Clean Sweep 26

A round-up of recent news in clean technology and cleantech investment.

Deals
VCT manager Matrix Private Equity Partners has invested £3m in a management buyout at environmental technology consultancy Monsal.
Mansfield-based Monsal offers a range of services to the water and waste sectors. Notably, it's the UK market leader in anaerobic digestion technology that breaks down biological solid waste into burnable biogas which is eligible for Renewable Obligation Certificate (ROC) subsidies. MD Aidan Cumiskey led the MBO.

Danish turbine manufacturer Emergya Wind Technologies has secured a Euro20m package led by Dutch investor AtlasInvest. London's Ludgate Environmental Fund chipped in Euro2m. Funding goes towards working capital and loan repayment.

Spanish biofuel group Ambene Biocarburantes raised Euro16m from French buyout house Demeter. Details are sketchy, but it's the third Spanish renewables investment for Demeter this year.

Swiss specialist investor Good Energies has led a $4m second round in Second Wind, a Massachusetts-based provider of software and electronics for utility-scale wind energy industry.
Good Energies has also announced the appointment of John Breckenridge as managing director at its New York office.

Mobile fuel cell developer Lilliputian Systems (no website, as far as I can find) raised an extra $20m+ from DAG Ventures and previous backers including Atlas Venture, Kleiner Perkins Caufield & Byers and Rockport Capital Partners. The Massachusetts firm is developing butane-powered fuel cells for mobile electronic devices, based on tech developed at MIT with DARPA sponsorship. It previously raised a $30m third round two years ago.

Californian energy efficiency consultancy Energy & Power Solutions meanwhile raised a $20m first round from NGEN, Robeco Group and others.


Further reading
US VCs predict another active year in cleantech, according to a member survey by the US National Venture Capital Association. 80% of respondents reckon cleantech will attract higher levels of venture funding, but 61% believe the sector will be over-valued. The rush is predicted to expand beyond solar and biofuel, the largest areas for US deals so far.
Other predictions include an improving IPO market and consolidation among venture firms. More details here (link opens PDF). Rob Day critiques the findings over on his Cleantech Investing blog.

News from the University of Copenhagen on a promising breakthrough in solar tech (full paper from Nature by subscription). The 'nano flake' material can use a variety of III-V semiconductors in what researcher Martin Aagesen describes as 'a perfect crystalline structure'. The cells promise 30% conversion efficiency, around twice that of current technologies. It's being commercialised by spin-out SunFlake with seed funding from the university and SEED Capital.


And finally, best wishes to all Clean Ventures readers for a very merry Christmas and a clean and profitable 2008.
The new year will see us move to a new home and a new look, with continuing coverage of cleantech VC deals and news, plus extra features and services for UK cleantech companies and their investors. Cheers!

Merton revisited

As we relayed a few months ago, the government was reportedly planning to drop a mandate that all new buildings should include some renewable energy capacity.

The so-called Merton rule, introduced by the eponymous London borough in 2003, requires any new building to reduce its carbon emissions by 10%. It had been taken up by around 150 other local authorities with encouragement from Whitehall, but this support was thought to be likely to disappear from the upcoming draft planning policy statement after pressure from the construction lobby.

Well, the relevant department (Communities & Local Government) has now released a special supplement to the planning policy statement, Planning and Climate Change.

While there's no explicit reference to the Merton Rule (though there is in the accompanying press release), the document recommends that local planning authorities should expect a proportion of the energy supply of new development to be secured from decentralised and renewable or low-carbon energy sources. And while no targets (or even target targets) are given, planning authorities are advised to set out a target percentage of the energy to be used in new development to come from decentralised and renewable or low-carbon energy sources where it is viable.

So not as bad as expected, perhaps, but it still all seems a little wafty - subsidiarity issues aside, an actual requirement would be of more use than a recommendation. It's not the news that businesses developing, supplying and installing alternative energy systems might have hoped for, but it's better than nowt.

In other news, the Carbon Trust and the Energy Technologies Institute have announced a new £40m initiative to speed the development and deployment of offshire wind power around the UK. The two quangos are also seeking further private sector sponsorship for the scheme, which is expected to lead to a small number of large R&D projects.

Clean Sweep 25

A round-up of recent news in clean technology and cleantech investment.

Deals
Mid-market bank investor Barclays Ventures has backed the buyout of two green building services companies, Solar Home Energy and Warmroof. The Hampshire-based sister companies provide domestic solar thermal installations and spray foam loft insulation, respectively.
The £10m+ deal's described as a BIMBO (that's a combined buy-in and management buy-out, for those not versed in private equity jargon), with new MD Arun Sahajpal and FD Martin Jackson taking over from the previous owner-managers. Invex Capital Partners also backed the deal, with the two investors taking a majority stake.
While not exactly a cutting-edge tech deal, it's further proof that the domestic solar and energy efficiency market is well within the (arguably rather conservative) mainstream of UK mid-market private equity. Kent-based renewables contractor Cel-F Solar secured £1m investment from Bank of Scotland Growth Equity in October.

Up in Norway, wind-power software company WindSim has raised undisclosed funding (Update: Euro500k, according to Library House) from local tech investor Sarsia Seed. WindSim develops wind and terrain simulation software to help turbine operators select optimum locations and layouts, with the new funding going towards hiring new development and sales staff. The firm reports a significant increase in interest from potential customers in Europe, Asia, Australia and North America.

Israeli solar tech business SolarEdge Technologies has secured a $11.8m first round from Silicon Valley VC Opus Capital, alongside Genesis Partners and Walden International Ventures.
SolarEdge is one of those stealth operations - they seem to have a website here, but there's nowt happening there yet. They're reportedly working on combined hardware/software tech to improve power conversion efficiency from PV installations. According to the VentureWire report, the IT-focused investors at Opus were wary of investing in a cleantech company - a sign of developing investor nervousness?

In other solar deals, Vermont-based installer GroSolar raised a $10m second round from NGP Energy Technology Partners and existing investors. And Canadian CPV cell developer Cyrium Technologies raised $5.5m top-up funding from existing investors - Cyrium's semiconductor quantum dots promise to increase cell efficiency by over 40%.

Elsewhere in the US, International Battery raised $25m from Digital Power Capital. The funding goes towards completing manufacturing facilities in Pennsylvania for the firm's large-format Li-ion batteries for use in hybrid and electric vehicles.
University spin-off OPX Biotechnologies raised $3.6m in a first round led by Morh Davidow Ventures. The Colorado firm is developing genetically modified microbes for biofuel production.
And Californian wind tech business Viryd raised $2.1m from undisclosed private investors. The firm is a spin-out from Fallbrook Technologies which produces novel drivetrain technologies, primarily for bicycles.

Canadian waste-to-energy group Plasco Energy raised a C$54m third round. Lead investor First Reserve also committed to invest an extra C$115m next year. Plasco is commercialising its plasma-based gasification tech, with a pilot plant in Ottawa capable of converting 85 tonnes/day of municipal waste into fuel gas.


Fund news
New European investor Sustainable Energy Technology Venture Partners launched with a networking bash in Amsterdam. The first fund, which recently closed at Euro50m, will focus on early-stage opportunities in alternative energy generation, emission control, applications such as micro CHP and fuel cells, and energy efficiency tech - pretty much the cleantech gamut.
SET VP is backed by Canadian specialist investor Chrysalix Energy Venture Capital and Dutch asset manager Robeco and headed by former Philips corporate VC chief Rene Savelsberg. Lead investors include Dutch utilities group Delta and energy group Essent.


Policy news
In what's presented as a significant boost to the UK's offshore wind industry, energy secretary John Hutton announced a Strategic Environmental Assessment of future development. According to the headline rubric, this could open up Britain's shores to a total 33GW of capacity, or enough to power all UK homes by 2020. Some researchers and industry insiders call the figures pie in the sky, however.
Britain is already set to soon overtake Denmark as the nation with most offshore wind capacity (well, we do have a lot of windy coastline). The rights for offshore installations are held by the Crown Estate, which has been allocating leases in a series of competitive rounds - current plans under the first two rounds include 8GW capacity by 2014. The new assessment considers opening up a third and subsequent rounds, allowing for up to 25GW extra.
The consultation document is available as a PDF here.


