Friday, 19 December 2008

Clean Sweep 52

A round-up of recent news in clean technology and cleantech investment. Seems like everyone's getting their deals wrapped up before the holidays.

Climate Change Capital is backing a landfill gas project in Northern Ireland with £2m capital funding. The investment comes from its Ventus Funds, specialist venture capital trusts (VCTs) focused on renewable energy projects.
The project is a joint venture between Belfast City Council and project development company Renewable Power Systems, to generate electricity from methane gas produced by the 121 hectare Dargan Road landfill site. The scheme is forecast to produce enough electricity for 6000 homes, with a lifetime of at least 20 years.

Welsh environmental diagnostics company Envirogene has closed a £1m second round from investors including RAB Capital and Finance Wales.
Envirogene uses molecular diagnostics and nanoparticle tracking technology to monitor water quality and assist bioremediation projects. The new funding will help commercialise its water quality technologies, and develop new diagnostic tools for the oil and gas industries.

AIM-listed Ludgate Environmental Fund has led a Euro10m round in German biogas plant operator Ludgate invested Euro3m, alongside London-based pensions hedge fund Valiance. uses manure and crop waste to produce methane-rich gas, which can be either burnt on site to generate elecricity or cleaned and fed into the national gas network. The leftovers, which the firm delicately calls 'fermentation residue', is used as a high-grade fertiliser.

Belgian renewables group Electrawinds has secured an extra Euro30m capital from existing investors. Dutch VC group GIMV put in Euro25m, with the remainder from DG Infra+, and infrastructure joint venture between GIMV and Belgian investment group Dexia.
Electrawinds aims to increase its generating capacity from 80MW to 200MW by the end of 2010.
GIMV also announced the close of its new XL tech VC fund at Euro500m.

Norwegian start-up Solar Cell Repower has raised a NKr20m (cEuro2m) first round in two tranches from Nordic tech investor Northzone Ventures. State-based Innovation Norway also contributed a NKr8m grant and NKr4m loan. The firm specialises in recycling and upgrading "non prime" solar cells to meet current performance standards, and aims to build partnerships with cell and module manufacturers.
Also in Norwegian solar recycling, silicon specialists Metallkraft raised NKr33m (Euro3.5m) from Belgium's Capricorn Venture Partners. Metallkraft is developing a patented process for recycling the silicon carbine slurry used in the wafer cutting stage of standard PV cell manufacturing.

Two much-favoured US firms have raised new rounds. Thin-film solar manufacturer Konarka has raised $45m and announced 'bilateral R&D and cooperation agreements' with oil major Total. The French energy group becomes the Massachusetts-based company's largest shareholder, with just under 20%, via its Total Gas & Power USA subsidiary. Konarka last announced a $45m round in October last year.
Cellulosic ethanol group Coskata meanwhile raised a $40m third round led by private equity giant Blackstone. Money goes towards completing Coskata's pilot plant in Pittsburgh and beginning work on its first commercial plant. The Illinois firm announced a partnership with General Motors back in January. The deal is the first publicised investment from Blackstone's new Cleantech Venture Partners fund.

In other follow-on news, vertical-axis 'Windspire' turbine manufacturer Mariah Power announced it had closed its second round, led by Noventi Ventures, at an undisclosed total. Last we heard in April, it had just raised some post-seed and was working on its first round - it's easy to lose count...
Canadian ethanol tech firm Vaperma announced a C$6.9m follow-on investment, after its C$21.5m second round last November. Investors again included London-based Low Carbon Accelerator and Volvo Technology Transfer.
(Meanwhile, LCA announced the insolvency of one of its portfolio companies, Austrian solar/biomass generator group EnergyCabin, blaming the recession for lack of consumer demand. Not the last time we'll be hearing that, I suspect).

Solar start-up Lightwave Power closed a $13m first round from Quercus Trust and 21 Ventures. The firm is an offshoot from roll-ro-roll electronics manufacturing group MicroContinuum, whose printing technology Lightwave is using to produce solar nanoarrays.

Energy management group PhoenixESG announced an undisclosed 'anchor investment' from Momentum Venture Management. The New Jersey firm provides a range of data-based services for reducing energy costs and meeting environmental targets.

