Monitor China board Chairman: Optimistic about energy efficiency use-oriented enterprises

Wang Jing Book "I first in the field of environmental protection investment, about 40 years ago."　　"Private equity fund Hao Capital General partner, Monitor Group China District Board Chairman Hotard (Edgar G. Hotard) told reporters.　　For its more than 40 years of investment experience in the Low-carbon field, Hotard in Qingdao 2011 China Green Company Annual meeting to accept this reporter's interview. At the Green Company's annual meeting, he and investors from mainland China are looking for new opportunities in the Low-carbon market.　　Even though the full Chinese language has made him a bit of a strain, the Chinese market is still in the mood to explore the attractions and new opportunities. Hotard from Praxair Inc in 1999. President, chief operating Officer and board member to retire from office. Praxair Inc. is a global industrial gas and medical service company with a total value of 6 billion dollars.　　As Vice President of Union Carbide Corporation in 1992, he split Praxair from Union Carbide Corporation with other managers and listed it on the New York Stock Exchange. First contact with the field of environmental protection began with his work experience at Praxair Inc. At that time Praxair from the U.S. government to buy garbage for recycling. Up to this day, Hotard is a veteran of green investment. At present, his Hao Capital private equity fund has invested in a Amina (LP AMINA), an energy environmental company in China, which is committed to the development of China's power environmental market and to the promotion of advanced technologies and solutions for NOx control in power plants.　　In addition, he is the partner of Arch Venture Partners, and Arch has been committed to early technology companies to invest in venture capital. For the past more than 20 years, Hotard has been committed to expanding its business in China and has established extensive and deep relationships with a number of senior Chinese government officials and business executives.　　His work in the Praxair and monitor group has made him a blade in various industries in China, including oil and gas, life sciences, advanced materials/technology, chemicals, consumer goods and industrial services. He is the founder of the China Economic and Technology Union. At the same time, it is also a council member of China Business Council for Sustainable Development.　　He was awarded the Great Wall Friendship Award by Beijing Municipal Government in December 2000.　　Talking about his latest investment, Hotard, he is investing in a U.S. technology that converts green algae into oil.　　Green algae turn into oil?　　New Mexico, the establishment of large-scale demonstration factories, commercialization of the 21st century: in the hot energy of today, what makes you still adhere to the oil and other traditional energy sectors investment?　　Hotard: I saw a lot of good technology in the lab and we knew it would be a huge market. Whatever the politicians say, as an investor, I thinkFossil fuels will not go away in the short term. It can even be said that fossil fuels remain the main source of energy for a long time.　　The world now maintains a consumption of about 18000 gallons of oil per minute. The future oil comes from two ways, one is from the less stable areas, such as the Middle East, Africa, the second is the deep sea, from the seabed down to drill down hundreds of meters, the future of oil sources will be very difficult.　　How to make fossil energy more sustainable is a huge business opportunity. At the same time, I do not think a single technology can solve the current human energy problems. We also invest in solar and wind energy.　　But the new energy is unstable, and we want a back-up plan, and the alternative is important.　　"21st century": What new investments have been recently?　　Hotard: ARCH Venture's investment focuses on commercializing the technology in the lab, as I now invest in a company Sapphire energy, which has the technology to turn green algae into oil, and will build a large-scale demonstration plant in New Mexico, where it can be commercialized. The goal now is to reduce the cost to the current product price. All the cost of this technology is to build a green algae farm, and the existing oil transport system does not need to make any changes.　　We hope not only to introduce this technology into China, but also to introduce countries near China, such as Indonesia and other countries that are not suitable for large-scale industrial development of the island. We've invested in a lot of these technologies that are still in the lab, such as absorbing carbon dioxide through a special resin, and a technology that absorbs carbon dioxide through the amino. Can be cooled to absorb carbon dioxide, when the temperature rises release carbon dioxide. The cost is about $20-30 a tonne, slightly lower than the current carbon price, and can be used for gas flooding in oil fields.　　These will become sister technologies for CCS (carbon sequestration and carbon capture), which cost less than CCS, and CCS is still too expensive. I think it's not too far from commercialization.　　Policy subsidy is a double-edged sword long-term sustainable development can not rely on government subsidies "21st century": Now the green field of investment enthusiasm, what needs to pay attention to? Hotard: A lot of advanced technology in environmental industry, we must be cautious about the risks of technology itself, and whether there is the value of commercial popularization.　　And be cautious about government subsidies. 30 years ago in California, many people were investing in wind farms because of government subsidies. But when the subsidy is over, the wind farm is not connected to power generation, and I see this happening now in China. I think government subsidy can be used in the initial stage of industry, but it cannot be the only reliance on the sustainable development of the industry.　　Some European governments are now living beyond their means.　　Of course, the real risks include the ability to commercialize these technologies in the context of achieving economic benefits.　　"21st century": How will government subsidies hinder industrial development? Hotard: First, too much subsidy may cause the industry to expand blindly, the industry may in a short timeexcess of development.　　Invest and build too much equipment under policy stimulus. Second, many times the policy is not long-term stability. My first investment in the environmental industry was about 40 years ago, when Praxair's business included industrial gas processing. At that time, the city government paid the company to dispose of municipal waste, about 20 dollars per ton, including transportation costs and later processing costs.　　We negotiated with the government that it would be a good technique to have these rubbish, to burn rubbish with high-purity oxygen, to produce carbon dioxide and hydrogen, and to continue to use solid materials. But soon after, the government wanted to sell us rubbish for $20 a tonne. This directly delayed the commercialization of the technology. It wasn't until many years later that we completely commercialized the technology. But without the government's charging order, maybe we could have done it years ago.　　That's why I don't like government subsidies. Long-term sustainable development cannot rely on government subsidies. It is impossible to rely on the government forever to subsidize your company and industry.　　Policies do not necessarily have long-term stability and businesses cannot rely on this for long.　　Optimistic about energy efficiency use-oriented enterprises low carbon is not a fast-growing field "21st Century": How to treat China's low-carbon sector? Hotard: First of all, China faces more severe energy challenges than those in Europe and the United States, and more opportunities for us. In developed countries such as the United States and Europe, the per capita energy consumption is very high, basically has been the fastest development stage, will not grow too fast.　　China is still in rapid development, so China will face the dual problems of meeting current development needs and safeguarding future energy security. Second, the Chinese People's awareness of environmental protection is improving, labor prices can also be accepted. Each country initially has a historical process of environmental protection, for example, when Germany initially made garbage collection, it told citizens that the income from recycling would be incorporated into municipal taxes, so that all citizens who had garbage collected could enjoy tax breaks. This slowly changes people's habits.　　China is also experiencing this process now, which will be the future market.　　21st Century: What industries will you pay particular attention to in the future? Hotard: I will pay more attention to energy efficiency in the use of enterprises, such as energy efficiency verification and other green services.　　I'm also looking at solar, wind, and so on, but the challenge is that China has too many wind farms, but most of them are not working, and I need to wait.　　"21st century": Can you share your own investment principles and recommendations? Hotard: I value the quality of management. Today, no matter how the technology is "sexy", the development of enterprises will finally be implemented in people, they have no such vision, they can formulate appropriate development strategy, whether they have strong management, implementation capacity.　　I will consider a lot of things, but the most important thing is management. When it comes to advice, I'd like to remind you that Low-carbon is not an area for making fast money, it won't make you rich overnight, you need a long-term investment strategy. The key to making money is whether you can stay in the business.