Salzman: Cleantech needs billions to scale

Emerging clean energy technologies are facing a funding shortfall in a race to roll out at a commercial scale, said Alan Salzman, CEO and managing partner of VantagePoint Venture Partners, last week at the World Economic Forum in Davos, Switzerland.

VantagePoint, which raised a $444 million cleantech growth stage fund in 2008, invests in such cleantech sectors as solar power, low-carbon light bulbs and electric cars.

The venture firm holds a stake in Better Place, a provider of charging infrastructure for electric cars and which last week raised a $350 million round of financing from VantagePoint, HSBC Group and other investors.

“There is an issue as these new technologies come on, that to deploy them, whether it’s Better Place deployment across countries, the solar thermal power plants around the world, our LED [light emitting diode] light bulbs and factories to make them, we need billions and billions of dollars to scale out,” Salzman told Reuters at the sidelines of the business and policy summit, held at the Davis Swiss ski resort.

“I don’t really have a good answer” to where that capital would come from, he said.

“VantagePoint is one of the largest [cleantech firms] in the world doing this stuff, but we have only about $5 billion under management. I think Exxon generated more than that last weekend,” he said.

Salzman was upbeat, however, about the future of the sector, saying electric cars and utility scale solar power plants using mirrors to generate power, called solar thermal technology, would become mainstream before 2020.

He said a number of items taken for granted today, such as cell phones, had similarly needed a long gestation period before taking off once the infrastructure was in place.

“We’re going to see the same phenomenon [with cleantech],” he said. —Reuters