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1. Solar Consolidation Continues: Recurrent Energy Buys Assets of UPC Solar
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2. Next-Gen Ethanol Firms on the Hunt for Funding - Good Luck
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3. Battery Tech Breakthroughs: What They Mean for Cars & Clean Energy
Solar Consolidation Continues: Recurrent Energy Buys Assets of UPC...
Katie Fehrenbacher - Startups
Tough times mean the big companies get bigger and the smaller firms, well, drop out. On Wednesday morning renewable energy project financier Recurrent Energy will announce that it has bought up the solar project assets of Chicago-based UPC Solar, which has developed solar farms across the U.S. and Canada. Recurrent Energy’s CEO Arno Harris wouldn’t disclose a purchase price but he said that Recurrent Energy started scouring the market for potential acquisitions soon after the current financial turmoil hit.
UPC Solar has a solar project pipeline of 350 MW and Recurrent now plans to finance, build and operate them, looking to put 100 MW of solar projects online by 2012. Recurrent has the capital to buy up its competition, because last July Recurrent raised a whopping $75 million from Hudson Clean Energy Partners. Harris says Recurrent could raise additional capital from Hudson if need be, but they haven’t disclosed a new round at this point. Beyond funding for operations and acquisitions Recurrent raises project financing for its solar projects, which it will continue to do throughout the year.
Consolidation is the name of the game right now in the solar industry. Spanish solar power developer Fotowatio plans to buy up some of the assets of San Francisco's MMA Renewable Ventures in a $19.7 million deal. And rooftop solar installer Borrego Solar Systems decided to sell off its residential solar power installation business to groSolar and stick with commercial and government projects.
Next-Gen Ethanol Firms on the Hunt for Funding - Good Luck
David Ehrlich - Automotive
While there is funding available for U.S. cellulosic ethanol companies in the form of grants or loan guarantees from the departments of both Energy and Agriculture, these days, it doesn’t come close to matching demand. And without help from the federal government, some projects may never get off the ground.
“If you don’t have a loan guarantee, you aren’t going to be building any projects,” said Gerson Santos-Leon, executive V-P of Abengoa Bioenergy New Technologies, at the Biomass 2009 conference in Maryland on Tuesday. And this from a man whose company already has a big backer — it’s part of Spain’s Abengoa, a publicly traded firm with operations in infrastructure, environmental services and energy.
“Equity two years ago wasn’t a big deal for Abengoa,” said Santos-Leon. “Now it is.” He said there is a lot of competition for cash within the company as it evaluates which projects across its wide portfolio can give it the best return. And advanced biofuels may be a product without a market.
“Right now in the ethanol industry we are in excess capacity mode, 20-25 percent excess capacity,” he said. “We are talking about building new cellulosic capacity, but we cannot sell the ethanol that we presently manufacture.” But for the time being, Abengoa is pushing ahead with its plans for cellulosic ethanol, likely in hopes of stricter regulations on biofuels that would give non-food based ethanol a leg up in the marketplace. The company previously teamed up with the DOE on a pilot plant in Nebraska and is now is working with the agency on a commercial-scale, biomass-to-ethanol plant in Hugoton, Kan.
Startups aren’t faring much better. Earlier this month, Coskata said it was pinning its hopes for a commercial plant on a loan guarantee from the DOE. Coskata, with backers including General Motors and Khosla Ventures, had expected to break ground on a plant this year and have it up and running by 2011, but those plans are on hold until that loan guarantee comes in.
Will Coleman, a partner at Mohr Davidow Ventures, which has investments in biofuel and biofuel-related firms including ZeaChem, Catilin, Genomatica and OPX Biotechnologies, said VCs just aren’t set up to back large construction projects.
Coleman said they focus on the earliest funding stages, and start reducing their percentage of funding as the technology moves through to the commercial level. VCs have a very specific set of returns that their limited partners expect, according to Coleman, so VCs can’t put up the amount of capital for a commercial plant over the time period that’s needed. They’d either have to compress the time frame or increase the return — both big hurdles in these tough times.
Lignol Innovations, part of Vancouver, British Columbia’s, Lignol Energy, thought it had a good thing going when it teamed up last year with Suncor, a Canadian oil and natural gas company. And Lignol had already lined up $30 million in funding from the U.S. DOE for a demonstration plant in Colorado. But Suncor pulled out of the partnership last month due to economic conditions.
