January 23, 2007

Vinod Khosla's forecast for 2007: Trends and outlook

1. Ethanol
* Cellulosic plants are real -- at least six in construction
* Tariffs on their way out -- global market for ethanol
* Congress sets much more aggressive RFS for ethanol -- all the 2008 presidential candidates adopt an ethanol friendly policy
* Next generation fuels (like butanol) and energy crops get attention
2. Renewable power
* Photovoltaics and wind continue their march
* Solar thermal technology starts to dispel the myth that coal is the cheapest long term central "utility grade" power source
3. Risks around coal based power generation
* Supply, costs, regulatory risks, carbon costs start to shake investor confidence in new coal power plants
* Calif. AB32 and similar state regulations start to stem the "coal rush"
* Carbon dioxide gets classified as a pollutant by the U.S. Supreme Court
4. Financing
* Venture capital in cleantech goes through the roof
* First cellulosic technology IPO set for 2008
* Private equity and hedge funds starts participating in biofuels
5. Efficiency
* First "high profile" startups in "efficiency"
* Green homes become visible as "real alternatives" at moderate cost
* Startups start in new renewable materials