Further reading
Last week's New Scientist had a good accessible overview of the state of the art in solar tech, focusing on its increasingly competitive costs compared to established generation:
The prospect of relying on the sun for all our power demands - conservatively estimated at 15 terawatts in 2005 - is finally becoming realistic thanks to the rising price of fossil fuels, an almost universal acceptance of the damage they cause, plus mushrooming investment in the development of solar cells and steady advances in their efficiency. The tried-and-tested method of using the heat of the sun to generate electricity is already hitting the big time, but the really big breakthroughs are happening in photovoltaic (PV) cells.
The full feature is subscription-only on the NS website, but the mag's still on the racks till Thursday.

Clean Sweep 24

A round-up of recent news in clean technology and cleantech investment.

Deals
Fuel cell tech developer Bac2 has raised £2m from private investor network London Business Angels. The deal is the largest to date for the 25-year-old network, part of the GLE group.
The investment will help Southampton-based Bac2 commercialise its 'ElectroPhen' conductive polymer. When used in a composite, the polymer promises to be a lightweight and cost-effective bi-polar plates for use in fuel cells. The firm is preparing to launch its first standard product, and is also looking at other applications in electronic components and circuits.
Bac2 previously secured a £250,000 grant from the DTI and, in May 2006, raised £500,000 seed investment from London Seed Capital, another GLE subsidiary.

Swedish thermoelectric firm Nanofreeze Technologies has raised SKr7.4m (£565,000) from Scandinavian tech specialists Northzone Ventures and TeknoSeed.
A spin-out from Lund University, Technofreeze is developing highly efficient thermoelectric elements that generate both energy and heat. Potential applications include personal electronic devices, replacing energy-hungry fridge compressors, and powering automobile electronics from the engine.

In an otherwise quiet week across the pond, the big news is the announcement from the omnipotent Google that the search engine giant is now aiming to develop renewable energy cheaper than coal. "Tens of millions on research and development and related investments in renewable energy" are promised for 2008.
The US blogs have provided ample coverage. VentureBeat covers the conference call; Greentech Media canvasses industry opinion; and Earth2Tech digs into Google's favoured start-ups, eSolar and stealthy wind firm Makani Power.
Expect to hear a lot more from this one.


Further reading
The US NVCA reports record cleantech investment in the first three quarters of the year - $2.6bn from 168 deals, well ahead of the total for all of 2006. The top investors are familiar names - Khosla Ventures (14 deals, net value $68.4m), Draper Fisher Jurvetson (14, $38.5m) and KPCB (11, $76.8m). More details here (pdf).

150 corporate leaders (led, curiously, by Prince Charles) issue a communique ahead of the UN climate change conference in Bali, demanding a legally-binding UN framework to tackle emissions. They note:
The shift to a low-carbon economy will create significant business opportunities. New markets for low carbon technologies and products, worth billions of dollars, will be created if the world acts on the scale required
In summary, we believe that tackling climate change is the pro-growth strategy. Ignoring it will ultimately undermine economic growth.

Everyone's business

Today's report from the CBI's 'climate change taskforce' has generated plenty of coverage for the business lobby group. While there's not exactly much new in the report, it's still good to get a signal that the corporate heavyweights are taking the challenges of climate change seriously. And if the signatories are serious about cutting their emissions, it can only be good news for the cleantech companies who can provide the products and services to help them reach their targets.

The report, Climate change: Everyone's business, has been compiled by a panel of execs whose companies together account for around 1% of global emissions. The case for action is put in good solid business terms - failure to act now will mean much greater costs in the future, and the UK will miss out on vital commercial opportunities in the global shift to a lower-carbon economy.

While the CBI isn't usually known for requesting more intervention in the workings of the market economy, it now reckons that a much greater sense of urgency is required if the UK is to meet its emission targets. The market will require a helping hand from government, the report concludes:
Market forces will drive big changes, but they will not by themselves be enough to do the job. The full range of public policies must be deployed to create the right incentives. Priorities include promoting an effective market price for carbon; revenue-neutral tax reform (such as changes to business rates and council tax) to reward greener behaviour; and bigger, more focused research and development programmes to finance new technologies and solutions until they become commercial.

In a move that may prove controversial, the CBI argues for increased use of cap-and-trade schemes rather than a straightforward carbon tax - see the excellent Environmental Economics blog for the counter-arguments.

New technology has a vital part to play, the report emphasises:
The UK has a unique opportunity to prosper in key markets of the future by taking a lead in the development of low carbon technologies and services in power, buildings, transport and industry. Government must give higher priority to existing research and technology programmes in these areas, and support the launch of new programmes to develop emerging solutions.

The report identifies key areas for reducing emissions, with possible technological fixes (some of which, as amply covered elsewhere, are rather questionable from a viability or sustainability viewpoint): from buildings, through better insulation, heating controls and appliances; from the power sector, through greater use of wind, carbon capture and storage (hmm...) and nuclear (hmmmmmmm...); in transport, through improved engine efficiency, and alternative sources such as electric and biofuel (hmm, again...); and from industry, through various process and efficiency improvements.

The CBI panel concludes:
substantial changes will be needed in the way the economy works if the UK is to meet its goals. Many of the technologies and solutions that will be required already exist but are not yet commercially viable. The pace and scale of implementation must now be accelerated.

The new energy research agenda just unveiled by the European Commission might help with all this. The Strategic Energy Research Plan proposes to strengthen industrial research and innovation in new and renewable energies across Europe; introduce six new 'Industrial Initiatives' in areas including wind, solar and bio-energy; and to create a new Energy Research Alliance to ensure greater cooperation between research groups. Detailed proposals for increasing investment in new low-carbon technologies will be presented some time next year - I wouldn't be surprised to see extra money for co-investment venture funds.

The plan also identifies key technology challenges for the next 10 years, including several in the current VC pipeline: making second-generation biofuels a competitive alternative to fossil fuels, without compromising sustainability; demonstrating the commercial readiness of large-scale PV and concentrating solar power; achieving a breakthrough in energy storage tech cost-efficiency; developing the commercial tech for hydrogen fuel cell vehicles; and commercialising more efficient energy conversion and end-use systems, including poly-generation and fuel cells.

Clean Sweep 23

A round-up of recent news in clean technology and cleantech investment.

Deals
Reading-based energy tech supplier Semplice Energy has raised $1.23m from Bahamas-based BIP Fund.
Founded in 2005, Semplice provides energy efficiency and renewable energy products, plus consulting, design and installation services, to business customers including Mothercare, Macdonalds and Tesco.

German specialist investor Ecolutions has secured undisclosed pre-IPO funding from heroically-named Swiss network Mountain Super Angel.
Frankfurt-based Ecolutions invests in emissions-reducing projects in China and India which generate tradeable certificates under the Clean Development Mechanism (CDM). Projects include biomass power stations, methane extraction from sludge, and solar and wind power. Ecolutions is aiming to list on the Frankfurt Open Market in early December.

Sketchy news on two Israeli solar deals: start-up XJet has raised $9m from Gemini Israel Funds, Good Energies, Taiwanese semiconductor group Spirox and others (although XJet is so stealthy it doesn't seem to have a website as yet, Gemini has the details here). And CPV developer Pythagoras Solar has raised an undisclosed amount from an un-named investor (thanks for sharing, guys).

Californian CPV firm Solfocus meanwhile closed its rolling fundraising at $63.6m. The firm announced it had raised $52m of a planned $70m round back in September.

Here's an interesting technology - motion-to-energy developer M2E Power has raised an $8m first round from OVP Venture Partners, @Ventures and Highway 12 Ventures. The firm is developing power units for mobile electronic devices which generate electricity from physical movement. Details on the pat-pending tech are sketchy, but it appears to be a refinement on the familiar induction method of moving a magnet through a wire coil.
M2E, a spin-out from the Idaho National Laboratory, is primarily focusing on military applications (not every cleantech firm boasts that its chief scientist is 'a veteran of the Vietnam war'). The tech also has potential in anything from mobile phones to large-scale wind and wave power - as @Ventures' Rob Day notes, it's another reason to dance with your MP3 player.

