Wednesday, 29 August 2007

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.

Tuesday, 28 August 2007

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.

Thursday, 23 August 2007

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.

Monday, 20 August 2007

Renewables requirement dropped

Bad news for firms selling energy-saving tech to the construction sector - the Guardian reports that the government is dropping plans to require all new buildings to include some renewable energy capacity.

The so-called Merton rule requires any new building to reduce its carbon emissions by 10%. Introduced by the eponymous London borough in 2003, it's since been taken up by around 150 other local authorities. Whitehall has previously encouraged LAs to adopt the rule but, under pressure from housebuilders, is now understood to be abolishing the rule in the upcoming draft planning policy statement.

The Merton rule has been hailed by solar installers and other players as one of the few effective drivers of renewables take-up in the UK - certainly well ahead of the government's confusing and under-resourced low carbon buildings programme, intended to subsidise installation on existing buildings.

Thursday, 16 August 2007

Clean Sweep 11

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

Deals
No UK or European deals reported this week, as far as I've seen. A sign of declining VC interest, a retreat from the recent storms in the debt and public markets, or just the height of the holiday season? I'd guess mostly the latter.

Things were a little busier across the pond, with Texan thin-film solar company HelioVolt closing a $77m second round. Investors included Abu Dhabi's Masdar Clean Tech Fund (following their investment in US water purification firm HaloSource a couple of weeks ago); Paladin Capital Group, New Enterprise Associates, Morgan Stanley and Sunton United Energy from the US; and Spain's SolĂșcar Energias.
HelioVolt's thin-film solar cells use Copper Indium Gallium Selenide (CIGS), a relatively well-established rival to silicon. The company faces stiff competition from other VC-backed firms with closely related tech, notably Nanosolar and Miasole.

Back with silicon, electronic substrate manufacturer Silicon Genesis raised $23m from half a dozen investors in its first round since 2001. The Californian firm says the solar panel market provides an "especially large and interesting opportunity" for its layer transfer process which reduces the cost of producing high-efficiency silicon-based cells.

Also in sunny California, another interesting lighting investment - "daylighting system" developer Solatube closed a mezzanine debt from Praesidian Capital with a reported value of $6m. Solatube's systems reduce lighting costs by using optics to bring daylight into dark spaces, and are credited under the US LEED sustainable building programme.

Sacramento fuel cell developer Jadoo meanwhile raised an undisclosed follow-on round from investors including Velocity Venture Capital. Jadoo, which raised an $11m second round in 2005, is already shipping commercial fuel cells based on its proton membrane exchange tech. The secrecy about the funding round might have something to do with the firm's current work with the US military's Special Operations Command.

In the emerging area of cellulosic ethanol, University of Massachusetts spin-out SunEthanol has raised an undisclosed (but reported to be sub-$5m) first round. Investors include NYSE-listed renewables group VeraSun, Battery Ventures, Long River Ventures and AST Capital.
SunEthanol has developed a proprietary microbial technique for producing ethanol from a range of biomass feedstocks, including wheat straw and wood pulp. It all promises to be a lot more sustainable and energy-efficient than the continuing subsidy-fed craze for corn ethanol.


Company news
As trailed in Clean Sweep 4, tech developer Nviro Cleantech has raised £7.5m in an AIM flotation. Nviro identifies promising cleantech at university spin-out or start-up level, and brings them to commercialisation. Key technologies in their current portfolio include a clean coal process being developed with a Chinese partner; a wood fibre reclamation system; and air purification and laser ignition technologies.

Scottish wave power stalwart Ocean Power Delivery (not to be confused with AIM-listed Ocean Power Technologies, as I confess I keep doing) has announced some hefty senior appointments. Phil Metcalf, formerly UK MD at controversial telecoms group Global Crossing, joins as CEO; Diana Dyer Bartlett joins as CFO from stockbroker Collins Stewart; and former Tory minister and director at AIM-listed Clipper Windpower Colin Moynihan joins as chairman.
Edinburgh-based OPD is backed by VCs including 3i, Norsk Hydro Technology Ventures and Carbon Trust. I suspect an IPO might not be too far off.


Further reading
Much angst following the Guardian's acquisition of a leaked government briefing on the best ways to dodge around the UK's renewables commitments (pdf here). The paper's Ashley Seager repeats his call for German-style support for renewables.

The Economist meanwhile takes a sceptical look at the green credentials of the recent US energy bill: When in doubt about energy policy, build more windmills...

Finally, a plug for EnviroDaq, the UK's top source for news and market information on the environmental industries. Beginning with their imminent August newsletter, I'll be providing a monthly round-up of UK cleantech venture activity to complement their excellent coverage of the listed sector.

Thursday, 9 August 2007

Clean Sweep 10

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

Deals
Imperial Innovations, the tech transfer wing of London's Imperial College, has led a £4.25m round in battery developer Nexeon (NB - website under development).
The Hampshire-based company is commercialising "second-generation" lithium-ion battery technology developed by Imperial's Prof Mino Green, which promises a higher energy density than current tech. Potential applications include hybrid electric vehicles, as well as rechargeable mobile devices.
Imperial Innovations contributed £1.95m to the round, with non-exec Paul Atherton chipping in a further £250k. NanoVentures, PUK Investments and Tudor Investment Corporation made up the total.
The investment comes just a month after a £1.35m syndicated round in another Imperial cleantech spin-off, solar concentration company QuantaSol.

