI Dynamics and VR Group, is also said to have signed an MoU with the Auckland company to provide green micro and mobile renewable energy solutions.

The website also said that ETI Dynamics develops infrastructure projects through extensive use of public private partnerships (PPPs) and Build-Own-Operate-Transfer (BOOT) deals. It had identified $US250 million of opportunities in New Zealand for such projects.

That included rooftop and off-grid solar power, hybrid marine energy systems, resource recovery from dairy and industrial waste, smart city development, electrical vehicle transport services and charging networks and LED lighting for local councils.

By Fiona Rotherham

Opinion: Bright funding future for Kiwi clean tech

Opinion: Bright funding future for Kiwi clean tech

Via The New Zealand Herald

The launch of Greenhouse Capital – New Zealand’s first and only dedicated clean tech investors – was announced at the New Zealand Cleantech & Environment Network (NZCEN) event hosted by Westpac on 20 May 2015. Six weeks later Greenhouse Capital has signed on more than NZD$240m of mandates from New Zealand companies seeking investment funding for growth of critical commercial infrastructure, and expansion into new domestic and export markets.

Continue reading …

GREEN TECH PROVIDES HIGH VALUE GROWTH

Via Smart Business.

The late Sir Paul Callaghan – an entrepreneurial kiwi, world-leading scientist and Rutherford Medal awardee, said in 2011 that New Zealand chooses to be poor because we don’t focus on leveraging our high-value innovation.

Nothing brings his insight into sharper focus than a recent steep drop in commodity prices, as our hard working farmers start feeling the effects of volume competition and exchange rate driven export market whimsy. Fonterra dropped its payout forecast for 2014-15 to an eight year low of $4.70/kg of milk solids. That’s nearly half of the previous season, and indicates an almighty drop of over $6.5 billion in farmer revenue – something all kiwis will ultimately be affected by. Continue reading …

Carbon-free NZ: kiwi cleantech

Carbon-free NZ: kiwi cleantech

via – The New Zealand Herald

New Zealand’s cleantech companies are world-class in developing low-carbon, environmentally friendly solutions.

First and foremost, it’s important to understand what the term ‘cleantech’ actually means. The working definition we tend to use is “a diverse range of products, services and processes that harness renewable materials and energy sources, dramatically reduce the use of natural resources, and cut or eliminate emissions and wastes.” So the key point is that ‘clean technology’ is not an industry sector as such, it’s a descriptor for a bundle of green goods and services that span across all industries.

Cleantech can be transformational in the sense that it can completely replace existing carbon or resource-intensive technologies, such as wind turbines replacing coal-fired generation, and it can also include the smaller components that fit into larger systems to deliver a lower overall environmental footprint, such as low-energy LED lighting in a building.

This definition helps when we consider the commercial opportunities and risks that cleantech represents; these are largely dictated by the strength of the industry sector to which the cleantech relates. In this way a ‘cleantech bubble’ is not possible, but there are certainly sector-specific examples where cleantech investment has become overheated, such as solar energy in Europe and first-generation biofuels in the US.

When we think about cleantech as an economic growth tool to deliver both efficiencies within an economy and revenue from trade export opportunities, (and yes it absolutely makes sense to do so), it is important to consider three key factors; firstly what commercial capabilities currently exist within the economy, secondly to characterise specific environmental vulnerabilities or challenges, and finally to be realistic about where and how it’s possible to compete internationally.

Cleantech is a global race. Denmark, South Korea, USA and many other nations are already setting the pace by stimulating sector-specific cleantech. Dire electricity grid problems in the U.S. provided an opportunity for skilled Silicone Valley tech entrepreneurs to innovate smart grid solutions. Israel’s highly limited water resource provided a great reason to accumulate efficient irrigation technologies. Denmark’s response to oil shocks was to introduce renewable generation. These nations now earn billions in export revenue from exporting sector-specific cleantech capabilities.

So what’s the big cleantech opportunity for NZ? The business group Pure Advantage recently released an independent review, Green Growth: Opportunities for New Zealand, where one of the key metrics the report highlighted was that 80% of NZ’s comparative trade advantage in some way relates to agriculture. No surprises there, but the more challenging question is this – if the future of farming is characterised by owning and adopting water-efficient, energy efficient, low-carbon and low-resource-intensity technologies and practices, what is New Zealand developing, commercialising and retaining the IP ownership of now, that will ensure that we are the leading ‘sustainable farmers of the future?’

Further analysis tells us that technologies which improve productivity while delivering benign or net positive environmental outputs are where we need to go, gumboots ‘n’ all. Examples include natural fertilisers, smart irrigation, wastewater management, methanogen reduction, seed systems, biological practices, food origin labeling… the list goes on. This is just one sector we have an advantage in, think also about our forestry, fisheries, design engineering and geothermal industries.

From an investment perspective New Zealand’s emerging cleantech market is plagued with good intentions, but notable pockets of real talent and opportunity exist. To better understand the commercial demographic and showcase New Zealand’s talent to interested international investors, I launched the New Zealand Cleantech & Environment Network (nzcen.com) in conjunction with New Zealand Trade & Enterprise.