Israeli green chemicals developer Botanocap secured an extra $2.3m from Swiss investor BHCO Group. The firm is developing less harmful pesticides and disinfectants based on microcapsules of essential oils.

Further reading
Predictions for 2009 from the US National Venture Capital Association - it'll be a difficult year, with 92% of responding VCs predicting a slowdown of new investment. But for cleantech, 48% expect increased investment, and another 20% reckon on no change, the most optimistic results for any sector. More details (160KB PDF).
Greentech Media meanwhile crunches the latest VC totals from Ernst & Young - a record $4.6bn throughout North America, Europe, China and Israel in the first three quarters, comfortably topping 2007's end-of-year total. That equates to 13% of all VC activity. E&Y's cleantech team is still predicting a slowdown, though.

A possible driver of new cleantech investment for the UK - the Lords EU Committee is calling for the money raised from the sale of carbon permits to be invested in green technology. No definite plans, but the committee reckons that ringfencing the permit revenues is essential to maintaining the credibility of the scheme. More from the Guardian or, for the very conscientious, the full 250-page report (1.8MB PDF).

Top cleantech blog post of the season is the slideshow analysis by Rob Day and colleagues at @Ventures of what's wrong with cleantech VC. In brief: not enough exits, so that valuations and ideas of what actually works are pretty much untested; too many big rounds in too few sectors; and not enough true early-stage investors.

Finally, a Christmas message to you all. I'll be back soon with a round-up of the year, but in the meantime, I'll wish everyone a very merry holiday and a clean and prosperous 2009.

Friday, 5 December 2008

Clean Sweep 51

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

UK fuel cell developer Acal Energy has raised a £3.3m round from state-backed Carbon Trust Investments, Belgian chemicals group Solvay and another un-named investor.
Cheshire-based Acal is developing small (<1kW) PEM fuel cells for domestic and transport applications, based on a proprietary 'liquid cathode' technology which replaces the standard platinum cathode. Founded in 2004, the company previously received incubator support from the Carbon Trust.
The Carbon Trust this week also announced a partnership with the CBI 'to maximise the opportunities that the move to a low carbon economy will create [for UK companies]'.

London-based Environmental Technologies Fund has led a $20m third round in Swedish biorefinery business Chemrec. Existing investors Vantage Point Venture Partners and Volvo Technology Transfer also joined in the round.
Chemrec claims to be the world leader in black liquor gasification. Rather than something you might experience after too much porter, that's a way of converting liquid biomass from pulp and paper mills into synthesis gas for biofuel production. The tech can potentially replace around two per cent of global fuel demand, according to Chemrec. The firm currently operates two plants, and is working with pulp and paper firms in Sweden and the US to develop second-gen plants on an industrial scale.

French recycling group Recupyl has raised a Euro14.5m development round from a syndicate including original investor Aloe Private Equity and new investor AGF Private Equity.
The firm provides a range of patent-protected waste treatment technologies based on hydrometallurgy, and specialises in recovering materials from electric batteries. Recupyl is also working with industrial partners on recycling fuel cells, electric and hybrid vehicle batteries, and solar panels.

US rechargeable battery developer Infinite Power Solutions closed a $13m second round led by existing investors DE Shaw Ventures and Polaris Venture Partners. A new, unnamed 'strategic investor' also joined the round.
The funding helps the Colorado company move its thin-film 'Thinergy' batteries into mass production. IPS says the cells are particularly suitable for storing energy harvested from ambient environments such as radio frequency, magnetic, solar, heat, and vibration.

A bunch of interesting US deals from November which I missed in the last round-up -
Energy tech group Danotek Motion Technologies raised $14.5mm from CMEA Ventures, StatoilHydro Ventures, and GE Energy Financial Services.
The Michigan company produces advanced permanent magnet generators and converters for applications including wind turbines and electric and hybrid vehicles.
Cellulosic ethanol group Qteros (formerly known as SunEthanol) raised a $25m second round led by Venrock and Battery Ventures. New investors include BP and Soros Fund. The firm's tech depends on what it calls the 'Q microbe', aka Clostridium phytofermentans, which eliminates the need for a separate enzymatic breakdown stage when converting biomass into fuel. The new funding helps Qteros scale up and move towards commercial production.
Sterling engine developer ReGen Power Systems has secured a $5m round from 21Ventures and the prolific Quercus Trust. The Stamford firm is working on low-temperature Stirling engines to produce up to 2MW of electricity from waste heat and steam at industrial plants. The new money will fund the production of two prototype engines, of 10KW and 500KW.

