Why Cleantech Investing Has Morphed Into Energy and Sustainability
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a generator that makes electricity from the exhaust gases of diesel generators used at mining sites and other industrial sites. The fact that it’s greener is good and may be worth publicizing, but the primary motivation of buying this type of product is to save money through efficiency.
Energy Ventures, for example, is dedicated entirely to making oil and gas operations cleaner and more efficient. It might be a stretch to call that cleantech. But these are willing customers, said partner Shantanu Agarwal. “There are a lot of inefficiencies in an oil field,” he said.
Indeed, it may be more useful—and socially impactful—to focus on developing products to modernize energy and other heavy industries. And it’s worth noting that oil and gas drilling in the U.S. is undergoing dramatic growth thanks to the spread of hydraulic fracturing and horizontal drilling.
Harvard Business School professor Joe Lassiter noted that startup C12 Energy originally wanted to sell its technology for storing CO2 underground to utilities as a way to lower emissions from power plants. Now, it’s working in the oil and gas business, where CO2 is injected underground to release more oil.
“There’s huge amounts of stuff to do here if instead of thinking about this as cleantech or green, you think of it as cleaner, safer, securer, and cheaper,” he said.
Some venture firms that did cleantech in the mid-2000s have shifted focus and taken on sustainability more explicitly. NGEN Partners, for instance, moved out of energy and into food and personal health. RockPort Capital Partners now calls itself a firm that invests in energy, sustainability, and mobile.
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