Capital.com NewsWhat do you know about clean technology or Cleantech investing? The name speaks for itself. The notion of clean technology is attributed to the environmentally friendly companies that strive to improve their performance and efficiency while lowering energy consumption, waste and various hazardous inputs. The logic is quite simple.
Clean technologies can help the companies to consume less energy and materials, produce less waste and, as the result, provide more economic value to the company’s shareholders.
When speaking about Cleantech, we usually imply 6 directional areas: energy, water, advanced materials, transportation, agriculture, energy efficiency and manufacturing.
Let’s start with the largest one and then delve deeper into the world of Cleantech.
Clean Energy
Energy efficiency is a question that attracts much attention in both political and business circles. Understanding of global climate change, oil depletion and energy security concerns have given rise to an increased recognition of the importance of clean technologies. Besides, people have realised that using modern, energy efficient solutions can significantly reduce the costs of their business. Talking about energy as a whole, we should touch upon the solar, wind and biofuel power alternatives.
Solar Power
Though still not as widely spread as hydropower, solar technologies have great potential. Hydropower is restricted by the limited number of available water deposits, suitable dam sites, in particular. However, the greatest advantage of solar power lies in the unlimited nature of sunlight available in many places on our planet.
Solar power is good for heating and electricity. It is absolutely pollution free and friendly for the environment. The biggest obstacle for making this type of energy more widely used is its cost. For now, solar energy is still very expensive and dependent on the government’s help, in comparison with the availability of grid electricity. Nevertheless, this may quickly change because of the investment boom in solar power.
Wind
Wind power can also be used to produce electricity. Though this type of energy generation has been rapidly developing during the recent years, it still forms only a small part of global power use. Renewable and clean, wind power is rather inconsistent, which makes it only suitable as a supplementary energy source.
Biofuels
Another source of energy worth mentioning is biomass. It is produced from metabolic byproducts of living organisms such as manure; and from plants such as corn, palm oil or sugar cane. This type of energy is renewable and rather stable. However, we should always remember that biomass energy can also contribute to global warming. For example, in the case of deforestation.
Considering investing in distributed power generation, represented by solar and wind power, and want to see how they respond to changing energy market conditions? These decentralised power sources need less fund and attract less political attention than centralised gas or coal power plants.
Water
Focused on several main areas, the Cleantech water industry is primarily concentrated on filtration and wastewater treatment. As water consumption continues to grow and global water resources are limited, there is a serious challenge to be overcome. The Cleantech water industry aims to use wastewater plants more effectively and use less power.
Advanced Materials
What do we mean by ‘advanced materials’? In general, advanced materials mean all the products that are cheaper, less toxic and more efficient than the currently used ones. The goal of using advanced materials is to develop and change the existing products in line with the innovative parameters that can make them stronger, lighter and cheaper for both, manufacturers and customers.
Transportation
The best example of clean technologies in transportation is the hybrid vehicle. Combining a standard engine with an electric battery that ensures better fuel economy. This market continues to grow as the worldwide petroleum prices remain high.
Agriculture
Clean technologies in the agriculture sphere include drip irrigation, efficient farming, natural pesticides production, etc. The market of organically grown products is rapidly developing and enjoys increased popularity among the general public.
Energy Efficiency and Manufacturing
It is well-known that green products consume less natural resources, both during the manufacturing process and their subsequent lifespan. Meaning that these products will cost less, for example, these include fluorescent light bulbs, environmentally friendly packaging and other smart things that make economic and ecological sense.
Investors today pay a lot of attention to companies that show social responsibility and have a tendency to use clean technologies in their production process. Therefore, companies feel the need to increase the use of Cleantech if they want to ensure the further growth and development. Investing in Cleantech has increased its potential and is likely to expand further. Let’s see.