Indian VC UTI Ventures has led a $8m first round in newly-merged waste management group Pesco Beam. The group combines US-based Pesco (Pragmatic Environmental Solutions) with Chennai-based Beam Solutions, and deals primarily with recycling waste oils. The group is seeking a further $25-30m round next year.


Further reading
A new UK government-commissioned report calls for much more support for on-site renewable energy installations. "Advancing Renewables Together", compiled by consultants Element Energy on behalf of DBERR's Renewables Advisory Board, analyses the role of on-site generation in meeting the government's target of ensuring that all new homes are 'zero carbon' by 2016. The policy could create a market for renewables installations worth £2 billion a year, the report claims, but the government needs to find "new ways of bringing forward demand for renewables before 2016, as part of an explicit strategy to build capacity in both the construction sector and in the UK onsite renewables industry". The report calls for R&D into sub-1MW biomass CHP to be made a national priority.

When it comes to trying to build an innovative industry cluster, your regional development types always look to California as the exemplar (even the ones in Yorkshire do it). So there's plenty to chew on in a new report on California's thriving cleantech industry from the non-profit Next10 group headed by veteran VC F Noel Perry. The California Green Innovation Index looks at the factors driving innovation and bringing economic and environmental benefits to the state, including the AB 32 policy of returning to 1990 emissions levels by 2020 (a pretty modest target, but well ahead of the rest of the US). Leading numbers: California holds 44% of US patents in solar technologies and 37% in wind, and 36% of US cleantech VC investment.
The full report is available as a 1.4Mb PDF here.

Depressing reading on the the six sins of greenwash from North American 'environmental marketing agency' TerraChoice. A study of environmental claims made for over 1,000 different consumer products identified only one that wasn't either misleading or demonstrably false.
Should cleantech companies and investors worry? Such ubiquitous marketing bollocks means that genuinely clean products or services risk losing their market share to their less clean (in either sense) rivals; there's also the risk of this fostering cynicism about any and all environmental claims.

And a reminder of what it's all about - the latest IPCC synthesis report warns for the first time of the risk of "abrupt and irreversible" impacts of climate change. The report, a summary of the three studies released earlier this year, features starker warnings in response to complaints that those earlier reports were inappropriately conservative.
With regards to cleantech solutions, the report concludes that there is high agreement and much evidence of substantial economic potential for the mitigation of global emissions over the coming decades, but notes that no single technology can provide all off the mitigation potential in any sector.
The summary report can be downloaded as a 6.4Mb PDF here.

Clean Sweep 22

A round-up of recent news in clean technology and cleantech investment.

Deals
The UK's Low Carbon Accelerator has led a C$21.5m second round in Canadian ethanol tech firm Vaperma. Volvo Technology Transfer also joined the round in its first parallel investment alongside its cleantech partner Emerald Technology Ventures, a first-round backer of Vaperma. Existing investors BDC Capital, and FIDD also increased their funding.
Vaperma is developing a gas separation membrance technology for removing water from ethanol, replacing the current energy-intensive steam distillation process. The firm's Siftek technology is primarily aimed at Brazilian sugarcane alcohol and North American grain ethanol producers, and promises to take around seven cents off the costs of a gallon of ethanol.

A clutch of overseas early-stage deals show the role of tech transfer from universities:
Eco-plastics company Novomer raised $6.6m from Physic Ventures and Flagship Ventures. The New York firm is developing biodegradeable polymers based on cheap feedstocks including carbon dioxide and carbon monoxide. The tech was developed by co-founder Geoffrey Coates at Cornell University.
US biocatalyst firm Akermin raised $5m in the second phase of its first round (this is somehow distinct from a small second round, I'm sure). All previous investors, including Prolog Ventures, OnPoint Technologies, Chrysalix Energy and the St Louis Arch Angel Network, increased their stakes. Akermin is developing a stabilised enzyme catalyst technology developed at St Louis University which can potentially replace heavy metals in biofuel cells.
In the solar arena, thin film developer SixTron Advanced Materials raised a C$10m first round led by Canadian VC Ventures West. Seed investors iNovia Capital, Innovatech sud du Québec, and FIDD also joined in. The Quebec university spin-out is commercialising what it calls a highly innovative and cost-effective method of depositing silicon carbide films on a range of substrates.
Israeli spin-out Distributed Solar Power raised $1.2m from TN Ventures and Aurum Ventures MKI. The funding goes towards the first industrial-scale model of DISP's CHP solar concentrator system.
And printed electronics group Plextronics has raised an extra $4m from Applied Ventures, the VC arm of Applied Materials. The top-up follows a $20.6m second round announced two months ago. Pennsylvania-based Plextronics is developing printed electronic technology based on tech developed at Carnegie Mellon university, with applications including printed solar cells.

Elsewhere, a $3m bridge round for this week's winner of the all-California silly name contest, Fat Spaniel. The firm provides software and hardware that helps renewable energy suppliers monitor efficiency and count their carbon-saving credits. The company raised $7m from DFJ Element and Chrysalix Energy in its first round a year ago, and is aiming for a full-scale $20m second round.


Fund news
UK mid-market buyout house Gresham Private Equity has set up a dedicated energy and environmental team. The two-pronged team will cover investments in the oil and gas industry and the greaner fields of energy management and minimisation, waste management and recycling. Partner Christian Bruning and research/origination manager Peter Lahoud lead the cleantech side.

As detailed below, veteran tech VC KPCB and specialist investor Generation Investment Management have teamed up in a new London-based greentech alliance. Al Gore's involvement in Generation has ensured plenty of media coverage, and should draw the attention of other potential investors to the funds.

European renewables specialist Enercap Capital Partners has announced the first closing of its EnerCap Power Fund I at Euro75m. The Prague-based fund invests in power projects across Central, Eastern and South-Eastern Europe

Israel Cleantech Ventures has launched a new seed-stage initiative in association with US VC Greylock Partners's Israel Fund. Cleanstart will back concept-stage ventures or university spin-outs across the cleantech sector.

Generation and KPCB team up

News of a major cleantech investment partnership setting up in London, with a rather big name on the masthead. Generation Investment Management, a specialist in sustainability-focused investment in listed equities, and veteran tech VC Kleiner Perkins Caufield & Byers have announced a dedicated greentech alliance.

The collaboration will, to quote the PR, find, fund and accelerate green business, technology and policy solutions with the greatest potential to help solve the current climate crisis. The partnership will provide funding and global business-building expertise to a range of businesses, both public and private, and to entrepreneurs [...] The two teams will collaborate on opportunities spanning sectors such as renewable energy technologies, building efficiency, cleaner fossil energy, sustainable agriculture and carbon markets.

In practice, that seems to mean combining Generation's contacts and sector expertise with KPCB's financial heft and experience of building private businesses. And Generation should give good contact - it's the firm co-founded and chaired by former US VP, award-winning alarm-raiser and new Nobel Laureate Al Gore (I'm still not convinced he really deserved to share the prize on an equal basis with the IPCC, but fair play to him anyway).

Gore joins KPCB as a partner (donating his salary to the Alliance for Climate Protection, which he also chairs), while KPCB partner John Doerr joins Generation's advisory board.

The global alliance will apparently be based in London, with KPCB 'co-locating' their European operations in Generation's West End offices. The VC currently has offices in Silicon Valley, Beijing and Shanghai, while Generation also has a base in Washington DC.

Fortune has more of the inside juice.

Clean Sweep 21

A round-up of recent news in clean technology and cleantech investment.
Consider this one as either late for last week or early for this - I'm having a busy couple of weeks.

Deals
Welsh battery business Atraverda has won the backing of two new European investors in a £10.4m second round. Denmark's BankInvest New Energy Solutions and Portugal's Espirito Santo Ventures led the round, with existing investors Scottish Equity Partners, Chord Capital and Finance Wales, plus US-based EnerTech Capital and OnPoint Technologies, also chipping in.
Atraverda, based in the former coal-mining town of Abertillery, is developing bi-polar batteries for use in hybrid electric vehicles, standby power and other applications. The lead-acid batteries are based on the firm's proprietary Ebonex technology, which uses a titanium sub-oxide ceramic to reduce lead content and extend battery life. The bi-polar design also increases energy density and reduces raw material demands. The new funding goes towards product and commercial development.

