Scots pioneers oil the wheels of industry

Published on Saturday 7 June 2008 14:29

Tech firms are Texas-bound in the push for greener energy, writes Bill Magee.

A GROUP of more than 15 Scottish technology companies is preparing to hitch up and hit the Texas trail. The aim of the group, while Stateside, is to establish a new pipeline of business deals as they capitalise on uncertainties caused by the soaring price of a barrel of oil and the emergence of greener forms of energy.

The firms, including a strong contingent from Aberdeen, have been invited to attend Microsoft's annual four-day Worldwide Partners Conference (WPC) in Houston, kicking off on July 7.

While in Houston, the party of 25 executives plan to tap into Scotland's long-standing commercial relationships with the Lone Star State that stretch back to the halcyon days of the first North Sea oil boom. They are keen to press the flesh with like-minded executives, especially those backing the view that "green is the new gold" when it comes to business.

Silicon Valley venture capital (VC) investors, the same ones who brought the planet personal computers and the internet, are now turning their attention to this relatively new sector. As global oil reserves diminish, alternative energy sources – such as wind and geothermal power and renewable industries – are increasingly attracting funds.

Among those travelling to the US is Charles Scott, technical director with Edinburgh's Quorum Network Resources, an IT business infrastructure, security and e-commerce specialist. He reports a significant influx of dollars from Valley-based VCs over the past 12 months.

Scott, a former Houston-based oil exploration surveyor with Haliburton, claims growing awareness of green energy issues is wrapped around a greater emphasis on corporate responsibility. The current squeeze on profits caused by the oil price and the global credit crunch is also forcing firms to think harder about their survival stakes.

John Doerr, a partner with Silicon Valley VC outfit Kleiner Perkins Caufield and Byers, describes "green tech" as "the biggest economic opportunity of the 21st century". In March, Doerr told TED, the annual technology entertainment design conference at Monterey that the global energy business is now worth $6 trillion a year.

The CleanTech Group, a Valley-based networking body promoting what it describes as the next wave of green technological innovations, reports that VCs are falling over themselves to invest in green energy.

CleanTech says that last year VCs invested $1.1bn in clean-energy technology, an increase of 94% over 2006, and there are no signs of any let-up in levels of funds available.

Microsoft Scotland's technical whizzkid Peter Ferry claims those Scottish firms attending the Houston WPC are ahead of the game. He says energy demands and the latest in technological developments are inextricably linked.

"Business is under a double whammy of increasing energy requirements and rising energy costs," he said.

Ferry added that information communications technology (ICT), the umbrella term for the information technology field, has become critical to business and society at large "with ICT systems now expected to be available 24/7 to support an increasingly globalised economy".

The trouble is that an exponential rise in numbers of PCs, semiconductor processors and hard disk storage has come with ever-growing power consumption and alarmingly high costs.

"Any business providing PCs to employees and running business applications on server equipment is incurring such costs," he said. The answer is for sectors, such as the oil and gas industry, to employ clever management software and green energy initiatives.

Cue the firms attending the Houston hi-tech get-together.

Sharon Park, a director of Aberdeen's Sunnyside Consulting, an IT solutions adviser, said clients want technology developments to link into their productivity targets to boost bottom line profits.

"We're going to the States to meet fellow partners who can help us improve our competitive edge, through helping customers' information workers use technology in an even smarter way than they do now."

Andrew Watson, managing director of Quorum, said that while in Texas the company will meet potential US partners along with established contacts from Bermuda and Canada.

Quorum has refined its blue chip IT services offering to SMEs anticipating how new generation green energy initiatives are starting to dominate the thinking of small to medium-sized enterprises.

Eddy Jacobsen, a director at Well Data Technologies in Aberdeen, says several clients are expanding their services into alternative energy sources, including carbon transport and storage, wind power and geothermal power.

"These are fairly challenging areas that require an effective balance between managing costs and risks," he claims. "We already help clients to tackle these issues, so expanding into alternative and renewable is straightforward."

New Scientist claims the world's 50-year addiction to oil has to end sometime soon. For VCs, this represents a huge opportunity because competing energy sources have been held in check for so long.

Vinod Khosla, a Silicon Valley venture capitalist, says he is convinced the world will never control global warming unless it embraces green energy technologies. But a nagging question remains: can the Valley's ongoing growing investment in the evolution of green technology make an Earth-changing difference?

David Downie, a director of the global round table on climate change, a group of influential academics, companies and government representatives, said: "We need people who are looking at over-the-horizon technologies."