Department of Energy Secretary Chu announces $93 million from the Recover Act to support the development of additional wind energy in the United States. The money will support R&D and testing for wind turbine drivetrains, support university and industry consortia focusing on critical wind energy challenges, advanced technology development in the private sector and a National Wind Technology Center in Colorado.
Chu also announced the National Renewable Energy Laboratory will receive $100 million for infrastructure projects. The largest is the development of an energy efficient LEED Platinum certified office, constructed at the same cost as that of a low efficiency commercial office building. The others are to use solar and other green energy sources to reduce the labs carbon use and to upgrade the integrated bio-refinery research facility used to develop commercial scale cellulose to ethanol technologies.
During his visit to the Golden, CO facility Chu stated that $26 billion of the more than $100 billion in the Recover Act for renewable energy projects had already been authorized with the goal of 70% being authorized by early September. He also discussed streamlining the DOE loan approval process with the goal of reducing the time to getting a loan application approved to a few months. It has been known to take years under the current process.
It is great to see some of this huge spending bill is being directed to innovation and more importantly that this is being coordinated with private industry. There continues to be a gap in funding for the commercialization of proven technologies. Until this gap is filled, the great innovation from the labs and universities will be delayed in helping solve our energy issues.
Bob Metcalfe, using the history of the Internet as a guide, provided his list of things to look for and look out for in the changing energy sector.
Metcalfe gave an optimistic view of the environmental challenge suggesting not only are we in a Global Warming Bubble but that cheap, clean energy will be so abundant, it will easily be squandered.
He suggested the best place for research is in the research universities and not in government labs which are “nothing more than local earmarks”. In this model, professors along with their graduate students, will commercialize innovation with the help of entrepreneurs and venture capital.
Metcalfe warned that energy and environment are two overlapping issues and they should be viewed as two things. Otherwise, we may solve energy without solving the environment or vice-versa. Oh, and he offered a new color for clean energy, blue.
McKinsey’s Matt Hirschland interviewed economist Nicholas Stern in Brussels this past January. You can read the transcript here or click below to watch the video.
Trading activity picks up for carbon financial instruments (CFIs) after the release of President Obama’s budget. Even though the budget does not include revenue from carbon allowances until 2012, future contracts prior to this date moved higher. Some people believe these instruments can be used as early action credits in a federal cap and trade system.
Between 2012 and 2020, nearly $645 billion could be raised from the sale of emission allowances, the budget outline says.
According to Point Carbon (subscription) estimates, that would assume around 80 per cent of the economy would face caps on their greenhouse gas output starting 2012 at 2005 levels, or roughly 7.2 billion tonnes of carbon dioxide equivalent.
This means the budget is banking on carbon prices of nearly $13.70 per tonne by 2012.With the cap declining around 2 per cent per year after 2012, Point Carbon estimates the price of carbon in 2020 would go up to $16.5 per allowance.
So just what is a cap and trade system and how does it work? MSNBC has a Frequently Asked Questions page that answers this question. While President Obama signaled his desires in his budget, congress is required to pass the legislation and the details. Many experts are suggesting legislation is unlikely this, however “Powerful Democrats such as House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., have said they would work hard to get legislation passed by this summer.”
Earlier this week, the White House stated a climate bill passed in 2010 would be fine as long as it included the critical components President Obama included in his campaign promises. This is consistent with President Obama’s budget which includes revenue for carbon cap and trade allowances of $658 billion in total for the years 2012 through 2019. $150 billion of this will be committed to invest in clean energy along with tax credits.
2008 was a bumper year for wind energy investment. The US added 8,300 megawatts (MW) of wind energy to lead the world with 25,170 MW. 42% of the country’s new power-producing capacity came from wind. The 50% increase in wind power generation also created 35,000 jobs bringing the total employee bast to 85,000.
Worldwide over 27 gigawatts (GW) of wind capacity was added. China doubled capacity to 12.2 GW and is on tract to double capacity again in 2009 and may reach its goal of 30 (GW) by 2010, ten years ahead of plan. All of Asia added about 8.3 GW with Europe and North America adding 8.9 GW each.
