Clean Tech Deal Flow

Biodiesel companies dying as subsidies end.

Geoff Jennings — Tue, 05 Jan 2010 19:34:06 +0000

Daily Tech has good article on the biodiesel market and the effect of ending subsidies. Basically, as the US government ends it’s $1/gallon subsidy on biodiesel it has become uneconomical to produce. Biodiesel producers, big and small, are shutting down. There are several ways to look at this:

Silly, knee-jerk free market types will say “good riddance, if it’s a good product then it makes sense without subsidies”. Although I generally agree that markets are generally effective, it is also true that allowing markets to move without regulation or oversight can cause big swings in pricing, allow monopolies, bubbles and crashes. On the other hand, subsidies, favored by many in the environmental movement, can have the effect of picking a winner.

Let’s suppose someone had a way of synthetically manufacturing net-zero-carbon fuel, that was just slightly more expensive than oil, but burned in regular cars, and was compatible with our current infrastructure. Seems like a winner, right? Maybe not. Right now, the Obama administration seems to be investing a ton of money in electric vehicles and battery technology. It’s possible that massive investments could make one idea the winner, even if it weren’t the superior one based on technology or environmental benefits.

Depending on subsidies and government programs, and who can afford good lobbyists, ideas that don’t make much sense (corn ethanol?) can receive tons and tons of government assistance. (Corn ethanol.) Arguing with myself, many ideas are very expensive to develop and commercialize, and without government assistance, a lot of technology we use every day wouldn’t exist. From small SBIR grants to multi-billion dollar DARPA programs, we have benefited greatly from government involvement.

My best guess for a solution? Incentives that promote a particular result, not a particular technology. If lower CO2 is the goal, then provide incentives and funding for programs that reduce CO2.

Venture Capital investments down in 2009 from 2008, though 4th quarter looks better.

Geoff Jennings — Tue, 05 Jan 2010 04:05:28 +0000

Techcrunch has published an analysis of VC funding in 2009. 4th quarter results look promising, with funding up 78% from the third quarter. We can hope that this trend will continue into 2010 and signals the return of venture capital investing. It is interesting to note that evne with the large amounts invested in Q4 09, the 2009 totals were still significantly lower than 2008. (2009, $32.6B : 2008 $38B). Their data shows the investing slump really starting in Q3 2008, so hopefully the 5 quarter period is over.

I noticed, and a commenter on TechCrunch did the math, that the number of deals is relatively low, with an average investment of $13M. Sure, there may be some small A rounds in there, but it indicates that a lot of the money is going in later rounds, in big dollar amounts. Good to support the industry and create jobs, but potentially tougher for true start-ups.

The good news for Clean Tech is that several of the bigger deals are clean.

Some of the big funding rounds of the quarter included Zynga’s $180 million, Playdom’s $43 million, and RockYou’s $50 million. But clean tech cleaned up even more, with Horizon Wind Energy bringing in $318 million in financing, Silver Spring Networks adding $105 million to its coffers, and Sun Run Generation raising $90 million.

All in all, promising signs, but we’ll have to see what the next few quarters bring before making any judgments on the health of the VC community.

http://www.techcrunch.com/2010/01/03/venture-funding-fourth-quarter-2009-15-billion/

Ford Fusion Hybrid Qualifies for $3400 tax credit

Geoff Jennings — Sat, 14 Feb 2009 04:29:00 +0000

Looks like the Toyota domination might be shrinking a little. New challenges are arriving from Honda with their new Insight competing against the Prius, and Ford with the new Fusion Hybrid competing against the Camry Hybrid.

Car and Driver had a recent comparison test, and picked the Fusion as their favorite. I’ve been reading C&D for as long as I’ve been able to read, so that review always counts a lot for me.

The Fusion as another big advantage right now. From Ford:

Buyers of a new 2010 Fusion Hybrid or Mercury Milan Hybrid this year will qualify for the $3,400 tax credit, the highest credit amount ever offered for hybrids purchased or placed in service after Dec. 31, 2005. The Ford Escape and Mercury Mariner Hybrid, the most fuel-efficient SUVs in America, continue to qualify for a $3,000 tax credit, the highest available tax credit of all hybrids on the road today.

Fusion Hybrid’s class-leading 41 mpg rating in the city and 36 mpg on the highway, which tops the Toyota Camry Hybrid by 8 mpg in the city and 2 mpg on the highway, helped Fusion garner the significant credit amount, which is based on a vehicle’s potential fuel efficiency.

The new Whitehouse.Gov page on energy and the environment.

Geoff Jennings — Tue, 20 Jan 2009 20:23:00 +0000

We swore in a new president today, and with that, hopefully a new approach to energy and the environement. It’s fresh, and limited, but here is the official plans: (Link at the bottom.)

ENERGY AND THE ENVIRONMENT

The energy challenges our country faces are severe and have gone unaddressed for far too long. Our addiction to foreign oil doesn’t just undermine our national security and wreak havoc on our environment — it cripples our economy and strains the budgets of working families all across America. President Obama and Vice President Biden have a comprehensive plan to invest in alternative and renewable energy, end our addiction to foreign oil, address the global climate crisis and create millions of new jobs.
The Obama-Biden comprehensive New Energy for America plan will:

Help create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future.