Dutch biomass research group Bioecon has hooked up with Silicon Valley hotshots Khosla Ventures to launch a bio-oil joint venture called KiOR. The new business will develop and commercialise Bioecon's Biomass Catalytic Cracking (BCC) process, which promises to convert lignocellulosic biomass from grass, wood and agricultural waste into a bio-oil suitable for use in transport fuels. Khosla provides an unspecified first round of funding and strategic support.

Meanwhile back in Silicon Valley, there's one big-ass fundraising for a new electric car venture known only as Project Better Place. The firm, headed by former SAP exec Shai Agassi, coyly says it has 'entered into a term sheet for its first round of funding in the amount of $200 million'. Oil and trade combine Israel Corp has put up half that amount, with Morgan Stanley, VantagePoint Venture Partners, and individual private investors making up the total.
The business model involves leasing existing battery tech to owners and maintaining a network of charging and battery exchange stations - a model which the firm compares to that of mobile phone companies. The subscription-based funding model should substantially reduce the cost and hassle of buying an electric car, and lay the infrastructure for much wider adoption. The firm predicts tipping-point saturation within ten years of rollout.

Still in California, demand response group Optimal Technologies announced a $25m second round from Goldman Sachs - $13m now, with further milestone payments over the next year.
The company says its power-management software can increase an electricity utility's supply by at least 10 per cent. It will launch both supply and demand side systems in 2008.

And San Francisco's solar concentrator business GreenVolts has raised a $10m first round led by Greenlight Energy Resources.
GreenVolt is currently working on a 2MW facility which promises to be the world's largest concentrating PV plant when it opens in late 2008. The firm says its sun-tracking concentrator systems are more efficient that that of rival SolFocus, which raised $52m two months ago.

Pioneering industry research and media company Cleantech Group has hooked up with Credit Suisse and Consensus Business Group in what they're calling a 'strategic business relationship to accelerate global investment in clean technologies'. That means new investment products and advisory services tailored for the fast-expanding sector. Credit Suisse and Consensus are together investing $10m in the Cleantech Group, according to reports.


Fund news
Kent-based VCT manager Foresight Group has held a £15m first close on its new Foresight Sustainable UK Investment Fund. The fund, which is aiming for a £20m close by the end of the year, focuses on environmental infrastructure businesses including renewable energy, waste-to-energy and recycling. Its first investment was in biomass CHP firm O-Gen UK back in June.


Further reading
An interesting list of winners of the 2007 California Clean Tech Open. The business plan competition aims to identify and support the most promising start-ups in one of the world's most active cleantech clusters. Expect some, if not all, to enjoy further VC funding before too long.

The ever-campaigning Guardian names and shames leading UK companies which it reckons aren't taking steps to cut their carbon emissions. If you're selling the goods or services that could help the recalcitrant corporates clean up their act, it may be a good time to give them a call.
Interestingly (if unsurprisingly), the sole private equity group on the FTSE 100, 3i, was among the handful of companies reporting their emission figures in confidence. Over on the Cleantech Blog, Neil Dikeman ponders the issues facing cleantech-hungry VCs trying to reduce their carbon footprints.

A Stern response to the bubble question

One year ago, the UK Treasury published the Stern Review on the Economics of Climate Change to intense media interest. Unlike previous surveys or popular accounts of climate change, Stern put a financial cost on both action and inaction in cutting emissions of greenhouse gases and moving to a low-carbon economy.

The work was of obvious relevance to the clean energy industry, which can't always convince potential customers that its products and services make economic sense, and generally hailed as good news. Specialist financial information provider New Energy Finance welcomed the Review as "good news for investors in the renewable energy and low carbon technologies sectors", highlighting Stern's calls for a stronger price signal for carbon emissions, greater international cooperation, and increased funding for low carbon R&D, "all of which will boost clean technology companies". Stock tippers on personal investment websites also saw the Review as positive news, posting 'Buy' recommendations on selected clean energy stocks.

At the time, there were concerns about a speculative investment bubble in the sector, manifest in both venture capital activity and in the valuations of publicly listed companies. Such concerns continue to date. While some bubble-like behaviour is hardly unexpected in an emerging and potentially revolutionary sector, a bubble and burst would be likely to cause medium-term financial problems that could seriously damage the prospects of clean energy companies.

From an economics point of view, it's virtually impossible to say whether a market is actually in a bubble situation until some time after it's burst - not a very useful situation for current investors. Previous bubbles have however demonstrated the role played by the media in feeding 'irrational exuberance' and inflating bubbles, with stock prices moving in an irrational fashion in response to high-strength but low-weight news events.

The release of Stern Review can be considered as such an event. The Review did not contain any new information about the nature of the climate change problem or related policy or technological issues. Despite the NEF's comments, it also contained nothing that could meaningfully affect the prospects of individual companies or the clean energy sector as a whole.

So could the stock price response of listed clean energy companies to the Stern Review and its accompanying media hype shed any light on the much-debated clean energy bubble?

That's the question I addressed in some recent research (completed as my dissertation for a Master's degree in Economics & Finance), using event study methodology to test the reaction of a portfolio of AIM-listed clean energy companies.

The findings were largely negative, which is fairly encouraging. A small minority of clean energy firms (notably those dealing in carbon trading) did show abnormal returns around the release of the Stern Review, but there was no significant portfolio-wide response that would indicate irrational exuberance among investors. There is no indication of a runaway bubble of the kind seen in the dotcom era, a period to which the current cleantech boom is sometimes compared.

Although the research methodology can't claim to be conclusive (and is relatively untested in its application to a non-company-specific event such as this), its conclusions are encouraging for the sector. Investor interest in clean energy, and the broader cleantech sector, appears to be rational and reasonable. That can only be good for its longer-term prospects.

The dissertation, 'Evidence for a speculative bubble in the clean energy sector: an event study', is available as a 1.2Mb PDF here.

Clean Sweep 20

A round-up of recent news in clean technology and cleantech investment.

Deals
Energy-efficient electronics group CamSemi has raised a £13m third round. The government-backed Carbon Trust comes in as a new investor with a £2m stake, alongside existing investors 3i, Scottish Equity Partners and TTP Ventures.
The Cambridge-based firm is developing pwer-management circuits for mains converters and battery chargers than can potentially improve standby energy efficiency ten-fold.

Waste management business Credential Environmental has reportedly received a £6m package from socially-focused VC Bridges Ventures. Based in Newton Aycliffe, Credential specialises in recycling and safe disposal of tyres and other automotive waste.

Kent-based renewables contractor Cel-F Solar has secured £1m investment from Bank of Scotland Growth Equity. The firm designs, installs and maintains solar, wind and heat pump systems for councils, housing associations and property developers. BoS says the company has grown at over 30%pa over the past three years and is on track to double turnover in the current year, thanks in part to wider adoption of the 'Merton Rule' which mandates participating councils to include some renewables element in new developments (though as noted below, the programme may be being scrubbed).
It's more of a public-sector facilities-management deal than a tech-led one, but still worth noting.

Over in Ireland, tidal energy group Openhydro has completed a Euro40m fundraising. According to the Independent newspaper, the round was led by One51, an investment firm headed by entrepeneur Philip Lynch, and an IPO is on the cards for next year.
Openhydro is developing marine turbines for power generation, with tests underway at the European Marine Energy Centre off the Orkneys.

More deals, as ever, across the pond. In what some are calling the biggest solar venture deal yet, thin-film manufacturer Heliovolt announced its second round fundraising has reached a whopping $101m. The Texan company previously announced a close at $77m in August (see Clean Sweep 11). New investors include Sequel Venture Partners, Noventi Ventures and hedge fund Passport Capital. The money goes towards opening Heliovolt's first plant, with the initial capacity to produce 20MW worth of thin-film CIGS cells a year. The firm is planning a global string of 40MW-capacity factories, including some potentially in Europe.