In the US, the financial crisis hit the wind industry and orders for turbines and components has slowed to a trickle. This needs to be reversed quickly if the US is to stay ahead of schedule to reach 300 GW of wind capacity, or 20% of our electricity needs, by 2030.
Citing lower forecasts in 2009 output along with an increase in the number of firms announcing temporary shutdowns, analysts are scaling back their forecasts for carbon emissions and the price for allowances for those emissions. Societe Generale has cut their forecast for EUAs a third to 17 euros a ton. They went on to say prices could rise to 20 euros by 2012, sharply down from estimates earlier this year that prices would reach 37 euros during this timeframe.
Deutsche Bank believes EU emissions in 2009 could be 10% below 2007 levels. This would push emissions below allowances for 2009. The excess allowances for 2009 can be “banked” for use through 2012 and the forecasted emissions for 2009-2012 remain slightly above the EU carbon allowances. As a result of reduced emissions and smaller shortfall, UN-approved Certified Emission Reductions (CERs) which EU industry can import from developing nations to meet compliance, may be able to meet the entire shortfall. Price estimates for EUAs and CERs clearly indicate analysts believe CERs will set the pricing for EUAs for the next few years.
The good news is EU will be able to meet the allowances under phase 2 with a small “carbon price” in this recessionary period. This is also the bad news, as the lower price reduces the investment per ton of CO2 available for carbon abatement projects. The net is by 2012, the European Union will have done less and perhaps much less to lower the Green House Gases (GHG) they produce per unit of energy they consume than anticipated when the allowance allocations were set.
The Generation WE movement is the largest generation in history, they are independant – politically, socially, and philosophically – and are spearheading a period of sweeping change in America and around the world. Check it out.
The McCain – Clinton Gas Tax Holiday is a farce and voters are beginning to realize this. Of course, Obama has been correctly outlining the problems all along. There are numerous problems with this approach even if the money would trickle into the hands of the consumers who most need it and therefore spend it on other items. At 18.4 cents per gallon, the family burning two gallons per day would receive a savings of $11 dollars per month or 5% of the cost of gasoline at the current $3.61 per gallon.
And of course, it is a proposal that few in Congress support and President Bush will veto. So, it’s a non-starter and perhaps in the eyes of two candidates a safe proposal aimed to win voter favor without having all the downsides. And there are several.
First of all, the tax generates revenue to pay for roads and bridge maintenance, which if anything is too small for our aging infrastructure. Of the three ways to pay for this, Clinton suggests taxing the windfall profits on Oil Companies while McCain says cut other spending. Let’s start with McCain. Congress has shown little appetite for cutting spending and the Whitehouse seems to agree that deficits matter not to voters. So, he is really offering the third option of borrowing to pay for this when we need to do the opposite.
Clinton wants to tax the Oil companies with a Windfall Profit tax which would do two things. First of all, it would diminish the expected returns on oil production and over the long term would decrease supply. It would in the short term put higher price pressure on Oil and with more demand coming during the summer driving season, it is more likely this added tax expense would be passed on to consumers.
If you want to help consumers and the retailers they visit, there are better ways to insure the money get to the right people. The stimulus package aims (many would argue aims poorly) to get $600 to those who need it most and are most likely to use it. The gas tax suspension would do no such thing.
And now here is the real catch. The realities of market economics cannot be suspended. Demand will increase to a point where it meets supply. Fiddling with the gas tax will not change this and the US Fuel Retail system has very little slack capacity. Therefore, supply is relatively inelastic and prices will move with demand. Bottom line, the gas tax will be eaten by the Gasoline Value Chain and consumers will be left with little in their pocket other than a higher debt and nothing done to solve the longer term energy issues. It’s bad policy, bad economics and it is time for us to show politicians, that pandering for votes is bad politics.
