Posted by jumperhead on April 21st, 2008
Irish renewables firm NTR is handing over $100 million to US solar company Stirling Energy Systems to help them deliver two massive plants.
This initially confused Greenbang. A quick scout around on the internet showed her you could get several massive plants delivered for a couple of hundred quid if you just went to Interflora and got silly with your credit card.
But no. To paraphrase Obi Wan Kenobi, these are not the massive plants you’re looking for.
The two massive plants in question are a pair of the world’s largest solar energy plants, located in the Imperial Valley and the Mojave Desert to provide energy to Southern California. The two will now be built by Stirling, thanks to the $100 million investment from NTR.
For its pains (read cash), NTR will get a controlling stake in Stirling. Stirling will get the two power plants, able to produce 800 MW of power when built, to be expanded to 1,750 MW in the future.
Posted by jumperhead on April 14th, 2008
Greenbang’s a bit, well, naive, which probably explains why she has always thought that the stock market works on the same principle as an airplane. In the same way that planes are kept aloft by their passengers’ belief in the miracle of flight, the stock market is kept aloft by the faith of traders in the value of the commodities. Or to put it another way: if people stop believing, both will crash.
Okay, so Greenbang’s understanding of the workings of economics and aerodynamics is a little on the superstitious side, but belief does go a long way in finance: it looks like belief in the value of green tech is helping to drive its growth.
Proof, if proof were needed: US cleantech investment gurus Cleantech Group has announced that in the first quarter of this year, cleantech investments are up 42 percent on last year’s first quarter total to $1.25 billion.
Cleantech Group recorded 79 transactions in the first four months of 2008, with each averaging $15.8 million, up 53 percent from last year’s average of $10.3 million.
That said, it’s not all plain sailing. While the overall cleantech sector is growing, successive quarterly declines in the first gen biofuels and second gen solar tech industries show that their heyday is coming to an end. Cleantech’s data reveals that two particular investments waves have peaked:
ETHANOL AND WIND (2005-2006): Powered by investments in ethanol and European wind energy companies, the wave peaked in 3Q06 at $1.52 billion and has steadily declined since.
THIN FILM SOLAR (2007): Driven by investments in US and European thin-film solar companies, this wave peaked in 3Q07 at $1.83 billion in 1Q08. Thin-film technologies accounted for approximately two-thirds of investments in solar, while crystalline technologies accounted for one-third.
Posted by jumperhead on April 14th, 2008
Shell is shaping up to be the kind of oil company that, if it doesn’t get its own way, will hold it breath until it turns a slightly odd colour in the hope its indulgent parents will cave in and let it have its own way. It probably took its ball home after it wasn’t picked to be striker too. It’s a bit like that.
What’s prompted Greenbang’s ire? Statements by the company’s head of exploration and production, Christian Blame’s comments that the company will stop investing in Europe if the European carbon trading scheme goes ahead.
Shell is unhappy as the proposed system would see it forced to pay for some of its carbon emission permits which, Shell says, would completely offset (see what Greenbang did there) its profits Europe.
According to The Times, Balme told an energy conference that if the scheme gets the green light:
“It is impossible. So there will be no more investments by Shell in Europe. I am talking about $US250 million of profits at the moment. If we extrapolate the price of CO2 by the tonne, we arrive at the same level, which is unacceptable.”
Shell apparently favours a cap and trade system instead.
Posted by jumperhead on April 11th, 2008
Like an itinerant millionaire without an heir, PSE&G (the utility, not the sponsors of Sesame Street) is seeking to give away millions. Like an itinerant millionaire without an heir that’s not altogether ready to shed his wealth, PSE&G is giving it away in the form of loans. Who gets those loans? Anyone who fancies putting a solar system up on their house or place of work, no less.
The utility announced it will be spreading the love after it got the approval for the loans from local regulators after proposing the plan last year.
What did it propose? Why it proposed this:
PSE&G’s solar program will be open to all of its electric customers, including low-income, residential, commercial, industrial and municipal/governmental. The solar panels would be owned by the developer or the host customer.
• Applications will be available for two years and accepted on a first-come, first-served basis until 30 megawatts of projects have been developed.
• PSE&G would provide loans to developers or customers to cover approximately 40-60 percent of the cost of a solar installation project, depending on the projected output of the solar energy system and the cost of the system. The borrower would repay the principal, plus interest, over 10 years for residential customers and over 15 years for all other borrowers, a considerably longer investment timeframe than traditional lenders are willing to provide for solar installations.
