A leading investment fund has predicted a flurry of action among start-ups in the clean tech space following the $28 million acquisition of demand response company Energy Response by US-based Enernoc.
The deal, for cash and stock, sees Enernoc, the global leader in the energy demand response market, take over its largest competitor in the lucrative WA market.
Energy Response was founded in Melbourne by Ross Fraser in 2005 and operates by saving money for clients and the grid by reducing the use of electricity by businesses during peak times.
The acquisition, hot on the heels of Sunday’s unveiling of the carbon pricing plan that includes a $10 billion fund for green technology, is an indication of growth in the market, according to Starfish Ventures, which had a minority stake in Energy Response before its sale.
“We invested (in 2009) because this was and is a fantastic market,” says Ivor Frischnecht, investment director at Starfish.
“There’s no question that there will be dramatic growth in the area of demand response. At the moment it’s a simple service that turns off power during peak times but it will become far more sophisticated when renewables, which are more intermittent, come in.”
Frischnecht says Starfish sees opportunities in several areas of clean tech but the company will be awaiting passage of the carbon pricing legislation before it had certainty over its investment options.
“This will be a fantastic opportunity for us and renewable energy companies,” he says.
“There are all sorts of companies that will emerge. The whole area of demand management is very exciting, such as add-ons for smart meters that will turn the heating up and down as well as energy efficiency retrofits.
“With government assistance there are very exciting things happening in the market with wave and solar although they need a bit of time to develop and for the cost to come down.
“There was a flurry (of start-ups) when the CPRS was on the cards and I expect there will be a further flurry now. A lot of businesses will want to get a piece of the action, not only for the low carbon economy but also the services such as trading and auditing, that surround it.”