Neal Dikeman at Cleantech Blog has a post on some basic rules for investing in clean energy technology - The Rules in Cleantech.

I've now been asked enough times, that at the risk of destroying what little edge Jane Capital may have in cleantech, I finally got around to blogging our "Rules" in cleantech investing and business in general. Hopefully it will stimulate some good debate.

One of the things that makes cleantech different from other investing areas, is the best practice rules are the opposite of what the best investors have grown up with. Maybe that's because cleantech IS energy and energy IS different.

Here is our version of the Rules:

1. Energy is slow and big - Energy technology R&D and commercialization time frames are longer and costs higher

2. Technology is “cheap”, the scale up is where all the risk is

3. There is no disruptive technology in energy, only disruptive policies and resource shocks that make certain technologies look disruptive after the fact - aka, "it's the policies (and subsidies), stupid"

4. At scale, there is no capital efficient investing in energy

5. Commodity prices and policy tend to be more important variables than technology and management

6. Energy is at heart a resource play, the price you pay matters more than what you do with the resource

As a result we've worked out a strategic playbook:

1. Look for mature technologies - if it's not 10 year old technology, don't touch it.
Limit scale up risk and look for technology with few dependencies for scale

2. Embrace policy - solid policy frameworks are much better bets than great technologies. In fact, most of the serious money in cleantech has been made by being in the right place when the policies or subsidies hit critical mass, not by developing technologies after the fact.

3. Expect lower exit multiples, and target lower burn rates over a longer commercialization time as a result

4. Discipline wins. Think Stage Gate and SPC instead of venture style “massively parallel” R&D commercialization strategies

5. Don’t be afraid to play a diversified investment strategy

6. Don’t ignore Acquisition & Development as a viable growth strategy

7. Don’t be afraid of good low tech deals, that's where many the cleantech hits have been (if we haven't heard "that's not a venture bet" 3 times, we tend to stay away.)

8. “Powder dry approach” - deploy limited capital early on for larger stakes and focus on returning capital quickly, not rapidly deploying capital

9. Secure vastly superior market intelligence before moving - stealth is pretty much a worthless strategy, you're too likely to miss key things that way.

Alan Kohler of the Business Spectator's "KGB Report" has an interesting column on an Australian fund manager, Phil Matthews, who has apparently become a billionaire after betting big on peak oil. The KGB boys seem to have become peak oil believers, with Robert Gottliebson also writing a column on peak oil - "Peak Oil Gathers Steam".

Phil Mathews, the Sydney-based fund manager nominated by Barron’s as the best performing manager in the world, seems to have made a billion dollars in May alone from oil futures. It looks like he is now personally worth as much as $2 billion as a result of his incredible oil bet.

That would make him Australia’s 13th richest person, just ahead of Lang Walker and behind John Gandel, except the BRW rich list editors haven’t discovered him yet. His Sabre Fund ended April with $906 million; it is now worth around $2 billion. He has told me that the three funds he manages are now worth around $3 billion. About two-thirds of the money in the funds is believed to be in his name.

Mathews is not much of a talker, but one of his clients told me, between gusts of happy laughter, how he made a billion dollars from oil futures last month. Late last year Mathews noticed that 2013 oil futures were trading at a big discount to the spot price, which then was around $US90 a barrel. The oil price is going to rise over the next five years, he believes, not fall, so the price for five-year delivery should be at a premium, not a discount.

Those who know Mathews say that when he gets an idea, he “backs a truck up to it” and bets big, usually with borrowed money. The client we spoke to said: “You’ve got to wear plastic underpants with Phil.” So when he saw the absurdity of 5-year oil trading at a discount to spot, he plunged.

At that point the May 2013 price was around US$80 a barrel against spot of US$90. By the end of May 2008, the spot price had gone to US$120 and the price for May 2013 delivery was at US$140. It was a 'whiplash'. While the front month futures contract, or spot price as it’s more commonly called, rose 33 per cent, the 2013 price went up 75 per cent, as long futures moved from a discount to a premium to spot. Has anyone ever made a bigger killing from one bet since George Soros made US$1.1 billion shorting the British pound in on September 16, 1992?

Although his 2008 oil futures win has undoubtedly been his biggest, it is the culmination of a six-year story of big bets and mostly wins that has ended up now focusing on energy. ...

According to his (clients only) website the Sabre Fund’s estimated return in May was 75 per cent. There are two other funds – Tomahawk and Velocity – which contain close to a $1 billion.

These days for Mathews it’s all about energy, and as usual he has approached that sector single-mindedly. Last week Mathews Capital emerged with 5.1 per cent of Santos, worth more than $650 million. According to other recent substantial shareholder filings Mathews also owns 12 per cent of Beach Petroleum, worth $100 million, 19.6 million shares in Nexus Energy, 15.4 million in Arrow Energy, 9.6 million in Metgasco and 6.5 million in Pure Energy. On top of that he also owns 93 million shares or 10.5 per cent of Renison.

In 2005 he told the Masters of the Market authors: “Our basic point is that world energy markets will only add 300,000 net barrels of production a day between now and 2010, and yet demand is projected to grow from 84 million barrels a day now to 125 million barrels a day by 2050. So you’re going to have a 50 per cent increase in demand and there’s been almost no significant, major discoveries for 30 years!”

In 2005 Mathews said he had committed over 60 per cent of the fund’s assets into “oil, oil-related stocks or any energy-related theme that fit that trend”. At the time of that interview, his biggest holding was Woodside Petroleum, which he said would go beyond $50 “or possibly $60 a share”. On the day of that interview, Woodside closed at $24.24. It went above $50 in October last year, hit $60 a month ago and last traded at $60.58, having peaked (so far) at $70.20.