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1. Mount Comfort!: EnerDel to Funnel $237M Into Third Indiana Battery Plant
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2. 3 Smart Grid Fundings This Week
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3. Q4 Wrap-up: Ending 2009 on a Greentech High
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4. ComEd Signs Up Silver Spring, Tendril for Smart Grid Pilot
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5. Former FCC Chairman Reed Hundt's Latest Act: Green Policy
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6. Some Hints About Stealthy Solar Startup Alta Devices, Courtesy of DOE
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7. Daily Sprout
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8. Stimulus Funds Almost Fully Tapped – Time For the Jobs Crunch
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9. Kleiner Perkins Doubles Down on a "Shrouded" Wind Turbine Design
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10. PG&E Puts Up $60M for SolarCity Installations
Mount Comfort!: EnerDel to Funnel $237M Into Third Indiana Battery...
Josie Garthwaite - Energy Storage
Regions around the country have been vying to lure stimulus-funded battery and electric vehicle plants in recent months, hoping to see residents employed in green manufacturing jobs and spur economic growth as the nascent green car market develops. Why did EnerDel pick Mount Comfort? Two key reasons: proximity to the company’s existing facilities, a network of electric drivetrain companies and automotive workers nearby — and money.
EnerDel announced today that local authorities have put together an incentive package worth up to $69.9 million, including $48.6 million from Hancock County and $21.3 million (primarily in the form of performance-based tax credits) from the state.
According to a release from the state-run Indiana Economic Development Corp. today, the Mount Comfort facility — which will be EnerDel’s third in the state — will create an estimated 500 jobs. However, EnerDel spokesperson Rachel Carroll told us that while the company plans to generate 1,400 jobs ramping up production at its three facilities over the next 5-6 years, it is not setting hard numbers at this point for where and how it will expand.
“We’re increasing production in a modular fashion,” she explained, at first leasing only half of the Mount Comfort facility, with a two-year option to purchase the entire 423,000-square-foot plant. Over time, it “might make more strategic sense” for the company to build out capacity at one facility vs. another, she said, so the company does not want to commit to a specific plan for phasing in new jobs.
The state and local incentive packages announced today come as just the latest government boost for the battery maker. EnerDel scored a $118.5 million stimulus grant from the Department of Energy for battery manufacturing last year, and the company expects to spend $60 million of that in 2010 (the full amount has to be spent by the end of 2011). The grant also requires EnerDel to cover at least half the costs for the project, and how the company will finance its portion remains unclear at this point.
As for EnerDel’s year-old request for $480 million in low-interest loans under the DOE’s Advanced Technology Vehicles Manufacturing program, it’s still waiting (like so many other companies in the green car space). Caroll told us today that EnerDel does not expect to win the full requested amount at this point, but rather a total of $400 million including both the $118.5 million grant and the still-pending loan.
Related GigaOM Pro reports (sub. req’d): “How EV Battery Startups Can Cross the Valley of Death” and “How to Break Into the Energy Storage Market“
3 Smart Grid Fundings This Week
Katie Fehrenbacher - smart grid
Investments included $14 million raised by smart grid communications player Tantalus, $6.73 million raised by home energy management player ecobee, and $1.5 million raised by long time building energy management firm Lucid Design Group.
While this month has seen a shockingly large flood of greentech startups filing funding documents, it’s interesting to see that the smart grid firms are still getting funding from the VC community. Tantalus’ funding was led by RedPoint Ventures, Lucid Design Group’s funding was led by Dry Creek Ventures, and ecobee’s came from the Ontario Emerging Technologies Fund (OETF), JLA Ventures and Tech Capital Partners.
I think there will be a whole lot more smart grid funding over the coming months. Particularly because the smart grid stimulus funds haven’t really trickled down yet to the vendors. Silver Spring CEO Scott Lang said at the Cleantech Investor Summit on Wednesday that his utility customers that have won funds don’t seem to have deployed them yet. So later on in 2010 I think we’ll start to see a boom in smart grid projects, which means the companies trying to sell to those utilities will try to ramp up to compete (i.e. some will raise money). And investors will be watching all of the utility deals announced and will be looking for investments to make.
A big area for innovation and investment will be the next generation of smart grid applications that will be rolled out on top of the infrastructure. Now that the utilities are making the network investment, what are they going to do with it? That’s an idea I argued about in this GigaOM Pro article on How Investors Can Avoid the Smart Grid Bubble (subscription required).
