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Two Big Deals for Hot Desalination Company

Michael Kanellos: July 31, 2008, 5:26 AM
It's been a good month for Energy Recovery. The company, which makes energy efficient systems for desalinating seawater, pulled off an IPO in the beginning of July in the middle of a swoon on the stock market. The stock is trading in the $11 range, or 40 percent plus the initial price. Ironically, the IPO took place a day after there was much hand-wringing about the lack of IPOs. And since then, it's announced two big deals. The company will supply equipment to the Hadera Sea Water Reverse Osmosis Desalination Plant going up near Haifa, Israel. The plant, being built by IDE Technologies, will open in 2009. Initially it will be capable of converting 100 million cubic meters of sea water into drinking water a year. Eventually, it could be expanded to 130 million cubic meter. ERI will also participate with IDE on the expansion of a desalination plant on Cyprus. Today, meanwhille, Singapore's Hyflux said it will adopt the company's PX Pressure Exchanger for a desalination plant in China. Desalination is a great idea, but it remains an expensive way to produce water. It takes quite a bit of pressure to get the water through the membrane, and over time the membrane can foul up and clog. ERI helps lower the energy costs by converting the pressure in the wastewater into electricity. Other companies like NanH2O are working with better membranes. Todd Kimmel, of Advanced Technology Ventures, is among the many in Silicon Valley scouting for water deals. He's particularly hot on desalination, he told me in a meeting yesterday. 98 desalination projects have been launched in the last three years. The tough part of the market, however, is that utilities are some of the main buyers. They aren't known for being speedy. "The value of water goes up when you don't have it," he said.

A Killing (and Feeding) Machine for Algae

Michael Kanellos: July 31, 2008, 4:34 AM
OriginOil should have called itself Shake and Bake. The Los Angeles-based company--one of the several start-ups trying to produce oil from algae--is seeking a patent on its process for growing and subsequently harvesting oil from the single-celled buggers with vibrations. The process, roughly, works like this. Nutrients such as carbon dioxide are injected into the growing medium and then fractured into micron-sized bubbles with ultrasonic waves. Breaking down the nutrients makes the nutrients easier to absorb (just as if you were incapacitated and someone pre-chewed your food for you.). Thus, the algae grow faster. Then, when it comes time to harvest water and other catalysts in the growing medium and wiggled at a high ultrasonic intensity to crack the organism's surrounding membrane. When the membrane is cracked, algae floats out of the cell, presumably, and to the top of the water. The oil can then be skimmed off the top of the pond. Death by tiny vibration. I can see the t-shirt now: Kill 'Em All, and Let the Water Pik Sort it Out. OriginOil in some sense is more of an equipment company than an oil company in my book. Extracting algae from the water and then extracting the oil from the algae are two vexing problems for algae companies. Some have come up with clever ideas to solve this problem. Solazyme, for instance, doesn't grow its algae in ponds. It grows it in kettles with sugar. No water, no extraction problem. Synthetic Genomics is working on a way to genetically modify algae so that they membrane will crack easily, or on its own But many algae companies--are there are at least twenty out there--haven't solved this problem yet. Some, judging by discussions with them, think they can get rich by merely getting some desert land and plastic bags. Some of these me-too companies would pay dearly for the OriginOil system.

Solyndra Ascendant?

Eric Wesoff: July 31, 2008, 4:03 AM
Fremont, California-based Solyndra is a secretive solar company.  As secretive as you can be when you have 400+ employees, are looking for a valuation of greater than a billon dollars, and occupy a 183,000 square foot building on the side of a major highway.  (I’ve verified those valuation claims from a number of Silicon Valley Venture Capitalists who passed on the funding deal.) But today we get two big Solyndra contract announcements from: Solar Power, an OTC-traded, Shenzen-based module manufacturer and “vertically integrated, turnkey solar power solutions provider,??? with an agreement to purchase approximately $325M worth of Solyndra solar panels over the next five years. As well as a supply agreement with Phoenix Solar, a Germany-based solar integrator, worth approximately $700 million.  They claim that Solyndra’s solar panels are “highly innovative and distinguish themselves significantly from conventional solar modules.??? I’ve tried to contact the firm a number of times but they’ve been less than communicative.  We’ll keep trying.  I have spoken to some former Solyndra employees.  In fact, oddly for a start-up with a brilliant trajectory, they’ve had a number of senior executive shake-ups.  The first was an “exodus??? of their CTO, CFO, and President and the next was a loss of the senior staff that replaced the original team. One of their original technologists, in fact the gentleman who has some of the core CIGS IP, is polite but says they have very little chance of scaling to volume at the right cost due to enormous packaging and encapsulation challenges. However, there has been some progress in CIGS solar packaging materials of late. According to Martin Roscheisen, the CEO of Nanosolar, in a comment he posted to one of my blogs, “If anything, CIGS is easier to package than CdTe: Because unlike with CdTe, at least the thin-film device stack is fundamentally stable with CIGS. (The CdTe thin-film stack is not intrinsically stable; its backelectrode is known to be instable.) So the packaging solutions that work for CIGS are a superset of what works for CdTe.??? We’ll get you some more info on these contracts and Solyndra in the coming weeks. BTW, Solyndra is hiring. But, some CIGS execs say they are seeing an increased flow of Solyndra resumes too. The same thing happened in 2007 before Miasole announced it was having problems. But this was before these two big contracts.