• The remaining project cost would be funded by the owner of the solar installation. The owner may have access to funds from banks and investors. In addition, the owner may be eligible for a federal investment tax credit. (Utilities are currently not eligible for this tax incentive.)
• Owners of solar energy systems would repay the loan with Solar Renewable Energy Certificates or SRECs, which are created every time the system generates solar electricity. It takes one megawatthour of solar generation to create one SREC, which has value in the marketplace. An SREC is a New Jersey tradable product that represents the clean energy benefits of electricity generated from a solar energy system. For the purposes of this program, an SREC is valued at the market price or $475, whichever is higher. Borrowers could also repay the loans in cash.
• PSE&G’s electric customers will pay for the cost of the solar program through the Solar Pilot Recovery Charge (SPRC), which will be included in the delivery part of their monthly bill. PSE&G will sell the SRECs it receives for loan repayment in an auction, and credit the proceeds from the sale to customers through the SPRC, which will offset a portion of the program costs.
After all that approval, the plan should see the development of 30 megawatts of solar power.
Posted by jumperhead on April 9th, 2008
Pensions funds remind Greenbang of Otto von Bismarck’s remark that “Laws are like sausages, it is better to not see them being made.” Greenbang is a cultured lass like that.
What goes into sausages and what goes into building pension funds sometimes doesn’t bare thinking about. The arms industry, for instance, might be a big money spinner, but Greenbang’s not exactly down with the idea that her pension contributions could be used to finance the R&D of the latest hi-tech death machine.
Fortunately, pension fund managers are cottoning on to the fact that your average Joe might, you know, want their pension fund to be invested in forces of good, like green tech. Which is precisely what New York State Comptroller Thomas P. DiNapoli has announced he’ll do with capital from the New York State Common Retirement Fund.
Tommy-boy’s Green Strategic Investment Program will see $500 million being ploughed into the clean tech and renewable sectors. This isn’t because he’s a tree-hugging hippy Comptroller, mind. Unsurprisingly, DiNapoli also reckons it’s a bang up way of making some money.
His press release also says:
Currently, the Fund has $40 million invested in private equity funds focused on renewable energy and clean technologies (clean tech). The Fund also has more than $440 million in commitments to funds where clean tech is a component of the Fund’s overall strategy. This includes more than $16 million already invested in New York-based clean tech companies through the Fund’s Instate Co-Investment Program.
Posted by jumperhead on April 9th, 2008
Is all the talk of economic meltdown giving you a bit of a headache? Feeling a bit down from all the misery mongering? Well, put your feet up, Greenbang will get you a bit of news tea accompanied by a venture capital biscuit. Mmm, tastes fund-y.
Today’s economic bright spot comes courtesy of Foundation Capital, which announced it’s closed a funding round of not-to-be-sniffed-at $750 million, which goes by the utilitarian name of Foundation Capital VI.
Of that $750 million, $250 million will go to the company’s clean tech practice, which started in 2003, no less.
You want details? We’ll give you details, from the horse’s mouth.
Foundation Capital has since built a comprehensive portfolio of investments in cleantech sectors including energy efficiency and intelligence, green building materials and industrial processes, food quality and clean water.
Foundation’s cleantech portfolio has celebrated numerous milestones since it started, including the firm’s investment in the demand response and energy management company, EnerNOC, which resulted in one of the cleantech industry’s first initial public offerings (IPO) in May 2007. EnerNOC and another Foundation investment, Silver Spring Networks, which delivers SmartGrid technology to utility providers, were recognized by the World Economic Forum as Technology Pioneers in 2007 and 2008 respectively.
Most recently, Foundation was selected as an Inaugural Partner of the Department of Energy’s Entrepreneur-In-Residence Program, working closely with the Department’s Oak Ridge National Laboratory to help sponsored entrepreneurs bring the most promising of the Lab’s energy technologies to the private sector.
Posted by Greenbang on March 31st, 2008
We ask the head of a venture capitalist firm how to pick a winner…
By Dan Ilett
It’s all about money this clean-tech business. And don’t ever be fooled into thinking that the big boys with the cash have any other agenda other than to make lots of it.
That’s how Bill Green, managing director of venture capitalist VantagePoint, puts it. And he doesn’t pull his punches.
“We are not triple bottom line investors [people, planet, profits],” he says. “That’s a fine theory and those who embrace it are great folks and they’re thought leaders in that area and welcome to do so.
