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Archive for the ‘enviro startups’ Category

End of the road for the Think electric car?

Posted in Better Place, electric cars, enviro startups, green cars, green policy, green tech, PG&E, plug-in electric hybrids, Think, Think Global, tagged , , , , , , , on December 16, 2008| 16 Comments »

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photo: Think

Think Global, the innovative Norwegian electric car company, has temporarily halted production of its City urban runabout and laid off half its workforce as it considers a sale to survive the credit crisis, Think CEO Richard Canny told Green Wombat Tuesday.

“Think is in a situation where we can’t grow anymore,” Canny said from Think’s Oslo headquarters, where the management team was still working at midnight. “We have started an emergency shutdown to protect our capital and our brand. We’ll need a new and stronger partner, whether that is a 25% owner or a majority owner or someone who buys the company.”

The Norwegian government said on Tuesday that it would not make an equity investment in the automaker but is considering Think’s request to guarantee up to $29 million in short-term loans. “Even a small participation from the Norwegian government will give investors confidence,” Canny said, noting that the company needs to raise $40 million to continue manufacturing its electric car. “The financial crisis has hit at a very critical stage as we’re ramping up production and when external financing is hard to bring into the company and internal funding is limited.”

He said a rescue package might include aid from from the Norwegian government and an infusion of cash from new investors or strategic partners. “We’re putting a hand out. People who would like to work with us should pick up the phone.”

Ford (F) acquired the startup in 1999 and sold it a few years later. Norwegian solar entrepreneur Jan-Olaf Willums and other investors rescued Think from bankruptcy in 2006, aiming to upend a century-old automotive paradigm by changing the way cars are made, sold and driven to create a sustainable auto industry.

As Green Wombat wrote in a 2007 feature story on Think, “Taking a cue from Dell, the company will sell cars online, built to order. It will forgo showrooms and seed the market through car-sharing services like Zipcar. Every car will be Internet-and Wi-Fi-enabled, becoming, according to Willums, a rolling computer that can communicate wirelessly with its driver, other Think owners, and the power grid. In other words, it’s Web 2.0 on wheels. ‘We want to sell mobility,’ Willums says. ‘We don’t want to sell a thing called the Think.’

The company sells the car but leases the battery so buyers don’t have to fork over cash upfront for an electric vehicle’s single most expensive component – an idea subsequently adopted embraced by everyone from Shai Agassi’s Better Place electric car infrastructure company to General Motors (GM).

The failure of the new Think would be a blow at a time when the auto industry desperately needs to reinvent itself. While Think is a niche player and faces formidible competition as Toyota (TM)  and other big automakers go electric, it has pioneered  the idea of a new automotive infrastructure that includes tech companies and utilities like PG&E (PCG).

Whether Think can survive the global financial crisis remains to be seen, but Willums, who stepped aside as CEO recently but remains on the board, is a prodigious networker with deep contacts in Silicon Valley and elsewhere. In little more than a year he raised around $100 million from an A-list of U.S. and European investors that includes General Electric (GE), Keiner Perkins Caulfield & Byers and Rockport Capital Partners – the latter two marquee venture capital firms formed a joint venture with Think to sell the City in North America. Canny said the U.S. expansion plans are now on hold.

The question now is whether Think’s investors, absent a government bailout, will step up to save the company just as it has started to gain a foothold in the market. In a presentation made Monday, Canny, a Ford veteran, said eight to 10 two-seater City cars a day had been rolling off the company’s assembly line outside Oslo.  Think has a blacklog of 550 orders and 150 cars will be delivered by January.  The company was set to begin selling a 2+2 version of the City in mid-2009. (Think had planned to begin selling its next model, a five-seat crossover car called the Think Ox, in 2011.)

“There are limited possibilities of funding working capital through bank credits without extra guarantees in today’s financial market,” Canny said, noting that the company hopes to resume production in the first quarter of 2009. “Think’s automotive suppliers are severely hit by the overall industry crisis, leading to tougher terms of parts delivery to Think.”

Green Wombat will throw out one potential savior of Think: Google (GOOG). Many aspects of Think’s innovative business model were born at a brainstorming session that the search giant hosted in 2006 for Willums at the Googleplex in Mountain View, Calif. Given that Google.org, the company’s philanthropic arm, has poured tens of millions of dollars in green energy companies and electric car research, an investment in Think would be another way to drive progress toward its goal of a carbon-free economy.

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Better Place to build Hawaiian electric car network

Posted in alternative energy, Australia, Better Place, climate change, electric cars, energy, enviro startups, environment, global warming, green cars, green policy, green tech, tagged , , , , , , , on December 2, 2008| 44 Comments »

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photo: Better Place

Silicon Valley startup Better Place on Tuesday announced a deal with Hawaii’s governor and the state’s biggest utility to build an electric car charging network throughout the islands.

The agreement comes less than two weeks after Better Place CEO Shai Agassi and the mayors of Northern California’s three largest cities unveiled a plan to build an electric car infrastructure for the San Francisco Bay Area. Better Place also has signed similar deals with governments in Australia, Denmark and Israel.

