Wall street venturing into efficiency

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Click graphic to download CLSA's report

As the New Work Times reports US Venture Capitalists are now starting to moving on the energy efficiency sector. Perhaps it has finally sunken into the conciousness that an 80% IRR on energy efficiency projects are regularly achieved. However, the double standard remains, whilst prepared to invest in capital plant and buildings with a very long Return on Investment, the hurdles for an energy improvement project in that facility is set very low indeed. Generally, the standard five years, became three, and now twelve months is often demanded.

Outlook
A short term outlook under estimates the realities that organisations are facing,  inaction today can only result in draconian knee jerk reactions further down the road.  CLSA’s vivid (Sept 2008) report aptly titled Panic Button offers a very stark view of the result, and cost today’s  inaction.  In a future of procrastination, it predicts that Governments will delay and delay, until they are forced to invoke instant and dramatic measures,  reminiscent of the second world war impositions, and only those who have already prepared and implemented energy efficiency improvement measures have a chance to survive. If the Government demanded a 50% cut in energy consumption by the end of the week most operations would fold or lower production by 50% risking revenues.

A some point in time, the environmental and carbon cost must be counted, revenues will plummet, and CEO’s will cry they never saw the writing on the wall.

About John A. Herbert, REA, energy consultant, BEAM Pro

John is director of energyLAB energy consultants firm, he has with more than 30 years engineering experience gained across three continents. He is Registered Energy Assessor, a member of HKAEE. Read his blog at http://www.johnherbert.hk
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