“We have a different philosophy and this can be controversial certainly in the NGO community and in the tree-hugger community.
“We take a view that says ‘just focus on building the company’. And if the company is pointed at the right goal or aim and it gets large – which implies that it’s making money because things that don’t make money don’t get large – then we’re going to see the result that we want and hope for.”
Mr Green is part of a team that made its first clean-tech investment way back in 2003. Since then, it has backed some well-know firms in the space including Tesla Motors, BrightSource, Chemrec, solarcentury and Shai Agassi’s Project Better Place .
There are also some impressive names on the advisory board - William McDonough (architect and design genius); Bernie Bulkin (former chief scientist BP); James Woolsey, former director of CIA; John Leggate (CIO, BP); and Terry Tamminen (former Chief Advisor to California’s governor).
All these big names pack quite a lot of weight. But financial success says much more to investors than famous people. So how does a venture capitalist pick the winning horse in clean tech?
“The average in venture capital history - and this should be no different [in this industry] – is that two out of ten will be successful,” says Mr Green. “So it’s the 80/20 rule.
“Sorry for the cliché but 20 percent of your companies are going to make you a 100 percent of your money, or 80 percent of your money at least. So we think it will be the same here.
“My partner Stephan Dolezalek describes these mini-trends. Corn-ethanol was one such where we saw all this interesting corn-ethanol and is the next big thing, and so and then 12 months later nobody is selling corn-ethanol.
“So we think that it is possible to become distracted by these smaller market movements that we believe are taking place within in a larger frame that says [that] we’re going to see cyclicality but the general trend for this energy technology, water technology, seems to be a growth trend.”
But Mr Green highlights some big differences in clean-tech to previous markets – namely that the demand for clean water, air and energy is already there. It is the delivery mechanism that has to change for several reasons.
“When we built the internet and the related businesses, depending on your point-of-view, we were painting the car as we were driving it off the factory floor,” he says.
“I mean, nobody knew what services consumers wanted. Nobody knew if you would actually buy pet food on line. It sounded good. By books online, why not pet food? Right? I mean, we just didn’t know. Maybe some of this we could’ve known.
“This is quite different. We know we want clean water. We know what the market is for clean water. We know where that market is.
“So the point however is, this is different because this is a market problem towards which we are all reaching.
“The other reason I would offer - a personal view - says this feels different - is that when you think about the drivers from my first point, this is a multi-factorial problem. This is about – there’s a diner I go to and there’s a sign on the wall - it’s a cheap place – it says, ‘fast-food real good, served cheap, pick two’.
“And this is similar to that, in that there are those who believe that climate crisis is a real driver for changes in our behaviour, whether it’s relative to automobiles or fuels. There are some who believe that peak oil is really the driver that lurks behind all of this.
“You can believe in the ever-increasing demand from India and China; you can believe in energy security issues.
“It’s four drivers. Pick one, pick two. And for those people who say “climate change is a hoax” - fine, don’t believe in climate change. How do you like energy security? ‘Ah, that’s real’. “
Mr Green is refreshingly honest about his approach to the clean-tech sector. But he says companies could learn a thing or two from the purely financial approach to sustainability – especially in the way they structure.
“You really don’t want the chief sustainability officer, you want the chief financial officer,” he says. “We need to change this conversation around. The chief sustainability officer, man he’s your friend. He drinks the cool-aid, he wakes up in the morning, he reads your blog, he so gets this, he hates George Bush, it’s all good. That’s not going to get us to done.
“The chief financial officer wakes up and says ‘here, regardless of my personal view, my fiduciary responsibility is to earn money for company X. How does this work exactly?’
“A CFO’s job is to count the money and that takes so many different forms that he’s not, quite often, thinking about this form of revenue - negawatts is an expression here – the money you generate from not using electricity.
“What I’d love to see more talked about, where we move away from all of this as a charity project and a science fair. How do we save money on this? Make sense?
“We seem to have lost to some extent the thread that says the economics of doing this can be so clearly understood. Not in every case, not with every start-up but we need to get our heads unscrewed from the contentious political aspect of this and say “friends, this is all about good business. This is all about clear thinking”.
“And if we have these other lovely fringe benefits, and if the trees get hugged and it’s collateral damage, great, we’ll have an extra pint, that’ll feel good. But this is a business story, right, and that’s why I respond to your CSO target a little differently.”
