Archive for the ‘EPA's Climate Leaders’ Category

The ECA Market grew up quickly

Tuesday, January 19th, 2010

Today Groom Energy published our newly updated ECA research report, 2010 Enterprise Carbon Accounting, which also included our selections for the market’s 2010 ECA Emerging Leaders.

The basis for our research report started back in 2006.  At that time, as Groom Energy engineers were working with a F500 customer to build a GHG reduction budget, it occured to us that GHG tracking and reporting would eventually represent a fundamentally new process within every large company.  Even by then, staying on top of reporting for the EPA’s Climate Leaders was requiring more and more time for our customers.  It was no surprise that spreadsheet tools were not going to scale – but it was the collaboration necessary to even gather and manage the data where the gap was most obvious.

What most people don’t know is that we even made a concerted effort to start our own Groom Energy spin-out GHG software company.  We had surveyed the market through our customers, found only a few third party software packages, and thought we saw a path to a new class of enterprise software, calling it “enterprise carbon accounting” or ECA for short.    (all new markets need a name, right?)

Within a few months we had detailed the basic software functionality and even recruited a software team to start building it.  After several initial meetings with traditional software VC’s in Boston (most of whom couldn’t spell G-H-G, but all of whom understood enterprise software) we sensed it was going to be a long slog to get early stage funding based on our powerpoint-ware.  Either we had bad breath, couldn’t convey the opportunity correctly or needed to live on Sand Hill Road…

Within a few months of our effort we starting uncovering more new ECA vendors, some established EHS vendors with GHG extensions, some VC funded pure start ups, some larger software companies who added GHG modules.  It seemed each week we were adding a new entrant to our wiki list, which was more and more daunting.  At 10 known players we were concerned.  At 20, we knew were were too late and abandoned our effort.  At 30, we knew that our customers were just as overwhelmed trying to understand the offerings, all while building their own strategies internally.

And hence the idea for our ECA research report was born.  We saw that the best way to leverage our effort was to help our customers with a more concrete deliverable – customer based research which could be regularly updated as the market developed.  Not as profound as an entirely new company, but worthwhile nonetheless.  The good news is that market response has been a bit overwhelming…

Check out the latest report and, if you’re an entrepreneur considering your own ECA software start up, study the vendor list carefully – its up to 60 and still going….

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What’s your time horizon for GHG reductions?

Friday, October 30th, 2009

On Thursday I participated on a panel at the Northeast Campus Sustainability Consortium Conference in Burlington, VT.  Our panel hosted a discussion about how universities and colleges (650+ of whom have signed the  Presidential Climate Commitment (PCC)) should consider financing their efforts to become carbon neutral.

Not surprisingly, at the time they signed up most institutions didn’t focus of the financial costs for going carbon neutral -  now a few years later it’s becoming more clear that the big issue (beyond behavior change) is where is the money to make this possible?

Today, getting an entire institution close to carbon neutral can only be achieved by purchasing REC’s or offsets.  This is probably a reason why Harvard and Yale have yet to sign the PCC, as they would be perceived as buying their way to neutrality with their now smaller, but still large endowments.

The good news is that the PCC goals are LONG TERM – when you’re an institution with plans to be around for the next 100 years, you can talk about the year 2050 in academic terms.  However, each year that passes after making a PCC announcement it will become more clear how unprepared these institutions are to make significant progress, except through buying REC’s and offsets.  There’s no silver bullet for Mr. University (or anyone else) to pay for new solar arrays, CHP systems or all new EV fleet.  An extra green student fee won’t do it.  Most have already attacked the “low hanging fruit” early on – so their respective annual report cards will be pretty hollow without some serious investment.

Which is why I’m a bit skeptical about the chance of success for the PCC.

Compare the PCC to the EPA’s Climate Leader (CL) program.  CL has had similar signup momentum with over 250 large companies committing to reduce their climate impact over a multi-year period.  Where the PCC talks about Carbon Neutrality in the next 20-40 years, the Climate Leaders’ goals are typically for 10-15% reductions over a 3-5 year period.  Where the PCC members chose to require a profound multi-decade goal, CL members chose Kyoto-like targets.  The CL annual reduction targets are being tracked and several corporations are now preparing their next targets, having achieved their initial targets in the last year.

The climate problem isn’t going away in a few years.  While both goal systems can work, only CL can be measured and reported in a way that allows for learning, revising and setting new direction in an iterative fashion.  Even grand challenge goals need to give folks a more likely chance of success in reasonable timeframes…

So we spent our time in the panel talking about lifecycle costs, energy performance contracts, taxable vs tax-free capital and power purchase agreements.  My expectation is the the university/college market will come quickly to the right decision – the only way to make a near term dent in their GHG emissions is to finance there way there.

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