Carbon Trust Investments is a fund management company specialising in investing in emerging clean energy technology businesses, and it is seeing some impressive results. Ominously melting ice-caps, rising sea levels and extreme weather conditions are constant reminders of the intense pressure we’re under to find effective low carbon solutions for modern industry and everyday lifestyles.

British research institutions, inventors, scientists and entrepreneurs are responding with alacrity, and today the UK is proving to be a hotbed of technological innovation in the field of clean energy technology. For those willing to take a degree of risk, there can be financial and ethical rewards for investment in emerging companies that aim to deliver carbon emissions savings.

Demand for bio fuels, fuel cells, solar photovoltaics, wind turbines, wave power technology and energy-efficient industrial technologies, to name just a few areas, is riding high as new legislation drives businesses, industry, and consumers to cut power consumption and switch to renewable energy.

“For fledgling clean energy companies to get into the marketplace and start making revenues and therefore deliver carbon savings, they need to build compelling investment propositions that can attract early stage investors,” explains Jonathan Bryers, an Investment Partner at Carbon Trust Investments. “Meaningful carbon savings will only be achievable once these companies have been scaled up from tiny start-ups to large professionally-run firms turning over hundreds of millions of pounds.”

Ceres Power began as a spin-out of Imperial College London, and is now an AIM-quoted fuel cell producing group, thanks to early investment from Carbon Trust Investments and other venture capital. It is now at a stage where manufacture of its compact combined heat and power unit can be scaled up to meet expected demand in residential mass markets both across the UK and abroad.

“Often a ‘great idea’ also requires an experienced management team to be parachuted in to oversee what is often incredibly rapid growth,” says Bryers. “Building a high-calibre commercial and product development team can often be costly, so investment is required here, as well as to fund capital-intensive manufacturing and testing equipment.”

Recently Whitfield Solar, the developer of low cost solar concentrator technology, secured £1 million funding through Carbon Trust Investments and co-investor Kilsby Ltd, enabling the University of Reading spin-out to reinforce its board of directors, as well as complete its product development, and take its solar concentrator through accreditation testing and closer to market.

Success is far from guaranteed when investing in high margin, rapid growth scientific start-ups, warns Bryers who explains that VCs focusing on this sector typically invest in a portfolio of companies to spread the risk. “It’s a hard market with many risks around adapting to market needs, the strength of management teams, and the product itself. But thanks to our close connections with the Carbon Trust Innovations programme, we see first hand which ideas have the potential to grow into robust, sustainable businesses, and can act fast when first-stage funds are needed.”

Carbon Trust Investments has invested around £10 million across 11 new companies since 2003, and in total, those enterprises have attracted £90 million of private equity. Profits arising from CTI’s portfolio over the coming years will be ploughed back into the Carbon Trust, with no system of distribution to shareholders likely in the near future.

“We look at almost everything coming onto the clean energy market, and are keen to invest in UK-based companies with a defensible - patented - technology that will deliver carbon emissions savings, and be able to generate rapid sales growth and a commercial return,” says Bryers. “Suitable companies will benefit from a timely injection of capital, as well as valuable technology and commercial advice from the Carbon Trust’s eminent Advisory Group.”

These are not ‘quick-flip’ ventures for a fast buck. “This kind of technology investment is a long-term game - anything up to 5-7 years,” says Bryers. Certainly, it must be long enough to launch the groundbreaking companies that will shape our future consumption of energy, and really make a difference.