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ISSUE OF THE WEEK

Virtually Green: The Tech Sector Weighs In

Take a stroll around Greenville, an environmentally astute and energy efficient municipality where citizens, businesses and government work together to make the town the smartest energy user around. From homes to hospitals, everyone has embraced technologies to reduce energy needs.

Too bad the utopian township, unveiled just in time for Earth Day last week, only exists on the Internet.

 

The virtual village is the brainchild of the Technology CEO Council, a public policy group made up of executives from Dell, Hewlett-Packard, IBM, Intel, and others. Their aim is to show how "smart meters," server virtualization, telework, power grid management and other innovations can be put to greater use in the real world to strengthen the U.S. economy and nurture Mother Earth.

The Web site currently features about 30 informational pop-ups, which Council Executive Director Bruce Mehlman hopes to expand and improve upon after he collects feedback on the application from users.

"There are hundreds more examples but you have to start somewhere," he said of the visual companion to a February report commissioned by the group that linked technology to dramatic energy efficiency.

 

Saving Energy Through Technology

The study, conducted by the American Council for an Energy-Efficient Economy, showed a direct correlation between gains in energy productivity and investments in information and communications technology.

Specifically, the study found that technology is a net saver of energy by a 10-1 ratio across the economy. It takes less than half the energy to produce a dollar of economic output as it did in 1970 and energy efficiency gains have increased significantly since 1996, according to the study.

"That's a really big deal. It means the more IT intensive, the less energy intensive our economy can be," Mehlman said. Those with a singular focus on global warming or foreign oil dependency and believe the answer is alternative sources of energy and taxes on energy usage are overlooking "a very critical third bucket -- energy efficiency,” he added.

Greenville's Web 2.0 interface makes it "easier for your average high school senior or member of Congress to understand in their own way at their own pace," Mehlman said.

 

Energy efficiency is a priority for the Technology CEO Council and for business leaders in Washington and in Silicon Valley. "You can't find an IT leader who isn’t focused on energy efficiency," Mehlman said. "There's a chance to do well by doing good and the market is creating an imperative for that."

As policymakers wake up to those great gains, high-tech stakeholders hope they will incorporate IT into their thinking, he said.

Promoting Telework

To coincide with Earth Day, the American Electronics Association released a report endorsing telework, which cited evidence that 1.35 billion gallons of fuel worth $4.5 billion at the current rate per gallon could be saved if everyone with the potential to telework did so 1.6 days per week.

According to the Environmental Protection Agency, that amount of saved fuel would prevent 26 billion pounds of carbon dioxide from being released into the atmosphere.

"[Telework] is a win for employers, who see increased employee productivity, lower overhead costs, and greater access to workers. It is a win for workers, who can reduce long commute times and strike a better work-life balance," AeA President Christopher Hansen said.

Hansen added, "Most importantly, it is a win for the environment, as fewer commuters on the roads mean reduced fuel consumption, traffic congestion, and air pollution."

The federal government can set an example for the private sector by offering telework programs, motivated in part by the need to maintain continuity of operations in response to a natural disaster or terrorist attack that would otherwise cripple the government, AeA said in the report sponsored in part by computer chip-maker Intel. The paper was the 21st in a series of reports focused on U.S. competitiveness.

AeA is also working to enact tax incentives for research and development work, which the group said would benefit alternative energy development efforts, and is pushing capital investment incentives to attract alternative energy investments in technology for solar panels and fuel cells.

Seeking More Electronics Recycling

The Consumer Electronics Association, meanwhile, has also sprung into action with initiatives aimed at energy efficiency and electronics recycling.

Earlier this year, the group launched myGreenElectronics.org, which has taught over 100,000 consumers about responsible purchasing and disposal of electronics. The site hosts a database of eco-friendly electronics, electronics recycling programs searchable by zip code, an energy-consumption calculator and more.

CEA, which supports voluntary, market-oriented programs that highlight and sustain energy efficiency, has pioneered several industry-led standards initiatives targeting power consumption and measurement domestically and overseas.

In March 2006, CEA representatives and officials from the Information Technology Industry Council and other high-tech organizations in Europe and Japan met to discuss topics of common interest and adopted a unified position on energy efficiency.

Investing: ‘Not For The Faint Of Heart’

The trend is not just impacting established businesses; venture capitalists are getting into the game.

Clean-tech investments by U.S. venture capital firms in the first three quarters of 2007 reached $2.6 billion for 168 deals, accounting for the highest dollar volume ever, according to recent data from the National Venture Capital Association and Thomson Financial. The full-year 2006 clean-tech investment was $1.8 billion from 180 deals.

Most investments by the VCs benefited U.S. companies, but the three largest were in overseas enterprises -- including a $500 million investment in Delta Hydrocarbon, a Netherlands-based firm with a focus in oilfield-production enhancement; a $200 million investment in Brazilian Renewable Energy; and a $118 million contribution in China's Yingli Green Energy Holding.

In the United States, the majority of investment dollars and deals flowed into California, where 68 deals accounted for $726.2 million. Massachusetts firms had the next highest level of investment with $292.6 million from 11 deals. Texas closed out the top three states with $149.4 million investment dollars from 8 deals, NVCA said.

The largest U.S. investment was the $115 million sunk into GreatPoint Energy, a Cambridge, Mass., firm whose plants convert coal and biomass into "bluegas," which aids in the power generation, NVCA noted. The second-largest was a $77 million investment in Austin, Texas-based Heliovolt Corp., which develops technology for depositing thin photovoltaic surfaces that generate electricity from sunlight on conventional construction materials.

"There are major opportunities for venture capitalists to totally reshape the energy market throughout the world as governments, consumers, and companies are demanding innovation in this space," NVCA President Mark Heesen said in a statement.

But he also warned that investing in new, eco-friendly technologies can be "fraught with pitfalls and is not for the inexperienced or the faint of heart."

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