McKinsey on Energy Productivity

Technology Watch:  As the CleanTech Blog brought to my attention, the McKinsey Global Institute has released a study suggesting that if the world invested $170BN a year in increasing "energy productivity" between now and 2020, the world could cut greenhouse emissions in half AND enjoy a 17% IRR on its investment, achieving savings of $900BN annually by the end of the period.  Interestingly, none of the investment needs to be in "alternative energy", but instead in energy efficiency, which it dubs "energy productivity" to cast it in a more positive, capitalist-appealing light.

Half of the capital ($80Bn / year) would go to global industrial sectors, a quarter ($40BN/yr) would go to residential and about an eighth would go to commercial and transportation.  Two-thirds of the investment would need to go to developing countries, with China alone requiring 16% of the total.  McKinsey points out the near-universal policy of providing fuel subsidies in developing markets is a particularly egregious market distortion that holds back efficiency gains.

This suggests that a good portion of the VC dollars being thrown at cleantech is barking up the wrong tree by focusing on alternative energy and that the real money (and earth-saving improvements) are to be made in the "energy productivity" sector.

Sprint and Clearwire near a WiMax deal

Technology Watch:  It looks like Sprint and Clearwire are again near a deal to form a WiMax joint venture that would involve a $2BN injection from Sprint and potentially other companies such as Intel and Motorola.

I personally believe that the activist investors that are giving Sprint a hard time for its potential WiMax investment are being short-sighted.  As this BusinessWeek article attests, mobile penetration is hitting the mature level of 80% this year, which means the industry can expect slower growth and more price competition going forward.  Sprint itself may even throw down the guantlet with a rumored all-you-can-eat plan.

Meanwhile, yesterday Comcast ruled out buying Sprint (or Yahoo) in the near term.  Sprint has attractive assets and is trading at a fraction of book value, but is at a clear operational disadvantage vs. AT&T and Verizon on the mobile wireless side, and if it hives off its WiMax business does not have a strategy to move back into a competitive position with them.  The eventual natural acquirors are Comcast or Time Warner Cable, but such an acquisition is likely years away and Sprint becomes less strategic to the cable cos without the wireless broadband assets.  Frankly, now Clearwire would be the more attractive (and affordable) target for the cable companies, particularly if it completes its JV with Sprint.

[FULL DISCLOSURE: My firm Catalyst Investors was an early investor in Clearwire and still owns a stake.  May family also (unfortunately) owns stock in Comcast and Sprint.]

Super Bowl Prediction – The Pats Cover

The past two weeks, I was lulled into the trap of believing the Giants were a better bet at +12.  You know, since the Giants played the last game of the season so close, the 12-point spread seemed too high.  But you know what?  This morning I asked myself the question: who learned more from that last game of the season?  I’m going with Bill Belicheck and the Patriots.  Expect them to get a big lead early and force Manning to come from behind.  The rout will be on.

Full disclosure: I grew up in Maine, so I may be subconsiously biased in my analysis.

[POST-GAME EDITOR’S NOTE: I am reminded why I don’t bet on sports.  Congrats to the Giants, especially to their D-Line, on a game well-played.]