“Potentially, we will need to change all the major parameters of the project,” said Mike Rushton, COO of Lignol. “The partners, of course — the main partner is gone. The location will probably change, the feedstock will likely change, the capacity might have to change. And the financing. There’s not a hell of a lot left.” But all is not lost; Rushton said his company is in talks with the DOE about restructuring the project.
Rushton also has some ideas on ways the government can help move cellulosic biofuels to the commercial market, including what he called a DOE dating service. He said it could match existing recipients of government funds with other well-funded projects. Even though it could end up pairing up potential competitors, Rushton said he thinks they could set aside their long-term competitive goals to help each other get to market.
He also thinks there should be cross-border funding between the U.S. and Canada. Lignol may have crossed the border for its Colorado project, but the money didn’t. Right now, projects funded by the U.S. have to be located in the U.S., and Canadian cash only goes toward projects in Canada. If nothing else, cross-border funding could save Lignol some travel expenses.
Battery Tech Breakthroughs: What They Mean for Cars & Clean Energy
Josie Garthwaite - Automotive
A breakthrough that could propel electric cars to the mass market — that’s the buzz about a recent study out of MIT. Here’s the gist of the research, published in the journal Nature: Scientists Byoungwoo Kang and Gerbrand Ceder tweaked the surface structure of lithium ion phosphate, a material commonly used to make batteries. The tweaks allows the material to conduct electricity very quickly and handle repeated charges without degrading, making it possible to have smaller, lighter, quick-charging batteries.
While this breakthrough might seem like the missing piece of the electric car puzzle, it’s far from it, according to Giorgio Rizzoni, director of the Center for Automotive Research at Ohio State University. “There’s all this excitement as though the problem has been solved,” Rizzoni said. “It hasn’t.” Rather, like other energy-storage breakthroughs that have emerged over the last several years, he said, it’s one more small step toward electrification of the U.S. auto fleet.
Ceder and Kang contrast their findings with ultracapacitors, which typically recharge quickly but lack storage capacity. They’re not technically batteries, and in fact store much less energy than batteries. As a result, they’ve traditionally been used for quick bursts of energy, rather than endurance. New technology that uses interactions of positively and negatively charged ions coupled with an electrolyte instead of static charges can boost storage capacity, but it’s still only a fraction of what batteries can hold. Rizzoni says the technology holds “outstanding potential” for transient sources of energy (short bursts) in conjunction with batteries — as a backup supply for glitches in the power grid or electric cars, for example, or during times when wind and solar power are low.
Stealthy ultracapacitor startup EEStor, controversial for its bold claims and scanty evidence, has bigger dreams than being an also-ran with batteries. The company says it has developed something of a battery-ultracapacitor hybrid device that can store 10 times the power with one-tenth the weight and volume, at half the cost of lead-acid batteries. If EEStor delivers, it would, in short, turn mobile energy on its head. But Cedar and Kang’s breakthrough, already licensed to two companies and much less of a moonshot (lithium iron phosphate is widely used — it’s the processing technique that’s different), could give EEStor new competition.
Advances in energy storage hold potential not only for electric and plug-in hybrid cars, but also for smart grid projects and utility-scale wind and solar power, in part through holding energy for times when sunshine and wind are absent. But in itself, the battery breakthrough of the month won’t change your life — not the car you drive, the source of electricity for your town or the way you use energy in your home.
Ceder and Kang have been clear about this, though they’ve set an ambitious timeline, saying the technology could be on the market within two to three years. Rizzoni emphasized hurdles beyond manufacturing (also mentioned in MIT’s release about the study), noting that major infrastructure investments (hello, stimulus) would be necessary to achieve the rapid charge times their research has opened up as a possibility. Even if production was a done deal, standard outlets wouldn’t pack enough punch to give the batteries a full charge within minutes.
So where does this leave energy storage research? Taken in combination, recent breakthroughs — which also include 3M’s recently announced battery balancing technology — reflect an industry very much on the move. With a massive injection of federal dollars for battery, energy storage and vehicle research, it’s poised to accelerate. But to put it bluntly, none of the recent breakthroughs will translate to mass transformation of the auto or energy industry unless costs come down (including those associated with licensing proprietary technology) and production ramps up. “It’s not just about the highest performing materials,” Rizzoni said. It’s also about the bottom line.
This article also appeared on BusinessWeek.com
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