Within 10 years save more oil than we currently import from the Middle East and Venezuela combined.

Put 1 million Plug-In Hybrid cars — cars that can get up to 150 miles per gallon — on the road by 2015, cars that we will work to make sure are built here in America.

Ensure 10 percent of our electricity comes from renewable sources by 2012, and 25 percent by 2025.

Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050.

Energy Plan Overview

Provide Short-term Relief to American Families

Crack Down on Excessive Energy Speculation.

Swap Oil from the Strategic Petroleum Reserve to Cut Prices.

Eliminate Our Current Imports from the Middle East and Venezuela within 10 Years

Increase Fuel Economy Standards.

Get 1 Million Plug-In Hybrid Cars on the Road by 2015.

Create a New $7,000 Tax Credit for Purchasing Advanced Vehicles.

Establish a National Low Carbon Fuel Standard.

A “Use it or Lose It” Approach to Existing Oil and Gas Leases.

Promote the Responsible Domestic Production of Oil and Natural Gas.

Create Millions of New Green Jobs

Ensure 10 percent of Our Electricity Comes from Renewable Sources by 2012, and 25 percent by 2025.

Deploy the Cheapest, Cleanest, Fastest Energy Source – Energy Efficiency.

Weatherize One Million Homes Annually.

Develop and Deploy Clean Coal Technology.

Prioritize the Construction of the Alaska Natural Gas Pipeline.

Reduce our Greenhouse Gas Emissions 80 Percent by 2050

Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050.

Make the U.S. a Leader on Climate Change.

http://www.whitehouse.gov/agenda/energy_and_environment/

Venture capital fund raising drops 71 percent in Q4

Geoff Jennings — Tue, 20 Jan 2009 02:49:00 +0000

By implication, that means less money for start-ups in the next few years. Companies are going to be forced to look for alternative capital sources. The big question will be, where? Consider what it cost to start a company like Facebook. Now consider what is involved in producing bio-fuels, or an electric car. The capital crunch is going to have deep effects on the green-tech market.

Venture capital fund raising drops 71 percent in Q4 | Markets | Markets News | Reuters

Where are the Hot Spots for venture capital? Tim Draper

Geoff Jennings — Thu, 15 Jan 2009 12:55:00 +0000

The $1 Myth of "Grid Parity" – Where solar and other alternative energies work.

Geoff Jennings — Wed, 14 Jan 2009 23:30:00 +0000

We are told that although solar has made considerable strides in its march towards this Mecca, we are not quite there yet. The magic number for modules, say they, is $1; at a buck a watt. At that point it will finally be cheaper to produce subsidy-free electricity from a module than buy it from the grid. Once you’re convinced of this conventional wisdom, it’s hard to see PV being cost-competitive right now or any time in the next few years. Roughly speaking, current module prices range from $2.50 to $4.00/W, so a $1/W module would take quite some doing.

At the risk of being at the receiving end of many a derisive “d’oh” from informed citizens for my perceived Captain Obviousness, there are so many problems with this train of thought that it’s hard to know where to start. The notion that a single, round number will drive solar cost-competitiveness the world over is a considerably misleading, blatant one-size-fits-all oversimplification at its finest; moreover, the anointed choice for that number, in the event one must be named – $1/W – is just plain wrong.

Greentech Media | Grid Parity and the Great $1 Myth

Sweet Electric Motorcycle – Vectrix

Geoff Jennings — Wed, 14 Jan 2009 19:30:00 +0000

“According to Vectrix, the Vx-1 costs just one cent per mile to operate (the equivalent of 357 mpg), compared to 50 to 87 mpg for most other gas-powered scooters.

It’ll also do 0 to 50 in 6.8 seconds, so it’s not your granny’s scooter.

Weighing in at 515 pounds, with a 60-inch wheelbase, the Vx-1 is powered by a brushless motor with a peak power capacity of 21KW, and a nickel metal hydride supplies the juice. Storage capacity in the bike is only enough for the helmet (40 ltr), so you might be wearing a backpack until someone designs panniers or a rear rack for it. Riding a Vectrix Vx-1 does require a motorcycle license.”

Vectrix Vx-1 Electric Vehicle Unveiled at International Motorcycle Show Long Beach : Gas 2.0:

Catch up posts – Products

Geoff Jennings — Wed, 14 Jan 2009 17:00:00 +0000

Saltwater Crops for Biofuels

Geoff Jennings — Wed, 14 Jan 2009 15:00:00 +0000

I’m a big fan of biofuels if the come from a smart feedstock. I don’t know enough about aquaculture to know if this is the answer, but it’s certainly a compelling argument.

Citing the work of Robert Glenn, a plant biologist at the University of Arizona, two biologists argue in this week’s Science that “the increasing demand for agricultural products and the spread of salinity now make this concept worth serious consideration and investment.”

Glenn has been arguing for the value of all kinds of saltwater farming to a small but growing audience for nearly thirty years, but it is the demand for biomass to turn into fuel that brought NASA calling. His team’s report for the agency estimates that salt-loving crops could be used to produce 1.5 billion barrels of ethanol annually on a swath of new agricultural land almost five times the size of Texas.