2001: When Green Tech was Born
Every few weeks, someone asks me "When did green technology begin?"
Technically, it started around 2000 B.C. when the Egyptians began to design buildings with passive air conditioning. The Roman Emperor Varius Avitus followed by having snow brought from the mountains to cool his palace, thereby kicking off a craze for ice-powered air conditioners. He's often ranked as the worst emperor but for other reasons.
The 19th Century experienced a burst of alternative energy activity, particularly in France. In 1839, Edmond Becquerel discovered the photovoltaic effect while experimenting with an electrolyte cell, paving the way for the first silicon solar cell, made at Bell Labs, in 1954. In 1860, August Mouchet proposed the idea of solar-powered steam engines. In 1859, a third Frenchman, Gaston Plante, invented the lead acid battery and demonstrated it at the French Academy of Sciences a year later.
In the 1970s, Japan, Denmark and others decided to invest in solar, biomass, wind and other technologies to wean themselves from fossil fuels. In some countries like the U.S. the effort sputtered a few years later.
But the current wave we're living in can be traced back to 2001. Consider these historical tidbits in sometimes chronological order:
1. In January 2001, then California Governor Gray Davis declares a state of emergency because of rolling power blackouts. Enron, rightly, gets the blame and implodes. In February 2001 Enron's Ken Lay gives the hot set to Jeff Skillings. Inadvertently, all three men become green Hall of Famers for what happens next. Davis gets recalled and replaced by Arnold Schwarzenegger, who subsequently helps install one of the most ambitious green programs in the world and renewed interest in one-liners from "The Terminator."
2. Cypress Semiconductor CEO T.J. Rodgers invests $750,000 of his own money into a struggling outfit called SunPower after nearly everyone else in Silicon Valley, including Cypress' board, turned the company down. SunPower holds a successful IPO in 2005 and Rodgers investment, which eventually got bought by SunPower, eventually turns into $2.5 billion.
3. Bloom Energy, which has created a futuristic fuel cell that can generate heat, electricity and even oxygen for submarine crews or people trapped in buildings, is founded. An early investor and board member is T.J. Rodgers, who can also rightly claim to be Silicon Valley's first and most successful green tech investor. Side note: Rodgers is a fundamental free marketer and opposes federal subsidies, including subsidies for scientific research. Both SunPower and Bloom, however, depend on federal and state tax credits and other subsidies to woo customers. Consistency isn't everything, kids, but at least he admits it. Bloom also puts the world on notice that green isn't cheap: over $400 million has been invested in the company and sales have only just begun.
4. Suntech Power Holdings is founded by a Chinese professor named Zhengrong Shi from the University of South Wales in Australia in September 2001. Again, traditional VCs don't pay attention: the primary early investor is China's Communist Party. Suntech, based in Wuxi, goes public in 2005 and now jostles with First Solar for the top spot in the solar market. Suntech marked China's entry into solar and in the process the company becomes one of the first brand names to come out of China.
5. Tim Healy and David Brewster from the Tuck School of Business at Dartmouth found EnerNoc, which wants to sell demand response services. VCs initially balk: why do utilities need a third party like EnerNoc to curb power demand at factories in the middle of the afternoon? A few years later, Foundation Capital puts money into the company and EnerNoc goes on to hold a successful IPO. Demand response services become an industry.
6. GreenFuel Technologies is founded. The company, spun out of research at Harvard and MIT, proposed making biofuel from algae and capturing carbon dioxide from smokestacks. The company helps establish algae as a potential biofuel source. GreenFuel raises $79 million but goes under in 2008, setting what could be an ominous trend for noble and expensive failures.
7. General Electric starts sniffing around green and announces in February 2002 that it will buy the wind division of bankrupt Enron (see above). From those ashes, GE goes onto become one of the biggest wind turbine manufacturers in the world.
8. Consulting firm Clean Edge predicts that the market for clean energy-fuel cells, solar panels, turbines will grow from $7 billion in 2000 to over $82 billion in 2010 while the clean vehicle market will go from $2 billion to $48 billion. Only a few pay attention. The prediction turns out to be somewhat close. (In 2007, the firm says green tech came to $77.3 billion.) By 2017, it says the market will be $254.5 billion.
9. Konarka, a company specializing in solar dyes and other futuristic solar technologies, gets founded. Despite hoovering in over $170 million from investors and government agencies, its technologies are still in the testing stage. It's a trendsetter in the having a really, really long runway department. But there are lengthier ones: wave power specialist Pelamis got started in 1998.
10. Pat Gelsinger then an Intel exec tells an audience at an engineering conference that computer processors will put as much heat, proportionally, as nuclear reactors by 2015. Intel, among others, ramp up efforts to cool off chips so computers won't melt. As power prices climb, cooler chips start to get marketed as a way to save energy and money. It marks the beginning of the accidentally green movement, which has surprisingly become large.
And the fun continued in 2002. In that year, First Solar shipped its first cadmium telluride solar cells, a technology others had tried but stopped pursuing. First Solar goes onto become one of the largest manufacturers in the world. NanoSolar, which specializes in copper indium gallium selenide solar cells, is founded, and AC Propulsion founder Tom Gage tells a then unemployed entrepreneur he's not interested in making electric sports cars. Gage, though, gives him the number of another guy who asked Gage the same thing. Martin Eberhard contacts Elon Musk. The two go on to found Tesla Motors and author one of Silicon Valley's best love stories ever.
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