VantagePoint is behind the electric sportscar, Tesla. It led the first round of investment in cobalt bio-fuels, which is bio-butanol. It identified large-scale power storage as a mega trend.
“So five out of five times we’ve been able to pickoff a trend line and say that is important.” he says. “We think that we still have a long way to go around innovation in carbon. We see real obstacles, and therefore real opportunity, in how the carbon capture and sequestration game plays out.”
Is that a hint then, I wonder? Is carbon capture the right horse to back? Today Mr Green is open and straight-talking with me - but on that question he’s not saying anything…
Posted by jumperhead on March 31st, 2008
The words ‘ethanol’ and ‘millions of dollars of investment’ are natural bedfellows these days, it seems. They’re going together like the proverbial horse and carriage, like good cheese and wine, like fish and chips, like Cannon and Ball. Yes, they’re that perfect together. Greenbang has amassed evidence to prove her theory:
Exhibit A: Biofuels maker Pacific Ethanol has got a $40 million funding injection from Lyles United after selling some of its stock to the company. Lyles recently gave Pacific Ethanol $30 million in debt financing.
In a filing last week with the SEC, Pacific Ethanol said this:
We believe that current and future capital resources, revenues generated from operations and other existing sources of liquidity, including available proceeds from our existing debt financing, will be adequate to fund our operations through 2008 and meet our capital expenditure requirements to reach our goal of 220 million gallons of annual production capacity in 2008 upon completion of our Burley and Stockton facilities. We will require substantial additional financing to reach our goal of 420 million gallons of annual production capacity in 2010 and we plan to reach this goal through new construction or acquisition of additional ethanol production facilities. If ethanol production margins deteriorate from current levels, if we experience additional cost overruns at our ethanol production facilities under construction, if our capital requirements or cash flows otherwise vary materially and adversely from our current projections, or if other adverse unforeseen circumstances occur, our working capital may be inadequate to fully fund our operations or meet our capital expenditure requirements, or both. We are presently exploring potential sources of new financing to provide additional working capital. Our failure to raise capital if or when needed may have a material adverse effect on our results of operations, liquidity and cash flows and may restrict our growth and hinder our ability to compete.
In other biofuels news, the government of Canada has dished out the folding matter to Ontario biofuels mob IGPC Ethanol for a new plant.
Here’s the skinny:
The 150 million litre ethanol plant, expected to be completed this November, has also received equity investment from farmers totalling close to $15.5 million. In addition to ethanol, the plant will produce distillers dried grains with solubles and distillers wet grains, sources of protein for dairy and beef cows, hogs and poultry, and carbon dioxide for use in carbonated beverages, freezing foods and making chemicals. This is the third ethanol plant funded under the ecoABC initiative and its opening is expected to create 35 new jobs in the region.
Posted by jumperhead on March 28th, 2008
Like the ‘if a shark and a tiger were to have a fight, who would win?’ question, two mortal enemies - solar and coal - are locked in a life and death battle for the title the cheapest per watt energy. Who will win? Ladies and gentlemen, place your bets, pur-lease.
North Bridge Venture Partners and Polaris Venture Partners have already placed theirs, betting $12.4 million in venture capital funding on MIT start-up 1366 Technologies, whose aim in life is to make solar cheaper than carbon.
According to News.com, it’s aiming for $1 a watt by using existing tech to make solar cells more efficient.
Here’s how 1366 says it can manage it:
1366 Technologies produces new manufacturing processes to lower the cost of silicon solar cells.
Among others we have developed proprietary new cell architecture for multi-crystalline solar cells. We are currently in the process of implementing this architecture in our pilot plant.[…]
The revolutionary, new Light-Capturing Ribbon increases the efficiency of a solar module by reflecting light back onto the surface of the cell. This grooved ribbon replaces the traditional wires used to interconnect solar cells.
Just as standard interconnect wires, the Light-Capturing Ribbon is soldered to the silver busbar on top of the silicon cell and to the solder pads on the back of the next cell.
The grooved surface of the Ribbon steers incoming light back to the glass/air interface at a grazing angle, that allows the light to undergo virtually total internal reflection, directing it back to the cell surface.
Up to 80% of the photocurrent from light that strikes the ribbon is recovered—far better than the 5% recovered by a standard interconnect wire.
Posted by jumperhead on March 21st, 2008
“Money can’t buy me love,” sang Sir Paul McCartney in his mop topped Beatles phase. “I don’t care too much for money, money can’t buy me love.”
