Robert W. Shaw JR. IS A BETTING MAN. Shaw's Aretê Corp. venture capital fund has invested $100 million in energy technology. This year the Center Harbor, N.H., fund set aside $30 million to invest in micro-generation technologies. Already the fund has pumped hundreds of thousands of dollars into more than a half-dozen companies trying to develop microturbines, fuel cells and other promising small-scale generation.
"This is a hot corner," Shaw says.
Shaw bucks naysayers like Ralph Selvig of VentureOne Corp., a San Francisco firm that tracks the venture capital industry. Selvig insists the regulation-intensive utility environment simply doesn't draw investors.
"Realize [that] we had almost $6 billion get invested in the first half [of 1998], in venture-backed deals," Selvig says. "All industries, all stages, all regions of the U.S. And that's by venture firms managing a minimum of $25 million and up. The fact is, you've got 657 venture firms out there and you can count, probably on one hand, the guys that are doing the utilities' deals."
But those developing distributed power applications and the venture capitalists who believe in them point out that most of the business plans they're financing fall outside regulated power.
In fact, that's exactly what's creating opportunity for energy's subset of small generation systems - photovoltaics, microturbines and fuel cells, to name a few technologies. Furthermore, it's the utilities, from the U.S. and Europe, who are backing the venture capital firms. Utilities like Cinergy Corp., PacificCorp and Electricité de France.