Agassi said the network of charging posts and battery swapping stations will be ready by 2012. That’s roughly the target date for Better Place’s other projects, which means the year-old startup will be simultaneously building electric car networks in four countries while raising billions of dollars in project finance.

Renault-Nissan will supply electric cars for the network. Better Place will own the car batteries and charge drivers for the miles (or kilometers) driven. By removing the battery from the purchase price of electric cars – the most expensive component – Better Place hopes to sell vehicles at prices competitive with their fossil-fueled counterparts.

Appearing with Agassi at a press conference at the capitol in Honolulu, Hawaii Governor Linda Lingle said the Better Place partnership offers the state the opportunity to slash the $7 billion it spends annually on imported oil and provide a market for renewable energy. Hawaiians pay some of the highest gasoline prices in the U.S. and the state has set a goal of obtaining 70% of its energy from solar, wind and other renewable sources by 2030.

“It’s not a simple goal – we’re looking to end our dependence on oil,” said Agassi, who shed his customary dark suit for a gray polo shirt and wore a lei. “Any form of renewable energy – wind, solar, geothermal – is here in Hawaii.”

“This will be the blueprint where six or seven million visitors will come and experience first-hand what it’s like to drive an electric car,” added Agassi, 40, a former top executive at business software giant SAP. “You couldn’t ask for a better advertisement.”

Utility Hawaiian Electric (HE), which supplies 95% of the state’s power, will generate renewable electricity equal to what the Better Place network consumes and work with the company on developing the charging infrastructure.

“The price of oil is irrelevant to us – we have to reach a clean and secure energy future,” Lingle said.

Better Place’s latest deal came on the same day that General Motors (GM) and Ford, which have asked for a multi billion-dollar bailout from Congress, (F) announced plans ramp up production of hybrid and electric cars.

“It’s a win-win-win – the only loser in the equation is oil and that’s ok,” said Hawaiian Electric executive vice president Robbie Alm. “Green cars will provide the market for renewable energy.”

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A smart energy grid inside your home

Posted in climate change, corporate green, energy, energy efficiency, enviro startups, environment, global warming, green buildings, green startups, green tech, PG&E, tagged , , , , on November 25, 2008| Leave a Comment »

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In case you missed it, this Green Wombat story appears in the current issue of Fortune.

A house that thinks

The high-tech networks that Reliant Energy is installing in the homes of its 1.8 million customers will help them save electricity.

By Todd Woody, senior editor

(Fortune Magazine) — Inside a white-brick house nestled in Houston’s leafy Montrose neighborhood, a gray handheld video display sits on the living room coffee table. But this is no ordinary remote control. Called the Insight and made by Tendril, a Boulder startup, the device communicates wirelessly with the home’s utility meter, letting you track real-time information about the cost of the electricity you consume.

The house is actually a demonstration project set up by Reliant Energy (RRI), a reseller of electricity with $12 billion a year in sales. Glen Stancil, Reliant’s vice president for smart energy R&D, taps the Insight’s screen. “Right now we’re spending $1.40 per hour,” he says, noting that the electricity prices and usage are updated every ten seconds. (Customers can also access the same data on the web or their iPhones.)

Stancil presses another button. “The bill so far is $86, and for the month it looks like it’s headed to $367,” he says. The Insight system also warns that you’ll fork over another $100 this month if you crank up the air conditioner a couple of notches. So keep your hands off the thermostat.

That’s just the kind of behavior that Reliant Energy CEO Mark Jacobs would like to see. Until now, Reliant has made its money by entering contracts with utilities for a fixed amount of power at a fixed price and then reselling it to its 1.8 million customers. If demand unexpectedly soars on a hot afternoon as everyone turns up the air conditioning, Reliant often must buy extra power on the spot market, where prices can spike as much as 60%.

That cuts into profits. “It’s like running a beachfront hotel, charging the same room rate all year round, and then building more rooms to guarantee that everyone has a room on the busiest weekends,” says Jacobs.

In November, Reliant started installing the Insight in homes, which means it will be able to pass along those high spot prices to its customers, or better yet, in sweltering Texas, let customers buy a month’s worth of cool at a set price – say, 72 degrees for $200 or 74 degrees for $160.

The Insight offers another advantage – Jacobs believes it will encourage his customers to cut back on electric use and save money. “What if you knew you could run your clothes dryer at five o’clock, and it would cost $3,” says Jacobs, “or you could wait until eight o’clock at night, and it would be only a dollar?”

PG&E (PCG), Southern Edison International (EIX) and other utilities are rolling out smart meters but have yet to to integrate them with smart energy systems for the home. But Reliant operates in a competitive, deregulated electricity market. If homeowners get cool technology that helps them avoid the unpleasant surprise of a big electric bill, Jacobs believes Reliant will retain more customers. And then there’s the green angle. “We as an industry are the single largest emitter of greenhouse gas, and our goal is to help our customers use less, spend less, and emit less,” says Jacobs.

For Jacobs, a 46-year-old Goldman Sachs (GS) veteran, smart energy technology is just the wedge to shake up what he calls “an industry in the Dark Ages” while opening new markets for his company, whose stock has been walloped by the one-two punch of Houston’s Hurricane Ike and the credit crunch.

