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The Sunday Times: Harness the power of eco-boffins

Green business: Technological skill and entrepreneurial instinct must work together to be a success

March 16, 2008
Andrew Stone

The green energy sector is booming. Concern over climate change, sustainability and energy prices has created the conditions for entrepreneurs to profit as investors jostle to fund green power generation and technologies that cut waste and boost efficiency.

Entrepreneurs able to form an effective management team and put a solid business together have never had a better chance to create a successful green business, according to financier and entrepreneur Philip Holbeche.

“I am not a scientist and it is often the case that technology people don’t know how to – and don’t necessarily want to – build a business. The entrepreneur is the one that builds a good management team and who is the interlocutor between the technologists and the City.”

Holbeche, former chairman of fuel cell maker Ceres Power, which he took from university start-up stage to a listing on the Alternative Investment Market, sees plenty of scope for entrepreneurs to get into the sector. “Solar energy generation, fuel cells, biofuels such as algae, as well as things such as land remediation, are all promising areas for new processes and technologies.”

The good news for entrepreneurs, according to Sam Richardson of e-synergy, which invests in clean and green technology businesses through its £30m Sustainable Technology Fund, is that building the right teams is getting easier as good managers and senior executives flock to the sector. “Environmental businesses are hot right now and senior people from big companies are interested in working in the sector,” he says.

However, the challenges can be daunting, says Richardson. “The opportunities are high, but so are the hurdles. Bringing a new piece of technology to market can be a time-consuming and capital-intensive job.”

Choosing the right technology to back is fraught with risk, as is securing initial backing from investors, says Holbeche. “Finding the first-round funding for a new technology is the hardest part. If you succeed with that, things tend to get much easier.”

Setting up a technology-led business is not the only way to profit from the sector, says Holbeche. “There’s huge pressure on businesses to reduce their carbon footprint and to change the way they do business to be more sustainable, so there’s great scope for consultancies that help them do this.”

Such service-led opportunities are multiplying. There is a growing demand for specialists who can help businesses with carbon trading, auditing and offsetting, and help them to manage their energy consumption, waste and recycling activities, says Richardson. “In time, consultants in these areas will become as ubiquitous as IT consultants are today.” Existing businesses can transform themselves to catch the wave of environmental sustainability as well, he says. Property management companies, for example, might position themselves as energy auditors and energy-efficiency consultants as well as maintaining and running business premises.

Speed is likely to be of the essence, however. Bigger, established players have woken up to the possibilities, too, says Richardson. “The likes of Shell and Dupont are looking at biofuels and renewable energy, and they have big budgets. On the service side, consultancies and service businesses such as McKinsey, Jones Lang LaSalle and Ernst & Young all have environmental arms already.

“The better opportunities will be for those able to identify niches, to specialise and to be fleet of foot. Opportunities on the service side will probably exist only for the next five years, while there’s still no core of expertise in these areas.”

Good Energy Group

THE Good Energy Group, based in Wiltshire, offers proof that helping consumers and firms to reduce their energy consumption and generate renewable energy offers significant growth opportunities.

The firm provides electricity generated by renewable means to homes and businesses, helps customers to install their own renewable power generation facilities and fits energy-saving equipment. Last year, sales reached £13m, serving 1,600 businesses and 24,000 domestic customers.

“Technology that gives feedback on energy usage such as metering displays is one example of a growing market,” says group chief executive Juliet Davenport, left, 40. “Solar is looking more promising, along with geothermal heat pumps, micro wind power and small biomass heaters for the home.

“We think there are also opportunities on the finance side. An early example is the green mortgage from Ulster Bank, but there’s much further to go, such as being offered finance to install solar panels.”

“We want to become a new kind of utility that provides services other than electricity or gas. Our aim is to provide a complete solution for those seeking to move towards a low-carbon lifestyle.” and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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