The top 10 cleantech countries of 2009

The cleantech wave is expected to continue to grow, with some analysts estimating the cleantech market will crack the $2 trillion threshold by 2030.

The players in the cleantech space are a mix of world economic, political and social leaders. They include former American vice presidents, billionaire entrepreneurs, Arab Sultans, Internet moguls and huge pension funds.

A few months ago, I ranked the best states for top 10 states in the U.S for cleantech (see The top 10 U.S. states for cleantech in 2009). But that got me thinking: Which countries are the leaders in cleantech?

There are no black and white answers. I analyzed what I thought were the most important factors, such as government initiatives and programs, large investment mandates, entrepreneurial innovation as well as cultural and social drivers.

What are the key objectives of the countries on my list? For starters, the creation of green collar jobs, continued economic development, and a desire to achieve energy independence.

Here, then, is my ranking for the ten top cleantech countries of 2009:

1. Denmark with the national goal of becoming 100 percent fossil fuel free. The Danes are Europe's largest exporters of energy technology and the birthplace of wind technology. The Danish wind industry accounts for approximately one-third of the world market, with big players such as Vestas, Siemens and Gamesa all having major R&D and production facilities in Denmark. The Danes also have the financial backing of ATP Pension Fund, DONG Energy and AP Pension, all with huge mandates for cleantech. Denmark is truly a model cleantech country where business, international cooperation, entrepreneurship and R&D partnerships are facilitated by such organizations as Copenhagen Capacity, Copenhagen Cleantech Cluster, and Cleantech Scandinavia (see A Copenhagen call to action). 
2. Germany is the solar capital of the world. Over half of all global solar energy is produced in Germany. Led by powerful government initiatives such as the feed-in tariff program, 10 percent of the energy consumed in Germany was produced from renewable resources in 2008. Germany also tops European countries for cleantech investment in 2008, with $383 million in capital—an increase of 217 percent from 2007 (see 'Mittelstand' drives Germany's cleantech boom). The German government’s "High Tech Strategy" devoted more than €15 billion to technology and innovation between 2006 and 2009 and has helped increase employment in the cleantech industry from 250,000 in 2007 to 280,000 in 2008. Germany's 2050 goal is to have half of primary energy consumption coming from renewable resources.
3. Sweden is a country fully embracing green technologies, with 43.3 percent of total energy consumption coming from renewable sources. The city of Malmo is a true example of cleantech living—with 39.9 percent of its energy consumption covered by renewable energy (see Swedish port city in green transformation). Sweden boasts two internationally renowned sustainable city projects, City of Tomorrow in Malmo and Hammarby Waterfront in Stockholm. Between 1990 and 2007 Sweden's GDP grew by 48 percent while greenhouse gas emissions decreased by 9 percent. Strong legislation has pushed the cleantech industry, fueled by some of the strongest environmental organizations in the world. The Society of Nature Conservation, WWF and Greenpeace have some 500,000 supporters/members in a country with a total population of 8.5 million. Add the backing of financial of such institutions as AP7 Pension Fund, Northzone Ventures, Sustainable Technologies Funds, and SEB Venture Capital, and one can easily see why Sweden is a true cleantech force on the world stage.
4. The United Kingdom's official commitment to cleantech is strong and growing. It is aiming to achieve a 60 percent reduction in UK carbon dioxide emissions by 2050, and carbon neutrality by 2012 for the government's office estate, all backed by such groups as UK Trade & Investments and ThinkLondon (see UK: No new coal without CCS and UK to spend £250M on electric car incentives). With the 2012 Olympics aimed to be the greenest games ever, the UK has set a target of 15 percent of energy from renewables by 2020. The UK is also in the running for the financial hub of cleantech with well respected firms such as Generation Investment Management (co-founded by former U.S. Vice President Al Gore), Virgin Green Fund (founded by entrepreneur billionaire Sir Richard Branson), Zouk Ventures, Carbon Trust, Impax, and the Environment Technology Fund.
