Renewables - Investing and Building Gets Us Only So Far

Om Malik's post today on the group think mentality running rampant among technology venture capitalists. I just visited a some VC firms in the Bay Area a few weeks ago, and it was interesting to hear the complaints about the recession and see the similarities in the questions and interest levels between the firms. But one of the more uplifting things noted in Om's post was speculation about clean tech investments.  It still looks positive for next year, despite the doomsday economic news about which we are all tired of reading.

Austin made a pretty significant clean energy/tech announcement earlier this month that captured national attention by rolling out the country's first comprehensive smart-grid project. The initiative aims to figure out how to handle distributed power when people start producing more of it in their homes versus depending on a centralized power plant.

I was sitting in an Austin Clean Energy Council meeting last month listening to our City Council member Brewster McCracken explain the "Pecan Street Project" - or what he referred to as the "The Power Internet" - and he made an interesting analogy to the technology industry. 

For those following clean tech investing trends, you are probably aware that energy storage is the "next big thing." Storage is the next frontier because if renewables start making up more than 3 percent of the domestic energy mix, storing the generated power when it doesn't need to be used is going to be a real issue. McCracken explained in the meeting, "Similar to storing data on a servers for consumers to pull when they want it, we need to translate this model to the electric grid." And this is enormously complicated being that energy is distributed by regional utilities versus a national entity. As he explained during a press interview earlier this month"

"Several other cities are testing clean-generation or efficiency products,” McCracken says. “We’ll do that. But we’ll also test the software, storage and business models we need to make it all fit together."

Austin is really onto something with this concept (maybe I'm biased, I'll admit), but it has already attracted the support of the Enviromental Defense Fund, GE Energy, Cisco, Freescale and Dell. We'll see how it comes along, but I'd keep an eye on it if your interested in seeing renewables become integrated into our energy structure. It's one thing to build and invest in them, but if they can't integrate into our energy system, developing them won't do us any good.