What the back-end data tells us is that New Zealand cleantech companies are very good at delivering niche products. For innovative companies the investment opportunities are very real. For example, global juggernaut General Electric launched its multi-billion dollar cleantech investment fund, Ecomagination, in 2008. The resulting investments now deliver more than US$20 billion in revenue.

In February this year I sat on GE’s Ecomagination investment review panel and was thrilled to see that of the 35 shortlisted entries, seven New Zealand companies were interviewed, two of which were awarded AUD$100,000 innovation grants (congratulations again to Outpost Central and Hydroxsys). Investment discussions with more New Zealand companies are underway in conjunction with GE’s venture capital partners.

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Duncan Stewart is an environmental scientist and entrepreneurial investor with a passion for growth businesses and innovative technology. He holds a growing portfolio of cleantech companies under advisory brand The Greenhouse, is the CEO of green growth business group Pure Advantage, and a board member of the New Zealand electric vehicle association APEV.

By Duncan Stewart.

Growth in clean technology

Growth in clean technology

via – The New Zealand Herald

The Global Green Growth Institute (GGGI) Summit on 10-11 June 2013 in Seoul was an eye-opening experience for a number of reasons. In a practical sense the scale of South Korean organisational thinking is manifest in the Songdo Convensia – a vast ‘international city’ purpose-built to attract and retain this type of event; the Koreans realise that conferences not only make economic sense, they can also be used as a means of capturing intellectual innovation. Even more compelling was the depth of green growth strategic thinking and economic self-assessment demonstrated by attending nations. In this sense New Zealand has a lot be proud of, but it also has a lot to learn.

Green growth is not an abstract concept in South Korea, it’s a reality that delivers billions in economic returns and at the same time improves energy efficiency, water quality, food security and public health. The 27 core technologies deemed as useful solutions to environmental and energy challenges and facilitating transition to low-carbon, green industries have a total market value of USD$1.5tn, and are expected to be worth USD$5.7tn by 2020. Domestic bank loans for green business and projects are more than USD$4.5bn. Green investment funds total more than USD$1.5bn. Big business by any measure. ?Green growth was formally introduced in South Korea in 2008 by way of a ministerial taskforce under the auspices of then President Lee Myung-bak. The positive economic and environmental outcomes delivered by this leadership, in what was a relatively short five-year period, is now the subject of intense study for economists globally. True, if we look closely, Korea has significant tools that New Zealand does not; a 50-million strong population, a more central style of government and what we might politely refer to as ‘less emphasis on lifestyle’ than your average Kiwi.

But also remember that South Korea transitioned itself into a high-tech manufacturing powerhouse from a very poor post-war agricultural nation in the 1950s.

Insight, willingness and leadership can achieve great things. Some relevant lessons New Zealand can import from the South Korean experience, both in terms of green growth and for ‘cleantech’, as a more environmentally benign technological innovation subset of green growth, include:

Put the green debate to one side: environmental toxicity, resource constraints and inefficient use of energy eventually inhibit economic growth. Therefore the point at which a nation begins to steer its economy in a direction that is ‘sustainable,’ (i.e. “can continue in perpetuity”) dictates the extent of long-run cost adjustments that will inevitably be realised.

Capture diffuse value: Clean technology also provides environmental and social benefits not necessarily captured by the entrepreneur, so to encourage growth in specific markets, mechanisms need to be developed to account for this value, such as (a). increasing R&D via credit programmes, (b). providing direct finance and de-risking investment exits, (c). establishing business incubators and networks of incubators, and (d). scaling up existing technologies through direct funding.

Top-down policy requires bottom-up capability: Policy intervention works best when local/domestic entrepreneurial business systems are in place, especially for New Zealand’s predominantly SME business community, where capability tends to be thin.

Holistic investment approach: Encourage investors to stop thinking about picking winning companies, and instead think about creating winning ecosystems between customer, finance, technology and entrepreneurs.

Technology transfer can lead to technology dependence: Differentiate between technologies which accelerate performance and improve efficiency, and those creating an unaffordable dependence and contributing to energy intensity. Focus the nation on asset creation, not owning the latest heat pump or air conditioner.

Taking these factors into account, overall I am really encouraged by what I am seeing in New Zealand right now – excellent work by the likes of Land and Water Forum has lead to meaningful policy change around water management, regional and city economic development agencies are now looking at ways to embrace green growth through planning tools, and central government is taking a closer look at how long-term wealth might be generated by greening key aspects of the economy. Pure Advantage will shortly release details of our first three integrated workstreams underway in affordable energy efficient homes, woody-mass biofuel and sustainable agriculture. ?There is much to be done, but it does feel like real progress is being made.

ABOUT THE GLOBAL GREEN GROWTH INSTITUTE

The Global Green growth Institute was founded on the belief that “economic growth and environmental sustainability are not merely compatible objectives; their integration is essential for the future of humankind.” The organisation has been established by governments to maximise the opportunity for “bottom up” progress on environmental challenges within core economic policy and business strategies; with global climate change economists such as Lord Nicholas Stern sitting on their select Council. GGGI is funded by donor nations including Australia, Korea, UAE, Qatar, Norway and Denmark.