5. Israel, the 'Silicon Valley' of water technology, is fast becoming the cleantech incubator to the world (see Israel to export $2.5B in water technologies by 2011). Israel recycles 75 percent of its wastewater, invented drip irrigation, and is home to the world's largest reverse osmosis desalination plant (see Israel plans largest desal plant in $513M deal). Israel certainly isn't the world's biggest cleantech market, but it might just be one of the world's most important centers of cleantech innovation and R&D, with innovative companies such as CellEra, Aqwise, and Emefcy. Better Place is also making Israel the first test-market for a nationwide electric vehicle recharge network (see Electric cars are coming to Israel). Leading Israeli VCs include Israel Cleantech, Aqua Argo Fund and Terra Ventures.
6. Switzerland has set itself apart as the global hub of cleantech finance. It led the way the with a specialized fund more than 10 years ago, and is now home to a huge pool of cleantech money in financial powerhouses such as SAM, Good Energies, Emerald, UBS, Picet Sarasin and Mountain Cleantech (see Swiss group spreads the cash around and Swiss cleantech € and ocean power). Intertwined with a historic culture for sustainability and 56 percent of all electricity coming from hydropower, Switzerland has positioned itself to take advantage of the cleantech revolution.
7. The United States, with American-based VCs pouring about $5.9 billion of new investments into the sector in 2008, leads the world with 70 percent of total global investment (see Record 2008 for cleantech with $8.4B in investments). Preeminent VCs such as Nth Power, Draper Fisher Jurvetson, RockPort Capital Partners, Khosla Ventures, Kleiner Perkins Caufield & Byers, Enterech Capital and corporate investors such as Google and Intel have helped to fuel cleantech. Other large U.S. investors in cleantech include CalPERS, California State Teachers Retirement System, New York State Retirement Fund and the Oregon Investment Fund. President Obama has also sent a very strong signal: Renewable energy is going to play a central role in both energy-environment and economic recovery strategies.
8. While the United Arab Emirates may not be the greenest nation in the world today, it is taking bold steps to position itself as a renewable energy hub of tomorrow (see UAE: The future of cleantech?). Led by CEO Sultan Al Jaber in 2006, Abu Dhabi established Masdar City, a $15 billion development that is expected to become the world's first zero-carbon, zero-waste city. It is to be home to more than 1,500 renewable energy-related companies, creating a global centre of renewable innovation (see Abu Dhabi, the next cleantech hub?). When a leading oil-producing country tells the world it wants to become the new hub for renewables, it is sending a strong message that the future is beyond petroleum.
9. China is a world leader in the manufacturing of solar photovoltaic technology, with its six biggest solar companies having a combined value of more than $15 billion. China has incredible potential when it comes to cleantech. China has abundant resources in hydropower, wind, solar, biofuel, geothermal and tidal energies. Renewable energies and nuclear power accounted for 7.5 percent of total energy consumption last year. China's State Renewable Energy Agency is aiming to raise its renewable share to 10 percent in 2010 and 15 percent in 2020. China's hydro potential ranks first in the world. In addition, China has the largest wind resources in the world and three-quarters of them are offshore (see China drives global market, supply for wind).
10. Canada runs on hydropower. Canada is the world's second largest producer of hydroelectricity in the world. Some provinces such as Quebec, Manitoba, Newfoundland & Labrador, and the Yukon produce more than 90 percent of their electricity from hydro. The Canada government has put a unique program into place, the $1 billion Sustainable Development Technology Canada fund. SDTC is a not-for-profit foundation that finances and supports the development and demonstration of clean technologies.

Who will emerge as the ultimate winner? In the end, I think we’ll see many winners, but keep an eye on those countries that have powerful government regulations and incentives, large capital infusions, a spirit of innovation and powerful cultural adaption and enthusiasm.

Shawn Lesser is the president and founder of Atlanta-based Sustainable World Capital, which is focused on fund-raising for private equity cleantech/sustainable funds, as well as private cleantech companies. For information, visit his Web site.

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