All-Energy - memo from the Highlands

So I'm up in Aberdeen for the All-Energy exhibition and conference - the two-day shindig that claims to be the UK's largest renewables event.

It's certainly big, sprawling across the labyrinthine complex of the AECC - delegates wandering confused in search of the next talk were a regular feature of the day.

It's events like this, with 380-odd exhibitors, that give you a better idea of the size and increasing maturity of the sector. It's not just the guys making and selling the wind turbines, fuel cells, solar panels et al, but a whole ecosystem of supporting industries - from the hard hats who brave the elements to put the turbines up, to the suits who will lobby the regulators on your behalf.

There was little sign of the VC and finance side of things, though. There was one stall from a small but keen investor (hello, Sigma Capital Group) but you wouldn't know that renewable energy and cleantech has become the key investment category that it is. Obviously the VCs themselves don't do their real hunting at events like this, but a some visible presence would have been good - I met a few serious guys who were looking for investment, so there were contacts to be made.

But then there were the talks - as expected, not much was said that was radically new, but a few sessions presented a good opportunity to catch up on some key areas.

I missed the opening plenary session as I was still travelling the last leg of the journey, but reports from those who were there suggested it was all a bit doom and gloom. I did manage to catch the second big panel - 'Policy: countdown to the EU 2020 targets'. Heady stuff.

The 2020 basically aim to make sure that the EU zone derives 20% of its total energy (not just electric generation, but heat, transport, etc) from renewable sources by the year 2020. Exact targets differ between countries, depending on their assessed ability to comply - the UK has a humble 15% target. The targets raise a lot of issues with significant implications for the cleantech industries in each country - perhaps particularly for that of the UK.

As the moderator, Tom Hodkinson, managing director of AMEC Wind Energy, emphasised - the UK's position is not good. There's very little manufacturing industry in the UK of the kind that can provide the necessary product - primarily wind turbines, which are suffering severe supply chain problems as global demand soars.

EU representative Reijo Kempinnen was a bit more optimistic - all EU member states are agreement on the principle of cutting emissions, but the devil as ever in the detail. If we are to reach the 2020 goals, we have to secure a European agreement by the end of this year, he reckoned.

Kempinnen also highlighted some issues with the incoming third phase of the European emissions trading scheme (ETS). This will produce revenue of some Euro50bn a year, and the EC wants 20% of that earmarked for actions to fight climate change, including R&D funding and support for tech commercialisations. The treasuries of member states have other plans, however. He urged interested parties such as industries (and, presumably, investors) who genuinely believe in the rightness of the cause to apply what pressure they can in their own territories.

The other speakers focused on off-shore wind, the key tech for the UK in the medium term at least. In a popular show for the economists in the audience, Richard Slark of Poyry Energy Consulting presented a cross-European supply curve of renewable energy sources, showing what technologies can achieve what reductions for what price. At the renewables production target of around 1100TWh (with an associated cost of cEuro110/MWh), off-shore is still marginally too expensive - but with the international give-and-take trading of 'Guarantees of Origin' (which may or may not be allowed by the current regulatory plans), off-shore should still play a large part in the UK's options. In fact, Slark said, it's absolutely critical for the UK to meet its obligations.

Alan Bruce of Scottish and Southern Energy and the British Wind Energy Association also (as you might expect) flew the flag for off-shore wind, and called for more UK businesses to enter the sector, particularly in component manufacture. We've got no problem raising capital for renewables in the UK, he noted - the problem is in deploying it here.

After an interesting research-based talk from Amec's Elaine Greig on the grievous constraints imposed by lack of grid resources, energy minister Malcolm Wicks took the podium. His talk had been postponed from the plenary session thanks to the previous night's abortion and embryo research votes, but it wasn't particularly worth the wait - a familiar trot round the overlapping climate change and energy security agendas, with an emphasis (disquieting for many) on tapping the more inaccessible fossil fuel resources, taking the Alberta oil sands as an example. With regards to the previous points, he noted that the government is currently consulting with Ofgem on the grid issue, and looking to streamline planning process for nationally important infrastructure.

After lunch, I caught a short presentation by Dane Wilkins of Ernst & Young's renewable energy group. He repeated some of the observations of the policy session with regards to the challenges facing the key technologies - planning, grid and supply constraints for on-shore wind, and the marginal economics of off-shore. The E&Y team are seeing investor interest in off-shore, however.

Despite the credit crunch knocking off a good portion of margins for large installations, utilities remain a dominant source of funding for renewable assets, Wilkins noted. There's also still strong appetite from private equity for developed assets and buy-and-build deals, he noted, as well as appetite for emerging technologies - though, he reckoned, we're not seeing much emerging tech being presented in a way that would appeal to later-stage private equity.

