Vinod Khosla and Renewable Energy

The Economist has a short article on Vinod Khosla's decision to focus much of his time and resources to funding renewable energy start-ups. Vinod has been a partner at Kleiner Perkins (one of top, if not the top Silicon Valley VC firm) for many years and has funded many incredible technology companies. The Economist points out that nurturing renewable energy company start-ups is one thing, but as these technologies start gaining traction in the marketplace, big oil will put up a fight:

So will his grand plan really work? Mr Khosla is convinced that “this fuel is greener, cheaper, more secure than gasoline—and this shift won't cost the consumer, automakers or the government anything.” There are undoubted attractions to ethanol. But making the switch will surely not be as easy or cheap as he suggests. Retail distribution is one obvious problem: fewer than a thousand petrol stations in America sell the most desirable blend of ethanol fuel today. Expanding infrastructure will cost money and take time, and the oil industry is not exactly enthusiastic. And cellulosic technology, which seems so promising today, may take much longer than expected to achieve commercial scale, or might fail altogether.

What is more, the OPEC cartel is suspected by some of engineering occasional price collapses to bankrupt investment in alternative energy. Mr Khosla concedes that after he made his ethanol pitch at this year's Davos meeting, a senior Saudi oil official sweetly reminded him that it costs less than a dollar to lift a barrel of Saudi oil out of the ground, adding: “If biofuels start to take off we will drop the price of oil.”

At some point, energy consumption will be evaluated using the Triple Bottom Line. While price is important, I believe that consumers will start making decisions with climate change and sustainability in mind. The U.S. and Western Europe will also start citing the need for national security and energy independence more frequently. Marketers will have no problem promoting these emerging technologies: just watch.