Chris Morrison
It may not be as much as the colossal $300 million financing that Nanosolar finally disclosed yesterday — the biggest ever for a solar company — but another thin-film manufacturer, AVA Solar, has broken into the nine-figure funding range today, with a challenge to industry giant First Solar’s dominance.
AVA stands out a bit from its peers, for several reasons. For one, it’s based in Fort Collins, Colorado, well away from the sunny or technology-laden areas its competitors operate in. The outfit has thus gotten relatively little attention. The second oddity is the technology that AVA uses, which builds thin-film cells using cadmium telluride (CdTe), a kind of semiconductor.
Most of the biggest bets in thin-film solar, a form of solar panel that is less efficient than traditional silicon-based cells but much cheaper to make, are based on copper-indium-gallium-selenide, or CIGS technology. Ascent Solar, Heliovolt, Miasole, Nanosolar, and a bunch of other companies all use CIGS. There’s an ongoing debate as to whether CIGS, CdTe or a third material, thin-film silicon, is best.
However, CdTe, despite a reputation for being difficult to work with, holds a singular distinction: It’s what First Solar, the industry’s first and only success, First Solar, uses. It has been reported that First Solar has no direct competitors in CdTe technology. AVA obviously proves that theory wrong. A handful of others in working with CdTe include Sunovia (OTCBB: SUNV), Calyxo, which is owned by the German giant Q-Cells, and PrimeStar Solar, which recently sold a majority stake to General Electric Energy. Primestar, like AVA, is based in Colorado, and both have relationships with the National Renewable Energy Laboratory.
AVA is currently building a plant in Fort Collins, CO, where it promises to employ 500 at a production line making 250 megawatts worth of cells a year. The company appears to use a deposition technique on glass to make its cells, which is also what First Solar uses.
A number of well-known venture firms came on for the $104 million funding. DCM led, while new investors Technology Partners, GLG Partners and Bohemian Companies participated, and previous investor Invus came back in. AVA raised its seed less than two years ago and took a second funding in June of 2007, but didn’t disclose amounts for either of those fundings.
Jeremy Jacquot
Taking a page from T. Boone Pickens, who made waves when he announced that he was building the world’s largest wind farm in Texas, Continental Wind Partners and CEZ Group have concluded a deal to create Europe’s largest onshore farm, with a total capacity of 600 megawatts (onshore farms tend to be in hilly areas 3 km or more inland from the shoreline while offshore farms are 10 km or more from land).
As part of the deal, Continental Wind Partners, a Wilmington, Delaware-based wind developer that funds projects in Romania and Poland, will sell two of its Romanian farms to CEZ, a large utility based in the Czech Republic, for €1.1 billion ($1.6 billion). The combined project will be twice as large as the next largest permitted onshore farm in Europe and three times the size of the largest farm that’s already operational — Spain’s Maranchon wind farm, which has a 208 megawatt capacity.
The farm will become operational in stages, with initial construction slated to begin this September and the first 139 turbines expected to be up and running between April 2009 and June 2010. CWP, which will manage the construction, plans on having 347.5 megawatts of total capacity up by the end of 2009, with the remaining 252.5 megawatts operational by the following year.
The turbines for the project will be procured by Good Energies, an investor in renewable energy that helped found CWP in 2007. CWP plans on having 600 megawatts of wind capacity permitted in Romania by the end of the year and 280 megawatts in Poland by 2009. Good Energies’ portfolio companies currently have a pipeline of wind and solar projects that add up to 3,000 megawatts.
While a far cry from Pickens’ ambitious 4,000 megawatts, this deal would supplant Scottish and Southern Energy’s recently unveiled 152-turbine onshore farm as Europe’s largest wind project. SSE’s £600 million ($1.1 billion) project will have a total capacity of 548 megawatts — enough to power up to 320,000 homes — when it is completed in 2011.
Chris Morrison
Thin-film solar company Nanosolar has been sitting on a big secret for much of this year, it turns out: The company took a $300 million financing this March, and has remained mum ever since, only detailing it on the company’s blog this morning after VentureWire reported the funding.
While Nanosolar hasn’t been entirely secretive about its technology, with chief executive Martin Rosencheisen showing off a rapid manufacturing technique early in summer, but apparently it didn’t want details leaking on this giant-sized investment until necessary. Word slipped out in April about $50 million of the total, but at the time, Nanosolar didn’t want to talk — and it’s now clear why.