I also caught a session on the UK's renewables solutions and market prospects, hosted by the good folk at BERR (the former DTI). Basically a pitch for inward investors, presented in a deathly civil service fashion - not the best advertisement in all.

Special mention, on the other hand, must go to the Caithness Energy Alliance for their sterling marketing efforts. Attaching a wee bottle of Old Pulteney to your press pack is an excellent way of making sure the journalists pick them up. Slainte!

Clean Sweep 37

A round-up of recent news in clean technology and cleantech investment. Lots to catch up on again, so let's crack on!

Deals
First up, a couple of smallish deals from UK specialist investors.
Ludgate Environmental Fund has put £4m into Rapid Action Packaging, a manufacturer of 'environmentally responsible packaging', as part of a wider placing. Can throw-away sandwich-wrapping really be considered 'environmentally responsible'? Probably not, but if we've got to have it, best if it is recycled, biodegradeable, etc. Cleaner rather than clean, anyway.
And Low Carbon Accelerator has upped its investment in sewage treatment group Eco-Solids by £750,000. The Hampshire-based firm holds the rights (outside the US) to a range of technologies which can help turn waste into burnable methane or biofuel.

With spring finally here, there's been some big US money moving round the European solar market.
Malta-based SunRay Renewable Energy announced a strategic partnership with US private equity group Denham Capital, primed with an initial $200m equity commitment. The partnership aims to developer over 300MW of solar power around Europe and the Mediterranean over the next four years.
Spanish energy group Gamesa sold its solar wing to energy investor First Reserve for Euro261m. Following First Reserve's acquisition of Italy's Ener3, the deal gives the US group a pipeline of some 400MW capacity over the next four years.
Spain's own Banco Sabadell meanwhile took a 25% stake in wind and hydroelectric player Adelanta Corporación via its Sinia Renovables private equity arm. Forbes has the essesntials if you don't read Spanish.

Also attracting big money - stirling engines! Ohio-based Stirling Energy Systems raised $100m in what was effectively an acquisition by Ireland's NTR. SES is developing two large-scale solar concentrating plants in Southern California, with a total target capacity of 1750MW. The company uses stirling engines, first developed in the early 19th century, to turn the solar heat into electricity.
Washington-based stirling engine developer Infinia meanwhile topped up its previously announced $50m second round with an extra $7m tranche led by Foxconn Technology Group.

Still in solar thermal, Google.org's favourite eSolar raised $130m from Idealab, Oak Investment Partners, and the investment wing of the search engine goliath. The California firm, which is developing what it calls pre-fab solar power plants, was sprung into the limelight in November 2007, when Google named them while launching its Renewable Energy Cheaper Than Coal programme.
And New Mexico's SkyFuel raised a $17m second round led by Leaf Clean Energy. SkyFuel is focused on 'line concentrating' solar installations, including an innovative linear Fresnel system and the parabolic 'SkyTrough'.

In solar PV, Ohio's cutely-named Xunlight secured a $22m second round led by Trident Capital. The funding aims to take Xunlight's thin-film silicon modules into commercial production.
Rival thin-film silicon developer Sencera meanwhile landed $3.6m from Quercus Trust. The North Carolina firm says it is working towards that magic target of solar cells costing less than $1 per watt.

Elsewhere, cellulosic ethanol developer Mascoma announced a $10m investment from Marathon Oil, bringing its second round up to a total $61m. General Motors also upped its investment in the round.
New York's TechnoSpin whipped up a $8m first round led by local VC 21Ventures. The firm is developing small wind turbines for residential and small business customers.
And Texan start-up Hydro Green Energy netted a $2.6m first round led by the Quercus Trust. The firm is developing a series of hydrokinetic power projects in Alaska and Mississippi.


Fund news
Santander Private Equity has announced a dedicated renewable energy fund, Santander Energías Renovables, with a first close of just Euro15m. Not much, chaps.

Italian environmental investor Ambienta has launched its first private equity fund, with a target closing of Euro250m. The Intesa Sanpaolo bank has committed Euro40m to kick things off.

As ever, they do things bigger in the States. Kleiner Perkins Caulfield & Byers announced a new $500m fund. The dedicated cleantech Green Growth Fund will also be supported by the firm's other new fund, the $700m KPCB XIII. Lucky for some.


Further reading
The Times reports on a new green investment push from Britain's armed forces:
Turning all three services “green” was one of a number of new defence targets outlined last week by Paul Stein, the MoD’s science and technology director, to the Royal Aeronautical Society in London[...]
The MoD’s science and technology experts envisage more efficient engines and greater use of solar power, microbe-powered fuel cells and lightweight and remotely operated aircraft and robots.

A useful new site for any business looking to become a little cleaner (especially if they can get hold of some money for doing so) - Green Grants Machine. A new venture by grants information group j4b (who, in the interests of disclosure, I should say I did some work for several years ago) aims to help businesses identify and access the right funding programme from a pool worth over £1.2bn. The site also offers funding and policy news.