And in a big battery deal, Massachusetts-based A123 Systems raised an extra $30m from General Electric and other existing investors. The round, the firm's fifth, follows a $40m fundraising in January.
A123 will use the funding to increase production capacity for its doped nanophosphate lithium-ion batteries, following contract wins for plug-in hybrid and other electric vehicle designs from industry primes including GM and BAE Systems.

Still in the US, East Coast VC Battelle Ventures and its Innovation Valley Partners affiliate have put a total $8m into three energy start-ups.
Energy-efficient traffic light firm Aldis gets $3.7m in two tranches; thin-film battery business Planar Energy Devices gets $4m in two tranches; and thin-film PV developer Ampulse gets $1m 'pre-seed'. Aldis and Ampulse are spin-outs from the Department of Energy's labs in Tennessee, while Florida-based Planar is out of the National Renewable Energy Laboratory.

Biofuel tech a-go-go! GM feedstock developer Mendel Biotechnology raises an undisclosed round from ZBI Ventures, Capricorn Investment Group, CFM, and Monsanto. Modular biorefinery business BioFuelBox takes a reported $9.5m from DFJ Element. And algal biodiesel start-up Solix Biofuels has raised at least $1.5m of a target $3.5m first round from Bohemian Investments and others.

In water purification, New Mexico's Altela secured a $7.1m first round led by Canada's CCS Income Trust. The firm develops desalination and decontamination systems based on thermal distillation, a tech it says is up to eight times more energy efficient than reverse osmosis.


Further reading
The cleantech boom continues in the US, according to the latest quarterly VC figures from VentureOne. Energy-related investment was up 28% from Q3 2006, to $590m. Total investments reached over $8m, the biggest quarterly total since 2001.
Two of the quarter's ten biggest deals were in cleantech - Heliovolt's $77m close (before this week's top-up, as noted above); and synthetic biofuel group Amyris Biotechnologies's $70m second round in September.

Australian VC Cleantech Ventures (catchy name!) and industry network Cleantech Group have released the first report on the sector in the lucky country. Headlines: A$539m VC into 75 companies over 1999-2007Q1, accounting for 4% of Aussie deals by number; agriculture, energy storage, transportation and water are the strongest sectors. Complete report, as 3Mb PDF, here. Cleantech Ventures announced a A$50m first close of its own Cleantech Australia Fund earlier this month.

Engineering giant GE offered an update on its Ecomagination cleantech investment arm. It says it's putting over $1bn in 'cleaner' R&D in the current year, rising to $1.5bn a year by 2010. Current projects include mammoth wind turbines 'with blades longer than the tip-to-tip wingspan of a jumbo jet': nimby groups are in a pre-emptive uproar.

Solarcentury ceo Jeremy Leggett launches a patriotic call-to-arms for more UK government support for the renewables industry.
His company has meanwhile helped kit out the UK's first solar powered pub for JD Wetherspoon. Solarcentury raised £13.5m from Zouk Ventures and Good Energies at the end of the summer, as noted previously. Cheers!

Something new for the tech-craze fans: after biotech, nanotech and cleantech comes... spookytech!

Investing in climate change

Deutsche Asset Management has released an interesting report on Investing in climate change. It's based on the belief that climate change, and all the economic and technological issues around it, is emerging as a 'mega-trend' that will shape the asset management industry in the near future. Ultimately, they reckon, most mainstream investment analysis will have to take into account the effects of climate change in terms of costs and opportunities for companies and markets.

The Deutsche team neatly summarises the scientific and economic issues, drawing on various well-known sources including the IPCC's Nobel-winning work, the report on the economics of climate change by the newly ennobled Nicholas Stern, and the McKinsey paper setting out a cost curve for greenhouse gas reduction. Some parts do smacks of boardroom bullshit, though - a prize to anyone who can convincingly describe exactly what the graph on p10 tells you.

So what does it mean for cleantech venture investment?

Deutsche reckon that the impact of climate change 'as a complex and enduring economic force' over the next 5-10 years should create market inefficiencies which offer significant gains for smart investors. For retail investors, that creates a limited role for small-cap cleantech stocks as part of a well diversified portfolio. For institutional investors, a less diversified strategy focused on pure cleantech companies 'might make more sense as it creates more diversification against other asset classes'. Good news for specialist VCs raising funds - and, of course, for the beneficiaries of those funds.

The report also focuses on the role of government policy on the carbon-cutting technologies at the top end of the cost curve - ie, things like industrial carbon-capture and large-scale biodiesel which are currently prohibitively expensive but which may still be needed to hit the necessary emissions targets. Government policy can dramatically alter the cost structure of these technologies, through R&D support and encouraging economies of scale. Experience with other alternative energy tech shows that a doubling of capacity can create cost cuts of up to 35%, bringing expensive techs into a wider market. As the report notes, while it may be tempting for an investor to focus purely on technologies that are currently low-cost, 'some seemingly prohibitively-expensive technologies are potentially very important investment themes and therefore represent another key area for analysis and return generation'. Again, that suggests real opportunities for serious risk capital.

The full report is available, as a 2.6Mb PDF, from here.

Clean Sweep 19

A round-up of recent news in clean technology and cleantech investment.

Deals
In what it's calling one of Europe's largest growth cleantech deals of the year, London's Zouk Ventures has led a Euro53.4m round in specialist waste management group SiC Processing. Merrill Lynch Corporate Principal Investments Group, CC Private Equity Partners, Masdar Clean Tech Fund, and Foursome Investments also invested, alongside existing investors and the founding Heckmann family.
Based in Bavaria, SiC runs recycling plants in Germany, Italy, Norway, China and the US for the solar and semiconductor wafer industries. The group's patented hydrocyclone technology takes the slurry used in the wafer cutting process and separates off valuable silicon carbide from its glycol base. The new funding goes towards further international expansion.

Otherwise, US companies dominated the week's investment. Norwegian VC Convexa Capital led a $28m investment in Californian thin-film silicon developer Innovalight. Norwegian tech developer Scatec also joined the round, alongside existing venture investors Apax Partners, ARCH Venture Partners, Sevin Rosen Funds, Triton Ventures and Harris & Harris.
Innovalight uses a proprietary silicon nanocrystalline ink to produce ultra-thin solar modules for residential and commercial use, potentially at a tenth of the cost of conventional cells. The new funding round, the firm's third, goes towards a new 30,000 sq ft manufacturing facility.

Solar power electronics firm SmartSpark Energy Systems raised an undisclosed first round from tech specialist Battery Ventures. The Illinois firm's SolarBridge product aims to simplify solar panel installation by integrating the inverter (used to convert DC from the cells into usable AC) into the panel itself.

Wind industry supplier TPI Composites raised a $22m first round led by specialist VC NGP Energy Technology Partners. The Rhode Island firm manufactures customised blades for wind turbines, with operations in Mexico and China, as well as products for transport and military vehicle applications.

Water filtration start-up Stonybrook Purification announced a $4.1m first round involving new investors Modern Water and TianDi Growth Capital and seed investors Battery Ventures and T2 Venture Capital. A spin-out from Stony Brook University, New York, the firm retains an intellectual vibe - their website is skimpy on details of their tech, which promises to increase liquid flow across filtration membranes, but does prominently feature a WH Auden quotation.

And 'intelligent grid' company GridPoint raised a $48.5m fourth round led by Goldman Sachs. The Washington DC business has developed an IT-based platform to help electric suppliers manage varyign supply and demand. The system also allows easy integration of new clean technologies such as plug-in hybrid vehicles and fuel cells.


Fund news
Nordic tech investor Provider Venture Partners has launched a new cleantech fund in association with Finnish state-backed investment agency Sitra. The fund will invest primarily in Finland and Sweden, and has a target close of Euro100-160m.

Clean Sweep 18

A round-up of recent news in clean technology and cleantech investment.

Deals
Micro-power group Perpetuum has closed a £5m second round led by Environmental Technologies Fund. The investment is the second from ETF's targeted Euro150m fund. Existing investors Quester and Top Technology also joined the round.
Southampton-based Perpetuum is commercialising a range of vibration-harvesting generators which can power wireless and battery-free sensors and other applications. The firm was spun out from Southampton University in 2004.

