Posted by Big Gav
Australian start-ups have always struggled across that great divide between R&D and commercialisation.
It is what is known in the venture capital world as the valley of death, but right now for the clean-tech industry it is looking more like a grand canyon. Not because getting funding has suddenly gotten any harder, although the GFC hasn’t helped, but because the rewards on the side have never been greater.
Australian’s clean energy industry has launched a campaign to convince Canberra to introduce new policies to encourage the development of emerging technologies such as geothermal, wave and solar, to ensure at least that there is something other than wind to fill the relatively ambitious renewable energy target.
The geothermal industry is a case in point. Australia has the opportunity to lead the world in the development of hot rock systems and the widespread development of sedimentary aquifers, but most companies are having trouble raising enough money to be able to drill their targets, let alone get the debt financing to take on the sub-surface risk of a new technology.
So the Clean Energy Council, reflecting the majority view of the industry, is calling on the government to consider a range of new measures common in the US, Europe and elsewhere, such loan guarantees for a pipeline of projects, accelerated depreciation and feed in tariffs for specific host industries – all measures the Rudd government has either ignored or rejected so far.
This week the CEC enlisted the help of a group of US cleantech heavyweights, including Todd Glass, a clean energy specialist at US legal firm Wilson Sonsini, Jerry Lomax, the vice president of emerging energy at Chevron Technology ventures, and Warren Hogarth, a partner in venture capital firm Sequoia Capital, to spread the word and sent them to Canberra to meet bureaucrats and policy makers.
Glass notes that clean energy is now the single biggest asset class in the venture capital sector in the US, and was close to the top in asset financing. “It is really phenomenal,” he said. In the US, as elsewhere, the industry had been supported by significant federal policies, even in the absence of a carbon price and a national renewable energy target. Tax credits on investment, production and manufacturing, had had a significant impact, as had accelerated depreciation and renewable energy bonds.
Australia, which hopes to have the revised RET legislation in place in the winter sitting of parliament, currently focuses its added incentives on a series of grants, picking a handful of winners in selected industries, through its solar flagships and renewal energy demonstration programs.