Hurdles, however, remain. Will consumers already suffering from information overload want to obsessively monitor their electricity habit? Will a sweating Houstonite on a 104-degree day say to hell with the cost and crank up the AC anyway? Jacobs isn’t worried. He believes nothing influences behavior better than knowing the true price of what you’re buying.

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San Francisco to Detroit: Go electric

Posted in Better Place, climate change, energy, enviro startups, global warming, green cars, green financing, green policy, green tech, tagged , , , on November 21, 2008| 33 Comments »

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Photo: Better Place/Acey Harper

SAN FRANCISCO – It was a day when the shift from the past to the future was almost palpable.

It started Thursday morning in Berkeley where Green Wombat was moderating a panel of tech luminaries gathered at the University of California’s Global Technology Leaders Conference. As Shai Agassi, founder of electric car infrastructure company Better Place, makes the case for harnessing Silicon Valley’s technological innovation to Detroit’s manufacturing might to create a sustainable car industry, dispatches from the automotive apocalypse roll down my BlackBerry: Ford (F) shares sink to $1.01…GM’s (GM) stock falls to its lowest level since World War II…U.S. automakers beg for a bailout…California Congressman Henry Waxman ousts Michigan’s John Dingell — the Duke of Detroit — from his 28-year chairmanship of the powerful House Energy and Commerce Committee.

Agassi slips out of the conference and an hour later I catch up with him across the Bay at San Francisco City Hall where he and representatives of Governor Arnold Schwarzenegger and the mayors of San Francisco, San Jose and Oakland announce a $1 billion project to build a regional network of electric car charging stations. Better Place has signed similar deals with governments in Israel, Denmark and Australia, but California is the company’s first foray into the U.S. market. Planning for the Bay Area network begins in 2009 with construction scheduled to start in 2010 and commercial rollout set for 2012.

better20place202The mood is ebullient. “This is the start of a regional effort to become the capital of electric vehicles in the United States,” proclaims San Francisco Mayor Gavin Newsom before an audience that includes representatives from state and federal environmental agencies, green groups. Silicon Valley business leaders and officials from GM and Toyota (TM).

For his part, Agassi says, ” We believe this is not just a model for California, but a blueprint for the United States.”

The blueprint works like this: The mayors of the Bay Area’s three largest cities agreed to expedite permitting and installation of electric car charging stations, standardize regional regulations to promote an electric car infrastructure and offer incentives to employers to install chargers at workplaces. The mayors also agreed to pool purchases of municipal electric car fleets.

Better Place will raise the capital to install thousands of charging spots on the streets of San Francisco, San Jose and Oakland as well as stations between California cities where drivers can swap depleted batteries for fresh ones when they make longer trips. The Palo Alto-based company will own the car batteries and charge drivers for the miles driven. Automaker Renault-Nissan is developing electric cars for the Better Place network.

The big idea: Only by building an electric car infrastructure first will automakers produce the tens of millions of electric cars needed to make a significant dent in greenhouse gas emissions and the nation’s dependence on foreign oil.

That business model elicited some skepticism earlier in the day at the Berkeley conference, where Michael Marks, former CEO of electric carmaker Tesla Motors, questioned Agassi’s claim that Better Place would be able to provide electric cars that cost no more than gasoline-powered vehicles. And Jim Davidson, co-founder of Silicon Valley private equity firm Silver Lake, asked if Better Place would essentially be tapping the power grid to create a monopoly. (No, Agassi said, the Better Place network would be open to all electric cars.)

When Green Wombat sat down with Agassi and Newsom in the mayor’s offices Thursday afternoon, I asked Agassi, who brings a charismatic messianism to his mission, how Better Place would raise the billions needed to roll out an electric car infrastructure in California amid a global economic meltdown. He noted that in Australia Better Place signed up investment giant Macquarie Bank to create an infrastructure fund to finance that project while in Denmark a utility will provide financing.

“We will do the same thing here; we’re working with Morgan Stanley (MS) and Goldman Sachs (GS),” Agassi says, recounting a conversation he recently had with investors who he said were eager to put money in Better Place projects.

If anything, Newsom, 41, and Agassi, 40, and their allies regard the confluence of the financial crisis, the great Detroit car crash and the consolidation of green power in the incoming Obama administration and Congress as a once-in-a-lifetime opportunity to launch a disruptive technology on a global scale and transform the U.S. automotive industry.

“We’re uniquely positioned in that our local representative is Speaker of the House,” notes Newsom, referring to his close political ally, San Francisco Democrat Nancy Pelosi, who on Thursday sent a message of support for the Better Place initiative. “That can elevate what we’re trying to achieve out here.”

There’s no doubt that Newsom has a knack for game-changing politics. (He launched the gay marriage movement in these offices.) But the nuts and bolts of getting the bureaucracy to fall in line will be a harder challenge, as anyone who has ever tried to get a permit to do a home renovation in San Francisco can tell you. And not all of San Francisco’s collaborations with Silicon Valley tech companies have gone well — witness the collapse of the citywide Wi-Fi initiative Newsom undertook with Google (GOOG).

