Did UK Prime Minister Gordon Brown's refusal to back a feed-in tariff bill cost him the worst loss for his party in 40 years? The Labour government won only 24 percent of the votes cast yesterday in UK council elections, while it looks like London Mayor Ken Livingstone - a Labour stalwart and environmental advocate - has lost the City election to the Conservative party's Boris Johnson. On Wednesday night - the same night Shell pulled out of the London Array project - Brown called his MPs back to London to vote against Clause 4 of the Energy Bill, which would have implemented a small-scale renewables feed-in tariff in the UK. While Clause 4 was dropped from the bill, 33 Labour MPs voted for it - and against the Prime Minister. That's half of Brown's majority in the Commons. Alan Simpson, the MP who introduced Clause 4 commented, "this is an important message for Gordon Brown. On the eve of the local government elections he had the biggest Labour rebellion of his premiership. What drove the Labour MPs to vote against the government was the certainty that we have very little time to get serious about climate change." The current Energy Bill moving through Parliament has outlined incentives that would increase Britain's renewables capacity to five percent by 2020, far short of its 15 percent target. Many in Britain are unsatisfied with Labour's commitment to expanding renewables capacity, with some faulting the government for pushing ahead with non-CCS coal plants while its renewables plans collapse. In a fun twist of irony, the House of Lords, that august body of fox-hunters, may reinstate Clause 4. Lord Redesdale called the Clause's failure "a massive missed opportunity [that] shows a complete lack of commitment to reducing green house gases." Tut tut! What ho!

Shell's decision Wednesday night to drop out of the proposed London Array has created a lot of finger-pointing and a lot of unanswered questions. The oil giant pulled its 33 percent stake in what would have been - and may well still be - the world's largest offshore wind project, saying only that the decision was part of an "ongoing review of projects and investment choices." Shell's stake in the $4 billion, 1GW wind project will be diverted into development of the Canadian tar sands, which have become a better looking investment given Shell's recent forecast that "if oil prices remain at $100 per barrel, we expect 2008 reported production to be broadly flat compared with 2007." Tar sands development makes sense if the price of oil remains high, which will likely happen as easily-recoverable reserves dry up and development and delivery of high CAPEX deposits becomes the norm. These high-risk projects have other costs too, however. But who's really at fault for the crash-and-burn at the London Array? The investor group, made up of Shell, E.On, and Dong Energy, recently entered the project tendering phase for assignment of major construction contracts. Shell, who is alone among the group in having a lucrative way out, probably looked at the cost projections from steel and cement suppliers and turbine makers, threw up a little in its mouth, and promptly left the room. But why would a company that made $8 billion in profits during the first quarter (thats about $4 million an hour) balk at these kind of expenses

Spanish power giant Iberdrola has filed an antitrust complaint with the European Commission against EdF and France. Iberdrola has accused the French government of giving EdF "substantial competitive advantage" through efforts designed to strengthen and maintain EdF's monopoly status in the French power market, while EdF was accused of engaging in monopoly practices. EdF provides nearly 95 percent of the electricity in France, and more than 20 percent of that for the entire European Union. This is the fifth antitrust complaint Iberdrola has filed against EdF, and is likely part of a larger legal strategy designed to stem a possible bid from the state-owned French power company. EdF was recently granted another extension by the commercial court in Bilbão to declare whether it plans to mount a takeover of Iberdrola. There's nothing we like better than a three-way, especially when that mix up involves three of the leading cellulosic ethanol companies, one double-dipping Detroit monster, and some hot bagass. First up, Range Fuels, which picked up another $50 million on their way to filling up a $166 million venture round. Range will likely need every penny of the oversubscribed Series B to fill out their 100 million gallon cellulosic refinery, which broke ground in Georgia in November, 2007. With the question of whether Range's plant will produce cellulosic ethanol at a price competitive with fossil fuels up in the air, it can be certain at least one major auto maker is betting against them. GM, which backed Coskata in January, announced yesterday it has initiated a partnership with rival cellulosic-maker Mascoma. It's possible GM has plans to integrate technologies from the two companies into a single biorefinery, though that will probably take a lot of arm- and teeth-pulling. The big winner in all of this is, of course, neither the consumer nor the biofuel industry. It's Vinod Khosla! Vinod is the founder of Range Fuels, which sprouted spontaneously from his head one fine September day. His Range bio puts us in awe, reminding us that Vinod "is perennially appointed to prestigious lists of entrepreneurs by various business publications, including Forbes, and featured in interviews by major television networks and newspapers." Vinod's also invested a hefty chunk of change in Coskata, and another couple of nickels in Mascoma. Which one do you think Vinod will take to the prom?

A123 Systems will file an IPO by September. Scott Kirsner writes today that, according to "two unnamed sources with close ties to A123 Systems" the battery company has nearly completed it's IPO filing and is merely waiting out the arrival of its first quarter numbers before licking the stamp and sending the S-1 off to the SEC sometime in the next month. A123 reportedly has a valuation topping $1 billion. There's a reason these guys are number one. Kleiner Perkins will announce today the formation of the ominously named KPCB XIII, a $700 million early-stage fund with a pie slice reserved for greentech ventures. KPCB XIII is separate from the $500 million "Green Growth" fund Kleiner is also raising. This divergence highlights an increasingly large trend among greentech-oriented VCs - the majors are raising increasingly large funds devoted to late-stage private, public, project finance, and debt investing in companies that already have products and revenue. While Kleiner is, at it's heart, an "early stage" firm, according to partner Brook Byers, the late-stage focus in new greentech investments "will be a different financing path than venture companies have historically been used to taking," says Ben Kortlang, a recent Kleiner pick-up from the energy desk at Goldman Sachs. One of my favorite things about going to greentech- and energy-related invents is the all the free swag oil companies give away. Shell traditionally has some of the best stuff. Which is why it comes as no surprise to learn that Shell is backing out of its 33 percent stake in the world's largest offshore wind farm. The $4 billion London Array, which would have generated more than 1 GW for the British grid is now on the ropes, leaving project partner E.On holding the bag. E.On CEO Paul Golby commented "Shell has introduced a new element of risk into the project which will need to be assessed. The current economics of the project are marginal at best - with rising steel prices, bottlenecks in turbine supply and competition from the rest of the world all moving against us." Shell has joined BP in ditching renewables in favor of developing tar sands, oil shale, and Skittles to take advantage of rising oil prices.