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1. Grid Net: Intel's Smart Grid Play
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2. Alico Abandons Cellulosic Ethanol Plant Plans
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3. Bill Gates Slashing Stake in Pacific Ethanol
Grid Net: Intel's Smart Grid Play
Craig Rubens - Startups
The San Francisco-based startup was founded in 2006 and has built software for the power grid that is based on the telecom and networking worlds, using open standards and protocols. Like its peers and competitors in the industry, the company is working to create a power grid that is “self-healing,” “self-optimizing,” “open,” “resilient,” and “secure.” (Though, it’s worth noting that the company is not officially a member of the GridWise Alliance, one of the larger smart grid consortia.)
Grid Net announced a collaboration with GE and Intel earlier this year. Under that agreement, GE’s new WiMAX SmartMeter products integrate Grid Net's PolicyNet firmware and the Intel WiMAX Connection chipsets. One of Grid Net’s missteps could be that it is betting heavily on the continued expansion of WiMAX, a 4G wireless broadband standard. But WiMAX development has been anything but smooth, with Intel itself recently putting up a cool $1 billion to bail out a WiMAX carrier.
Intel is also not the only tech giant dabbling in smart grid plays. IBM recently formed a partnership with Australian utility Country Energy to deploy its Intelligent Utility Network Down Under. Meanwhile, Cisco and Oracle (and GE, for that matter) are working with Silver Spring Networks, a startup similar to Grid Net, as part of their Technology Alliance Program. As one of the biggest, dumbest networks in the country - our electrical grid - starts to smarten up, expect to see more big players looking to get a slice of the pie.
Alico Abandons Cellulosic Ethanol Plant Plans
Katie Fehrenbacher - Big Green
In the process of mapping out these dozen or so companies that are racing to build the first cellulosic ethanol plants in the U.S., we discovered that not all the companies are still rushing forward. Some, in fact, have quit the contest completely. Alico, a land management company that was one of the six companies that the Department of Energy chose to fund to build a cellulosic ethanol plant, said on Monday that it will not actually build that planned plant. In a press release the company said it now has no intention of building the plant nor will it pursue the federal grant money.
In its statement Alico explained it had abandoned the cellulosic ethanol idea because:
“the risks associated therewith outweighed any reasonably anticipated benefits for Alico.”
Given Alico’s press release was rather vague, we confirmed with the DOE that, yes, Alico had also informed the government of their recent decision to get out of the cellulosic ethanol biz. The DOE tells us:
“Cellulosic biofuels hold great promise for lowering greenhouse gas emission and reducing Americas dependence on fossil-fuels. The U.S. Department of Energy recently received a letter from Alico, Inc. notifying us that they will no longer pursue funding for their project. The Department has not yet determined next steps on this matter.”
It’s significant news, because while corn-based biofuels have been getting bad press, next-generation cellulosic ethanol was supposed to be another, more positive story. And the DOE said back in Feburary 2007 that it would invest up to $385 million for six biorefinery projects over the next four years, Alico being one of the chosen ones. This federal investment is supposed to help the country meet President Bush’s goal of making cellulosic ethanol economically feasible with gas by 2012 and help reduce U.S. gasoline consumption by 20 percent in ten years.
Well, not if the companies don’t end up building them. In Alico’s case the company says another firm will be taking its torch. In an updated press release today Alico says that “During the past year, Alico has been working with New Planet Energy LLC on this project and NPE is continuing its pursuit of cellulosic ethanol.” We’ll see what happens with that. Our big question is, isn’t the DOE supposed to be vetting the companies that it pledges money to to build our green technology future?
Because ultimately these cellulosic plants will be expensive to build, and the companies involved need to have a solid commitment to investing in this technology. Not just an interest in getting media attention. And the costs of the plants will likely be a lot higher than the companies have been anticipating. Alico had previously planned to use up to $33 million from the DOE to build a cellulosic ethanol plant in LaBelle, Florida. If the plant was anywhere near the cost of the ones that Range Fuels and Coskata are building, $33 million is hundreds of millions of dollars short of the full plant costs.
And while the next-generation of cellulosic ethanol plants are taking a lot of investment to build, the current generation of corn-based ethanol producers have been scaling back on building plants as the margins of that business have become really thin. The latest was POET, which canceled plans for a plant in Glenville, Minn. in May due to permitting problems. Before that Pacific Ethanol, Panda Ethanol, Renewable Agricultural Energy, BioFuel Energy Corp. and VeraSun all said they would suspend construction of ethanol facilities as well.
So while you’re checking out our map of cancelled plans for corn ethanol plants, please look at our map detailing all the cellulosic ethanol plants that are (hopefully) going up in the U.S. in the next few years.
Bill Gates Slashing Stake in Pacific Ethanol
Kevin Kelleher - Big Green
Bill Gates is making good on his plans, announced last November, to sell off his 20.6 percent stake in Pacific Ethanol.
Cascade Investment, the private investment and holding company controlled by Gates, has been whittling down the stake trade by trade, according to recent filings with the SEC.
The latest round of selling began with the sale of 300,000 common shares into the market on May 28 . The next day, Cascade converted 1 million shares of preferred stock into 2 million shares of PEIX common stock worth $8 a share each.
Cascade then began to immediately sell those common shares off at a huge discount - in the market, investors paid between $3.40 and $3.75 a share for them. By last Friday, Cascade had sold off a total of 1.4 million shares in three days, or roughly $5 million worth of Pacific Ethanol stock.
The sales came only a few days after Pacific Ethanol reported surprisingly strong earnings for the first quarter, only to erase most of the stock gains with an announcement it would dilute investors with a new stock offering. It seems that Gates may want to cash out some of his stake in Pacific Ethanol before that dilution took effect, even if it meant selling below the $8 a share price that he converted his shares at.
Earlier, in April and May, Cascade had sold more than a million shares in the market, between $3 and $4 a share. All told, Bill Gates has come close to cutting his stake in the company in half over the past several weeks.
A Sacramento Bee story quoted Pacific Ethanol CEO Neil Koehler as philosophical about the steady stock sales from what was its largest investor.
[Gates'] original stake was 20 percent, and “he’s well on his way to 10 percent,” Koehler said. Gates’ $84 million investment in 2005 was a big early boost to Pacific Ethanol, but Koehler said he isn’t particularly bothered by Gates’ recent sales. “That’s the great thing about markets; people are free to buy and sell,” he said.
These days, they are a little freer with their sales. Pacific Ethanol closed Tuesday down 4 percent at $3.30.
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