Since the last federal election there has been a growing political, business and community consensus that we need a carbon price. However, what a carbon price should look like and how it should be implemented has rapidly deteriorated into a free-for-all, particularly at a political level. 

While the debate on a carbon tax continues to rage, a key element is at risk of being overlooked – how to develop and commercialise the clean technologies required to transition to a low-carbon economy.

One of the few conferences to focus on cleantech in Australia is the annual Cleantech Forum, an initiative originally developed by the Castellas brothers, Peter and Jeffery. The Cleantech Forum is quite unique, as it brings together an eclectic mix of inventors, university researchers, early stage cleantech companies seeking investment, Australian and international cleantech venture capitalists, institutional investors, industry super funds and a sprinkling of corporate heavyweights.

While there were some real positives at the annual Cleantech Forum held in Sydney last week, it also displayed many of the features that have characterised early stage technology commercialisation in Australia for decades:

– Plenty of good inventions, in many cases originating from universities and CSIRO, as well as individual inventors;

– Few early stage investors;

– Only a few examples of successfully commercialised clean technology;

– Under-developed early stage commercialisation skills and experience;

– A lack of meaningful government interest and support for early-stage technology commercialisation.

While most of these issues won’t be solved any time soon, there were some encouraging signs at this year’s Cleantech Forum.

Australians have always been an innovative lot and we seem to be generating inventions at a rapid rate in the cleantech space. This year’s Cleantech Forum showcased innovations in areas as diverse as trade waste processing (Creative Water Technologies), water bioremediation (BioRemCo), energy efficiency technologies (Enerji), particle boards made from rice stubble waste (Ampan) and high efficiency electric motor generators (Marand).

Historically, Australian technology companies have not had a strong track record in commercialising their inventions. One cleantech company that does appear to have progressed well in this area is Windlab, a wind farm developer with a unique program for more accurately identifying good potential wind farm sites. The program was originally developed by CSIRO and has been commercially exploited by Windlab as key element of its business of developing and onselling wind farm projects to major players. Windlab currently has a wind farm development portfolio of 8.5GW and expects to rapidly expand this portfolio both in Australia and overseas in the next couple of years.

The other cleantech company with an impressive commercial rollout is the recently established Building IQ, a company headed up by former venture capitalist Mike Zimmerman. Building IQ has a unique and sophisticated program, also originally developed by CSIRO, for controlling the efficient use of energy in commercial buildings. Without refitting buildings or modifying their existing systems, Building IQ is achieving energy savings of up to 30 per cent in early commercial rollouts of its program. Needless to say, the worldwide market for Building IQ’s program is potentially enormous.

While early stage cleantech investors are thin on the ground, there are some Australian venture capitalists focusing on the space – notably Cleantech Ventures, OneVentures, Playford Capital and Starfish Ventures.  However, with most VCs looking at up to 100 opportunities for each investment made, only the very best opportunities will be funded by VCs. Most early-stage cleantech will still need to rely on the three F’s – family, friends and fools; or notoriously elusive high net-worth private investors.

While not immediately helpful to early-stage cleantech companies, there are also growing pools of funds for cleantech companies at the more developed end of the market. Hunter Hall operate Australia’s largest and most well known suite of funds focused on the environmental and ethical sectors, with over $2 billion in funds under management. Lesser known Arkx Investment in Sydney manages the Arkx Clean Energy Fund, which invests in listed cleantech companies on a global basis.

One of the most innovative moves by a large corporate in the cleantech space is the $100 million Lend Lease Ventures initiative. While operated along traditional VC lines, Lend Lease Ventures aims to invest in cleantech opportunities that are potentially synergistic with its core businesses. It’s a model some other large corporates should seriously consider replicating.

While all of the above is encouraging, unfortunately it is nowhere near enough, given what is required to move to a low-carbon economy and the significant efforts being made in many other parts of the world to encourage and embrace clean technologies. A positive step forward would be to refocus some of the energy and attention currently being thrown at the carbon tax debate to looking at some of the very real solutions and opportunities available in the cleantech space.

Geoff Green is a director of business strategy consultant, GRG Momentum