Mike Rosenfeld, Vice Consul USA Clean Technology Sector Lead

UK Trade & InvestmentBritish Consulate-General

Clean Tech Industry OverviewClean Tech Industry Overview

UK Trade & InvestmentUK Trade & Investment

US Network ConferenceUS Network Conference

Global Annual VC Investment

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1

2

3

4

5

6

7

2003 2004 2005 2006 2007 2008

0

50

100

150

200

250

300

350

400

450

Invested

Number of Deals

Inve

stm

ent (

$ in

bill

ions

)

Q3 ‘08 represents a new record for quarterly investment total

•$2.6B globally

•$1.7B in North America - almost 70%

$6.6B ‘08 YTD vs. $6.1B same period ‘07

Num

b er

o f d

e al s

357

$4.4

$6.1

427 $6.6

328

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Current Situation & TrendsAnnual investments have steadily increased, with the industry picking up pace in 2006.

Investment profile follows a similar pattern in clean tech focused venture and private equity fund raising.

The first three quarters in 2008 have already seen more investment than all of 2007 and may reach up to $6 billion.

North America Annual Clean Tech VC Investment

($ billions)

$279m

$708m $477

m

$753m

$883m

$912m

$1.3b

$2.8b

$4.0b

$4.35b

Clean Tech Represents at Least Nine Different Markets

Water Desalination Purification/Filtration/Disinfection Remediation Wastewater Treatment Water Management

Recycling/Waste Mgmt. Reuse Reduction Reclamation Landfill

Air Emissions Measurement Controls Remediation

Greenbuilding Design/Build Green Building Materials Systems Optimization Retrofit/Refurbishment

Carbon Markets Registry Trading Reporting/Verification Finance

Energy Efficiency Lighting HVAC Power Optimization/Consumption Monitoring/Metering/Control

Carbon Abatement Technologies

Generation Technologies Low Carbon Fuels Carbon Capture & Storage Asset Management

Energy Storage Fuel Cells/Hydrogen Battery Technology Power Management Battery Management Nanomaterials Ultracapacitors

Smart Grid Energy Infrastructure Intelligent Network Grid Management Software Applications Load Management Optimization/Storage

Water Treatment & Conservation

$0

$10$20

$30

$40$50

$60$70

$80

$901

Q0

6

2Q

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3Q

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4Q

06

1Q

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3Q

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4Q

'07

1Q

'08

2Q

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3Q

'08

Water Treatment

WaterConservation

Wastewater

$m

illio

ns

Recycling

$m

illio

ns

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40

60

80

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1Q06

2Q06

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3Q07

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1Q08

2Q08

3Q08

GreenBuilding

$m

illio

ns

$0

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$40

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$1201Q

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2Q06

3Q06

4Q06

1Q07

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3Q07

4Q07

1Q08

2Q08

3Q08

Smart Grid

$m

illio

ns

$0$20$40$60$80

$100$120$140$160$180$200

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

Transportation

$m

illio

ns

$0

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$4001Q

06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

Global Biofuels & Biomass

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illio

ns

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1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08

Energy from Waste/Waste to Energy

$m

illio

ns

$0

$50

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1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08

Growth of cumulative fuel cell units per

application between 1997 and 2006

0

5000

10000

15000

20000

25000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Large Stationary Small Stationary Portable Transport Courtesy & copyright of Fuel Cell Today

Thin Film Solar PV

$m

illio

ns

$0

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1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08

Concentrated Solar Thermal

$m

illio

ns

$0

$50

$100

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4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08

40% of all Clean Tech VC investment is in Solar, due in large part to thin film and Concentrated Solar Thermal.

Thin film solar companies are raising massive war chests and ramping up quickly with next-generation manufacturing facilities.

Biofuels 2.0 has revived the sector with cellulosic biofuels and algae leading the way with large raises and capital expenditures.

Smart grid and water and beginning to gain momentum within VC investment community.

Green Building companies considered to be underinvested, although investment may come at decreased valuations, given the downtown in housing.

Other sectors continue to receive interest but have not experienced the sustained capital flows of these primary industry sectors.

Current Situation & Trends - RecapCurrent Situation & Trends - Recap

While record amounts of capital continue to flow into start-up and established companies, investors are placing bets with care.•The economic contraction may have caused even more capital to flow into the sector as investors gird their portfolio companies for what looks to be an extended recession.

First generation failures, such as biofuels, are an eyesore but important reminder in today’s investment community

Valuations, formerly stratospheric across the board, have come in line with a more appropriate risk/reward profile•Thin film solar may be the only exception, as massive late rounds come on billion dollar valuations.

Investors are placing a premium on established companies with significant revenue and traction.•Venture funds are still willing to take execution and technology risk, but market risk has become a non-starter.

Clean Tech in a Turbulent EconomyClean Tech in a Turbulent Economy