25 November 2008

The Upside of A Downturn

World on cusp of technological revolution, Merrill Lynch says

Clean technology will rival the Industrial Revolution and every major technological development since then to become the "Sixth Revolution," as the world grapples with the threats of peak oil, global warming and the need for energy security, says Merrill Lynch. While such revolutions occur only about every 50 years, and can deliver "a golden age" based on the new technology's transformative possibilities, we are now on the cusp of the next great change, says Merrill Lynch clean-tech strategist Steven Milunovich. The end result will be significant investment opportunities likely heralded by a phase beginning as early as 2010-2011, when the potential impact of these changes bursts fully onto markets and the current financial crisis has eased, the report said. It also foresees: A world in which energy is not to be conserved but is so abundant as to be wasted, and one in which power generation is no longer the integrated monolith it is now, but one that is decentralized among users. A world in which electric automobiles navigate our roadways, solar panels heat our homes, and where hotels and large buildings use "utilities in a box" that offer electricity, heat, hot water and cooling on site by recapturing waste heat. And with transmission costs and new power plants adding dramatically to power costs, it will be a world in which "microgrids," or clusters of small on-site generators, serve office buildings, industrial parks and homes without overburdening aging transmission lines. Consequently, "the application of technology to resource problems should cause profound changes in the energy, utility and automotive industries," Milunovich said. The building blocks will likely be nanotechnology and genetic engineering. How biotech is already overlapping with the clean technology revolution is evident in the engineering of enzymes to break down cellulose to create biofuels. The alternative energy industry is currently well off its peaks, and is under pressure as the credit crisis crimps availability of capital. But Milunovich expects friendlier government policies, particularly from US president-elect Barack Obama, and economic improvement to spur investment. Critical to the success of alternative energy is the support of venture capitalists, whose entrepreneurial bent encourages innovative thinking.
(Vancouver Sun 081125)

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