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HALF MOON BAY, Calif. – Green Wombat has been at Fortune’s Brainstorm Tech conference the past few days, the highlight of which for me was leading a session on energy with Vint Cerf. Known as the “father of the Internet” for his role in co-creating its underlying technology, Cerf is now a Google (GOOG) vice president and its chief Internet evangelist.

The idea: Brainstorm with 40 high-powered participants – everyone from Idealab’s Bill Gross (chairman of solar power plant company eSolar) to Stan Williams of Hewlett-Packard’s (HPQ) Quantum Systems Labs to venture capitalist Richard Wong of Accel Partners. The task we set out: Devise solutions to Al Gore’s challenge last week for the United States to obtain 100% of its electricity from renewable energy by 2018. Piece of cake.

Sorry, Al, we didn’t come up with a 12-step plan to kick America’s addiction to the black stuff – oil and coal. But the wide-ranging discussion underscored the complexity of the challenge and the fact that a solar-power-plant and wind-farm building boom is but one part of the big fix.

First, said one participant, we must create the “energy Internet.” In other words, a smart transmission grid that can get electricity generated from desert solar power stations and High Plains wind farms to other regions of the country as well as manage “distributed energy” from such things as rooftop solar panels. Another technological challenge that must be overcome: energy storage to capture electricity produced by solar and wind power stations for use when the sun isn’t shining and the wind isn’t blowing.

For many in the room, just as critical is the need to reduce energy demand, increase public awareness and devise the right economic incentives to promote green power and lower electricity consumption. As more than a few participants noted, Americans use more than twice as much electricity per capita as Europeans.

Gross suggests establishing a floor on electricity prices – say 10 cents/kilowatt hour – to allow renewable energy companies to get up and running and achieve economies of scale to compete against coal and natural gas.

Given the techie crowd –  Silicon Valley is just over the hill from Half Moon Bay – some of the more interesting ideas were about how to use software and Web  2.0 tools to change consumer behavior and awareness about energy consumption. For the home there needs to be an energy meter that provides constant feedback on the electricity usage – and the charges incurred –  of individual appliances and gadgets, like that laptop you left plugged in. Your mobile GPS-enabled phone could monitor your driving habits, suggesting ways to consolidate trips, report your fuel efficiency and ping you about your home energy use. Another idea;  Embed carbon footprint data in individual products, so that consumers can scan them with their phones when making purchasing decisions.

(Another provocative idea that Cerf discussed with me before the session: How to re-architect the suburbs when the aging baby boom generation begins to abandon their McMansions in search of housing and a lifestyle less isolated and closer to shops and services.)

Beyond technological innovation, the overriding sentiment was that the president and Congress must show leadership in establishing a national renewable energy policy that commits the resources and sense of urgency of a 21st century Manhattan project.

Coincidentally, the day before the session I moderated a panel at Google on renewable energy sponsored by the California Clean Tech Open, a contest that provides seed capital and services to incubate green startups with promising business plans. This year’s finalists, announced Tuesday, include several companies developing software and services to monitor and cut home and business energy consumption. Judging by the overflow crowd – some 350 people with a line out the door – there’s no shortage of talent in the Valley interested in green tech.

Among those present was Bob Cart, CEO of San Francisco-based Green Volts, which is developing concentrating photovoltaic power plants. Green Volts was a 2006 Clean Tech Open winner and Cart told Green Wombat that less than two years later the company is breaking ground this week on its first power plant, which will generate two megawatts of electricity for utility PG&E (PCG).

Green tech innovation can come from some improbable places. Rock star and home-brew technologist Neil Young closed out Brainstorm Tech on Wednesday by taking the stage for an interview with Time Inc. editor-in-chief John Huey.  Young has been working with a far-flung group of technologists and auto enthusiasts to convert a 1959 Lincoln Continental Mark IV into a 100-mpg, Internet-enabled bio-electric-hybrid. He told Huey the Continental is just one of several green car projects he has under way.

“We have an onboard fuel creation device on an Envoy in Adelaide, Australia,” Young said. That prompted Cerf to ask from the audience, “You mentioned onboard fuel production. This car doesn’t happen to run on piss, does it?”  Young laughed, “It could.”