Agassi hesitated when I asked about plans to extend the Bay Area electric car network to the rest of California, noting that negotiating agreements with the nearly 100 municipalities that make up Greater Los Angeles poses a challenge. “I got a call the other day from the mayor of L.A. asking where are we,” Agassi says. “We hope to eventually make it an electric charging corridor from California to Seattle to Vancouver.”

On Thursday, Agassi and the politicians took pains to paint the Better Place initiative as not a California versus Michigan thing, or new economy versus old. And they just may be right. For in a strange way, by building an electric car infrastructure, California is offering Detroit a rescue package of its own: Supplying the network lays the groundwork for the mass production of electric cars that could be the auto industry’s salvation.

That may be counter to conventional wisdom, but perhaps Robert F. Kennedy Jr., environmentalist and advisor to Silicon Valley’s VantagePoint Venture Partners – a Better Place investor – put it best on Thursday at the press event when he upended the East Coast view of the Golden State: “When you come to California, you find people in touch with reality.”

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California to build electric car network

Posted in alternative energy, climate change, electric cars, energy, enviro startups, environment, green cars, green policy, green startups, tagged , , , , on November 20, 2008| 19 Comments »

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photo: Todd Woody

SAN FRANCISCO – As Congress considers bailing out a U.S. auto industry damaged by its dependence on fossil fuel-hogging SUVs, San Francisco Bay Area leaders on Thursday unveiled plans for a $1 billion regional network of charging stations for electric cars.

Silicon Valley startup Better Place will construct the network, deploying thousands of chargers for electric cars on the streets of San Francisco, San Jose and Oakland. The cities will be linked by battery swapping stations so drivers can travel longer distances. Better Place, founded by former SAP executive Shai Agassi, previously struck deals with governments in Israel, Denmark and Australia to build electric car networks. This is the well-funded startup’s first move in the U.S. market. Construction on the Bay Area network will begin in 2010 with commercial rollout in 2012.

“This is the start of a regional effort to become the capital of electric vehicles in the United States,” proclaimed San Francisco Mayor Gavin Newsom at a press conferences at city hall attended by the mayors of San Jose and Oakland as well as representatives from state and federal environmental agencies.

California Governor Arnold Schwarzenegger threw his support to the project and the the cities of San Jose, San Francisco and Oakland have pledged to expedite permitting of Better Place charging stations, standardize regulations and offer incentives for employers to install chargers at workplaces.

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Forget the recession, California goes for the green

Posted in alternative energy, BrightSource Energy, climate change, endangered species, enviro startups, environment, global warming, green policy, green startups, green tech, Natural Resources Defense Council, OptiSolar, PG&E, renewable energy, San Diego Gas & Electric, solar energy, solar power plants, Southern California Edison, the green economy, tagged , , , , on November 18, 2008| 2 Comments »

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photo: California Governor’s Office

California Governor Arnold Schwarzenegger on Monday terminated talk that the recession will crimp California’s fight against global warming when he ordered every utility in the state to obtain a third of its electricity from renewable sources by 2020. And in a move that will shake up the land rush to build solar power plants in the desert, Schwarzenegger signed an executive order to streamline and prioritize the licensing of such projects.

“One of the great things about California, of course, is that we always push the envelope,” said Schwarzenegger at startup OptiSolar’s solar cell factory in Sacramento, surrounded by a triptych of solar panels, utility executives and environmentalists. “That is why today I’m proposing that we set our sights even higher. This will be the most aggressive target in the nation.”

California currently requires the state’s Big Three investor-owned utilities – PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) – to secure 20% of their electricity from green energy sources like wind, solar and geothermal by 2010. Monday’s move turns what had been a 33% renewables goal into a mandate and extends responsibility for meeting it to every electricity retailer in California.

Utilities, however, have struggled to reach even the 20% target as renewable energy projects become bogged down in California’s extensive environmental review and licensing process that involves a host of state and federal agencies.

Many proposed massive megawatt solar power plants will be built on environmentally sensitive land in the Mojave and Colorado deserts in California, threatening to trigger years-long battles over endangered species and water.

Take, for instance, the Ivanpah Solar Electric Generating System, 400-megawatt solar thermal power plant  to be built by Bay Area startup BrightSource Energy on U.S. Bureau of Land Management property. BrightSource, which has a 20-year contract to sell the power plant’s electricity to PG&E, is dealing with the California Energy Commission, the California Department of Fish and Game, the BLM and the U.S. Fish and Wildlife Service as well as the agencies that control access to the transmission grid.

Then there’s environmental fights over extending power lines to connect such projects to coastal metropolises. Late last month, state regulators rejected San Diego Gas & Electric’s plan to build $1.3 billion transmission line called the Sunrise Powerlink due to the environmental impact of routing it through sensitive desert lands.  A final decision on the project to bring green energy from the Imperial Valley to coastal metropolises will be made next month.