Carbon Trust Investments and Oxford Capital Partners have led a £1.58m round in biomass conversion business Green Biologics. Existing investors from the angel community also joined the round.
The Oxfordshire-based company uses thermophile microbes to convert biomass (from agricultural waste to purpose-grown crops) into butanol. The basic fermentation tech, using clostridial bacteria, was first commercialised in 1916 to produce acetone. By optimising the process and using cheaper waste feedstock, the firm aims to reduce production costs by a factor of two or three.
Elsewhere in microbial biofuels, California's LS9 (no, not a suburb of Leeds) raised a $15m second round from Lightspeed Venture Partners and existing investors Flagship Ventures and Khosla Ventures. The firm is using synthetic biology to engineer bugs capable of producing what it calls 'renewable petroleum'.
And in a loosely related deal (it's not biofuels but it is microbial), Luca Technologies raised $20m in a round led by Kleiner Perkins and Boston-based Oxford Bioscience Partners. The Colorado-based group is working with natural micro-organisms that can convert coal and other hydrocarbons into cleaner-burning methane. As 'clean coal' goes, it's an interesting approach.

While there's been a few water purification deals lately, there's been less happening in air purification. But now French group AirInSpace has raised a Euro6bn second round from Paris-based VC Matignon Technologies and investment bank Oddo et Cie.
Founded in 2002, the firm offers microbial decontamination products for healthcare applications, and is now moving into new areas including air transport. The tech was originally developed for the Russian space programme.


Fund news
French investor Emertec Gestion is reportedly targeting Euro80m for its second clean technology fund. The group's current Euro15.5m Emertec Energie Environnement (3E) fund targets seed-stage companies in the energy and environmental industries sectors.

California-based seed investor Greenhouse Capital Partners meanwhile closed its first fund at $11m. The firm is currently considering opportunities in solar, biofuel and green building tech.

At the bigger end, New York's Braemar Energy Ventures closed its $250m fund. The firm aims to back ' the best of the new breed of energy and energy-related communications companies'.

Clean Sweep 17

A round-up of recent news in clean technology and cleantech investment.

Deals
Thin-film solar firm Konarka announced a $45m private round from new and existing investors. New investor Mackenzie Financial, a generalist investment manager, led the round alongside existing investor Good Energies, a leading renewables specialist. Pegasus Capital also joined in, along with existing investors Draper Fisher Jurvetson, Asenqua Ventures, New Enterprise Associates and 3i; plus a string of minority investors.
Konarka is developing what it calls 'Power Plastic', polymer-based solar cells which can be printed on a flexible plastic base. The new round follows major fundraisings for some of its competitors – $77m for Heliovolt in August, and $50m for Miasolé just last week.

A couple of big US wind deals this week. East Coast windfarm developer EverPower Renewables raised $55m from Good Energies (yes, them again). The firm is currently developing 1.5GW worth of projects in seven states.
And California-based wind turbine manufacturer Nordic Windpower received an undisclosed 'significant investment' from Goldman Sachs. Nordic's low-maintenance turbines are based on Swedish state-backed research going back to the 1970s. The firm aims to start production in the US next year.

Biofuel group Ceres meanwhile raised $75m from private equity giant Warburg Pincus. Ceres is using genetic modification to develop a portfolio of biofuel feedstock crops with substantial environmental benefits over the usual ethanol feedstocks - a mix of technology and outcome which could cause a dilemma for old-school greens... Its first product, a high-yield switchgrass cultivar, is due for release in 2009.

Demand response group ConsumerPowerline has closed a $17m first round led by Expansion Capital Partners. Bessemer Venture Partners, Schneider Electric Ventures, the New York City Investment Fund and Vantania Holdings also joined the round.
The firm provides energy efficiency and management services, metering technologies, etc, to help customers reduce their energy costs by reducing demand at peak periods.


Fund news
Belgian tech specialist Capricorn Venture Partners has raised Euro50m for its new Capricorn Cleantech Fund, halfway towards the target closing. Investors include regional investment company LRM and energy group Electrabel, part of the Suez Group. Capricorn has already backed Dutch micro-filtration group fluXXion and Belgian algal biofuel company SBAE Industries from the fund.


Further reading
Third quarter figures from New Energy Finance show a sizeable drop in cleantech VC deals and IPOs. Deals totalled $2.7bn, less than half the value in Q2; while IPOs valuations totalled only $673m, down from almost $4bn. Hardly unexpected given the usual summer lull and the particularly unpleasant market conditions, and NEF remains as bullish as ever, forecasting 'another record year'. Total new investment up 25% to $94.5bn, with VC/PE funding up 31.3% to $8.8bn and IPO valuations up 31.7% to $13.7bn, is the forecast for year-end. More numbers in the press release, available here as a PDF.

News on a couple of big wave energy projects. The proposed Severn Barrage got the thumbs-up from the Sustainable Development Commission despite worries about its effect on protected wildlife sites. The proposed 10-mile barrage across the Severn estuary could supply some 17TWh of energy, 4.4% of the UK's current supply needs.
Meanwhile, off the northern coast of Portugal, the world's first commercial wavefarm is preparing to commence operations. The first stage of the project features three 'sea snake' devices from the UK's own Pelamis Wave Power (formerly Ocean Power Delivery).

Clean Sweep 16

A round-up of recent news in clean technology and cleantech investment.

Deals
University spin-out EVO Electric (no online presence that I can find as yet) has raised £1.5m funding. Uni tech transfer company Imperial Innovations led the round with a £375,000 investment, and now holds 38% of EVO. Consensus Business Group, a family trust vehicle for the Tchenguiz brothers, and a group of private individuals also joined the round. Consensus previously managed Imperial Innovation's AIM listing in July 2006, and has continued to work closely with the group.
EVO is developing high power-density electric motors and generators for applications including traction motors in hybrid-electric vehicles. The axial flux technology is based on research by Michael Lamperth at Imperials' Department of Mechanical Engineering.

The UK government-backed Carbon Trust has announced a £3.5m investment in marine energy technology. The funding, part of the Trust's Technology Accelerator programme, aims to speed the commercialisation of marine power by reducing costs and introducing new device concepts. The Trust is working with three companies to cut the costs of installation, operation and maintenance - AWS Ocean Energy, which is using the Trust's support to develop its submerged Archimedes Wave Swing device; AIM-listed Ocean Power Technologies; and Norwegian group Hammerfest Strom.

German water filtration developer Weise Water Systems has raised a Euro325,000 investment from early-stage investor Leonardo Ventures. Leonardo takes a 49% stake in the membrane filtration business, which is targeting industrial markets, relief organisations and off-grid households.

Hotly tipped solar business Miasolé has raised a further $50m funding. The round, Miasolé's fourth, includes six new investors who weren't identified. Previous backers include Kleiner Perkins Caufield & Byers, VantagePoint Venture Partners, Garage Technology Ventures and Nippon Kouatsu Electric.
Miasolé is developing thin-film silicon-free solar cells based on copper-indium-gallium-selenide (CIGS) tech. Competitors include HelioVolt and Nanosolar.

In one of the year's biggest deals for clean(ish) tech, coal conversion group GreatPoint Energy raised a $100m third round. Dow Chemical and Citi Sustainable Development Investments led the round alongside AES Corp, Suncor Energy and existing VC backers.
GreatPoint is commercialising a catalytic process for converting coal and biomass into natural gas. The process may be a relatively efficient way of exploiting low-quality supplies such as lignites and tar sands. The company aims to locate production plants close to coal mines which can be used for carbon sequestration.


Fund news
London-based investor HgCapital has boosted its renewable energy team with a couple of new recruits and some internal promotions. Jean Perarnaud, formerely at ING Bank, and Jens Thomassen, from Crédit Agricole's Calyon investment bank, join as associate directors. Team co-founder Emma Tinker meanwhile becomes director.
HgCapital launched its Euro300m Hg Renewable Power Partners fund in 2004. Its most recent investment, in UK wind farm operator RidgeWind, brings its portfolio to over 120MW renewable energy capacity in construction or operation and 700MW in development.


