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The Morning Feedstock

Daniel Englander: May 15, 2008, 12:25 AM
CSP company BrightSource has pulled in a $115 million C round led by Google, VantagePoint, BP Alt Energy, and Statoil Hydro. The company recently signed a $2-$3 billion, 900 MW project deal with PG&E, though from the statements and investor list, it's possible BrightSource may be looking to expand abroad. BrightSource CEO John Woolard said, regarding his investor list, "they have a global presence and the ability to work to develop markets internationally." Originally based in Israel, BrightSource may be looking to deploy their towers of power in other glaringly sunny climes - though few come to mind, except perhaps the Germans' plan to cover North Africa with mirrors. This is the second major solar thermal investment for Google, which recently led a $130 million round in eSolar, further solidifying the company's commitment to its RE<C project. If only they could site a solar plant near one of their data centers. Other investors in the BrightSource round included Morgan Stanley, DFJ, and Chevron Technology Ventures. Fluor, an oil and gas construction company, has won a $1.8 billion contract from Scottish & Southern Energy to build a 500 MW wind farm off the English Coast. The wind park, which SSE is calling the world's largest, will use 140 Siemens turbines and will begin construction in 2009. Whether SSE is counting out the London Array, or if they know something we don't about the Shell departure causing the project to collapse, remains to be seen. As part of the deal Fluor has sold its 50 percent stake in the project to Airtricity, an SSE subsidiary, for $80 million. SSE, in turn, plans to sell this 50 percent stake to continue financing the project. The move by Fluor to sell its stake signals the company's desire to focus more on the project development and construction sector, and not move into the power production and resale business. A few weeks ago I wrote about a ruling by a federal judge in California compelling the Bush administration to decide whether the polar bear was an endangered species. Well, Dirk Kempthorne, our adultering, gun-toting, Secretary of the Interior has decided the screw the bears with their pants on, so to speak. Interior has listed the polar bear as a "threatened" species, meaning "listing the polar bear as threatened... should not open the door to use [endangered species laws] to regulate greenhouse gas emissions from automobiles, power plants, and other sources," says Kempthorne. The government's decision would allow oil & gas developers working in the arctic to sidestep endangered species laws, since Kempthorne has decided he will apply separate rules for marine mammal protection, and continue exploring and drilling in sensitive arctic areas.

The coming trend in biofuels: burgers

Michael Kanellos: May 14, 2008, 10:29 AM

Flippin\' good

This past weekend, I was talking about a tech company with a friend of mine. The company in question looked promising, but the exit strategy patently seemed geared toward a quick sale.

“It’s a burger,"? he said. “Born to flip."?

That description will become more common in the world of biofuels. A whole raft of cellulosic ethanol, biodiesel and butanol companies have launched in recent years and gathered hundreds of millions in venture capital. Their processing techniques range from futuristic (getting microbes to convert plant matter into alcohol) to slightly retro (employing the Fischer-Tropsch method once used by the Third Reich to turn coal into tank fuel to convert leaves into liquids).

Established conglomerates, however, are coming to town. Today, DuPont and food/agricultural giant Danisco from Denmark said they will plunk $140 million into a biofuel joint venture. Earlier this year, Chevron and Weyerhauser, the lumber company, formed Catchlight Energy to produce cellulosic ethanol. Daimler, the car maker, and Archer Daniels Midland have also become allies. Oh yes, and Tyson Foods and ConocoPhilips want to turn scraps from the slaughterhouse into biodiesel.

When conglomerates gather, it’s tough for start-ups to survive, particularly in manufacturing. In software, it’s a lot easier. Two or three people can coin a novel application and become a global success through word-of-mouth marketing. Not so in fuel. You need long-term R&D funding, prototyping plants, large refineries, and miles and miles of pipeline connections. The land use planning meetings alone can turn a young college graduate into a bitter, middle-aged man.

Last year, Don Paul, the recently retired CTO of Chevron, estimated that it takes 15 years and $3 billion to get a fuel from the lab to market.

That really narrows down the likelihood of a Facebook of ethanol. Think of it. A prototype plant that produces 500,000 gallons a year can cost nearly $15 million. (the budget for a plant by Mascoma in New York.). A 100-million gallon a year plant can run over $75 million. (Range Fuels.) and 100 million gallons is a drop in the sea. The U.S. consumes over 140 billion gallons of liquid fuel a year.

Fortunate start-ups have already landed alliances or received investments from conglomerates. Coskata, which will make ethanol and other fuel from plant waste and garbage, has linked up with General Motors and Marathon Oil. Solazyme, which cooks algae into a fuel precursor in brewing kettles, has a research agreement with Chevron. Acquisitions in this area will likely become more common in recent years.

So in the future, we will probably see fewer deals where venture capitalists pour tens of millions into a cellulosic ethanol company. Instead, you will see a few million going into companies on the fringes of scientific knowledge that will be flipped while they are still in the lab.