The songwriter and political provocateur said he was focusing on land yachts  – the Continental stretches to 19.5 feet.  “Americans, a lot of them are big, and they like big cars and long highways.”

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The souring economy hasn’t dissuaded green tech investors from making big bets on renewable energy. On Wednesday, solar power plant builder BrightSource Energy announced it had raised $115 million from a group of investors that include Google.org, the search giant’s philanthropic arm, and oil giants Chevron and BP.

The investment in the Oakland, Calif.-based startup is Google’s (GOOG) second big solar energy play in the past two months. In April, Google.org joined a $130 million round for eSolar, a Pasadena solar power plant company whose chairman is Idealab founder Bill Gross.

BrightSource Energy, started by American-Israeli solar pioneer Arnold Goldman, has contracts to supply California utility PG&E (PCG) with up to 900 megawatts of solar electricity from power plants to be built in the Mojave Desert on the California-Nevada border. BrightSource has developed a new solar technology, dubbed distributed power tower, that focuses fields of sun-tracking mirrors called heliostats on a tower containing a water-filled boiler. The sun’s rays superheat the water and the resulting steam drives an electricity-generating turbine. (Artist rendering of BrightSource’s planned Ivanpah plant above.)

Given that a 500-megawatt solar power plant can cost more than $1 billion to build, $115 million is but a drop in the bucket. But it will allow BrightSource, which previously raised $45 million, to proceed with the development of its technology as it seeks project financing for construction of its first power plants.

And it can’t hurt to have such high-profile backers when you negotiate power purchase agreements with utilities. Besides Google, BP Alternative Energy (BP) and Chevron Technology Ventures (CVX), previous investors participating in the new round include Morgan Stanley (MS), VantagePoint Venture Partners, Draper Fisher Jurvetson and DBL Investors.

Another new BrightSource investor is Norweigan oil and gas behemoth StatoilHydro (STO). Apparently, even Big Oil has seen the light when it comes to hedging its bets with green energy.

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PASADENA, Calif. — Solar power plant builder eSolar has raised $130 million from Google’s philanthropic arm, Google.org, and other investors.

That was the headline news that eSolar chairman and Idealab founder Bill Gross slipped to Green Wombat during dinner Sunday night as Fortune’s Brainstorm Green conference kicked off in Pasadena. The other investors include Idealab and Oak Investment Partners. Big numbers grab attention but the far more interesting angle is the technology that eSolar is developing. If it lives up to its claims, eSolar could help break the logjam that has put Big Solar on the slow track in California.

“We just completed tests at our test site this week and we will be able to produce electricity that is competitive with coal,” said an animated Gross Sunday evening.

That is the Holy Grail of renewable energy and the charge set out by Google (GOOG) founders Sergey Brin and Larry Page when they launched their green power initiative, RE<C (Renewable Energy less than Coal), in November. Google.org subsequently invested $10 million in Pasadena-based eSolar. (eSolar did not say how much of the $130 million Google.org ponied up in the latest round.)

eSolar has been operating in stealth mode but Gross shared details of the company’s technology and how it intends to produce greenhouse gas-free electricity so cheaply — a claim sure to be met with some skepticism by competitors like Ausra, BrightSource Energy and Solel.

At first glance, there doesn’t seem much radically different about an eSolar solar thermal power plant — it’ll use fields of mirrors to focus the sun’s rays on a tower containing a water-filled boiler. The resulting heat will create steam that will drive an electricity-generating turbine.

The tipping-point innovation, according to Gross, is the mirrors and the software that controls them as well as the modular design of the power plants.

While Oakland, Calif.-based BrightSource is developing a similar system, Gross says eSolar is able to use smaller mirrors — called heliostats — that can be cheaply mass produced from off-the-shelf glass like that used in bathroom mirrors. Proprietary software developed by eSolar controls each sun-tracking mirror, increasing their efficiency to produce more electricity. “It’s all about the software,” Gross said.

