Harnessing the Net to Power a Green Revolution

Source: By BETH GARDINER, New York Times • Posted: Wednesday, June 19, 2013

LONDON — At the intersection of clean power and information technology, a new breed of digital start-ups is harnessing the power of the Internet to make smarter, more efficient use of energy and other resources.

Proponents call it “cleanweb,” and they say the sector is poised to bring about huge leaps in efficiency, saving money and cutting planet-warming carbon emissions.

As its backers define it, cleanweb is any software or Internet application that makes it easier to use resources — like textiles or cars or electricity — more efficiently.

The label is applied to a diverse mix of companies, some of them far removed from the power sector. Cleanweb enthusiasts often point to Airbnb, a Web site that connects people seeking vacation accommodation with others looking to rent out their homes, reducing the use of hotel rooms — and, in theory, the number of hotels that need to be built.

The Nest, a sleek, smart home thermostat that can be controlled from a mobile phone, is cleanweb, too. So is Mosaic, a crowdfunding platform that links individual investors to solar energy projects that reduce the use of fossil fuels. RidePal tallies online votes from commuters to design routes to work for employer-funded buses, taking cars off the road in the congested San Francisco Bay area.

“For me, it’s about bringing the optimism and the creative energy of the Web to the big challenges of sustainability,” said Jack Townsend, an organizer of Cleanweb U.K., a network of British entrepreneurs and technology experts. “It’s early days right now, but it’s very fast-developing.”

“A lot of the problems of sustainability are information problems, so information and information technology can be a big component of the solution,” he said.

Investors scared off by volatility and falling prices in more traditional areas of clean technology — big wind farms or solar arrays that require hundreds of millions of dollars to get up and running — are turning in growing numbers to cleanweb, where capital requirements can be lower and returns can come quicker.

Globally, investors put at least $1.2 billion into cleanweb ventures in 2011, according to research by Pure Energy Partners and the Cleantech Group, a market research company. A quarter of clean technology deals had a cleanweb component that year, a 55 percent increase from 2009, said Nicholas Moore Eisenberger, the managing partner at Pure Energy Partners, a venture capital and strategy firm in New York.

Mitch Lowe, the managing partner at Greenstart, a San Francisco venture capital and design company focused on cleanweb, said the number of start-ups in the area had doubled in the past year.

“We’re seeing a lot of interest in this category right now,” he said. “The number of entrepreneurs who are starting businesses in this space has grown a lot in the last couple of years.”

The growth of cleanweb is another example of the huge change information technology has brought to so many sectors of the economy, Mr. Lowe said. This time, he says, it is energy’s turn to be revolutionized by the Internet.

“Cleantech is moving from its first chapter, where it was all about wind farms and solar panels and these huge industrial things,” he said.

“Now that all that technology has been built, the question is how do you distribute it, how do you get it out to the world.”

Fresh out of the University of Chicago’s Booth School of Business, Archie Gupta, an electrical engineer, saw a way to help independent energy generators operate more efficiently. Big utilities have smart systems guiding their decisions about how much power to produce and when, but in the United States alone, there are 24,000 smaller-scale businesses and institutions — universities, hospitals, airports and factories — that also generate power, mainly for their own use, Mr. Gupta said.

Because energy is not their main business, many have not bothered to install sophisticated systems to manage it, he said. Root3 Technologies, a start-up that he co-founded a year ago, offers software and services to do just that.

“All the data is already there,” he said. “We are taking the data and converting it into actionable information — and this is actionable information hour by hour. What do you need to do? What do you need to turn on? How much do you need to produce?”

“It’s a significant bottom-line benefit,” that helps clients cut their power generating costs by up to 30 percent, he said.

Along with leaders in the field like the entrepreneurs Sunil Paul and Blake Burris, Mr. Eisenberger, of Pure Energy Partners, recently helped to start the Global Cleanweb Initiative to promote the sector. In cities including Houston and Rome, the group has sponsored weekend meetings for programmers to brainstorm and build apps that save energy or other resources.

Information technology can have a bigger impact on resource management “than any hard technology in our lifetimes,” Mr. Eisenberger said.

In addition to energy-related applications, the cleanweb world includes companies in what has been dubbed the “sharing economy,” connecting individuals who want to share baby clothes, appliances, cars and more. That saves money as well as the cloth, metal and other materials used in manufacturing such goods — and the greenhouse gases their creation would have produced.

Brian Steel, the co-director of the Cleantech to Market program at the Haas School of Business, at the University of California, Berkeley, said the popularity of cleanweb could lead to a glut of companies in the area, followed by a shakeout and consolidation. Yet even if that happens, he said, the sector looks likely to play an important complementary role, alongside more traditional renewable power companies, in helping to cut carbon emissions and conserve resources.

Mr. Lowe, of Greenstart, said that venture capitalists who had lost money on clean energy investments in recent years might still be wary. But investors from outside the energy sector have been showing lots of interest, he said, looking at the new companies simply as strong start-ups with good prospects.

Greenstart is investing in one new cleanweb company every four weeks. “We’re superbullish on it,” he said: With a growing global population and tightening constraints on carbon emissions, “it’s just a massive financial opportunity.”

Mr. Eisenberger said he hoped the opportunities would draw even more entrepreneurs with big ideas.

“Instead of thinking about making a billion dollars by creating some sort of photo-sharing program, which is great,” he said, “we would like that next generation of entrepreneurs to see how they can make a billion dollars using tech to tackle resource problems.”