Schwarzenegger’s executive order requires various state agencies to collaborate to create a one-stop shopping permit process to cut in half the time it takes to license a renewable energy project – which now can be a two-year slog. The U.S. Fish and Wildlife Service and BLM also agreed to participate in a Renewable Energy Action Team to expedite the licensing of solar power plants and other green energy projects.

“We will streamline the permitting process and the siting of new plants and transmission lines,” Schwarzenegger said. “We will complete the environmental work up front, dramatically reducing the time and the uncertainty normally associated with any of those projects.”

By March 1, the action team will identify and prioritize those areas of the desert that should be developed first for renewable energy projects based on environmental impacts and access to transmission. The group will also work with another task force that is identifying where power lines should be extended into the desert.

That will affect the fortunes of dozens of solar startups, financiers and speculators — everyone from Goldman Sachs (GS) to Chevron (CVX) — that have filed lease claims on nearly a million areas of desert land that the BLM is opening up for solar power plants. Those with land claims in areas at the top of the list for renewable energy development will find it easier to obtain financing – currently in short supply – to build billion-dollar projects. Those at the bottom of the list may rue the six-figure application fees they paid to stake claims on thousands of acres of desert land.

Behind the optimistic talk and smiles at Monday’s press conference, utility execs and environmentalists who praised the governor’s latest green initiative also signaled that political fights over how to achieve the state’ ambitious renewable energy goals are not over.

“Transmission is absolutely critical to get those renewables from the Imperial Valley,” San Diego Gas & Electric CEO Deborah Reed told the audience. “Assuming a positive decision on Sunrise Powerlink next month, we’ll get to 33% by 2020.”

But when the Nature Conservancy’s Rebecca Shaw took the microphone, she offered a cautionary note. “In our urgency to create a more sustainable future, we must be careful not to destroy the very environment that we are trying to protect,” said Shaw, associate state director for the environmental group.

California’s aggressive renewable energy policies already have had one desired consequence: spurring the creation of green collar jobs. OptiSolar, which earlier this year signed a long-term contract to supply PG&E with 550 megawatts of electricity from a massive photovoltaic solar farm, employs 500 people at its Bay Area headquarters and factory. CEO Randy Goldstein said his company will hire another 1,000 for its new Sacramento factory.

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Credit crisis shakes up solar land rush

Posted in alternative energy, Ausra, BrightSource Energy, energy, enviro startups, environment, First Solar, PG&E, renewable energy, solar energy, solar power plants, Solel, tagged , , , , , on November 13, 2008| 5 Comments »

Photo: Todd Woody

The land rush to stake prime sites in the Mojave Desert for solar power plants has moved east from California to a state that knows a thing or two about desert dreaming and scheming — Nevada.

When Green Wombat’s story on the solar land rush was published in the July 21 issue of Fortune (see “The Southwest desert’s real estate boom”), solar energy developers, financiers and speculators had filed lease claims on 226,000 acres of federal land in Nevada. Today, 702,000 acres are in play, largely thanks to Goldman Sachs’ aggressive moves to lock up land. The New York investment giant has put claims on about 300,000 acres of Bureau of Land Management dirt in the Silver State — in one week alone, it filed claims on some 187,000 acres.

Given its financial firepower, Goldman’s designs on the desert have been a matter of intense interest. (The firm also has filed claims on 125,000 acres in California.) Goldman (GS) declined to discuss its solar strategy, but a review of BLM documents and interviews with green energy executives sheds some light on its power plans as the financial crisis triggers a shakeout in the solar land rush.

Over the past two years, scores of companies — from Silicon Valley startups to Chevron (CVX) to utility FPL (FPL) — have scrambled to put lease claims on the nation’s best solar real estate to build massive megawatt solar power plants. In California, where utilities face a state mandate to obtain 20% of their electricity from renewable sources by 2010 with a 33% target by 2020, claims have been filed on nearly 1 million acres. If all those solar stations were built, they would generate a staggering 60,000 megawatts of electricity, or nearly twice the power that California currently consumes.

With most of the prime solar hot spots taken in California, the action is moving to sun-drenched states like Nevada where there’s plenty of wide-open desert land. The BLM has yet to issue any leases and is currently evaluating the applications on a first come, served basis. A key consideration: whether the applicant can deploy a viable solar technology.

But with the credit crunch threatening to derail many of those projects, companies are jockeying to score the best sites – those near transmission lines and water – when the weak are weeded out by a failure to obtain financing or a proven solar technology. Some sites have two or three companies queued up in case the first company in line falters.

For its part, Goldman Sachs has brought in its Cogentrix Energy subsidiary to develop its solar projects, according to BLM records.  Cogentrix is a Charlotte, N.C.-based owner and operator of coal and natural gas-fired power plants that Goldman acquired for $2.4 billion in 2003.

“Cogentrix doesn’t have a solar technology,” says Rob Morgan, executive vice president and chief development officer for Silicon Valley solar startup Ausra. He says Ausra, which is building a solar power plant for utility PG&E and itself has staked claims in Arizona and Nevada, has held discussions with Goldman about its solar technology.

