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Archive for the ‘environment’ Category

Better Place in deal for Canadian electric car network

Posted in alternative energy, Better Place, electric cars, enviro startups, environment, green cars, green financing, tagged , , , , , on January 15, 2009| 2 Comments »

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photo: Better Place

Electric cars, eh?

Silicon Valley startup Better Place on Thursday unveiled a deal with the government of Ontario – the Michigan of Canada – to build an electric car charging network in the automaking province. The announcement comes on the heels of agreements Better Place — the electric car infrastructure company founded by former software executive Shai Agassi — has made with governments in Australia, California, Denmark, Hawaii, Israel and Japan.  Better Place is working with the Canadian arm of Sydney-based infrastructure finance giant Macquarie to develop the Ontario electric car network.

“We need to be where the puck is going and in this case bring the puck to Ontario,” said Ontario minister of international trade Pupatello at a press conference in Toronto Thursday morning.

The Canadian deal comes amid turmoil in the nascent electric car industry. While EV companies like Think and Tesla struggle to survive the credit crisis, the big automakers – Ford (F), General Motors (GM), Toyota (TM), Honda (HMC) and Chrysler – have announced they’re accelerating plans to build electric cars and, in GM’s case, a battery-making factory.

On Thursday, the premier of Ontario, Dalton McGuinty, said his government will conduct a study on how to expedite the introduction of electric cars in the province. When the study is released in May, Better Place will detail its plan and investment timeline for building the network of charging posts and battery-swapping stations.

Better Place, said McGuinty,  “is a model with the power to reshape our province. It’s going to create new green jobs, it’s going to make life more convenient for car drivers of the future and it’s going to signal to the world that Ontario is electric-car friendly and will make it a more attractive place to build electric cars.”

Agassi has now committed to raising billions in capital to simultaneously build charging networks in five far-flung countries over the next three years. When Green Wombat talked to Agassi in November after he signed a deal to build a $1 billion San Francisco Bay Area charging network, he insisted the financial crisis would not hamper efforts to raise funding.

Under Better Place’s system, consumers will buy the electric cars while Better Place will own the batteries, charging subscribers to its network a fee per-mile (or kilometer) driven. Renault-Nissan is supplying electric cars for Better Place’s other networks. An electric Nissan SUV – emblazoned with little wind turbines – was parked at the press conference but company spokeswoman Julie Mullins said an electric car supplier had not yet been selected for Ontario. “Ultimately, we expect a wide range of vehicle makes and models to be available to drivers,” she wrote in an e-mail. “We are currently in talks with several car companies.”

Ontario-based Bullfrog Power will provide renewable energy – 80% hydro, 20% wind – for the Better Place network. “We’re going to create a virtual oil field across the province,” said Agassi.

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No happy new year for the solar industry

Posted in alternative energy, climate change, energy, environment, First Solar, global warming, PG&E, renewable energy, solar energy, solar power plants, Southern California Edison, Sungevity, SunPower, Suntech, tagged , , , , , , on December 8, 2008| 9 Comments »

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photo: Southern California Edison

While demand for solar panels is expected to continue to grow by double-digits in the years ahead, 2009 could be a make-or-break year for some companies, according to an analysis from HSBC Global Research.

After grappling with a shortage of polysilicon – the base material of conventional solar cells – for the past couple years, the industry now faces falling prices. The spot market for polysilicon has plummeted 35% since October, writes HSBC alternative energy analyst Christine Wang, who predicts prices will fall 30% next year.

That’s bad news for solar module makers who locked in long-term contracts at higher prices – which looked like a smart move when polysilicon was in short supply and prices rising rapidly. “The winners will likely be the companies with competitive cost structures, scale, good product  quality, strong balance sheets, and strong customer relationships,” according to Wang. “We believe that new entrants and small players will suffer the most as they lack brand recognition.”

The culprits are the usual suspects – the global financial crisis as well as some cutbacks in subsidies from countries like Spain. Solar cell companies that have rapidly ramped up production over the past two years now may be saddled with too many high-priced products.

Wang downgraded Chinese solar giant Suntech (STP) and set a price target of $4.50 – down sharply from HSBC’s earlier target of $55. Suntech was trading at near $10 Monday afternoon but still nearly 90% off its 2008 high.  (SunPower (SPWRA), First Solar (FSLR) and other solar cell makers have also seen their share prices nose-dive.) “High portion of polysilicon based on contract prices will hurt Suntech,” writes Wang, who estimated that 80% of Suntech’s polysilicon supply is locked into contracts “on less favorable fixed prices.”