The race for funds, and ever-larger production targets, is definitely on for thin film. Secretive thin-film silicon company Optisolar has raised over $200 million this year, and Nanosolar’s thin-film CIGS competitor Miasole is trying to close on a similar amount. And while dozens of other startups are also on the hunt, large companies like Oerlikon Solar and Applied Materials are pouring money into ventures of their own.
In many ways, it looks like an overheated sector. But on the other hand, Optisolar’s recent deal with PG&E to provide 550 megawatts of electricity suggests that the potential for thin film panels is larger than previously expected, even when considering one analyst firm’s prediction earlier this year that the sector will grow at 45 percent annually.
That figure could now be much higher, especially for a few big winners — of which Nanosolar will likely be one. The company will be doing some utility-scale projects of its own, Rosencheisen tells us, with experienced partners. It also has a panel built specifically for use by utilities. And one of the backers of this funding, AES Corp., is also one of the world’s biggest power companies.
At the moment, Nanosolar is still working toward a gigawatt of annual manufacturing capacity, but it will grow beyond that after completing its plants in Palo Alto, Calif. and Germany.
The backers in the funding were mainly private equity firms and large companies: EDF Energies Nouvelles, AES Solar, Riverstone Holdings, Energy Capital Partners, the Carlyle Group, Lone Pine Capital, and the Skoll Foundation. Previous backers GLG Partners and Beck Energy also joined in. The company has taken almost half a billion dollars to date, including grants.
Chris Morrison
Chris Morrison
Following a spate of hefty financings this year, culminating last week with Trilliant’s $40 million funding, it looks a bit like smart grid startups — companies that give the meters on homes and businesses the ability to communicate with utilities and other devices — are poised to take off. But for many of these firms, growth may be less of a rocket ride than a long, slow trudge uphill.
The smart grid, also called advanced metering infrastructure (AMI), is usually seen favorably by the utilities that do the actual work of installing new meters. But AMI startups, which sell to the utilities, might be better off marketing their ideas to the people who actually buy the electricity, as evidenced by a new recommendation from San Francisco’s Department of the Environment that the California Public Utilities Commission deny Pacific Gas & Electric’s request for $572 million to install advanced meters.
PG&E was already approved for $1.7 billion in funds, so the recommendation doesn’t exactly spell doom. But where PG&E wants to rush ahead and expand a program that it has been planning for several years, adding in the most current technology, San Francisco — arguably the most aggressive city in the nation, in terms of rebuilding the energy infrastructure — is pulling back on the reins.
The reason for the hesitation is that there is no proof yet that PG&E’s planned network will function as planned. The utility clearly stands to benefit, because any unexpected costs will be passed on to its customers. That state of affairs is true across the whole industry, says Henry Jones, CTO of the AMI startup SmartSynch. According to Jones, until large AMI networks are deployed, a risk of disappointment with their performance will remain.
If PG&E does get to build its network (a final decision on the funding comes in December), any failures in the technology, which is made by Silver Spring Networks, will impact the whole industry, says Jones. “With any new technology, there’s a hype cycle. It’s not clear that AMI has been through the part of the cycle where expectations are not met,” he told me.
It’s worth pointing out that SmartSynch has an interest in casting doubt on whether the sprawling mesh networks made by companies like Silver Spring will turn out to be a good investment; SmartSynch’s own technology instead beams information directly to the same carriers that power your cell phone, which cuts out the step for utilities of maintaining their own networks. And Jones also noted that his worst-case expectation of the AMI industry’s growth is still a fairly healthy 10 percent a year, plenty to keep SmartSynch humming along.
A PG&E spokesman, Paul Moreno, told me that any worries about either the performance of the network or getting funding are unfounded. “All [of the department's] concerns have already been vetted and expressed,” he told me.
According to Moreno, the program stands on its own merits: Of PG&E’s total 22,000 megawatts of capacity, the original version of the metering program was expected to help reduce demand by 400MW, about half a coal plant. The new version might reduce demand even more. And he dismissed concerns that the network wouldn’t work well, noting that test units of Silver Spring’s technology functioned well even in the rugged terrain around SF’s Mt. Davidson.
However, the possibility remains that part of the program will be nixed. That could be bad news for AMI startups, because utilities that are smaller or more conservative than PG&E are watching it and other proressive utilities, like Ontario’s Hydro One, to see what happens. “They’re having trouble making a clear case for the investment,” says SmartSynch’s Jones. Other municipalities, also, may follow SF’s lead in recommending against AMI deployments, at least until there’s hard data on how well they work.