Finally, I'll be heading up to Aberdeen in a couple of weeks for the All-Energy conference. If you're also heading up and want to say hello, drop us a line.
Or if you're going to SustainabilityLive in Birmingham the same week, have a good one. You'd think it wouldn't be too hard to make sure the country's two biggest renewable energy tech conferences don't clash, wouldn't you?

Clean Sweep 36

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

Deals
In a corporate deal, Coventry-based Geothermal International has raised up to £15m from utility group Scottish and Southern Energy (SSE).
SSE takes a 20% stake in the company which, as the name might suggest, designs and installs ground-source heating and cooling systems - with over 1300 systems totalling over 90MW capacity installed since 2000, mostly in the commercial building sector.
The deal gives SSE a foothold in the rapidly-growing geothermal sector, complementing its extensive renewables holdings - the utility reckons it has around 1,900MW of renewable generation capacity, bolstered by its acquisition of Anglo-Irish wind developer Airtricity earlier this year. The group's also active in areas such as fuel cell research.

Private equity seems to be looking at the public market for clean investments. One Equity Partners, a fund manager for JP Morgan, is investing $150m in AIM-listed Clipper Windpower. One Equity will pay a price equivalent to lower of 48p, or Clipper's share price average over five days up to 4 May, with the California-based company retaining the option of cancelling the deal if its share price drops dramatically.
The funding will help the turbine manufacturer clear debt and deliver its new 2.5MW Liberty turbine. California-based Clipper also raised $50m from institutional investors last month.
The UK Crown Estate has meanwhile agreed to buy the prototype of Clipper's new offshore turbine, the mammoth 7.5MW 'Britannia'. The Guardian has details.

Elsewhere on AIM, investment big shot Vincent Tchenguiz is reportedly mulling a take-private of renewables generator Econergy International. Econergy's share price, which has fallen by around two-thirds in the past six months, perked up very slightly on the news.

Across the pond, VCs have been a bit more active, with deals in the three big energy arenas.
In solar, thin-film silicon developer Optisolar raised just under $3m from Kensington Capital Partners towards a new Californian manufacturing plans and some 10MW solar farms in sunny Ontario.
In wind, small vertical-axis turbine (or 'Windspire') developer Mariah Power raised a post-seed $500,000 from Greenhouse Capital Partners and Big Sky Partners. The Nevada-based company is targeting a $10m first round.
And in biofuels, Greenline Industries raised $20m from Leaf Clean Energy. The California company is commercialising a water-free production process for biodiesel from seed oils and animal fats (a tougher sell to your traditional green consumer, I'd imagine).


Fund news
UK clean energy quango supreme Carbon Trust has scooped a fairly high profile name for its VC wing - former BVCA chief executive Peter Linthwaite, who joins CT Investment Partners as managing partner. Linthwaite, a veteran of Murray Johnstone and Royal London Private Equity, will 'look to develop further CTIP’s leading market position in the rapidly growing clean energy sector'.
Carbon Trust Investments is one of the most active investors in the UK cleantech - recent investments include power supply unit developer CamSemi and biofuel fermentation group Green Biologics.

Big news for funds across Asia - seen by many as the real big market for cleantech. Asian Development Bank is putting up to $100m into each of five selected clean energy VCs. The lucky five are MAP Clean Energy Fund, China Environment Fund III, GEF South Asia Clean Energy Fund, Asia Clean Energy Fund and China Clean Energy Capital. Environmental Finance has the details.


Further reading
European wind energy is one area that's seen its peak of investment, according to new figures from the Cleantech Group. Along with your bog-standard bio-ethanol, European wind deals peaked in mid-2006, while the sun started to set on thin-film solar in 2007.
First quarter figures for 2008 for investment across all cleantech categories in North America, Europe and Israel still totalled $1.25bn - this was up 40% from Q1 2007, despite a decline on a quarter-by-quarter basis. The analyst's mood is one of "tempered optimism", with next-gen biofuels, wind turbines and new solar technologies still looking good.
Preliminary first-quarter figures from UK research house New Energy Finance (as reported by WSJ online) tell a slightly different story, however. Venture capital and private equity investment totalled $2.4bn, down from $3.7bn in Q1 '07. VC held up better than later-stage private equity, however - largely the result of the credit crunch and general market slowdown. NEF also highlights a shortage of talented management for growing clean energy firms.

In one small step for a much-vaunted new economy, the UK now has its first hydrogen gas fuelling station - in Birmingham.
The pilot station is hosted by the University of Birmingham's department of chemical engineering, which is leading a number of hydrogen-fuel research projects.
The gas is provided by Basingstoke-based Green Gases, which uses all-renewable energy to power its electrolysis process. The university has also bought five hydrogen-powered vehicles from Microcab Industries, based in nearby Coventry.