by Richard T. Stuebi
I was recently forwarded an article by Amol Desphande, partner of the renowned venture capital firm Kleiner Perkins, entitled "Investing in the Biomass Industry", which appeared in the September 2009 issue of BioCycle magazine.
No doubt seeking to contrast Kleiner Perkins from its peers, Deshpande questions the prudence of investing in large-scale biorefining operations -- whether first- or second-generation -- and instead characterizes the attributes of biomass technologies that make for more appealing investment candidates:
Scales down and can operate in a distributed manner
Produces a product that is supply chain compatible (e.g., grid connection, pipeline access points)
Uses a feedstock that already has a supply chain
Has a beneficial reuse and is free of harmful contaminants or odors
Uses available feedstocks of low value and that require minimal pretreatment
Costs less than $5 million to demonstrate at semi-commercial scale
Consumes minimal water and parasitic energy
Has one step for its primary energy conversion (i.e., one primary unit operation, like an anaerobic digester)
Takes less than six months to build a commercial plan from "shovel in ground"
Apparently, Kleiner Perkins has seen a number of venture opportunities possessing most of the above characteristics, having invested in Amyris, Harvest, Mascoma, and Sundrop Fuels.
Deshpande closes passionately with the following call to action:
"This is the greatest time in history for entepreneurs in the biomass industry. Rising energy prices, public awareness, technology breakthroughs and carbon credits will make the next 10 years a great time to innovate...Distributed biomass power technologies are available and should be deployed in the short-term. Over the long-term, we probably need to change the way we grow our food. These changes present opportunities for entrepreneurs willing to take the challenge to innovate and transform biomass in a more efficient way."
Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org
