Advocating an energy efficiency thrust

Energy efficiency can't compete with the sexiness of new technologies like solar, biofuels or new materials. But it does make business sense, especially in China, where the central and local governments are driving a new push in energy efficiency.

It’s also something that Roger Ballentine can talk about with conviction. Ballentine spent three years in the White House, serving President Bill Clinton as chairman of the White House Climate Change Task Force and deputy assistant to the president for environmental initiatives.

Ballentine is currently a venture partner with Arborview Capital in Washington, D.C., and president of Green Strategies, where he assists clients in the energy and environmental arena with domestic and international public policy matters and provides investment guidance in the cleantech marketplace.

But recently, Ballentine was appointed to the board of directors for Shanghai-based China Energy Recovery, which designs and builds waste-energy recovery systems. The technology uses industrial waste to generate low-cost electrical power. In doing so, industrial manufacturers are able to reduce their energy costs, shrink their emissions footprints and generate sellable emissions credits.

Ballentine spoke with the Cleantech Group today about China Energy Recovery’s next steps and the push for making industries across China more energy efficient with waste recovery systems.

Why doesn’t energy efficiency technology get much visibility?

This is not emerging technology; this is not new technology. Many of us who spend a lot of time in the cleantech sector overlook and underappreciate energy efficient businesses as opposed to the sexiest and newest PV technology or exotic biofuels.

China Energy Recovery claims it can reduce energy costs by producing two-to-three times the usable energy from the same fuel. How has this value proposition played out in China?

The average factory pulling power off the grid in China is completely inefficient. If you can cut 60 percent of the energy, that’s a huge reduction in the plant’s carbon footprint. And there is a whole additional revenue stream that can come from selling those carbon credits.

But first and foremost, it is about saving clients money, and the business of energy efficiency is basically a nuts and bolts kind of business with no technology risk.

How solid are the drivers for cleantech in the current political and economic climate?

The drivers for cleantech are bigger than politics. There is a lot of stake in this election but the cleantech industry is certainly not one of them. Energy efficiency technology is counter cyclical because it is about reducing cost. Nothing is completely recession-proof but energy efficiency is pretty close.

What are the cost economics of an energy waste recovery system in a typical industry installation?

If you built a 54 MW solar power system, that would normally cost upwards of $200 million. In contrast, CER has installed a waste-heat recovery system with the same power generation capacity for as little as $12 million.

China Energy Recovery currently has a backlog of orders for its waste recovery systems. That’s a problem lots of companies would like to have, but what are the challenges for CER?

The company has identified some sites for manufacturing and plans to raise capital. What with this huge backlog, the company wants to increase its capacity by a factor of five.

With the manufacturing facility in place, it will be able to aggressively pursue other industries like fertilizers, cement, steel and methanol. The biggest hurdle for the company is getting this plant built.

What about the Olympics and its impact on Chinese industry?

In a sense the Olympics were a kind of a blip, as the government took drastic measures like shutting down factories.

China has figured out the best way to address the environmental and economical challenges is through efficiency. The government recently announced a national commitment to improve efficiency across the industry by 20 percent by 2012.

The government has essentially charged the local governments with implementing these environmental goals with some sort of financial carrot stick attached to it. This is the first time and that’s a pretty big breakthrough.