Smaller more powerful solar fields means that eSolar can build power plants on far less land than competitors for less money, according to Gross. For instance, a 500-megawatt solar power plant can cost more than $1 billion to build and requires thousands of acres of land — which is why most will built in remote deserts. But eSolar plans to build modular, 33-megawatt power plants that can be constructed on a couple hundred acres and plugged into existing transmission lines near urban areas.

“We’ve already bought up rights to enough land to produce more than a gigawatt of electricity,” said Gross, showing Green Wombat a map of California polk-a-dotted with the locations of potential eSolar power plants. A gigawatt can power about 750,000 homes.

The small size of each power plant has another benefit — solar thermal power stations under 50 megawatts do not have to be licensed by the California Energy Commission. That means eSolar can cut at least a year or two off the process of getting a solar power plant online.

That will certainly be attractive to the Golden State’s big utilities — PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) — which face a mandate to obtain 20 percent of their electricity from renewable sources by 2010 and 33 percent by 2020.

Although all those utilities have signed massive megawatt deals with solar energy companies, no plant has been yet built.

Gross says that while eSolar has been talking to the utilities it’s not going to wait to have a power purchase agreement in hand before building its first plant.

“Sergey said to go for it and we are.”

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Twice now the renewable energy industry has narrowly lost votes in Congress to extend an investment tax credit crucial to jump-starting the market for large-scale projects like solar power plants. In December, Big Oil outmaneuvered green energy advocates and their Congressional supporters by claiming that rescinding huge tax breaks for the fossil fuel industry to pay for renewables would cost consumers at the pump. A more recent attempt to revive the tax credit also failed.

Now the American Council on Renewable Energy is bringing out its big green guns. Representatives from Silicon Valley tech giants, Wall Street investment banks and utilities signed a letter sent to the congressional leadership late Wednesday urging the long-term extension of the 30 percent investment tax credit as well as the production tax credit for the electricity produced by solar, wind, geothermal and other renewable energy systems. Among the signers urging action by March 1 are executives from )Google (GOOG), Hewlett-Packard (HPQ), Applied Materials (AMAT), Credit Suisse (CS), Wells Fargo (WFC), venture capitalists Kleiner Perkins Caufield & Byers and utility San Diego Gas & Electric, a subsidiary of energy giant Sempra (SRE).

Interestingly, the phrases “climate change” and “global warming” never appear in the letter. In a savvy move, the council has forsaken doom and gloom for a purely economic message: American jobs, competitiveness and innovation are at stake, the signers argue, and the tax incentive will spark a green tech boom at relatively little cost to the taxpayers. It’s a Silicon Valley mindset and its no surprise that while the signers represent companies from all over the United States, most hail from California.

The tax credits expire at the end of 2008 and proponents argue that a five-to-eight year extension is needed to create a stable investment climate, given that it can take three to five years for a large solar power plant to be permitted and built.

“The United States is in a historic position to lead in innovation and competitiveness in the renewable energy sector,” wrote the council’s three co-chairs, which include Dan Reicher, Google.org’s director of climate and energy initiatives. “As with all energy markets and in plans for growth in any businesses, certainty and continuity in public policy provides the confidence needed for stability in investments. We must ensure we are not creating an environment for boom and bust cycles in renewable energy and that we are not tying the hands of business owners in the sector looking to scale their technologies to meet demand and price points.”

Without an extension of the tax credits, the council warns that renewable energy projects in the pipeline that would produce 42 gigawatts of greenhouse-gas free electricity — enough to power tens of millions of homes — could grind to a halt, giving competitors in Europe and Asia the upper hand when it comes to green tech innovation.

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Web 2.0 to the rescue

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A non-profit bankrolled by Google.org launches Thursday with a mission to deploy technology to detect disease and coordinate responses to global health and environmental disasters. And a prime weapon in its arsenal?

Twitter.

InSTEDD (Innovative Support to Emergencies, Diseases and Disasters) has big plans for the instant messaging service that techies, teenagers and twentysomethings use to instantly – and constantly — update their network of friends by broadcasting instant messages over their cell phones.

“It’s an example that seems almost laughable,” InSTEDD chief executive Eric Rasmussen tells Green Wombat. “But from our perspective, Twitter has remarkable capacity.”