Falling panel prices is good news for solar system installers like Sungevity and Akeena Solar (AKNS) and their residential and commercial customers. When Green Wombat ran into Akeena CEO Barry Cinnamon in San Francisco at the announcement of Better Place’s Bay Area electric car project, he said he was in no rush to enter into long-term contracts with solar cell suppliers as he expects prices will continue to fall in 2009.

Still, not all the news is gloomy for the industry. Wang expects that the financial crisis won’t derail government support for solar, given climate change pressures and state mandates to increase the use of renewable energy. The move by utilities like PG&E (PCG) and Southern California Edison (EIX) to sign long-term contracts for electricity from photovoltaic power plants will also keep demand high in coming years.

Wang projects solar cell demand will grow 45% between 2008 and 2012. “Developed countries are increasingly focused on environmental protection and curtailing the causes of climate change, and we do not believe this trend will shift just because of a (hopefully) short-term financial crisis,” she wrote.

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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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The electric car economy

Posted in Better Place, electric cars, energy, environment, green cars, green policy, PG&E, solar energy, Southern California Edison, tagged , , , , on November 24, 2008| 47 Comments »

betterplaceplugElectric cars are as good for the economy as the environment and could put $80 billion in consumers’ pockets by 2030, according to a new study from the University of California.

Not surprisingly, the oil industry would take a $175 billion hit under the scenario sketched by UC Berkeley’s Global Venture Lab, while a booming battery business would gain $130 billion as the internal combustion engine sputters out. “There will also be significant changes in the balance of payments among nations as petroleum imports decline,” the authors wrote. “We find the net imports of the U.S. will decline by $20 billion.”

The report makes several assumptions to arrive at its optimistic conclusions: The Cal researchers are counting on 39% of cars on the road to be electric by 2030 and powered by electricity generated from renewable sources like wind and solar.

Electric car owners would save an estimated $7,203 in operating costs, mainly because with no engines to maintain, battery-powered vehicles rarely see the inside of mechanic’s garage.

Left unexplored in the report was the impact of electric cars on the United States auto industry. If General Motors (GM), Ford (F) and Chrysler survive – and that’s a big if these days – they stand to benefit assuming they retool for the electric age and produce cars consumers want to buy before rivals like Toyota (TM), Honda (HMC) and Renault-Nissan beat them to the punch. But their dealer networks are sure to suffer once their lucrative repair and maintenance business evaporates.

Another winner in the electric car economy will be solar and wind companies and utilities, particularly those like PG&E (PCG) and Southern California Edison (EIX) that are making multi billion-dollar investments in renewable energy.

One of the biggest assumption the Cal report makes involves the rise of a U.S. battery industry. “We don’t have a battery industry today,” said Shai Agassi, CEO of electric car infrastructure startup Better Place, on Friday at a panel Green Wombat moderated for the University of California’s Global Technology Leaders Conference. “Either we make them here or they’re going to be made in China.”

Agassi and the mayors of San Francisco, San Jose and Oakland on Friday announced that Better Place would build a $1 billion network of charging stations throughout the Bay Area. Renault-Nissan has agreen to provide Better Place with the hundreds of thousands of electric cars it’ll need to put on the road make its business model profitable.

photo: Better Place

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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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The First National Bank of Green

Posted in alternative energy, climate change, corporate green, energy, energy efficiency, environment, geothermal, global warming, green collar jobs, green financing, green policy, investment tax credit, renewable energy, solar energy, wind power, tagged , , on November 19, 2008| Leave a Comment »

deutsche-bank-green-bankPresident-elect Barack Obama may dismiss notions of a New New Deal to stave off a Great Depression 2.0, but signs of a Rooseveltian shift in thinking abound.

Case in point: This week, Deutsche Bank called for the establishment of a “national infrastructure bank” to create “green” jobs, fight global warming and ensure U.S.  energy independence by investing in an array of projects – from energy efficiency to upgrading the Eisenhower-era power grid to large-scale renewable energy power plants.

The idea of a national infrastructure bank is not new – versions have been proposed by Obama and Senators Chris Dodd (D-Conn.) and Chuck Hagel (R-Neb.) to finance the repair of the nation’s crumbling highways, water systems and cities. Deutsche’s twist is to give such an institution a green mission.

“We believe this confluence opens up an historic opportunity for a new U.S. administration and Congress to take a global leadership position on the issue of the environment and energy security, while addressing current financial problems,”  wrote Deutsche Bank’s Climate Change Investment Research team in its report.