European renewable energy companies are also taking advantage of the market turmoil. State and federal records show that Iberdrola Renewables, a spinoff of Spanish energy giant Iberdrola, has quietly acquired a year-old Henderson, Nev., startup called Pacific Solar Investments — and its claims on about 180,000 acres of desert land in Arizona, California and Nevada. Iberdrola Renewables is the world’s largest wind developer.

The saga of Pacific Solar shows how cutthroat the competition for solar real estate has become. Just ask Avi Brenmiller, CEO of Israeli solar power plant company Solel, which last year inked a 553-megawatt deal with PG&E (PCG). Brenmiller now finds himself up against his former COO, David Saul, who set up Pacific Solar and began filing land claims while still working for Solel, according to BLM  records and Brenmiller. During this time, Saul also was making land claims on behalf of a second solar company, IDIT, where he serves as CEO, according to filings with the Arizona Secretary of State’s office.

Five days after leaving Solel in August 2007, Saul filed a claim on a California site, getting second in line behind Goldman but beating his former employer to the punch by a week. Solel is now behind Pacific Solar and IDIT on two other sites. “So he’s now a competitor in the land rush, which is one of the problems we face,” Brenmiller told me ruefully when we met in San Francisco earlier this year.

Saul did not respond to requests for comment. Iberdrola Renewables also did not return requests for comment.

French energy company EDF’s U.S. subsidiary, enXco, meanwhile has been joined in the land rush by Portuguese utility company EDP and Germany’s Solar Millennium. Spanish renewable energy heavyweight Acciona’s name doesn’t appear on any land claims. But the CEO of Acciona’s U.S. solar operations, Dan Kabel, started a company called Bull Frog Green Energy that has filed claims on 56,000 acres in California and Nevada. Kabel did not respond to a request for comment.

Other new players in the desert solar game include U.S. energy giant Sempra (SRE), which wants to lease 11,000 acres in California’s Imperial County for a 500-megawatt photovoltaic power plant. That could be good news for solar cell maker First Solar (FSLR), which is currently building a smaller solar power plant for Sempra in Nevada. Johnson Controls (JCI), the Fortune 100 automotive and power systems conglomerate, has put in a solar land claim in Nevada. Even former hotel magnate Barry Sternlicht, founder of Starwood Hotels & Resorts, wants a piece of the action through his Starwood Energy Group, which has filed claims in Arizona and Nevada to build solar power plants.

SolarReserve, a Santa Monica, Calif-based solar startup backed by Citigroup and Credit Suisse, has BLM land claims in California and Nevada and is also negotiating with smaller companies that staked claims on prime solar power plants with access to the transmission grid.

“We have done deals with three or four applicants in the BLM queue,” SolarReserve chief operating officer Kevin Smith tells Green Wombat. “The smaller companies with land claims are typically speculators who don’t have their own technology.”

Industry insiders say a shakeout in the land rush is inevitable, given the credit crunch and too many companies in the chase for the best solar power plant sites.

“A drawn-out financial crisis will reshape the renewable sector, most likely forcing a wave of consolidation,” says Reese Tisdale, research director for Emerging Energy Research, a Cambridge, Mass., consultant. “If someone holds land and someone holds a technology, maybe there’s a deal out there.”

That’s Ausra’s thinking. With the financial crisis putting the billions of dollars needed to build big solar projects out of reach, the company is repositioning itself as a supplier of solar technology as well as a builder of solar power plants.

“We see our future as being a technology provider,” says Ausra’s Morgan, who says the company has had discussions with various power plant developers. “And hopefully a lot of these developers in the BLM queue will use Ausra technology.”

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Generating electricity from a balloon

Posted in alternative energy, Cool Earth Solar, enviro startups, green startups, green tech, PG&E, renewable energy, San Diego Gas & Electric, solar energy, solar power plants, Southern California Edison, Uncategorized, tagged , , on November 5, 2008| 16 Comments »

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Image: Cool Earth

LIVERMORE, Calif. – It sounds like something out of one of those do-it-your-self magazines: Stitch together two buck’s worth of thin-film plastic – the stuff potato chip bags are made of – stick in a photovoltaic cell, inflate with air and, voilà, you’ve got yourself a “solar balloon” that will generate a kilowatt of electricity. String together 10,000 balloons and you’ve got a solar power plant that can power a town.

California startup Cool Earth Solar believes this high-low tech approach is what will make its solar power plants competitive with fossil fuels. Green Wombat visited Cool Earth’s Livermore headquarters recently for a Fortune Magazine story and got a look at the technology.  “We wanted to do solar in a very different way,” says Cool Earth CEO Rob Lamkin.

Different it is. We’re standing in Cool Earth’s back shop in front of an eight-foot-high solar balloon. Two pounds of plastic are pumped with a third of a pound of air per square inch to make the balloon taut. The curved top two-thirds of the balloon is transparent and the bottom is made of the silvery reflective plastic you’d find lining a bag of junk food. A steel strut inside will hold a tiny but highly efficient solar cell, which is the most high-tech component of the balloon.