Earth2Tech is also holding an intimate exclusive event on the morning of January 28 at our San Francisco offices specifically looking at what will be the next generation of smart grid applications. We’ll be featuring a town-hall style discussion led by PG&E’s Andy Tang, Silver Spring Network’s Scott Lang, Foundation Capital’s Warren Weiss, and EcoFactor’s John Steinberg. We have a few seats left for the discussion, so if you would like to participate email me at Katie AT gigaom.com. We’ll also be streaming it live online at Earth2Tech, so catch it there if you can’t make it down.
Image courtesy of Tantalus.
Q4 Wrap-up: Ending 2009 on a Greentech High
Pedro Hernandez - Green IT
Greentech VC investment, which totaled $817 million in the fourth quarter, according to Greentech Media – or $1.4 billion, according to the Cleantech Group’s figures – fell considerably short of the prior quarter’s $1.9 billion haul. Investors simply pulled back amid a quarter marked by the lackluster conclusion to the Copenhagen climate talks and Congressional inaction on energy and carbon emission legislation.
All things considered, things could have been a lot worse given the precarious state of the economy. Bright spots this quarter like Silver Spring Network’s $100-million-plus round of financing, signaled some decidedly bullish sentiment toward the smart grid’s future — a sentiment fueled, in part, by the U.S. Department of Energy’s multi-billion-dollar outlays in stimulus funds.
Fremont, Calif.-based Solyndra, a thin-film solar maker, kept the cleantech optimism alive by filing for an IPO in the waning days of 2009 after having raised nearly $1 billion. Beyond U.S. borders, Panasonic’s massive $4.6 billion takeover of Sanyo, a Japanese powerhouse in batteries and renewable energy, proved that even established industry giants were willing to stake their futures on clean energy. On the computing front, solid-state storage firms continued to rake in VC cash in a bid to supply data centers with energy efficient, high-performance — and high priced — enterprise data storage systems.
Check out our latest report, “Cleantech Was a Market Leader in Q4” for more insights and a glimpse of what Q1 2010 has in store.
Image of SqueakyMarmot's photostream Flickr Creative Commons.
ComEd Signs Up Silver Spring, Tendril for Smart Grid Pilot
Katie Fehrenbacher - smart grid
ComEd already started installing its planned 130,000 smart meters in nine towns in Northern Illinois starting in November 2009. During the upcoming pilot, customers will be offered different pricing structures with off-peak pricing options to see what price at what time of day results in the biggest drop in energy consumption. In addition ComEd will be offering customers different ways to access to their energy consumption, like through the web, or through an in-home energy display. In the third quarter of this year Pramaggiore says she thinks ComEd will start collecting data from the project.
For ComEd, the pilot is a way to find out what their 3.8 million customers will want, and how they will respond to the new smart meters. Pramaggiore told me after her talk at the Summit on Wednesday that she expects to see a spectrum of different needs among customers, from the early adopter tech fan that wants a high-end in-home display, to a consumer that reacts solely to a more granular online bill. “We want to find out what moves customers,” said Pramaggiore.
For Silver Spring it’s another win for their Internet Protocol-based technology. The Redwood City, Calif.-based company, which is one of several greentech firms considered likely candidates for an IPO this year, has already done deals with Florida Light & Power, PG&E, American Electric Power and Pepco Holdings, among others. On the panel at the Summit, Silver Spring CEO Scott Lang described the company’s work as, “We help utilities cross a bridge that has never been crossed before.”
For Tendril, the win is a big deal, as it’s one of the few that the company has been public about. Tendril has a deal with Houston-based utility Reliant and maintains that it has many more utility partners in the works (it’s holding discussions with Tucson utility Tucson Electric Power, or TEP, for example). Tendril CEO Adrian Tuck told us via email that Tendril was one of more than 40 firms that competed for the ComEd project.
Perhaps the most important aspect of the pilot will be what Silver Spring’s Lang spoke on during the panel: education. Lang said what happened in Bakersfield (where residents in the region ended up suing PG&E last year over heightened rates that they claimed were due to smart meters) was a lesson that the industry needs to get more information about smart meters in front of customers as soon as possible.
