As India and China pledge to spend billions of dollars on renewable energy, the US government is hoping to help American companies cash in on the clean-up of Asia’s smoggy skies.
Representatives of more than a dozen US companies, including General Electric Co. and DuPont Co., will touch down in Chennai on Wednesday to kick off a one-week Clean Energy Technologies Trade Mission to India and China aimed at drumming up new business for America’s burgeoning clean-energy industry. The companies are shopping technologies including solar power, energy-efficient building materials, clean coal, wind power and more experimental power sources, such as a gasification technology developed by Utah-based Emery Energy that creates fuel from the organic matter in municipal trash.
The demand for energy alternatives in Asia is creating a substantial business opportunity. The trade mission aims to capitalize on India and China’s growing commitments to renewable energy, as the region’s dependence on coal-fired power plants fuels concern about global warming and air pollution.
The Chinese government recently pledged to spend $200 billion on renewable energy and to make renewable energy account for 15% of total supply by 2020—though such allotments are subject to change. The Indian government has made fewer concrete commitments, but the market for renewable energy in India is estimated at $500 million a year and is growing by 15% annually. The government already provides substantial tax breaks for wind energy, and a wave of proposed state legislation would encourage other “clean tech” industries to make inroads there.
“Either we have a complete environmental collapse, or we have to quickly evolve the entire global economy to a much more energy-efficient, resource-efficient and environmentally conservative model,” says Andrew Pidden, who co-manages a $42 million investment fund focused on the Asian clean-tech sector for CLSA Asia Pacific Markets.
The US Commerce Department mission aims to address some of the road blocks that have made it difficult for US clean-energy companies to crack markets in Asia, including concern over intellectual-property rights. Some American clean-energy companies are reluctant to deploy their most cutting-edge technologies in Asia, from solar panels to coal scrubbers, for fear they will be copied.
“It’s a concern for anybody trying to export advanced and novel technology to markets where they don’t have strong regulatory systems around patent issues,” says Benjamin Phillips, president of Emery Energy, the Salt Lake City start-up that is marketing a proprietary system that can create a biofuel from the organic waste in municipal garbage. The company aims to help cities in the developing world tackle the twin problems of waste disposal and polluting power sources.
Intellectual-property issues have become a growing source of friction between China and the US, which last week announced it would file a complaint with the World Trade Organization over China’s lax copyright enforcement.
“We need to make people understand that this is an environmental issue, too,” says David Bohigian, assistant secretary of the commerce department, who is meeting officials in Beijing during the week-long mission. “It’s affecting China’s ability to clean up coal plants, because they’re getting second- and third-generation technology. US companies don’t want to export their best technology there.”
Companies in the mission also hope to scope out the depth of the Indian and Chinese governments’ commitments to renewable resources to make sure promised support for clean energy materializes. “Renewable energies tend to prosper in markets where the government provides strong support,” says Martin Wenzel, senior vice president of sales and marketing for MiaSole, a Santa Clara, California, solar-power company. “If India and China want to turn these programs on, they’ve got to make commitments in terms of resources and money.”
The participating firms reflect a wide range of industries. DuPont will be showcasing technologies ranging from cellulosic ethanol, which is made from nonfood sources, to Tyvek building wrap, a synthetic textile that can improve the energy efficiency of buildings. The clean-energy mission is part of a wave of initiatives developed by the US government that seek to harness the forces of the free market to address Asia’s environmental problems.