The New York Times reports that Venture Capitalist invest in 922 deals in the first quarter of 2008, compared to 861 in the same period last year. The total amount invested was down 5% causing the times to lead with the headline Venture Capitalists Invest Less In First Quarter – New York Times.
“We do not expect to see significant declines in investment levels in the coming year,” said NVCA President Mark Heesen.
Is this additional evidence that media outlets lean toward a doom and gloom outlook or are they just following the current sentiment of their readership? Just be sure to read past the headlines.
Now you can generate energy and pump clean water by just being a kid.
Developed by Daniel Sheridan, now a British student at Coventry University, the Springwise: See-saw power for schools generates electricity while kids play on it. Brilliant!
The Regional Greenhouse Gas Initiative (RGGI) has set the rules for the first allowance auctions to take place on September 10, 2008 and December 17, 2008. This is the first mandatory CO2 emissions reduction program auction in the United States. Quarterly auctions will take place after these first two. These companies have won the right to work with RGGI on aspects of the program: World Energy Solutions, Inc., Perrin Quarles Associates, Inc., ICF International, and the Greenhouse Gas Management Institute.
is a must read and this one is no exception. Continuing last year’s scolding of the sub-prime mortgage banking industr, my favorite lines included these:
John Stumpf, CEO of Wells Fargo, aptly dissected the recent behavior of many lenders: “It is interesting that the industry has invented few ways to lose money when the old ways seemed to work just fine.”
You only learn who has been swimming naked when the tide goes out – and what we are witnessing at some of our largest financial institutions is an ugly sight.
Chris Anderson’s at Wired discusses where, why and how free products make sense today and will make make even more sense (and cents) in the future. Starting with the story of Gillette and bringing us to the plummeting cost of computing and networking, Anderson argues that the traditional cross-subsidy model is not required when incremental costs approach zero. This opens the way for numerous value creation models when a product is given away and allows companies to avoid the “penny gap” or the difference between cheap and free as coined by Josh Kopelman.
“People think demand is elastic and that volume falls in a straight line as price rises, but the truth is that zero is one market and any other price is another. In many cases, that’s the difference between a great market and none at all.
“The huge psychological gap between “almost zero” and “zero” is why micropayments failed. It’s why Google doesn’t show up on your credit card. It’s why modern Web companies don’t charge their users anything. And it’s why Yahoo gives away disk drive space. The question of infinite storage was not if but when. The winners made their stuff free first.”
Speaking of the TXU purchase, Mr. Bonderman said the company was adept at running a profitable company and equally bad at politics from price increases to ecology to labor relations. These shortcomings lead tothe opportunity which focused on addressing these public concerns.Opportunities for private equity include exploiting public investorsfocus on short term focus, their dislike for debt or leverage, fixingbroken companies and putting companies together that changes thecompetitive landscape.His advice to students wondering which classes to take for a career inprivate equity, which job to take this summer, which classes to takenext year is to “Just relax”.In looking at the public policy of the US, Bonderman says ourlawmakers are thinking like it is 1975 when the US represented 50% ofthe world’s GDP. Now that we are less than 30% and falling the rest ofthe world has choices and will not play by any US tax code.Best run companies are those which build value over long periods oftime. However, fund managers often are looking for short term gains.This makes creating proper incentives for publicly traded companies’managers sub optimal if not downright harmful.
The 4 hour work week is an interesting and educational book, even for those who would not choose to work only half a day each week. It pushes you to think about different ways to get your job done and to think differently about which activities you keep inside and which you push to others. And at the same time think differently about careers, yours and that of other workers in your company.
Tim Ferris asks you to consider these questions as he recommends helping to make the world a better place through access to books in LitLiberation: How to Travel the World–and Get a Personal Assistant–for Free
Envision the 5 books that have most impacted your life. How would your life be different if you’d never read them?
Where might you be today if you’d never met the most influential teachers in your life, past and present?
How would your options be affected if you could never again read a book, menu, or sign?