InSTEDD will use free social networking services like Twitter and Facebook and Web 2.0 programs like Google (GOOG) Maps to coordinate health programs and disaster relief.

Rasmussen — a physician, former U.S. Navy commander and veteran relief worker — says one of InSTEDD’s first projects will be working with the Mekong Basin Disease Surveillance Network Project, a joint effort of six Southeast Asian nations. Field workers, for instance, can send out Twitter updates on their work to colleagues, hospitals and relief organizations.

“I was very impressed that Twitter worked in Laos,” Rasmussen says. “We were in the highlands of the Mekong Delta and had one bar [of cell phone signal strength] but we could get messages out. I have had trouble finding my team members from time to time when people go to remote villages to deliver supplies. But if there is a cell signal I can get an SMS message out. It is the ubiquitous form factor.”

InSTEDD’s Palo Alto-based team — which includes former Microsoft (MSFT) executives — will tap $5 million from Google.org (Google’s philanthropic arm) plus money from the Rockefeller Foundation to develop technology tools for humanitarian organizations, the United Nations and other groups.

“The eventual hope is that there will be a robust, resilient platform that goes end to end, from field reporting to deep analysis,” says Rasmussen. “We only build what we can’t find off the shelf.”

One humanitarian mashup might combine Twitter, Facebook and Google Maps. Managers and members of a relief organization, for example, could check their Facebook group to see the location of far-flung field workers on a map and receive updates on their work via Twitter.

“It’s the broadcast aspect of Twitter that’s so powerful,” says Rasmussen. “I can go to the people in a tent next to me, I can go to four different emergency centers and headquarters all at one time.”

For the field worker, all that is needed is a mobile phone.

Says Rasmussen: “We recognize the hot, tired, scared aspect of working in these environments so we’re looking at keeping things simple.”

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hp-enviro-1.pngOvershadowed by Google’s jump into the renewable energy business on Tuesday was Hewlett-Packard’s more modest move to go green by installing a 1-megawatt solar array at its San Diego facility, buying wind power for its Ireland operations and subsidizing employees’ home solar systems.

In Silicon Valley these days putting a whopping solar array up on your roof is akin to having the coolest corporate jet or your CEO back-ordered for a Tesla Roadster. Google (GOOG), of course, has the biggest, a 1.6-megawatt monster that covers buildings and carports at the Googleplex in Mountain View. Not to be outdone, Applied Materials (AMAT) is planning an even larger solar system for its headquarters in neighboring Santa Clara.

But there’s more at stake here than green bragging rights. Companies like HP (HPQ) are realizing that tapping renewable energy can also be good for the bottom line. Take HP’s solar array in San Diego, for instance. The 5,000-panel system carries no capital costs for HP as the array will be financed and operated by a third-party affiliated with solar cell maker SunPower (SPWR). The Silicon Valley company will install the array and perform maintenance for 15 years while HP purchases the electricity produced by the solar system at a guaranteed below-market rate. That gives the company a hedge against rising energy costs. (HP thinks it’ll save $750,000 over 15 years.) HP also retains ownership of any potentially marketable renewable energy credits associated with the array while the financier can take advantage of California’s solar subsidies.

SunPower wasn’t disclosing the identity of that financier when Green Wombat inquired on Tuesday, but this morning the company announced a $200 million deal with Morgan Stanley (MS) to provide financing for solar installations and power purchase agreements like the one HP signed. SunPower and Morgan Stanley have formed a jointly owned holding company to finance SunPower’s solar systems for customers, with the Wall Street firm kicking in up to $190 million and SunPower putting up as much as $10 million.

In Ireland, HP will buy a year’s worth of clean electricity generated by Airtricity’s European wind farms, saving the company an estimated $40,000 in 2008. Electricity generated by Airtricity’s wind farms is fed into Ireland’s national power grid rather than directly to HP facilities. But the additional power generated by the wind farms, as well as the solar electricity eventually produced by the San Diego array, will eliminate tons of greenhouse gas emissions from the atmosphere.

Last, SunPower will give HP employees a $2,000 rebate if they install the company’s residential solar systems, with HP providing another $2,000. That’s on top of state rebates under the California Solar Initiative program.