It can buy you out of a messy divorce though, which Greenbang suspects the ex-Wings member is more than a little chuffed about.
The other thing it can buy you is a chuffing great stake in a renewable energy company. Just ask the world’s local bank.
According to reports, HSBC Environmental Infrastructure Fund has swapped £18 million for a 49 percent stake in Partnerships for Renewables, an offshoot of Carbon Trust Enterprises which deals with public sector bodies, such as local authorities, NHS Trusts, Universities and central government grganisations, to develop and manage on-site renewable energy projects.
HSBC will also cough up £100 million to help expand Partnerships for Renewables’ projects, which are set to cover 500 megawatts over the next few years.
Here’s what the Carbon Trust published:
The Carbon Trust and HSBC today announced a landmark deal which will see HSBC Environmental Infrastructure Fund making a substantial investment in Partnerships for Renewables Limited (PfR), a venture created by Carbon Trust Enterprises to develop renewable energy projects on public sector land. HSBC Environmental Infrastructure Fund will commit up to £18 million to acquire 49% of PfR and provide development funding, as well as make a £30 million revolving construction capital facility available to fund an estimated £100 million of equity required to build out renewable energy projects. This will be HSBC Environmental Infrastructure Fund’s first investment.
Partnerships for Renewables aims to develop a 500MW portfolio of renewables projects on public sector land across the UK during the next five years. This portfolio of projects would generate enough electricity to power the equivalent of some 230,000 homes. It is already talking to more than one hundred public sector organisations, including Oxford City Council and Reading University, with the primary aim of delivering 2-15 MW onshore wind projects.
Environment Secretary Hilary Benn welcomed the announcement, saying:
“There is enormous untapped potential for generating renewable energy on public sector land. As we explore every opportunity to generate renewable energy, making the most of the potential for public sector renewables is more important than ever. I’m delighted that the Carbon Trust has secured a partner on commercial terms for their Partnerships for Renewables venture, which demonstrates the very real market opportunities for action on public sector sites.”
Tom Delay, chief executive of the Carbon Trust, commented:
“This announcement is a win win for the environment and the public sector and it sums up our belief that acting on climate change brings a plethora of new commercial opportunities. Our partnership with HSBC Environmental Infrastructure Fund is groundbreaking and will enable the UK to fast track the development of a major renewable resource that at present lies largely untapped.”
James Hall-Smith, HSBC Specialist Investments, said:
“As the world’s first carbon-neutral bank, HSBC is committed to tackling the challenges presented by climate change, including promoting effective means for generating renewable energy. This investment in PfR represents a particularly exciting opportunity for HSBC as it is the first investment to be made by our new Environmental Infrastructure Fund. Furthermore, it demonstrates that it is possible to combine genuine commercial investment opportunity with sustainable or environmental infrastructure.”
Stephen Ainger, chief executive of Partnerships for Renewables, said:
“The public sector owns more than one million hectares of land. Even if a small proportion of this land is utilised for renewable energy development, it has the potential to make a significant contribution towards the fight against climate change. Today’s announcement provides us with the financial means to deliver the economic and environmental benefits associated with renewable energy to the public sector without diverting their resources away from frontline services.”
John Sauven, Greenpeace executive director said:
“This is an excellent example of private finance delivering real emissions reductions through innovative partnerships. It also demonstrates that significant cost effective renewable energy potential exists at all levels rather than simply in industrial scale wind power, and that a viable business case can be made for this investment. Within the context of the UK’s demanding emissions reductions targets, we sincerely hope this is a sign of things to come”
Professor Gordon Marshall, Vice-Chancellor at the University of Reading said:
“Working with Partnerships for Renewables has enabled us to look at the renewable energy potential of our whole land portfolio. As environmental work progressed the number of potential sites reduced and we recently announced that we were going to start detailed environmental work on a site adjacent to the M4.”
Councillor John Goddard, Leader of Oxford City Council, said:
“Oxford City Council wants to play a leading role in the community in responding to the challenge of climate change. We have already set demanding targets for reducing the council’s carbon footprint. We welcome, therefore, the opportunity to develop renewable energy from wind turbines. Working with Partnerships for Renewables provides a low risk way for the local authority to generate renewable energy locally for local benefit. This provides the City Council with a major opportunity to generate revenues for the council to invest in other sustainability projects and at the same time generate green energy.”