Even though the most likely outcome for a successful technology company is via an acquisition, I have never liked the idea of planning for it. Plans and actions then often go away from what will help our customers and help us succeed in the market to what would ABC Inc. like to see in an acquisition target. Rarely do the two line up and even then the focus goes away from key items required to build long term sustainable value.
Guest blogger Will Price offered a sound plan for building value in a post on Ask The VC. Responding to a question regarding how to prepare for an acquisition exit, Will provided details around these three items.
1) Plan for Independence
"The company’s operating plan, technology road map, and executive team should not focus on unnatural acts, in the hopes of attracting a buyer, but rather on building a company with the potential for independence. Companies built to "flip" often flop."
2) Be prepared for acquisition
"…acquirers tend to believe that successful partners make the best acquisition targets. "
3) Keep the house in order
"good record keeping makes for good diligence and good diligence makes for expedited outcomes."
Maximize your "best alternative to a negotiated agreement" (BATNA) and your will be well on your way to delivering value to all your stakeholders.
Why are private boards putting more value on the efforts of top managers than comparable public companies? With no doubt there have been compensation structures for CEOs that were neither aligned with the interest of the shareholders or other stakeholders in the corporation. However, the comparison between the pay at the top of the organization and that at lower levels really misses the mark. This comparison just happens to be simple to calculate, easily understood and highly contentious.
The true value of a CEO is her ability to improve the value of the company. The best way to measure this is to compare the value increase to other similar companies in order to remove the value increase or decrease that impacted all companies in the sector.
The cost of the CEO should be market driven with significant portions based on performance. What is the market rate for a CEO with these skills and necessary experience? Just as the top performers in movies or baseball games are paid many multiples the salary enjoyed by their peers due to the short supply of “stars”, CEOs are short in supply as well.
What is surprising here is that private companies with active investors on their boards are offering higher compensation for these talents than the generally less active boards of public companies? I would suggest that the backlash of the “compensation scandals” have the compensation committee of public companies swinging too far in the conservative direction. The swing was needed, let’s hope it does not continue so that public companies become the minor league training camps for CEO destined to play in the private company major leagues.
Public CEOs take to private firms in order to get top dollar as shown in Private Firms Lure Chief Executives With Top Pay – New York Times
In Web start-ups snub the big money, the International Herald Tribune suggests this is a trend that should be expected to continue for a few if not spread to many companies in the space.“By then, Meebo was being courted by venture capitalists, but it decided to take a modest $100,000 from three angel investors, people who typically contribute small amounts and make few demands.
“We had a bunch of VCs talking to us about potentially putting more money in,†Sternberg said. “We said no. A lot of things happen when you raise a VC round, and they really slow you down.â€
Eventually, Meebo did raise money from venture investors – about $3.5 million from Sequoia Capital. But that was after the company was well on its way to showing that its service was a hit with consumers. At the time, Meebo had about 200,000 daily log-ins.â€
Ta-Da! Cheaper Stock Options! Are stock Betas, volatility, really going down as fast as stock option valuations suggest. This article suggest they are not.
Look, the only reason any investor wished companies to expense options is to reduce the number of options granted. An appropriate goal, perhaps, I question the approach.
There is limited value to investors by adding another non-cash item to earnings. Especially, one so difficult to value or in other words so easy to manipulate. Future cash flow per share is the metric investors desire and the information needed is how many options will vest over time and what is the dilutive impact on cash flow per share. Oh, and make sure you are getting our money’s worth when you grant future cash flows to employees via stock option grants.
The excellent series on the History Channel, 10 Days that Unexpectedly Changed America, continues to be very educational and quite entertaining. Watching these 10 events, I feel compelled to add and question if perhaps other unexpected events would be in my top 10. Their events are:
Massacre at Mystic
Shays’ Rebellion: America’s First Civil War
Gold Rush
Antietam
The Homestead Strike
Murder at the Fair: The Assassination of President McKinley
Scopes: The Battle over America’s Soul
Einstein’s Letter
When America Was Rocked
Freedom Summer
After reading the list, I could not help notice the lack of inclusion of events drawing the US into a war. The sinking of the Lusitania, the attack on Pearl Harbor, and the Gulf of Tonkin. While all of these lead to war and perhaps one could predict it, the total cost and impact to the country could not have been known by anyone.