Here’s the ingenious part of the technology, developed by scientists at Caltech: Instead of using expensive optics to concentrate sunlight on the solar cell, Cool Earth manipulates the air pressure inside the balloon to change the shape of the mirrored surface so that it focuses the maximum amount of sunlight on the solar cell, boosting electricity generation 300 to 400 times.

By replacing expensive materials like steel with cheap-as-chips plastic and air, Cool Earth aims to dramatically lower the price of solar electricity. “We strongly believe it’s all about cost,” says Lamkin, “not how clever the technology is or if it is 1% more efficient.”  For instance, the amount of aluminum in a can of Coke would provide enough reflective material for 750 balloons, he notes.

The company, founded in 2007, has raised $21 million so far. It plans to build solar power stations in the 10-megawatt to 30-megawatt range. Two to six balloons will be suspended on wood poles and anchored with cables about 10 feet off the ground. That means the earth won’t have to be graded, reducing the environmental impact of Cool Earth’s power plants – a growing issue given that most solar thermal power stations will be built in the desert, home to a plethora of protected wildlife. The relatively compact size of Cool Earth’s power stations also means they can be located close to existing transmission lines.

A prototype power plant is being built in a field across the street from Cool Earth’s offices and Lamkin says a 1.5 megawatt plant will be constructed early next year in the Central Valley town of Tracy. The electricity probably will be sold to utility PG&E (PCG) under a state renewable energy program.

Unlike big solar thermal plants, photovoltaic power stations do not need to obtain a license from the California Energy Commission, which can be an expensive two-year ordeal. Lamkin estimates that a Cool Earth power plant can be up and running in six months, which should appeal to utilities like PG&E, Southern California Edison (EIX) and San Diego Gas & Electric (SRE), which are under the gun to meet state mandates to obtain 20% of their electricity from renewable sources by 2010.

Now Cool Earth just needs to make the technology work in the field. It has yet to produce electricity from its balloons, as the solar cells are still being produced. Also unknown is how the balloons will operate in real-world conditions. Lamkin says they can withstand 125-mile-an-hour winds. They have a lifespan of just five years, but Cool Earth expects to replace the balloons every year, given their low cost.

“Our major structural element is air, which so far is free,” Lamkin says. “And the sun isn’t taxed either.”

Yet.

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First Solar jumps into residential rooftop market

Posted in alternative energy, energy, enviro startups, environment, First Solar, solar energy, Uncategorized, tagged , , , on October 29, 2008| 17 Comments »

In a move that will bring thin-film solar panels to the U.S. residential market, First Solar has signed a deal to provide installer SolarCity with 100 megawatts’ worth of solar arrays over the next five years. First Solar is also investing $25 million into SolarCity, the Silicon Valley startup backed by Tesla Motors founder Elon Musk.

This is First Solar’s initial foray into the home market — and apparently the first of any thin-film solar module maker. Thin-film solar panels are made by depositing solar cells on sheets of glass or flexible material and use little of the expensive silicon that forms the heart of more bulky conventional solar modules. That makes thin-film panels cheaper, although they are less efficient at converting sunlight into electricity. And thin is in for homeowners who prefer less-obtrusive panels on their roofs.

SolarCity CEO Lyndon Rive told Green Wombat that First Solar’s more economical panels will allow the company to expand to the East Coast and other areas that do not heavily subsidize solar. SolarCity installs solar panels at no cost to the homeowner and then leases them back for a monthly charge. “What matters is not efficiency but cost per kilowatt-hour,” Rive says, noting that solar programs like California’s reduce rebates to panel makers as the number of installations increase. “We need solutions that address declining subsidies.”

Added SolarCity communications director Jonathan  Bass: “When we talk to customers their four biggest priorities are cost, cost, cost and aesthetics.”

Beginning in early 2009, SolarCity will start receiving 20 megawatts’ worth of First Solar panels a year. Rive won’t disclose how many megawatts SolarCity currently installs annually, but 20 megawatts would seem to represent a significant expansion of the startup’s operations. Over the past two years, SolarCity has installed solar arrays for 2,500 homes and small businesses and a spokeswoman says the First Solar deal would supply enough panels for about 5,000 homes a year.

The deal also marks a move to diversify on the part of Tempe-Ariz.-based First Solar (FSLR)  — known as the Google (GOOG) of solar for its once-stratospheric stock price. The company, backed by Wal-Mart’s (WMT) Walton family, had primarily focused on the overseas commercial rooftop market. This year though First Solar has signed deals to build thin-film solar power plants for utilities like Southern California Edison (EIX) and Sempra (SRE).

First Solar on Wednesday reported that third quarter revenues rose 30% to $348.7 million from the second quarter and was up 119% from the year-ago quarter. Profit spiked 42% to $99.3 million from the second quarter and increased nearly 116% from a year ago.

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Credit crunch darkens solar’s prospects

Posted in alternative energy, Ausra, BrightSource Energy, climate change, energy, enviro startups, environment, GE Energy Financial Services, global warming, green startups, investment tax credit, PG&E, renewable energy, solar energy, solar power plants, tagged , , , , , , on October 24, 2008| 7 Comments »

photo: Ausra

The promise and peril of large-scale renewable energy was on display Thursday as California’s first solar power plant of the 21st century went online near Bakersfield. Under blue skies, Governor Arnold Schwarzenegger and other politicians heralded the five-megawatt Ausra solar station as the vanguard of a new era of alternative energy that would combat the effects of climate change while building a green economy.