Former FCC Chairman Reed Hundt's Latest Act: Green Policy
Katie Fehrenbacher - Policy
At the Cleantech Investor Summit in Palm Springs on Wednesday Hundt called for the creation of a U.S. green bank that would provide low cost loan guarantees and other financing tools for clean energy and energy efficiency projects. Regulation, like an energy bill, that raises the price of carbon looks like it’ll be many years down the road, and in the meantime greentech entrepreneurs need debt financing mechanisms to help deliver breakthrough innovation, said Hundt. “Is it a panacea?” asked Hundt. “It’s pretty close, and out of the question it’s essential.”
Hundt is the Chairman of The Coalition for The Green Bank, a group of dozens of clean power companies that are together advocating for a green bank program. Hundt is a volunteer and membership to the coalition is free and open to anyone, says the group on its web site. Many others, like the Center for American Progress, are also calling for the implementation of a green bank.
As the former FCC Chairman and a former broadband entrepreneur Hundt has an interesting perspective on the similarities and differences between the former dot com boom and greentech growth. Unlike in the case of rapid growth in demand for mobility and the web, there won’t be a massive boom in demand for energy in the U.S., said Hundt — no one is racing to be able to leave the lights on longer. “Efficiency is the enemy of capacity growth. We have a fundamental demand problem here,” he said.
However, that’s where China could have an advantage. The country can add all new capacity (compared to replacement in the U.S.) and meet the new energy demand with clean power.
On the other hand the buildout of clean power projects should look like the history of the Internet, in terms of starting out by laying down the early basic infrastructure and building the next generation technology on top of it. The Internet “wasn’t just created in a lab and then thrown over the wall. It was a period of rapid generations of replacing the technology that came before it,” sad Hundt. We’re on the verge of creating that virtuous cycle for clean power, he said.
Hundt finished his talk by putting the benefits of a green bank straight for the audience. “It won’t be a disaster. It might not be as good as I say. Let’s just have a crack at it and see. We need to reset our vision.” Not exactly the most persuasive argument for a former lawyer, but I saw plenty of head nods during the conclusion in the audience. Well, he was preaching to the choir.
Image courtesy of ReedHundt.com
Some Hints About Stealthy Solar Startup Alta Devices, Courtesy of DOE
Josie Garthwaite - Energy
While these funds come through the government’s Photovoltaic Technology Incubator Program — intended for early stage, pre-commercial tech — Alta Devices expects to enter the market as early as next year. According to this job posting for an executive position at the company, Alta make its thin film solar cells using manufacturing equipment that are “compatible” with rigid modules as well as roll-to-roll processing, and it’s keen on developing partnerships with electric utilities.
Compared to the DOE’s $36 billion in stimulus funds for clean power and energy efficiency projects ($10 million of the solar funds announced today come from the stimulus budget), and even compared to many venture capital plays in the solar sector, a $3 million government investment might seem skimpy. But the PV Incubator program will also give Alta Devices access to the handy toolbox of resources at the National Renewable Energy Laboratory, or NREL, which could help it make the leap to pilot and commercial-scale manufacturing.
In a time when the outlook for solar looks rather volatile, support from Uncle Sam can give companies some breathing room. Today’s four PV Incubator awardees will each receive the full $3 million over 18 months only if they hit certain milestones. Still, a little funding can shift the playing field for early stage startups, even in the often capital intensive business of green energy technologies.
As Michael Sinkula, the co-founder and director of battery startup Envia Systems told us last fall after his company scored a $4 million grant from the DOE’s ARPA-E (Advanced Research Projects Agency-Energy) program, the government investment will allow it to expand its focus and pursue riskier R&D. For Massachusetts-based 1366 Technologies, a $33 million ARPA-E grant last year helped kickstart its effort to deliver a manufacturing revolution for solar power.
Also receiving funding in today’s round of PV Incubator awards is quiet Tetra Sun, a Saratoga, Calif.-based startup (neither Alta Devices or Tetra Sun operates a public web site). With the federal grant, Tetra Sun plans to develop what’s called “back surface passivation” for lower-cost crystalline silicon solar cells.
Solar Junction, a 3-year-old startup working on , and Durham, North Carolina-based Semprius, backed by firms including Applied Ventures, Arch Venture Partners and the CIA’s In-Q-Tel fund, also garnered awards for up to $3 million each under the PV Incubator program to develop cells for lower-cost concentrating photovoltaic (CPV) systems and a CPV receiver based on microcell technology, respectively.
