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Posts Tagged ‘Cool Earth Solar’

photo: Todd Woody

Green Wombat has been in transition so I’m a bit behind on posting. In case you missed it, in the Sunday New York Times on May 9, I wrote a profile of David Gelbaum, one of the nation’s biggest — and until now — most reclusive green technology investors and environmental philanthropists:

AMID the $6 million homes perched on a beachfront cliff in this conservative Southern California enclave, the seven-year-old Honda Civic hybrid with the Obama bumper sticker is the giveaway.

It’s not the usual drive of choice for wealthy former hedge fund managers like David Gelbaum. Then again, there’s not much that is business as usual about Mr. Gelbaum, an intensely private person who happens to be one of the nation’s largest — and largely unknown — green technology investors and environmental philanthropists.

Mr. Gelbaum has invested $500 million in clean-tech companies since 2002 through his Quercus Trust, amassing a portfolio of some 40 businesses involved in nearly every aspect of the emerging green economy, be it renewable energy, the smart electric grid, sustainable agriculture, electric cars or biological remediation of oil spills. He has poured almost as much into environmental causes.

“I think his impact on green technology is huge,” says Bill Gross, the serial technology entrepreneur and founder of eSolar, a solar power start-up in which Mr. Gelbaum has invested. “He is supporting bolder and riskier bets, and he’s doing it from a different filter than a traditional venture capitalist, and I think that makes a wider opportunity for success.”

In this economic downturn, many venture capitalists have grown cautious about putting money into what Vinod Khosla, the prominent Silicon Valley green tech investor, calls “science experiments.” But Quercus Trust is still taking chances on blue-sky start-ups pursuing technological breakthroughs.

Working outside the clubby venture capital network, Mr. Gelbaum has, until recently, maintained an obsessively low profile. In Silicon Valley, he remains something of an unknown. Associates say his near-invisibility is owed to a genuine modesty and concerns over the security of his family because of his wealth. Recipients of his philanthropy, for instance, signed confidentiality agreements that forbade mention of his name.

Mr. Gelbaum says he decided to break his long silence upon becoming chief executive in February of Entech Solar, one of his portfolio companies that is publicly traded. “This is what’s best for the company,” he says, pointing out that Entech benefits if he maintains a more public profile.

It is too early to predict whether Mr. Gelbaum’s big green bets will pay off. But he’s been capitalizing on two trends: the rapid decline in the price of photovoltaic power, and a focus on cutting capital costs as solar power competition with China intensifies.

His environmental philanthropy also gives him an influence beyond laboratories and boardrooms. He has given $200 million to the Sierra Club and $250 million to the Wildlands Conservancy, a land trust he co-founded that has acquired and preserved 1,200 square miles of land in California, including more than a half million acres of the Mojave Desert.

You can read the rest of the story here.

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cool-earth-solar-balloon1

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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photo: eSolar

If Wall Street’s implosion can feel remote on the West Coast, where green tech startups largely rely on Silicon Valley venture capital, there may be no escaping the fallout from the credit crunch.

Still, even those renewable energy companies tapping East Coast cash have powered ahead amid the chaos on the Street. Take SolarReserve, a Santa Monica, Calif.-based solar power plant developer. A day after Lehman Brothers filed for bankruptcy last week, the stealth startup announced a $140 million round of funding from investors that included Citigroup (C) and Credit Suisse (CS).

Lehman does hold small stakes in wind turbine maker Clipper Windpower of Carpinteria, Calif., and Ormat Technologies, a Reno, Nev., geothermal developer. “Lehman’s exit from wind is not good news, but it’s not the end of the world,” says Ethan Zindler, head of North American research for New Energy Finance, a London-based research firm. And while Lehman holds stock lent to it from solar cell companies like SunPower (SPWR) and Evergreen Solar – potentially diluting their earnings per share if the stock is not returned – Lehman is not a big player in solar.

That’s not the case with Goldman Sachs (GS) and Morgan Stanley (MS). Both are major solar and wind investors and both were forced this week to reorganize themselves into bank holding companies to stave off shotgun marriages with other institutions. Spokespeople for Goldman and Morgan Stanley told Green Wombat that the firms’ transformation into more conventional commercial banks – at least a two-year process- will not change their green investing strategies.

But if there appears to be little immediate collateral damage from the financial crisis for green tech startups, there are longer-term consequences. Solar power plants, wind farms and other large-scale renewable energy projects require billions of dollars in bank financing.

“Credit is just going to get more expensive,” says Zindler. “We’ve already seen some pull-back for some big solar and wind deals. Bigger developers who have solid balance sheets will be OK but the smaller guys could be in trouble.”

Says Bill Gross, chairman of solar power plant developer eSolar: “I think if you’re going to get project financing, you’re just going to have to show higher returns to get people to take the money out of the mattress.”

But Gross, the founder of Pasadena, Calif.-based startup incubator Idealab, argues that given soaring electricity demand and fossil fuel prices, large-scale renewable energy projects will be an attractive investment, paricularly since utilities typically sign 20-year contracts for the power they produce. eSolar, which is backed by Google and other investors, has a long-term contract to supply Southern California Edison with 245 megawatts of green electricity. Gross says eSolar has a pipeline of other projects and interest in the company remains high, particularly overseas.

“If you can make projects that can compete with fossil fuels on a parity basis, those projects are going to be financed,” he says, “because they’re safe returns for 20 years and I think money is going to flow to them.”

Rob Lamkin, CEO of solar power plant startup Cool Earth, echoed that sentiment. “The credit crisis does give me pause,” says Lamkin, whose Livermore, Calif.-company has raised $21 million in venture funding and is developing “solar balloons” that use air pressure to concentrate sunlight on solar cells. “But the energy problem is so big that I don’t see problems raising project financing.”

The key for developers of utility-scale projects – particularly solar power plants – will be keeping their costs under control; not an easy thing when deploying new technologies amid a commodities boom.

Dita Bronicki, CEO of geothermal power plant developer Ormat Technologies (ORA), does not anticipate trouble obtaining project financing. “I think the cost of money is going to go up, but a company like Ormat with an operating fleet and operating cash flow will not be as affected,” Bronicki says. “Small companies will find that lenders will be more picky in what they will invest.”

Green entrepreneurs tend to be an optimistic bunch, so it’s not surprising they still think the future looks bright. But they had reason to be sunny this week – amid Wall Street’s meltdown, the U.S. Senate on Tuesday passed, at long last,  extensions of crucial renewable energy investment tax credits and other goodies to goose green tech, such as a tax credit worth up to $7,500 for buyers of plug-in electric cars. The Senate action now must be reconciled with similar legislation in the House of Representatives.

Solar projects, for instance, would qualify for a 30% investment tax credit through 2016.

“That is one thing that will help project finance,” says Gross. “So many people are sitting on the sidelines right now and if the investment tax credit passes that will help get these projects financed.”

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