Nothing on this list leads to the US declaring its independence from England. I’m not sure I can point to a single day that led the founding fathers to make that decision and the country to make the required sacrifice. The events that come to mind fill today’s elementary school books. The Shot Heard Round the World, seems to fit the bill. However, this was in volatile New England and may have meant little to a New Yorker or Georgian. Bunker Hill (Breed’s Hill) is another event following the Boston Massacre that could have set the country on a direction of succession.
Economic events include The Federal Reserve, going off the gold starndard and, my favorite, the invention of the semiconductor which has to rank very high in terms of impact to the US and the world.
or overstepping the boundaries of government? Which of these best describes the recent “Healthcare for All” bill supported by an overwhelming majority of the Massachusetts Legislature (154 to 2 in the House and 37 to 0 in the Senate) and Govenor Mitt Romney? The plan’s objective is one shared by all concerned about the unisured, responsible quality healthcare for all. It differs from many other universal plans in several ways.
The bill requires individuals to provide personal coverage, just like the state’s laws on auto coverage. Massachusetts is the first state requiring individuals to have health insurance or prove they can self-insure.
In addition, the bill provides funds to make sure those eligible for Medicare and Medicaid are enrolled. It subsidies healthcare insurance for those who don’t qualify for government programs and can’t afford insurance. The state expects to pay for the subsidies out of a $1 billion fund set aside for providing healthcare for those who can’t afford it.
The bill currently requires employers to pay $295 per unisured employee. “That’s likely to be adjusted by me,” stated Governor Romney. Will he wield the line-item veto pen?
Massachusetts now spends about $1 billion a year to provide emergency health care for at least 500,000 uninsured citizens. About 200,000 of those are young people, predominantly male, who are making enough money to buy health insurance but figure they don’t need it. They would be required to buy a relatively inexpensive health insurance policy, with higher deductibles and co-pays—that’s where the “mandate” comes in. Another 100,000 are extremely poor people who are eligible for Medicaid; a concerted effort would be made to bring them into the system. The remaining 200,000 are the people who have been most neglected by the system in the past: the working poor, people who have low-end service jobs or work part time for employers who don’t offer health coverage.
According to USA Today, Mass. Gov. Romney’s health care plan says everyone pays , other healthcare proposals have focused on expanding government healtcare coverage for the poor and have largely failed. Romney put distance between his proposal and the Clinton plan, saying “we don’t need Hillary-care.”
In an article by The Washington Post, Mass. Bill Requires Health Coverage, the plan goes much farther than any other state but is by no means finalized. It leaves the task of determining exactly how much some low-income residents will pay for their new, more affordable policies to a new agency that would serve as a liaison between the government, policyholders and private insurance companies.
Because of that uncertainty, some still worry that the residents required to buy insurance would not be able to.
In any event, a creative approach which does not unduly burden employers or tax payers. As long as it does not place too great a burden on the poor, then it is a very good start.
During the next few years, western countries will face a more intense labor shortage than last felt in the first two years of this century. Very few companies are prepared for this with hardly any looking to utilize the aging workforce to fill this shortage. Initially, offshore workers will be able to handle some of the shortage. However, India and China are only a few decades from reaching a neutral or negative growth in trained workers.
A survey in America last month by Ernst & Young found that “although corporate America foresees a significant workforce shortage as boomers retire, it is not dealing with the issue.†Almost three-quarters of the 1,400 global companies questioned by Deloitte last year said they expected a shortage of salaried staff over the next three to five years. Yet few of them are looking to older workers to fill that shortage; and even fewer are looking to them to fill another gap that has already appeared. Many firms in Europe and America complain that they struggle to find qualified directors for their boards—this when the pool of retired talent from those very same firms is growing by leaps and bounds.
Why are firms not working harder to keep old employees?