Related GigaOM Pro report (sub. req’d): “Renewable Energy Charging Up Electrical Transmission Tech“
Daily Sprout
Josie Garthwaite - Misc
Wind Expansion Feasible, Costly: “Wind could replace coal and natural gas for 20 or 30 percent of electricity supplied in the eastern two-thirds of the United States by 2024…but doing so would require a reorganization of the power grid and a significant increase in costs. And it would have only a modest impact on cutting carbon emissions,” according to a new DOE study. — New York Times
Alberta, Abu Dhabi Team Up for Carbon Capture: The province of Alberta, the center of Canada’s oil and gas industry, said Wednesday it will collaborate with Abu Dhabi on energy development, including carbon capture and storage technology. — Dow Jones Newswires
EV Disaster Scenarios: Industry experts today at the World Future Energy Summit in Abu Dhabi “warned of potentially alternate, adverse outcomes to the smart mobility utopia envisioned by most electric vehicle proponents.” — Cleantech Group
Coda Brings in GM Exec: Coda Automotive has hired General Motors’ former sales and marketing chief Mike Jackson to build the startup’s direct-to-consumer sales model as senior vice president of global sales and distribution. — Press Release
Meet Solar Fusion Power: “Solar Fusion Power will in nine months try to show off a prototype of a solar thermal power system that combines unusually shaped heliostats, a beam down heat transfer system, calcium and hydrogen.” If the system works, “it could raise the bar for efficiency for solar thermal systems.” — Greentech Media
Stimulus Funds Almost Fully Tapped – Time For the Jobs Crunch
Katie Fehrenbacher - Policy
PALM SPRINGS, CALIF. — The Department of Energy’s Senior Advisor Matt Rogers has one of the best and worst jobs in greentech: He’s one of the leaders in charge of handing out the $36 billion in U.S. stimulus funds for clean power and energy efficiency projects. But the hard work is almost over — at the Cleantech Investor Summit on Wednesday afternoon Rogers said that the agency has selected the companies and projects for about $31 billion of the funds, $23.7 billion of that has been sent out to companies, and about $2 billion has actually been spent by the companies that received the funds.
Now comes the true test that will determine if Rogers and the DOE’s work has been successful: Will that $36 billion in grants and loans, which so far is going to 7,000 recipients, deliver real jobs? The agency has until September 30 of this year to distribute funds under the Recovery Act, and Rogers says his job now is “to make sure recipients start hiring and making money.” The first calender year for these funds is very important, said Rogers.
If we are successful, we’ll be setting the agenda for clean power and energy efficiency industries, and we’ll have remade the way the DOE works, said Rogers. Success is if the clean power companies that received funds become major contributors to the jobs story by the middle of this year when these funds really hit the market place, said Rogers.
He didn’t touch on what would happen if they don’t succeed. But I can imagine: The U.S. public revolts if very few jobs are created despite the government spending such a large portion of the stimulus funds. That could lead to next-generation energy technology being set back a decade and little public funding followup after the stimulus funds are spent.
No one wants that to happen, and there’s no doubt that Rogers and the DOE have been working extremely hard to find solid projects that create jobs and boost the U.S. economy. Rogers and Secretary of Energy Steven Chu have in a matter of mere months transformed the methods and pace at which the DOE selects and allocates funding. The environment of the DOE before Chu and Rogers came in was used to working slowly and with a lot of bureaucracy — for example the DOE let loan guarantees hang in limbo for years.
Rogers said he had daily meetings to dramatically speed up the process — the Secretary is an impatient guy, Rogers quipped. While the DOE commonly took two years to select companies and three years to allocate funds, Rogers and Chu handed out the first set of competitive awards in 168 days.
Rogers and Chu have also been pushing hard for selecting better projects than the DOE has in the past. “What keeps the secretary up at night is us funding a perpetual motion machine,” laughed Rogers (we receive a proposal for one of those per week, he added). But to raise the level of selection, Chu and Rogers turned the process into a peer review process that included 4,000 academics and industry-leaders reviewing the proposals.
Even though the $36 billion in stimulus funds is one of the largest U.S. public funds for cleantech ever, there have been way more great applications filed and proposals submitted. Rogers said 70 to 80 percent of the applicants for ARPA-e funds were turned down — there were 3,500 proposals for 37 APRA-e grants. There was about 350 that we would have loved to fund. Companies that actually did receive the ARPA-e grants tended to have excellent fundamental science, and also had a path and team to execute it.