Then the CEO of one of the nation’s largest utilities stepped up to the podium and delivered a reality check. “As we all know the capital markets are in disarray,” said PG&E chief Peter Darbee, whose utility has a contract to buy 177 megawatts of electricity from Ausra. “They’re down 40%. The capital markets are going to distinguish between high-risk projects and low-risk projects and the high-risk projects are not going to get financed in the future.”

But he added, “PG&E stands ready to take on the challenge of financing renewables.”

The utility may just have to.

At the solar industry’s big annual conference in San Diego last week, renewable energy executives were euphoric over Congress’ 11th-hour passage this month of an eight-year investment tax credit that would allow big solar power plants to get up and running, eventually allowing for economies of scale crucial to driving down the price of green electricity. Then a dark clouded drifted over the sun-splashed proceedings in the form of three somber-suited men bearing ominous PowerPoint presentations.

The message from Wall Street: The credit crunch will wallop big solar plant projects that need billions of dollars in financing to get built.

Here’s why. It gets a bit arcane but bear with the wombat. The renewable energy legislation passed as part of the financial bailout package allows solar companies to take a 30% tax credit on the cost of building a power plant. Now most of these companies are startups and have no way to monetize, as they say on the Street and in Silicon Valley, those tax credits as they’re not profitable. Instead, a solar company must essentially trade the tax credits to a firm that can use them in exchange for cash to finance construction.

So investors form something called a tax equity partnership, in which they agree to finance, say, a solar power plant in exchange for the tax credits generated by the project. The problem, according Tim Howell, managing director of renewable energy for GE (GE) Energy Financial Services, is that investors’ appetite for tax equity partnerships has taken a nose dive just as the market will be flooded with solar tax credits from a growing number of projects currently being licensed. For instance, he said, 1,000 megawatts of solar projects would generate $1.5 billion in tax credits.

That means there has to be enough investment dollars – or “capacity” in Wall Street lingo – available to buy those tax credits from the solar power companies.  “Competition for tax capacity, which is a scarce resource in tough financial times, is a problem we have to solve,” Howell told a packed ballroom in San Diego.

John Eber, managing director of JPMorgan Capital (JPM), flashed a PowerPoint that showed the total value of the tax equity market at $15 billion last year with 40% going to renewable energy projects, mainly wind. Now that investment banks-which put together the partnerships and sometimes invested their own capital-are all but an extinct species on Wall Street, only an estimated $875 million will be available for all solar projects in 2008. In contrast, he noted, just the solar power plant projects already announced  would need between $6 billion and $8.5 billion in tax equity funding.

“Tax equity is becoming increasingly hard to raise for renewable energy projects,” said Keith Martin, a project finance attorney at the Washington firm Chadbourne & Parke. “Several large institutional investors who put money into renewable energy deals in the last three years have dropped out of the market.”

That, they said, means untried technologies from startups will face higher hurdles to attract investors.

In conversations Green Wombat has had with solar power plant executives over the past couple of weeks, they acknowledge that financing will be much harder to come by but they’re hardly ready to throw in the towel.

“There’s probably a gigawatt of press releases and 200 megawatt of plants that acutally will go live in 2010,” says John Woolard, CEO of Oakland-based BrightSource Energy, which has a contract with PG&E to deliver up to 900 megawatts of electricity.

His point: Despite gigawatts of signed utility deals, only a few power plants will actually be built in the next couple of years when financing is expected to be the toughest to obtain. “In 2011, it’s reasonable that 500 to 600 megawatts could happen,” he says. “Those aren’t big numbers for the tax equity market, but if you believe everything that’s been announced is going to be built, then it is a big market.”

California utilities, however, are counting on that big market to meet a state mandate to obtain 20% of their electricity from renewable sources by 2010 with a 33% target for 2020. PG&E (PCG), for instance, has signed 20-year power purchase agreements for more than 2.5 gigawatts of solar electricity.

When Congress extended the solar investment tax credit it also lifted a ban on utilities claiming the tax subsidy. Hence PG&E chief Peter Darbee’s statement Thursday that his utility would be willing to make sure its projects get funded by using the company’s considerable capital clout.

“We certainly could look at potentially funding or investing in renewable projects,” PG&E senior vice president Greg Pruett told Green Wombat Thursday. While he said PG&E has no specific projects in mind, it might consider financing construction of solar power plants through a tax equity partnership or a direct investment.

“Say we have a solar thermal company and they have a proven technology and they have done a demonstration plant, but because of the markets they can’t get financing,” says Pruett. “We might consider investing so they can build the plant and get it online.”

He says it’s less likely that PG&E would get into the solar construction business itself.

While it’s anyone’s guess how the markets will shake out by the time solar companies start making the rounds in New York, it’s clear that a shakeup in the nascent solar power plant business is in the offing.

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