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Google the jolly green giant?

In a move to shake up the nascent renewable energy industry, Google announced Tuesday it will spend hundreds of millions of dollars developing new solar and wind technologies while investing in green tech startups.

The goal, according to Google founders Sergey Brin and Larry Page: Send the fossil fuel industry to the coal bin of history by making renewable energy cheaper than coal, a main culprit in the global warming crisis.“

Assuming we can develop this, we want to deploy it as broadly as possible,” said Brin during a conference call. “Which means we’ll license the technology or put it in place ourselves.” Of particular interest is spreading renewable energy technology to rapidly industrializing but coal-dependent countries like China and India.

Dubbed RE<C (as in Renewable Energy Cheaper than Coal), the Google initiative will involve hiring green energy engineers and technologists for an in-house R&D program that will focus on developing breakthroughs in large-scale solar power plants. At the same time, Google’s (GOOG) philanthropic arm, Google.org, will invest in green energy companies. Within a few years Google wants to be able to produce a gigawatt of clean energy — enough to power a city the size of San Francisco — at a price that will undercut cheap electricity from coal-fired plants.

For solar energy companies, the double-headed approach raises the prospect of both a potential brain-drain to Google and the possibility of a payday if the search giant goes on a green tech shopping spree. Page said Google routinely acquires “dozens of companies” and would apply that strategy to the renewable energy initiative where appropriate.

John O’Donnell, executive vice president of Silicon Valley solar energy startup Ausra, said he welcomes Google’s bid to become a green energy player.”I think folks who have or are developing technologies that can deliver RE<C are going to get some speedup in moving to market,” he told Green Wombat. “That’s good news for the sector and for the planet.”

Ausra, backed by venture capital heavyweights Vinod Khosla and Kleiner Perkins Caufield & Byers, builds large-scale solar power plants and recently signed a long-term deal with California utility PG&E (PG&E).

“We’re at a more mainstream engineer/build stage, and don’t expect hiring problems,” O’Donnell added. “Google may encourage more smart folks to seek careers in clean energy.”

Given that a solar power plant can cost anywhere between half a billion and a billion dollars or more, it appears Google will concentrate on perfecting solar technology rather than get into the utility business. “In terms of building power plants, hundreds of millions of dollars is really not a large sum, so I hope they spend the money in a highly leveraged way to get the most out of it,” says John Woolard, CEO of solar power plant startup BrightSource Energy, which is negotiating with utilities to supply 1.5 gigawatts of solar electricity.

“We are very active in the Southwest, and would look forward to working with a group like Google on building out power plants,” he adds. “I never would have predicted that Google would emerge as a provocative leader in large scale solar, but I am very excited about thevisibility it brings to an area of technology that we know has real economic potential.”

Google already is working with two renewable energy startups. One is eSolar, a Pasadena, Calif., developer of utility-scale solar thermal power plants whose chairman is serial tech entrepreneur Bill Gross. The other is Makani Power, a stealth Bay Area startup that is developing what it calls “high-altitude wind energy extraction technologies aimed at the most powerful wind resources.”Page and Brin declined to say if Google has invested in those companies.

PG&E spokeswoman Jennifer Zerwer said RE<C is “clearly a sign of the growing awareness of and response to climate change — and that is a positive trend, especially for those concerned about climate change, as we are. While we did not work directly with Google on this announcement, we team with them on their energy efficiency and renewable efforts.”

Like other California utilities, such as Southern California Edison (EIX) and San Diego Gas & Electric (SRE), PG&E is under the gun to obtain 20 percent of its electricity from renewable sources by 2010 and 33 percent by 2020.

The move into green energy is Google’s biggest departure so far from its core search and advertising business. But Page noted it is not a change of mission for Google.org, which currently is managing initiatives to promote plug-in hybrid cars.

Brin and Page took pains to stress that RE<C makes good business sense, with the potential to profit from Google’s stake in green energy companies or technology the company develops. Still, acknowledged Brin, “We’re not going for huge margins. We want to deploy this fast.”

“This has the ability to change the world,” he added.

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