Duncan Stewart is an environmental scientist and entrepreneurial investor with a passion for growth businesses and innovative technology. He holds a growing portfolio of cleantech companies under advisory brand The Greenhouse, is the CEO of green growth business group Pure Advantage, and a board member of the New Zealand electric vehicle association APEV.

By Duncan Stewart

Clean Technology: The ‘go to’ guy in cleantech

Clean Technology: The ‘go to’ guy in cleantech

Via – The New Zealand Herald

Duncan Stewart hears every day from people around the world looking for what New Zealand can offer in clean technology.

He’s become the “go to” guy in cleantech because of his lead role in penning the Pure Advantage manifesto, subtitled “New Zealand’s Position in the Green Race.”

His company, The Greenhouse, offers advice to cleantech companies and also oversees NZ-CEN, the New Zealand Cleantech and Environment Network website, a directory to more than 100 member companies.

“People look to New Zealand because of our international image as a clean, green, pristine country,” says Stewart, sitting in his offices in a renovated heritage building in the Britomart sector.

“New Zealanders are also renowned for rolling our sleeves up. We’re working with one company in Dubai that likes kiwi companies because we get the job done and at good value compared with overseas. So the role of The Greenhouse is to connect the dots.”

It also has a recruitment subsidiary. “We regularly get inquiries from people looking for businesses to get involved with, so it made sense to provide an introduction service. The Greenhouse is trying to foster growth in this industry. That includes making sure the right talent goes in the right places.”

Stewart plans to launch a sub-$50 million cleantech fund later this year with a mix of local and international investors, giving him a direct stake in growing the sector.

“A lot of these businesses do not require huge amounts of capital to get to the next stage so we will look at early stage investment, introducing further funding partners once they get past the proof of concept or demonstrate they can access particular markets.

“Few companies I have come across in this cleantech space are capable of raising more than $5m, and for many of them, the gap between success and failure is the ability to raise up to about $2 million.”

Cleantech is not industry specific.

It could include everything from insulation to agricultural technology to nanotechnology.

“The things we look for include the governance and management capacity, the cash position, the growth potential, likely export growth, and the sophistication of the expertise behind the idea.

“Part of the idea of NZ-CEN was to provide the Greenhouse with some understanding of the depth and spatial distribution of these companies. It allows us to look under the hood and understand who are likely to be the leaders.”

Stewart sees things through the lens of environmental science. “If you take Fridays and Mondays off to go skiing you end up with a bachelors degree in environmental science,” he says.

After Auckland University he went to engineering company Beca, which exposed him to large infrastructure projects. ?In 2002 he and Aaron Andrew set up Andrew.Stewart Limited, a consultancy specialising in water quality issues, which put them in the box seat to help with the massive overhaul of Auckland’s stormwater and wastewater infrastructure.

Seeing how decisions are made in large organisations fed into The Greenhouse.

“Pure Advantage is an example of that. You have a complex issue that needs to be carefully articulated to a wide group of stakeholders in order to get some action,” Stewart says.

The lukewarm response the report got from the government doesn’t faze him, as its aim was more to get corporate leaders thinking.

“A lot of decision-making by successive governments has been underpinned by thinking that is fairly narrow and failed to take into account some of the mega shifts happening internationally.

“If you look at other countries, many are taking an interventionist approach looking at environmental issues but they are also looking at the upside and the opportunities that arise from that.”

The unequal size distribution of New Zealand business, with a few large companies and legions of tiny ones, is a challenge.

“It means those larger organisations have a responsibility to foster growth and innovation in smaller businesses as well.”

Global cleantech investment

Sweden
About 3,500 clean technology companies generate NZ$19 billion in revenue from exports, a quarter of overall sales and a figure that increased by 75% over the last five years. The government is earmarking NZ$750 million for environmental projects over the next two years to further boost the industry, including NZ$229 million to further commercialise green technology.

Denmark
Denmark’s continued investment in wind energy sees it employ 20,000 people, and Danish companies now make up 40% of the world market for wind turbines, with combined turnover of over $4.8 billion.
Denmark’s export of energy technology and equipment has more than tripled since 1989. Energy exports accounted for 11% of total Danish exports, or NZ$14 billion in 2008. This places Denmark at the top of GDP-weighted world rankings for clean energy exports.

Finland
A world leader in the production of wood products, Finland boasts a strong biomass-fuelled energy generation sector. The local forestry industry derives 73% of its energy from wood-based fuels, and biomass cogeneration systems account for almost 80% of industrial heating, 74% of domestic heating and 29% of national electricity. Finland’s National Climate Strategy Energy (2004) set out to double the annual use of forest chips to five million cubic meters (36 petajoules or PJ) for domestic consumption.
This is of interest to New Zealand, as our strong forestry sector means we have potential to emulate this type of biomass generation.

Australia
The Australian Government’s Clean Energy Future package, due to be passed later this year, will provide NZ$128 billion for clean energy over coming decades, including about NZ$13 billion to be distributed through the new Clean Energy Finance Corporation.?Australia’s established and substantial low carbon goods and services sector is currently growing at 4% per year.

By Adam Gifford.