As a society we are reaching far and deep to increase energy efficiency, reduce waste, create new technologies, and improve on existing ones. Although the government sets parameters and standards, much of this effort falls to partnerships between business and investors.
Investment in this market segment, as in others, must flow from sound business decisions, but often it also has the happy consequence of helping the environment. Although Braemar Energy Venture’s foremost goal is to give a good return to its investors, and it doesn’t specifically advertise itself as a socially responsible firm, companies in the energy sector are almost by definition making a social contribution.
“Clearly there are things we do in the firm — improving the efficiency of existing energy sources, investing in renewable and alternative energy, and looking for opportunities — where we can make money and can do good for the environment,” says William D. Lese, managing director and cofounder of the Manhattan-based Braemar Energy Ventures. “I believe the two can go hand and hand. Everything we work on makes some improvement in energy and helps many environmental problems related to energy.”
Lese will be part of a panel on Green Investing Trends on Monday, February 25, at 5:10 p.m. at the Green Trends and Predictions Conference at the Rutgers University EcoComplex in Columbus. The other panelists will be Tracy S. Warren, general partner at Battelle Ventures; Michael Winka, director of the New Jersey Board of Public Utilities Office of Clean Energy; Patrick Regan, New Jersey Network’s senior correspondent for science and technology; and Alfred Matos, vice president of renewables and energy solutions for PSE&G.
Lese describes several areas where Braemar Energy Ventures invests:
Making coal cleaner and more efficient. With oil prices so high, the value of the abundant hydrocarbons in the ground — including coal, heavy oil, and shale — goes up. To make coal an economically feasible energy alternative, the cost of extraction and processing must be brought down and its environmental impact, both in terms of air quality and global warming, reduced.
Once coal is extracted from the earth, the question is how to process it so it can be more efficiently used for power production, fuel conversion, and in some cases providing heat for industrial processing. In some parts of the country, utility boilers will combust coal and use the heat to process chemicals, metals, and a variety of applications.
One focus of Braemar’s investment is coals that are relatively low in energy but also lower in pollutants; the goal is to release more energy from them. Certain coals, for example, are cleaner but wetter. But by virtue of the fact that the water must first be boiled off, they have less energy. “If we can preprocess the coal to remove water in an efficient manner,” says Lese, “you have a higher quality coal and it is inherently clean.”
Because reserves of higher-quality coal from the Central Appalachians are declining, businesses are looking at more abundant reserves. Lese points specifically to the Powder River Basin in Wyoming. “It is abundant in coal that is low in energy content — which is not good — but is also low in ash, in sulfur, and in mercury — which is good.” This is considered low-rank coal, because the BTU content is low, but the right processing can make it closer to its high-quality cousin on the East Coast.
Developing the next generation’s photovoltaics. Right now photovoltaics that produce electricity on rooftops are very expensive and hence used primarily in remote areas. In areas where other types of energy are available, it is hard to get an adequate return on investment in photovoltaics in a reasonable period of time.
In an effort to reduce dependence on fossil fuels, many states, including New Jersey, have passed legislation supporting renewable and solar energy with subsidies and tax credits. “These have helped improve the economics of solar for commercial, industrial, and residential,” says Lese, “but they still haven’t gotten around the issue of it being inherently pricey.”
So Braemar is looking at an approach that is the next generation in solar energy production. “The company is developing a technology that we think will radically reduce the cost of photovoltaics,” says Lese. “It involves a different approach in terms of chemistry and how you make the films used to produce the electricity.”
Lese continues, “We decided rather than doing something slightly different, we thought we would like to put money into the next generation, which will take longer to develop.” The advantage of a shorter-term development horizon, he admits, is that it gets to market more quickly, but he is not worried. “We feel we can get more value by betting on a technology that will make more of a difference,” he concludes.
Developing LEDs. Lighting means far more than just flicking a switch at home. Light, for example, is used to light up equipment and exhibits, to light the inside of equipment like a projector, and to light the liquid crystal in flat screens.
In hopes of increasing the efficiency of light bulbs, Braemar is investing in LEDs, solid-state bulbs that Lese believes will ultimately replace incandescent and compact fluorescent bulbs.
The goal is to find a light source of good quality that produces much less heat than existing ones. Incandescent bulbs are the worst. “An incandescent bulb is a filament inside a piece of glass from which air has been removed. The bulb functions by the fact that electricity runs through a filament, radiates energy, and produces light,” explains Lese. LEDs surpass incandescents in terms of efficiency.
As for compact fluorescents, which certain governments, like Australia, have mandated, they produce light that is not always of the best quality. Lese suggests that LEDs, dollar for dollar, give better light.
Improving energy storage. Batteries need to become more efficient, says Lese, both in their ability to store energy and to deliver it over many cycles so they do not wear down. “There is a need for better energy storage for powering small devices like laptops, cell phones, camcorders, and PDAs,” says Lese, “but also hydroelectric vehicles.” Although the Prius is selling well, it is very expensive, and part of that cost is the battery, says Lese.
Another area where the storage of electricity is critical is as part of a system for capturing wind energy. Wind yields an enormous amount of energy, but it is erratic — the wind can blow slowly or quickly and can change direction on a dime. “If we can store it,” says Lese, “it makes the energy more dispatchable — rather than at the will of the wind.” Better storage would make wind a more valuable energy source and help prevent it from destabilizing the grid by providing more control over the energy. It can be dispatched when it is most needed rather than just when it chances to occur.
Lese received a bachelor’s in physics in 1982 and then a master’s in energy science, both from New York University. His mother, who is deceased, worked for New York Mayor John Lindsay, and politics was both her passion and interest. His father is retired from the real estate business.
Lese started his career as one of the original employees of Sithe Energies, which became one of the world’s largest independent power producers; while there, he managed several power projects. Next he served as director of business development for NPS Industries, an international manufacturer of engineered equipment for the power industry. Then he moved to Mantis Holdings, a venture capital firm focused on investing in environmental and energy efficiency companies; he concentrated on emerging technologies for converting industrial waste streams into value-added products.
Braemar’s reach is broad. It considers investments in transportation fuels, power, and energy storage, as well as how to control pollution, improve efficiency, control costs, and provide the level of precision necessary to prevent waste. The goal is simple, says Lese, “to use fewer electrons but still get the same effect for residences, industry, and commercial energy requirements.”