Further reading
New investment stats from Ernst & Young and VentureOne show continuing growth in cleantech VC during the first half of the year. Globally, cleantech investments reached $1.1bn – European investment, at $80m in 19 deals, continues to be dwarfed by US activity ($893m in 71 deals). Cleantech's share of the overall VC market reached 4.4% in Europe (up from 1.6% in 2001) and 5.4% in the US (from 1.4%). E&Y's Gil Forer predicts continuing bullishness from VC investors and more IPOs.

The Yorkshire Post reports on plans from regional development agency Yorkshire Forward to take the lead in carbon capture. The region has three major coal-fired power stations – Drax, Ferrybridge and Eggborough – and plenty of disused mines to pump the stuff into. The RDA reckons that by already signing up the likes of BP, Shell, E.ON, Drax and Scottish and Southern Energy, it has a good chance of getting the £100m of government funding that's up for grabs.

Entertaining post from cleantech PR specialist William Brent on the dearth of clean toilet technology:
Sadly, the number of self-composting, or dry, toilets on the market is pitiful, with Biolan, Biolet and Envirolet apparently the only ones who make enough money to advertise. Nor was I able to find any evidence of a company on the Internet that has a next generation waterless toilet technology, despite the fact that only one-sixth of the world’s population is served by sewage systems[...] All of this to say there is an opening to invest in new solutions.
Maybe VCs are just too wary of seeing their money go down the pan.

Clean Sweep 15

A round-up of recent news in clean technology and cleantech investment.

Deals
Insource Energy, a waste-to-energy business set up by the UK government-backed Carbon Trust, has secured funding from Scottish and Southern Energy plc. SSE is investing up to £2.7m for a 40% stake in the business, with a further £10m on the table as the company develops.
Insource provides on-site CHP, biomass boilers and other technologies for food producers, a sector that produces some 5.6m tonnes of biodegradable waste per year in the UK. Pilot projects use anaerobic digesters to convert waste to methane, which is then fed into a CHP unit.

US energy storage developer Pentadyne has raised $14m ahead of a possible AIM listing. According to reports at the start of summer, the California company was planning to raise around $30m in an imminent IPO on the lightly-regulated London market. The firm has now announced a $14m private fundraising from Guernsey-based Loudwater Investment Partners, which specialises in pre-listing investment.
Pentadyne produces energy-efficient flywheels for use as emergency supply - typically replacing batteries as a stopgap supply between main power cutting out and back-up generators kicking in. Other applications include rail and distributed generation.

Some hefty biofuel deals across the pond. California's Amyris Biotechnologies announced the first tranche of a $70m second round from investors including DAG Ventures, Khosla Ventures, Kleiner Perkins, and TPG Ventures. The firm uses engineered micro-organisms to produce petrol and diesel substitutes from feedstocks including sugarcane, corn and cellulose. Amyris is also using similar synthetic biology methods to produce anti-malarial drugs from a yeast-like organism.
Rival bioproduction start-up Solazyme meanwhile raised $5m debt funding from BlueCrest Capital Finance. The California firm is looking to exploit microbial photosynthesis to produce biofuels and other chemicals from algae.
A more conventional South American operator, Pure Biofuels, secured a $30m private financing round to complete the construction of a production facility in Peru. The facility will produce biodiesel from palm feedstock, which the company claims is 35-times more efficient than corn on a fuel-per-acre basis. Pure is also looking at moving into Argentina to take advantage of pal, jatropha and canola (rape) plantations.

In solar, PV developer Solar Notion reportedly raised $10m from hedge fund Third Point. The California-based company says it is developing 'patent-pending disruptive technologies that reduce the manufacturing cost of solar panels by over 500%, while achieving the efficiency and reliability of single crystal silicon solar panels'.
Installation managers Solar Power Partners meanwhile raised a $6m first round from Globespan Capital Partners. SPP manages some 47 solar PPA installations across the US, including grocery chains, wineries and universities.
And in a corporate venture deal, GE Energy has bought a minority stake in thin-film company PrimeStar Solar. PrimeStar is commercialising cadmium telluride PV modules, a relatively mature thin-film tech. Terms weren't disclosed.


Projects
Planning permission has been granted for Wave Hub, a pioneering wave farm project off the coast of Cornwall. The £28m project centres on an 'electric socket' some 10 miles off shore, which companies developing wave energy tech can plug into for large-scale pilot programmes. Oceanlinx, Ocean Power Technologies, Fred Olsen Limited and WestWave have already signed up.
The Yorkshire Post meanwhile reports 'overwhelming public support' for E.On's 300MW Humber Gateway wind farm


Further reading
Eyecatching stats from the industrious New Energy Finance, who report that European VCs are on track to record annualised gross returns of over 50% from their cleantech investments.
The details might be a bit less impressive. The study is based on 129 companies, backed by 37 investors, representing just over half of all VC-backed clean energy companies in Europe. Of those 129, 15 have IPO'd, 10 sold to trade, and 21 achieved further rounds at a higher valuation. On the down side, 19 received further rounds at a lower valuation, and 11 have been liquidated. The overall pooled gross IRR of all companies is 54.9% - obviously, such a pooled figure can be based on a few big wins and a lot of losses, and valuations for many of the companies must be a little questionable. The continuing high valuations across the sector, which many suspect of being fuelled by bubble-like behaviour, must also play a part - the Wilderhill NEX index of quoted clean energy companies was up by almost 49% during the same period. NEF's press release (available as a PDF here) has more figures, if not a thorough analysis.

Clean Sweep 14

A round-up of recent news in clean technology and cleantech investment.

Deals
Nascent wave-power company Embley Energy has won a £150,000 Applied Research grant from the Carbon Trust to develop a prototype of its Sperboy device. When floating in the sea, waves drive air into and out of a chamber within the Sperboy, driving a generator on top. The grant will fund a two-year trial of the low-maintenance buoy, which Embley says can bring the cost of marine power down to a competitive level.

Three diverse biofuel deals this week. Israeli biodiesel start-up Galten landed $10m from a syndicate led by the UK's Capital Partners. The firm is cultivating the oil-rich Jatropha plant in Ghana for conversion to fuel.
Texas-based Endicott Biofuels meanwhile raised $40m private equity from an unnamed investor(s) to build its first biodiesel facility. The company's looking to exploit animal waste, including pork and poultry fats, as a feedstock.
And Wisconsin's Virent Energy Systems raised a $21m second round from local funds Stark Investments and Venture Investors, alongside existing investors Cargill Ventures and Advantage Capital Partners. Virent is developing a catalytic process developed at the University of Wisconsin-Madison for converting sugars (including glycerol, a by-product of biodiesel production) into gasoline.

Those Californian solar deals just keep rolling. Thermal tech developer Ausra unveiled a circa $43m second round from cleantech big boys Kleiner Perkins Caufield & Byers and Khosla Ventures. The firm is currently building a pilot 30MW solar thermal plant, and aims to build a 175MW installation in California, which would be the US's largest.
Solar installer SolarCity meanwhile raised $21m to expand nationally. Draper Fisher Jurvetson led the round, alongside JP Morgan and company chairman Elon Musk (who also chairs hot electric car group Tesla).

Still in California, green IT group SynapSense raised a $10m second round from Emerald Technology Ventures and existing investors DFJ Frontier, American River Ventures and Nth Power. SynapSense is developing hardware and software to reduce energy consumption in power-hungry data centres.


Fund news
US-based Expansion Capital Partners has closed its new green tech fund at $103m, well above the initial target of just $60m. The Clean Technology Fund will focus on reasonably mature US and Canadian companies.


Further reading
According to the Cleantech Network, cleantech investments in North America and Europe for Q2 2007 totalled just under $1 billion, up 10% from Q1. Of that, $154m was invested in 17 deals in Europe, down substantially on the previous year by value (even with currency effects) but up on the first quarter. $98m of that went to energy, the largest sector on both sides of the Atlantic. IPOs also did well, with 17 cleantech floats raising nearly $1.7bn - a continuing strong exit route seems likely to inspire more deals. More here.

New Energy Finance has an interesting white paper on the lessons of game theory for international emissions-reduction agreements (available as PDF here). The paper supports the transfer of clean technologies to developing economies as a strong incentive for international cooperation.

Clean Sweep 13

A round-up of recent news in clean technology and cleantech investment.