“We’re calling for the national infrastructure bank to go green because in the long run it will save us money and create more jobs,” Deutsche senior investment analyst Bruce Kahn told Green Wombat.

He says Deutsche Bank is not putting a dollar figure on the capitalization of such bank, but the report notes others have suggested a $100 billion investment would generate two million green jobs.

Deutsche Bank (DB) recommends a green infrastructure bank focus on energy efficiency, the transmission grid, renewable energy and public transportation. The green bank would dispense federal funding, make grants to states and cities, issue loans to governments and companies, underwrite public and private bonds, and provide tax credits for public and private projects.

In Deutsche Bank’s analysis, the biggest bang for the buck would come from a massive retrofit program to increase the energy efficiency of the nation’s commercial buildings and make sure the 1.8 million new homes constructed every year are green. Buildings consume as much as 50% of the electricity generated in urban areas and emit about 20% of the country’s greenhouse gases. The work of installing energy-efficient heating, lighting and air conditioning systems is labor intensive and would spike demand for green building materials.

Upgrading and digitizing the power grid to create a “transmission super highway” to bring solar and wind energy from the deserts and Great Plains to the cities could generate as many as 500,000 jobs, according to an estimate by the American Wind Energy Association. The price tag to modernize the grid: $450 billion over the next 15 years by New Energy Finance’s estimate.

One area given short shrift by the Deutsche report is how a green infrastructure bank would support large-scale renewable energy power plants. Wind farms and solar power stations typically require billions of dollars in financing to get built and rely on investors buying the tax credits the projects generate. Those investors have been in short supply thanks to the credit crunch and the collapse of the Wall Street banks that often put up the cash for such deals.

“Everyone’s lost money, there’s no tax equity to be had,”  says Kahn. “But we expect that tax credit equity investors will return to the market, not next month, but in the next couple of years.” Kahn says an infrastructure bank could support green energy power plant projects through loans and loan guarantees.

A green bank would also be good business for Deutsche Bank.

“We have large number of investments at stake, current investments in all these sectors,” says Kahn. “It provides an investment opportunity as this infrastructure bank would not be able to exist all on its own. It would need private capital to invest alongside it.”

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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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The renewable energy industry’s Obama wish list

Posted in alternative energy, energy, environment, First Solar, geothermal, Google, green collar jobs, green policy, green tech, investment tax credit, renewable energy, solar energy, Suntech, the green economy, tagged , , , , , , on November 13, 2008| 26 Comments »

The wind, solar and geothermal industries have wasted no time pressing the incoming Obama administration to implement an alternative energy agenda to spur investment and create jobs.

During a conference call Thursday, the leaders of the Solar Energy Industries Association, American Wind Energy Association and other trade groups lobbied for a plethora of legislation and policy initiatives. None of these proposals are new, but given Barack Obama’s campaign promises to promote alternative energy and the strengthened Democratic majority in Congress, the industry has the best chance in many years of seeing this wish list made real.

  • A five-year extension of the production tax credit for the wind industry (it currently has to be renewed every year) to remove uncertainty for investors.
  • A major infrastructure program to upgrade the transmission grid so wind, solar and geothermal energy can be transmitted from the remote areas where it is produced to major cities. Obama advisor Eric Schmidt, CEO of Google (GOOG), recently joined with General Electric (GE) chief Jeff Immelt to launch a joint initiative to develop such smart grid technology as well as push for policy changes in Washington to allow the widespread deployment of renewable energy by rebuilding the nation’s transmission system.
  • Impose a national “renewable portfolio standard” that would mandate that utilities obtain a minimum 10% of their electricity from green sources by 2012 and at least 25% by 2020. Two-thirds of the states currently impose variations of such requirements.
  • Mandate that the federal government – the nation’s single largest consumer of electricity – obtain more energy from renewable sources.
  • Enact a cap-and-trade carbon market.

“If the administration and Congress can quickly implement these policies, renewable energy growth will help turn around the economic decline while at the same time addressing some of our most pressing national security and environmental problems,” the green energy trade groups said in a joint statement.

No doubt those measures are crucial to spurring development of renewable energy and creating green collar jobs. But the major obstacle confronting the alt energy industry right now is the credit crunch that is choking off financing for big wind and solar projects and scaring away investors from more cutting-edge but potentially promising green technologies.

A focus by President Obama and Congress on restoring confidence in the financial system will most likely do the most for green investment as well as restore luster to battered renewable energy stocks like First Solar (FSLR), SunPower (SPWRA) and Suntech (STP).

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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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