13 December 2017
visit www.avoka.com

Cleantech the sixth technology revolution - Merrill Lynch

24 November 2008  |  1033 views  |  0 Source: Merrill Lynch

Energy concerns will not disappear despite the falling price of oil, so investors can expect significant long-term opportunities in the cleantech space, according to a new thematic report published by Steven Milunovich, Merrill Lynch Cleantech Strategist.

Mr. Milunovich believes the sixth technology revolution will be driven by clean technology - the application of technology to optimize the use of natural resources - and biotech. He sees a return to renewable resources given the problems of global warming, energy dependence, and scarcity of fossil fuels. The current pressure on cleantech stocks may continue for now, but the combination of friendlier government policies and economic improvement should lead to investment opportunities in 2010-11. Thus Mr. Milunovich is bullish on cleantech in the long term. "History shows that technology revolutions occur about every 50 years. We believe cleantech is at the beginning of a high-growth period much like computing was in the early 1970s. The application of technology to resource problems should cause profound changes in the energy, utility, and automotive industries." says Mr. Milunovich.

Energy efficiency a large opportunity

Boosting efficiency is the low-hanging fruit of cleantech. Although efficiency measures will not reduce demand as some think, investors need to be aware of the demand-side opportunities in areas such as lighting, demand response, and building materials. Electric vehicles would be important in linking for the first time the oil and non-oil parts of the energy world.

Cleantech could help decentralize the energy economy

Energy markets today are mostly centralized. While solar and wind farms may continue this trend, Mr. Milunovich believes decentralized energy generation and monitoring through solar panels, distributed intelligence and microgrids may prove the wave of the future. Cleantech therefore may evolve toward a horizontal, distributed industry.

The disruptive role of venture capital

Critical to the success of alternative energy is the support of venture capitalists and the attraction of entrepreneurial managements. The venture capital model encourages innovative thinking and the adoption of new technologies. "Venture capitalists understand that digital technology is moving from the microscopic to macroscopic world," says Mr. Milunovich. "Subsidies are needed to support cleantech in the short run, but the industry must succeed on stand-alone economics over time."

Portfolio approach the likely cleantech investment strategy

Although investors should take a diversified approach at this early stage, Merrill Lynch Research has identified the solar industry as the long-term technology frontrunner, since the sun is by far the Earth's largest energy source and solar enjoys the fastest price-performance improvements. Wind also is promising, with biofuels and geothermal dark horses.

Comments: (0)

Comment on this story (membership required)

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.solutions.lexisnexis.comvisit www.atos.netvisit www.aciworldwide.com

Who is commenting?

Top topics

Most viewed Most shared
Saxo Bank's 'Outrageous Prediction': Bitcoin to peak at $60k next year before spectacular crashSaxo Bank's 'Outrageous Prediction': Bitco...
11906 views comments | 7 tweets | 7 linkedin
Deutsche Bank paper hails 'huge' blockchain potentialDeutsche Bank paper hails 'huge' blockchai...
8973 views comments | 15 tweets | 21 linkedin
PSD2: Laying the regulatory foundation for a new age in paymentsPSD2: Laying the regulatory foundation for...
7294 views comments | 17 tweets | 35 linkedin
Santander UK poaches Barclays innovation chief Michael HarteSantander UK poaches Barclays innovation c...
7177 views comments | 8 tweets | 17 linkedin
Alior Bank to use Open API platform and accelerator to create fintech marketplaceAlior Bank to use Open API platform and ac...
6997 views comments | 20 tweets | 11 linkedin

Featured job

Competitive base, double ote, benefits
London, UK

Find your next job