Does the “cleantech sector” need a new name?

The non-profit Advanced Energy Economy Institute (AEEI) is pushing a new term to describe innovations and disruptions in the energy economy, not surprisingly using the term “advanced energy.” My colleague Katie Fehrenbacher points this out when she discusses a new report from Pike Research showing that the advanced energy sector is already over $1 trillion and is estimated to have grown 19 percent in 2012 (Check out Fehrenbacher’s post on whether it’s time to bury the term “cleantech.”)
“Cleantech” is a dirty word right now in venture investing circles and for me has never defined a sector as much as an idea—that we should leverage technology for the betterment of the earth. That is a very broad idea, and opens up the possibility of technologies that make fossil fuel technologies more efficient. For example, an internal combustion engine that could get 70 miles a gallon might then become cleantech, if it had a technological innovation that reduced a vehicle’s need for fossil fuels.
And if you start to include those fossil fuel based technologies, then companies like Luca which farms natural gas from microbes in coal beds and which raised $125 million in 2011, is a company that would qualify to be part of the emerging “advanced energy” landscape. Will Luca’s products lead to CO2 emissions and climate change? Yes. Is it incrementally better for the planet than hydraulic fracking and dependence on coal power plants? Probably.
What’s certain is that the folks researching cleantech much prefer branding that is as expansive as possible. Bloomberg’s research unit has gone with the name “New Energy Finance.” Pike Research likes the word “smart,” attaching it to whatever vertical it’s examining, as in “Smart Energy,” “Smart Utilities” and “Smart Transportation.” What everyone wants to point out is just that what matters is innovation, and tools to improve efficiency.
So where do we go from here? Well, the obvious benefit to the Pike Research report showing that the advanced energy sector is growing to over a trillion in revenue is that it points out to investors that there are many entry points into energy investing that could bear fruit. It’s not just solar panels, electric cars and smart meters. And a little rebranding along those lines probably isn’t the worst thing for the “cleantech” sector.
Speaking of cleantech, for my analysis of Q4 2012 and an outlook on this year, see The fourth quarter of 2012 in cleantech.