A trio of low-energy lighting companies have closed development rounds. Canada's Group IV Semiconductor raised an unspecified (but at least $10m) second round. Garage Technology Ventures Canada led the funding alongside Khosla Ventures, BDC Venture Capital and Applied Ventures, a subsidiary of nanomanufacturing giant Applied Materials. Applied Materials will also be collaborating with Group IV on developing low-cost manufacturing process for the firm's silicon-based solid state lamps which promise to be cheaper and more efficient than conventional LEDs.
BridgeLux, a Californian high-volume LED producer, meanwhile raised a $23m third round from Chrysalix, VantagePoint and existing investors.
And Israeli lighting control firm MetroLight has raised $9m in a round led by Virgin Fuels and Gemini Israel Funds. MetroLight produces High Intensity Discharge (HID) ballasts which can halve the energy consumption of street lights and other lighting fixtures.

In another sign of growing interest in water purification tech, Clear Water Compliance Services raised a $25m first round from hedge fund Plainfield Asset Management. The Washington-based firm specialises in treating water on construction projects, ports and industrial sites.


Fund news
UK tech specialist Esprit Capital Partners has joined the global network of US-based cleantech leader Draper Fisher Jurvetson. With offices in London and Cambridge, Esprit is itself the product of recent consolidation in early-stage VC, being created in a 2006 merger of Cazenove Private Equity and Prelude Ventures. With DFJ taking a "strategic stake" in the firm, it's now rebranded as DFJ Esprit.
While Esprit hasn't been active in cleantech to date, DFJ has made some pioneering investments via its DFJ Element wing. With total funds of $292m, Element typically invests from $3-5m in early-stage ventures through to $10-15m for later-stage opportunities, using DFJ's office network to access deals worldwide. The Esprit deal should give it an additional way in to European deals.


Further reading
The rate of growth in global energy demand can be halved without compromising economic growth or consumer convenience, according to new research by McKinsey. The report, Curbing the growth of global energy demand, focuses on four sectors - residential buildings, commercial buildings, road transport, and industry - which represent 98% of global end-use demand:
an intensive focus on improving energy productivity would spur new markets for demand-side innovation and thus generate important business opportunities for manufacturers, utilities, and other companies. Yet market forces alone will not produce such outcomes.

In what could be good news for windfarm developers facing nimby opposition, researchers from Salford University found that noise complaints about existing turbines are relatively insignificant compared with complaints about other noise sources. The report focused on noise caused by aerodynamic modulation, a phenomenon which has been identified at four sites nationally but which can be avoided by improved control systems. The report, prepared for the DBERR, can be downloaded as a PDF here.

Ashley Seager, economics correspondent at the Guardian, lets fly at the UK government's record in backing renewable energy, arguing for something closer to Germany's feed-in tariff rather than the current Renewables Obligation:
Britain's use of renewables rose about 10% last year to 4.6% of all energy use. And the pace of increase slowed. In Germany it is rising much faster and is already at 13% of all energy, a share Germany proposes to double by 2020. Germany now has 200 times as much installed solar energy capacity as Britain, for example.
Britain's chances of achieving the EU target of a 20% cut in emissions by 2020 are negligible. Indeed, the government has acknowledged it will not achieve it. Germany plans to over-achieve it.[...]
So next time you hear the government claim it leads the world on climate change, do as the Germans do: burst out laughing.

Thursday, 2 August 2007

Clean Sweep 9

Fund news
A modest new player on the UK block - Ludgate Investments has launched its new Ludgate Environmental Fund on AIM, raising over £25m to back environmental technology and service companies.
The fund is run by Ludgate's Nick Pople and Nigel Meir. Ludgate has previously advised or raised funds for nine cleantech companies, notably as a founding investor in fuel cell group Ceres Power.

Meanwhile across the Atlantic, cleantech and life science specialist Technology Partners has launched a new $300m investment fund. The Palo Alto firm says it's already tapped the fund, its eighth, for its part in the recent $45m round in Tesla Motors and for a 'stealth solar' investment. The firm's cleantech team, led by general partner Ira Ehrenpreis, focuses on energy and water tech, as well as advanced materials.


Deals
Yorkshire-based tidal power business Pulse Generation has secured undisclosed funding from the Viking Fund, a regional co-investment firm backed by the government's Early Growth Fund (thus limited to rounds of up to £250k). Pulse, based at Rotherham's Advanced Manufacturing Park, is currently installing a 100kW £2m prototype tidal generator in the Humber estuary. The firm is understood to be seeking a further £2-5m within the next year to develop a second full-size protoype.

The Carbon Trust has announced a £1m round of seed funding from its Applied Research programme for a range of promising technologies. Projects which may have the potential to attract VC interest as they approach commercialisation include next-generation LEDs from GlowLed Ltd, a natural ventilation system for large buildings from E-stack Ltd, and a steam trap performance sensor from Spirax Sarco Ltd. More details here.

Danish investor BankInvest has announced an investment in German solar start-up O-Flexx, the first from its NES (New Energy Solutions) II fund. Emerald Technology Ventures, Schneider Electric Ventures and Partech International also joined in the round. O-Flexx is developing a proprietary thermo-electric solar system to transform heat into energy.

In a deal that may bear out all the talk about the growth opportunities in developing countries, US water purification company HaloSource has raised a $15m round from Masdar Clean Tech Fund. Although HaloSource currently does most of its business in the domestic recreational market, CEO John Kaestle says the real opportunity is in the developing world. the support of Masdar, which is backed by the government of Abu Dhabi, should provide a short cut into the Middle East and beyond.

Not a VC deal but worth mentioning to illustrate how, as clean technology and green considerations enter the business mainstream, so goes the media. Discovery Communications (best known for the Discovery Channel, of course) has acquired eco-lifestyle blog Treehugger for a reported $10m (although Treehugger whimsically puts the direction of acquisition slightly differently). Treehugger was launched in 2004 with backing from some fairly hefty serial entrepreneurs and now reaches some 1.4 million visitors a month - the low overheads of the blog format presumably helped it grow without having to seek VC money.
Similar offers for this blog will be taken under advisement.