Singapore-based renewables project developer Orient Green Power has raised $55m from Olympus Capital Holdings Asia, Bessemer Venture Partners, and Indian renewables project management group Shriram EPC. Orient is developing a string of biomass, biogas and wind installations in India, with a target of 500MW capacity within five years. The company is also looking to make money by selling credits under the UN’s Clean Development Mechanism.
Indian solar project developer Azure Power recently raised an undisclosed first round from Helion Venture Partners and Foundation Capital.

Fund news
Hertfordshire-based TTP Ventures has secured £20m government funding for its new £30m Enterprise Capital Fund (ECF). The fund will target cleantech SMEs, as well as early-stage IT opportunities.

An ambitious new entrant in the environmentally-focused investment market - Earth Capital Partners (no web presence yet, as far as I can find). The firm is headed by former Man Group CEO Stanley Fink (who takes the non-exec chair), and is aiming to raise $5bn from institutions and individuals within five years. Rufus Warner, formerly with Close Investments, is chief exec.
ECP is planning on launching at least six targeted funds: Environmental Opportunities Fund; Environmental Infrastructure Fund; Sector Funds; Environmental Markets Fund; Agriculture Fund; and Cleantech VC Fund. More as we hear it.

Further reading
Npower Renewables has secured government approval for its Gwynt y Môr offshore wind farm, set to be the world's second largest.
The 250-turbine installation, eight miles off Conwy, Wales, will add 750MW capacity to the UK's renewables armoury. Some 4.5GW of offshore projects currently have planning approval.

Todd Woody of Green Wombat has an interesting article on the effects of the credit crunch on the US solar industry.

Cleantech Group's traditional predictions for the coming year, including a shake-out of thin-film solar, and a doubling of the failure rate for cleantech start-ups.

Tuesday, 2 December 2008

CCC sets out carbon budgets

Yesterday saw the release of the first full report from the UK government's Committee on Climate Change, Building a low-carbon economy - the UK's contribution to tackling climate change.

The top line is that the CCC is urging the government to commit to unilaterally reducing national greenhouse gas emissions by at least 21% (relative to 2005 levels) by 2020 (or, if you prefer the classic Kyoto measure, by 34% relative to 1990 levels). That target should increase to 31% (42% from 1990) when (or if) a global emissions-cutting agreement is reached. In the longer-term, we're looking at a 77% reduction (80% from 1990) by 2050.

That's the simple bit. The rest of the 500+ page report is taken up by detailing a series of five-year 'carbon budgets' and considering how those budgets can be met with existing technology and policy changes.

From a cleantech point of view, the key is renewable energy generation. The CCC's findings won't present many surprises. Wind is likely to be the main contributor for the UK, with the inherent irregularity smoothed by new forms of energy storage and load balancing techniques. Solar power will be less important thanks to the UK's high latitude and low yields. The potential for tidal range generation, such as the proposed Severn barrage, depends crucially on economic assumptions and wider environmental impacts - other forms of tidal and wave power are as yet unproven. Biomass also remains questionable. Nuclear has a strong case but considerable concerns, while carbon capture and storage is essential but in need of urgent development.

The report also posits new transport technologies and energy efficiency improvements as vital in achieving the targets - as well, inevitably, as behavioural change.

The overall economic cost of all this is in line with the findings of the earlier Stern report - less than 1% of GDP by 2020 and 1-2% by 2050, a fraction of the potential costs of doing nothing. And for the companies with the right technologies, there's obviously huge opportunities.

The terms of the Committee's appointment means there's no actual proposals or predictions with regards to technology or policies, and certainly no hint of extra support or finance for the domestic cleantech industry. But while there's not much new apart from the proposed carbon budgets, there's plenty of chewy detail if you like that sort of thing.

For more detail, see the executive summary (370KB pdf) or the full report (5.5MB pdf).