The next couple of months will be crucial in terms of if Rogers and the new DOE will be successful. The stimulus winners will need to show a lot of jobs and a lot of growth to convince the already skeptical public. I just hope that even if there’s some impatience and finger-pointing in the short term, that the strategy will ultimately be able to prove that a green economy actually does deliver green jobs.
Kleiner Perkins Doubles Down on a "Shrouded" Wind Turbine Design
Justin Moresco - clean power
High-profile investment firm Kleiner Perkins, the only disclosed backer of the startup's $6 million first round, led this latest funding and was joined by Goldman Sachs, Technology Partners, and VantagePoint Venture Partners. FloDesign Wind also announced that Lars Anderson, the former head of wind energy developer Vestas' business efforts in China, joined as chief executive officer. The startup's previous CEO and co-founder, Stanley Kowalski, will remain with the company as vice president.
FloDesign Wind so far hasn't officially said much about its wind turbine design or business plan, since the company remains in "stealth mode," a spokeswoman told us. The company is still working on R&D and is "moving into the next stage of actually building a company around the product," she said. That product is a wind turbine using a "shrouded" design, a cage-like enclosure commonly used with jet engines (the image is a rendition supplied by FloDesign), as opposed to conventional turbines that use long blades.
The shrouds work off the concept that air moving through a hole will gain speed because of differences in air pressure. The web site New Energy and Fuel has an interesting write-up on the science and engineering behind the design concept.
FloDesign Wind believes its design will be able to extract 3-4 times more energy from the wind than current technologies, according to this YouTube video. The spokeswoman said this would lead to turbines that are more efficient and less costly than competing products on the market today. She wouldn't say if the startup will look to sell or license its technology to large wind turbine manufacturers like General Electric or Denmark's Vestas, but the addition of Anderson to the FloDesign Wind team could make a Vestas deal easier.
Wilbraham, Mass.-based FloDesign Wind was founded in 2007 as a spin-off of FloDesign Inc., a contract engineering company that applies aerospace technology to new product development. The startup already has some victories under its belt: in 2008 it won two Massachusetts Institute of Technology-sponsored competitions, the Ignite Clean Energy business presentation competition and the Clean Energy Entrepreneurship Prize. Just a few months after those awards, Kleiner Perkins plunked down the startup's first venture round, and since then FloDesign Wind has also secured an $8.3 million grant under the Department of Energy's Advanced Research Projects Agency – Energy, or ARPA-E, program.
PG&E Puts Up $60M for SolarCity Installations
Josie Garthwaite - Energy
PG&E and SolarCity, a Foster City, Calif.-based startup founded in 2006 and backed by Tesla Motors CEO Elon Musk, Draper Fisher Jurvetson and JP Morgan, are calling the deal the first investment of its kind by a utility holding company, and the first collaboration of its kind between a utility holding company and a power provider. It’s more common for a bank to invest in tax equity — basically buying clean energy tax credits to shelter otherwise taxable income.
Here’s how it works: SolarCity typically finances the systems it installs — paying the upfront costs of the system in exchange for a contract to sell the electricity produced at a fixed, flat rate (a power purchasing agreement), or leasing the system to customers. Under the PG&E deal, the utility will pay the upfront costs for SolarCity to install a system, and then receive revenue from the customers’ lease payments. PG&E will also reap federal investment tax credits and rebates provided at the local level for solar projects.
Firms like AIG, Lehman Brothers, Wachovia and Morgan Stanley not too long ago ranked among the most active tax equity investors. But given the recent turmoil in the banking sector, it’s an interesting move for SolarCity and PG&E to join hands for this type of financing.
According to a statement from Rand Rosenberg, PG&E’s senior VP for corporate strategy and development, in today’s release, this deal with SolarCity offers the utility a number of benefits. The investment will “broaden access to renewable energy,” he said, helping PG&E to support California’s rooftop solar goals. And working with SolarCity, Rosenberg said, will give PG&E “valuable experience with a technology and a marketplace that may become increasingly important in the future.” (See our Q&A with SolarCity CEO Lyndon Rive for more about the startup’s business model.)
Currently operating in Arizona, California, Colorado and Oregon, SolarCity plans to expand to 5-10 additional states in 2010.
Photo courtesy of SolarCity
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