Deals
UK solar provider Solarcentury Holdings secured a £13.5m development round led by London-based cleantech specialist Zouk Ventures and Marcel Brenninkmeijer's Good Energies. Vantania Holdings Limited and Foursome Investments also chipped in alongside existing investors VantagePoint Venture Partners and Scottish and Southern Energy.
Solarcentury sells PV and solar thermal products, based on bought-in tech, to domestic, business and public sector customers - prominent installations include Cornwall's Eden Project and Manchester's CIS Tower. The firm was founded by former Greenpeace activist Jeremy Leggett in 1999, and raised a £7m first round during the 2000 tech bubble. The new funding will go towards driving further European growth.

Insulating paint group Thermilate Europe has secured a £750k funding package from Enterprise Ventures. When added to paint, Thermilate's Nasa-developed microspheres act as an extra layer of insulation, reducing energy costs. The Yorkshire firm distributes the additive globally, with the exception of North America.

In an interesting deal for European biofuel, Sweden's SEB Venture Capital has sold its 42% stake in Lithuanian biodiesel producer UAB Mestilla to Norwegian trade buyer Statoil. Mestilla is currently building the Baltics' largest biodiesel factory, with an expected capacity of 100,000 tonnes pa, to use rape or other vegetable oil as feedstock.

Loads more solar activity in sunny California, with concentrating PV developer SolFocus securing $52m of a planned $70m round. Investors included New Enterprise Associates, Moser Baer India, David Gelbaum, Metasystem Group, NGEN Partners, and Yellowstone Capital. Around half of the sum raised is going towards the firm's European subsidiary, which was boosted last month with the acquisition of Spanish PV tech developer Inspira. SolFocus is one of three companies working on a 3MW solar concentrator installation in La Mancha.
Innovative solar cell developer Solexant meanwhile raised a $4.3m first round from a VC syndicate led by X/Seed Capital. Details of the round remain vague, as do details of Solexant's technology, which I understand is based on silicon-based nanostructured cells which can capture a greater part of the infra-red spectrum.
And solar installation manager Tioga Energy has raised a further $4m in its continuing first round from existing investor Nth Power. Tioga launched in June with $10m venture backing.
In another deal with solar interest, Pennsylvania-based Plextronics closed a $21m second round led by Belgian chemicals group Solvay. Firelake Capital Management, Birchmere Ventures, Draper Triangle Ventures and Newlin Investment Company also joined in. Plextronics is developing printed electronic technology based on tech developed at Carnegie Mellon university - applications include printed solar cells.

In other US deals, Propel Biofuels closed a $4.75m first round from @Ventures and Nth Power. Propel is rolling out a network of biodiesel fuel sites from its Washington base.
And Ohio-based reXorce Thermionics raised $1.8m from JumpStart, mTerra Ventures and Bally Energy. The firm is developing a thermal engine, based on a carbon dioxide absorption heat pump developed by Nasa, with potential applications in waste, solar thermal and geothermal generation.


Fund news
London-based Climate Change Capital has closed its latest fund at Euro200m. The Private Equity fund will invest in expansion and later-stage deals, including buyouts, in the European clean power, clean transport, energy efficiency, waste recovery and water sectors. Target investments will be in the Euro5-20m range. CCC also manages two Carbon Funds, totalling over over Euro800m, targeted at emission-reducing projects in developing countries.


Further reading
New Energy Finance has released its annual review of clean energy VC/PE, covering 2006 and the first half of '07. NEF counts 521 deals totalling $8.6bn last year, and $10.6bn invested in the first half of this. However, demand for clean energy deals is outstripping supply, driving up company valuations - further evidence of a continuing bubble in the sector. The full report is for subscribers and those with deep pockets only, but the key points are listed in this pdf press release.

The previously-mentioned Greentech Media has now gone live with a strong mix of US-centric news and analysis. The company was founded by a team from telecoms news site Light Reading (more recently boosted with the acquisition of the highly respected Cleantech Investing blog run by @Ventures' Rob Day) and is backed by Lightspeed Venture Partners and Northport Private Equity.

Following the news (below) that the EU is flogging its excess wine for bioethanol, the Earth2Tech blog presents a handy A-Z of potential biofuel sources. Everything from apples to zeolites!

Vin ruse

It seems the great European wine lake is taking on a greenish tinge (and not because of an influx of vinho verde). Reuters reports that the European Union is preparing to sell its stockpiled wine surplus for conversion into biofuel. A tender notice in the EU's Official Journal (available as pdf here) offers around 70 million litres of alcohol distilled from otherwise unsellable plonk - strictly for use as bioethanol.
So is viniculture a particularly sustainable potential source for biofuel? I've not seen the sums, but I'd strongly suspect not - like corn in the US, this is more to do with finding a market for the fruits of heavily subsidised production.

A year of expansion

The Cleantech Network last week released 2006: A Year of Expansion, a 'white paper' surveying the state of cleantech investment (downloadable from here).

It tells the now-familiar story of the confluence of political and market factors that made 2006 a banner year for cleantech, backed by a solid presentation of the data collected by the Cleantech Network, plus extra comment from some key players. Curiously, there's no mention of a possible bubble in either the venture or public markets - reports from other groups, notably Library House, the Carbon Trust, Forum for the Future and Lux Capital, have not been so squeamish.

One point worth emphasising is the evolving energy specialisms in the US and Europe:
North America and Europe share a need to develop alternative energy sources, but their differing public policies, geographical characteristics and historical strengths have led to divergent investments in the some types of renewable energy sources being developed and marketed today.
For instance, North American companies received all but one of the 30 biofuels deals that occurred in 2006. [...]
In Europe, on the other hand, investors turned to a different source renewable energy, and one that is particularly abundant in parts of Europe: wave and tidal power. All of the six deals in the hydro and marine power companies were placed in European companies; half of the six went to companies in the UK. The UK, with its high proportion of coastal land and tidal activity, is considered well positioned to become a global leader in wave and tidal technology.

Clean Sweep 12

A round-up of recent news in clean technology and cleantech investment.

Deals
Solar CHP developer HelioDynamics has secured £600k further funding from Low Carbon Accelerator. The latest tranche is the third from AIM-listed LCA, which now holds 35% of the company with options on further rounds.
Cambridge-based HelioDynamics produces sun-tracking solar concentrators which both generate electricity and heat liquid-filled pipes. The firm claims its system delivers 35 times the energy per solar cell area of conventional photovoltaic units.

The electric car is alive and well, going by two new US deals. LA-based Venture Vehicles has raised a $6m first round from investors including NGEN Partners and Dutch group DVC Technologies. Venture's electric and hybrid tricycles are based on DVC's petrol-driven Carver One runarounds.
Still in California, Phoenix Motorcars has raised an undisclosed round (reported to be around $15m) from Kleiner Perkins, Virgin Fuels and AES Corp. The firm produces all-electric fleet vehicles.

Continuing consolidation in the world of cleantech blogs! The Cleantech Group has acquired trade blog Inside Greentech. The deal comes a few weeks after the Discovery Channel's acquisition of environmental blog Treehugger.
IG's Dallas Kachan, who'll be heading the combined Cleantech Media venture, notes:
some might say this deal marks a clear resolution, even a vindication, of the ol' greentech vs. cleantech debate.
In choosing our original name, we at Inside Greentech acknowledge we took a gamble, but this process couldn't help but convince me, personally, that in picking the greentech moniker, we hitched our wagon to the wrong horse.
Elsewhere, Greentech Media is preparing to launch in the next few weeks.


Policy news
The UK government will miss its renewables electricity target for 2010 and 2015 by wide margins, according to a new report by Cambridge Econometrics. Renewables' contribution to national electricity generation will barely reach 5% by 2010, well short of the 10% target. According to the group's projections, accelerating renewables development will take its share to 12.5% by 2015 (short of the 15% target) and 19% by 2020 (almost hitting the 20% target for that year).
Policies to give incentivs to renewable energy sources, particularly offshore wind, are 'urgently needed', the report concludes: However, as the proposed changes require primary legislation, it is unfortunate for the government’s 10% target that they can only be introduced in April 2009 at the earliest.