Luxim unveils the svelte streetlight

Michael Kanellos: May 14, 2008, 7:00 AM
That\'s a real quarter Someday, downtown streets may be lit with bulbs the size of a Tic Tac. Luxim, a lighting start-up in Silicon Valley, has released a lamp--the elegantly named LIFI STA-40-01—that delivers as much or more light than a standard street light. The trick is that it consumes less power. The new lamp cranks out 120 lumens per watt. Top-end LEDs provide around 70 lumens per watt. High-intensity discharge (HID) lamps, which you see on light poles today, get about 90 lumens per watt. HIDs are also quite large, which means a heavier street light or spotlight. The bulb at the center of Luxim's lamps is only a centimeter or so long. It looks like a Christmas tree light. You can pick up the whole lamp with your hand. The company has talked about putting its LiFi lamps inside cathedrals and other public spaces to replace architectural lights. The lamp also lasts 30,000 hours, longer than HIDs, so the repairmen don't have to replace them as often. The company, which has received over $60 million in venture capital from Crosslink Capital and Sequoia Capital among others, initially concentrated on providing lamps for rear-projection TVs. With projection TVs fading away, the company shifted to tackle the larger, and potentially more lucrative, market for commercial lighting. Although it doesn’t get as much attention as solar or biofuels, lighting is expected to be one of the growth markets for green tech. Approximately 22 percent of the electricity used in the U.S. goes to lighting, according to an oft-quoted statistic from the Department of Energy, and light sources weren’t designed for efficiency. Incandescent bulbs only use around 5 percent of the energy fed into them for light: the rest gets converted into heat. (That’s why Easy Bake ovens work.) Light-emitting diodes are already replacing neon signs and some public light fixtures. LED maker Cree, for instance, is currently working with several cities to convert garages and municipal buildings to LEDs. Other LED companies to watch include Luminus Devices, a Boston-area company that landed $72 million recently, and the stealthy Kaai. Like LEDs, Luxim’s lights cost more than incumbent solutions, but the company (like LED makers) says the difference can be made up in lower replacement rates, lower maintenance costs, and lower power bills. Both LEDs and Luxim’s bulbs can also be remotely controlled by sensors to crank the amount of light coming out of them up or down, depending on foot traffic and other factors. How does Luxim’s bulb work? Energy is pumped from a puck into a small gas-filled chamber. The gas gets heated up, turns into a plasma and emits light. Crazy, eh? Check out this cinematic masterpiece for more.

Dell to cut PC power consumption by 25 percent by 2010

Michael Kanellos: May 14, 2008, 5:39 AM
There will be less heat coming out of your Dell PC in the future. The Round Rock, Texas-based PC giant has set a target of cutting the power consumption on its laptops and desktops by 25 percent in 2010, according to a report from Martin LaMonica at That will mean lower power bills for large companies—close to two-thirds of the power in PCs never gets used for a productive use, according to some estimates. A lot of that power gets converted to heat (reach around and touch the back of your computer). Idle time also consumes a lot of power. The company will also do the same for its servers. Last month, Michael Dell showed off a compact desktop that uses 70 percent less power than a regular minitower desktop and takes up 80 percent less space. Smaller computers, of course, also mean less plastic, which means less petroleum products consumed in production. So how will they reach this goal? PC makers didn’t really start concentrating on power consumption in earnest until a few years ago. Back in 2001, Intel and a bunch of other companies began to crank down power consumption in their chips, but mostly to curb heat. There was a fear that hot chips could cause servers to melt or malfunction. Since then, of course, electricity rates have climbed. While Intel and AMD have largely curbed processor power consumption, a lot of other components haven’t been retrofitted for lower power. Power supplies, that brick you plug into the wall to run a notebook, are historically somewhat inefficient. Several companies are trying to bring down the price on power supplies that can convert 75 percent or more of the power coming in from the wall into something that your PC uses. Microsoft and Verdiem, meanwhile, are working on software that lets IT managers optimally adjust power consumption remotely. Swapping out traditional hard drives, which have whirring motors, for flash memory will also help. Screens are notorious power suckers. Some companies are working on screens made from organic light emitting diodes, or OLEDs. Right now, though, OLEDs are somewhat expensive. A few companies such as 3M are also looking at films that will let more of the light from LCDs through the screen, which in turn will improve brightness while curbing power consumption. And watch out for novel ideas from companies like Liquavista, one of the great company names in high tech. The Philips spin-out uses a technology called electrowetting. And for servers? Tubes filled with chilled water will start to become fixtures in server rooms. Some are also trying to harness the waste heat in server rooms for productive uses.

Strange Bedfellows: Jim Rogers Joins Applied Materials’s Board

Daniel Englander: May 14, 2008, 4:35 AM
Applied Materials has appointed Duke Energy CEO Jim Rogers to its board of directors. Applied is one of a handful of dominant PV production equipment manufacturers, though it only entered that market about two years ago. It's devoted a ton of resources recently with the aim of beating out Oerlikon for market share in the thin film production equipment industry. So, what's the dealio, yo? One clue is Duke's recent plan to invest $100 million in solar power. North Carolina's RPS requires utilities to hit a 12.5 percent target by 2012. Duke, which is one of the largest utilities in North Carolina (and the U.S. - 4 million customers with 36,000 MW of good ole' American coal power), has got a pretty large portfolio to fill. Rogers's plan involves acting like a PPA provider, building and operating solar capacity on commercial and residential rooftops, selling it to consumers and buying back the excess. But thin film is an interesting choice. By way of comparison, the 40 MW plant going up in Germany right now will cost $170 million and use about 550,000 panels from First Solar. The project's size is in excess of one million square meters. Big though it may be, 40 MW doesn't really knock it out of the park. Could Rogers's appointment be based only on his love/hate relationship with renewables, or maybe something a little more mutually beneficial. Applied could be using Rogers to build up their connections in the utility world - a place Rogers knows like the back of his (it is, actually, the back of his hand) - as a way of gaining customers building utility-scale projects. Contracts on the big projects would certainly put a dent in Oerlikon's plan for world domination. Rogers, in turn, could use the board seat to clean up Duke's image and grease a few thin film palms looking for good deals on fab equipment.