Chris Morrison
An idea that has long been batted around by entrepreneurs and venture capitalists is finally getting its day in (or, more accurately, out of) the sun: Pumping air into pressurized air cave systems using electricity from wind turbines, to blow out and provide spin turbines when it’s not quite so gusty topside.
PSEG Energy Holdings will provide around $20 million to Energy Storage and Power, a joint venture between itself and energy storage expert Michael Nakhamkin, according to the AP. The company will work on marketing the technology to wind generators, primarily using natural caves once occupied by gas or oil.
Cave storage should prove useful in many of the same areas that wind turbines will be going up. In Texas, for example, where oil tycoon T. Boone Pickens is investing billions in wind, many of the same oil reservoirs he helped to empty will be available.
However, it should also be pointed out that this is one idea that has been floating about for several years — and never got a venture investment, as far as I’m aware (PSEG is a large holding company). There are likely numerous reasons for that. Caves that stored fossil fuels for millions of years can still spring leaks, for one, and they may or may not be of a useful size. Also, the air in the caves can’t provide an immediate substitute source of power if the wind dies down, mainly being used during longer windless periods.
And it’s not a totally clean solution; a natural gas turbine needs to be paired with the storage method, to heat the air (thus making it expand). Finally, energy is lost in all stages of the process, which translates into making the wind turbines working to store air less efficient.
Still, the prospects for any storage technology look pretty good right now. And that has everything to do with the scale of new demand for it: According to a new study released this morning by BCC Research, the US market for wind systems will be worth $60.9 billion in 2013, up from $11.2 billion this year.
Anthony Ha
European venture investments continued their decline in the second quarter of 2008 — there were only 167 deals completed, the fewest in at least nine years. A total of EUR 858 million was invested in Q2, marking a 35 percent drop from the same period last year, according to Dow Jones VentureSource.
That drop is particularly dismal when you realize that 2007 wasn’t exactly a banner year for venture investment either; in fact, it also represented a record low. As in the United States, where VentureSource’s numbers show VC investment falling by 31 percent during the first six months of 2008, analysts blame the dearth of venture dollars on the weak market for IPOs and mergers/acquisitions. At least Europe appears to have one advantage — unlike the U.S., where most of the money goes to sustain older companies as they wait for the public markets to improve, 44 percent of European investment went to early-stage deals, the highest since 2001. So at least a healthy amount of money is supporting the development of new companies, rather than just sustaining the existing ones.
As you might expect given the overall declline, investment in most industries fell too. Health care, for example, shrank to EUR 164 million, a 55 percent drop from the same period last year. The energy sector seems to be doing well, however, with a record high of EUR 147 million invested in 10 deals, including an EUR 85 million investment in German photovoltaic company Sulfurcell Solartechnik.
German investments in general appear to be heating up, with a 29 percent increase since Q2 2007, making Germany the venture leader for the first time since 2001. Here’s a list of investments, by country, in millions of Euros.
[Art from Calvin and Hobbes by Bill Watterson]
Chris Morrison
Despite heavy opposition from environmentalists, economists and renewable energy supporters, it’s looking increasingly like carbon capture and sequestration (CCS) will play a large part in various government plans for reducing greenhouse gas emissions. The latest project to be announced — a full coal burning plant using CCS technology in Canada.
Most CCS technology aims to reduce the carbon footprint of coal, which represents much of the CO2 emitted around the world. However, projects have had trouble getting off the ground. Groundwork for one of the biggest projects ever planned, the United States’ Futuregen coal plant, was scrapped in favor of a less ambitious approach early this year. Independent utilities balk at the price, which can run into the billions of dollars.
The Canadian project will be run by Saskatchewan Power, which will spend CAD $1.4 billion (about $1.33B in US dollars) on a small 100 megawatt coal plant. The utility will use two technologies and contract out to three companies to help with construction, according to Bloomberg. FutureGen, for comparison, was set to receive a similar amount for a 275MW plant, but faced rapidly climbing costs.
The CO2 will be pumped into a nearby oil field to enhance recovery. Notably, that means that the project offers nothing to the significant portion of CCS startups who plan to use CO2 for various industrial processes. These include algal biofuel firms like Greenfuel, which feeds its critters with the gas, as well as companies like Calera, which wants to make cement using CO2.
Like most clean coal projects, this one is slated for completion years out, in 2013 — if it manages to avoid cancellation. However, since it will be the first complete CCS power plant project in North America, it should help start the process of proving whether clean coal and the CCS technologies needed to make it happen are real, or just a stalking horse.
Chris Morrison
Jeremy Jacquot
