SAN FRANCISCO (Reuters) - Venture capitalist and “cleantech” evangelist Vinod Khosla is placing his bets on alternative technologies that could potentially make at least 80 percent of global energy consumption cleaner in the next few years.
Speaking during the Reuters Global Environment Summit, Khosla said he hunts for “black swans” in alternative energy — revolutionary and unforeseen ideas that change the world as we know it — and are as unexpected as the birds they are named for.
“There is no such thing as great visionaries,” said Khosla, one of Silicon Valley’s best-known venture capitalists. “There’s a huge dose of luck... we just have to take more shots on goal.”
Khosla said Nassim Taleb, a Wall Street trader-turned-author uses the term “black swan” in a recent book to describe the unpredictable and consequential events in business that can be clearly explained once they happen — such as the current financial crisis.
But the world of technology creates opportunities for “good” black swans, added Khosla, who was dressed in his trademark all-black outfit.
Khosla Ventures, the venture capital firm he founded in 2004, has alternative energy investments across the spectrum of wind, solar, biofuels and geothermal energy.
The firm also invests in cleaner battery technology and cleaner building materials; Khosla said he expected more than half the firm’s investments in 65-odd start-up companies to succeed.
Khosla said clean technologies had to do much more than reduce the size of our average carbon footprint to compete with traditional sources of energy or building materials, such as fossil fuels or cement. They also had to be cheaper than traditional power and have the ability to scale up to mass production.
“Does a Prius sell well? Of course it does,” Khosla said, referring to Toyota Motor Corp’s hybrid vehicle. “So do Gucci bags. But are they material compared to the number of bags sold at Walmart? Not on your life.”
Biofuels made from non-food based natural sources and waste — cellulose such as wood chips and switchgrass — were among the most promising sources of scalable clean energy alternatives, Khosla said.
He said he expected there to be at least six different ways of producing cellulosic ethanol within the next four years, and each of these methods would produce the alternative fuel at prices competitive with corn-based ethanol and regular gasoline.
Once the wider market saw that a cleaner fuel could be made cheaply enough to compete with existing fuels, Khosla said he expected a mass conversion to the cheaper and cleaner fuel — particularly because cellulosic ethanol can be poured into gas tanks with only minor modifications to the car.
Khosla agreed the future of biofuels remained uncertain because the technologies were still new, but defended his optimistic outlook by saying that millions of investment dollars had been poured into alternative fuels since 2006, which is accelerating research, production and eventual commercialization.
“Four years ago, when I said biofuels were interesting, people told me don’t be flaky,” he said.
Even big oil is taking an interest in the activity going on in these second-generation biofuels, so-called because they come after the push toward corn-based ethanol.
Other than biofuels, technologies that store solar and wind power to provide a consistent supply — “not just when the wind is blowing and the sun is shining” — would get more venture investment dollars, he said.
An Indian-American who came to the United States as a student in the 1970s and is a fixture on Forbes Magazine’s list of billionaires, Khosla said he is happiest poking around for the next big cleantech idea and chatting with entrepreneurs.
“I’m a techie nerd,” said the co-founder of Sun Microsystems.
(For summit blog: summitnotebook.reuters.com/)
Editing by David Fogarty