Senate Republicans (Mostly) Vote Against ITC

Daniel Englander: July 30, 2008, 6:46 AM
Shame on you, Harry Reid. At 11:50 a.m. today the bill containing extensions for the production and investment tax credits was voted down in the Senate. Democrats failed to gain the 60 votes necessary to invoke cloture and start floor debate on S. 3335, the Jobs, Energy, Family, and Disaster Relief Act of 2008, picking up only 51 votes in favor compared to 43 against the motion. Senators McCain and Obama abstained, while Senate Majority Leader Harry Reid (D-NV) voted against the motion. This is the fourth time this summer the Senate has failed to move ahead with debate on production and investment tax credits, dampening hopes that the tax credits will be extended past 2008. The bill included $18 billion in tax credits for the renewable energy industry, as well as $8 billion for infrastructure repair and improvement, and a short-term fix for the alternative minimum tax. To pay for the tax credits, Sen. Max Baucus (D-MT) again moved with the proposal of eliminating the $54 billion tax loophole for offshore profits earned by multinational corporations and hedge fund managers. But why would Harry Reid vote against the tax credits? His state, which he's referred to numerous times as the 'Saudi Arabia of solar', is a hotbed of renewables activity. It might have something to a deal he's offered to Senate Republicans on amendments to an energy bill that includes provisions for lifting the moratorium on offshore drilling. His nay vote good be a sign of good faith to Republicans, or maybe he just sat on the wrong buzzer.

EEStor Comes Out of Its Hidey Hole With Milestone

Michael Kanellos: July 30, 2008, 5:28 AM
Companies like EEStor make it worthwhile for reporters and analysts to come to work. The Texas-based start-up hopes to bring ultracapacitors to market that some claim will dramatically improve the performance and drop the price of electric cars. Lockheed Martin, which signed a development deal with the company, says EEStor is on track to produce devices that sport an energy density ten times the density found in lead acid batteries at a tenth of the weight and volume. Canada's Zenn Motors is an investor and plans to bring a sedan out based around EEStor's parts. The ultracapacitor will recharge in minutes too, compared to hours for a battery. Critics aren't buying it. Potential investors and engineers have picked through their patents and dismissed these claims. EEStor also delayed the released of its first products. Venture firm Kleiner, Perkins has put money into the company, but won't state so publicly on its web site. EEStor could resolve some of these issues, but it rarely puts out press releases and gives interviews. I had a brief interview with CEO Richard Weir last year, but only because he happened to be near a phone when I called. The conversation lasted about a minute. The lack of public information on the company has spawned flame wars on the Internet. The actual, certifiable facts in these debates are severely limited, but the insults, heated emotions and pseudo-intellectual posturing are top notch. This week, they went a little more public. It said that it has certified that the crystallization level in its composition modified barium titanate powders comes to 99.92 percent. Remarkable! To be honest, I have no idea what that means. But it is a public statement. But Dave Erlich at got Weir on the phone. Weir told him that the chemical numbers mean that, ultimately, devices made around EEStor's technology have the potential to be charged in three to six minutes, compared to a few hours for a lithium ion battery. "It's all certified," said Weir to Erlich. "No bullshit in this." Zenn Motors, which hopes to come out with a car based around EEStor's parts late next year, said the results bode well.

Anchorage to Join LED Cities Club

Michael Kanellos: July 29, 2008, 10:38 AM
This will be a good test to see if the light coming from light emitting diodes is warm enough. Anchorage, Alaska in conjunction with LED maker Cree will replace the 16,000 light fixtures, about one-fourth of the streetlights in town, with LEDs. The swap should save the city about $360,000 a year in electricity, judging by current prices. The city will likely save a similar amount of money in lower maintenance costs. LEDs last longer than traditional sodium lights so fewer maintenance crews are required. The city could also provide an interesting place to test the quality of light. LEDs have historically been bogged down by two issues: their comparatively high cost compared to traditional light bulbs and the sterile, antiseptic quality of the light coming from the bulb. Manufacturers have tinkered with phosphors and combining different colored LEDs into the same lamp, but people still tend to prefer the warm light that comes from incandescent bulbs. (Incandescents produce light out of the orange and red spectrum.) In Anchorage, the lights will be on for a long time. For 85 days a year, the sun shines for less than eight hours a day, providing plenty of opportunity for feedback. (As an added bonus, the lights are smaller, making it tougher to shoot them out. Just in case anyone is suffering from SAD.) Toronto, Austin, Ann Arbor and Raleigh, North Carolina have already launched municipal LED lighting projects with Cree. LEDs and solid state lighting are expected to begin to take a larger share of the lighting market in the next few years. The lumens per watt for LEDs has been climbing while the price has been coming down. Commercial buildings and public spaces will likely convert to LEDs much more rapidly than homes. LEDs, which are chips, also don't contain mercury like florescent bulbs. Lighting, by the way, accounts for 22 percent of the electricity consumed in the U.S.

Energy Notes and Scoops From Silicon Valley

Eric Wesoff: July 29, 2008, 4:05 AM
I was shopping in Whole Foods, Palo Alto the other day (Don’t get the wrong idea – I do not drive a Prius like our CEO, I drive a 1971 Datsun 240Z) and while buying cheese (Jarslberg, not Brie), I ran into a notable VC with an investment in an algae development company. This investor, who asked to remain nameless, lamented the difficulty of even finding the right species of algae, let alone scaling up to the volumes required. Then, buying chocolate, I ran into the CEO of another algae firm, also requesting anonymity (seems like a trend). He said that achieving real volume in algae to biodiesel production is four to seven years away. Which seems realistic but also seems to fall outside the time horizon of most VC fund expectations. Which seems problematic for impatient VC investors and their LPs. According to Ken Epstein at NewCap Partners, an investment banker with some knowledge in this field, algae would be better used in aviation fuel applications, where the volumes are less and the prices are better. I then slowly backed out of the store in order to avoid any more algae entrepreneurs. For some reason I bought this beverage. In other energy news, Steve Eglash, CEO of Cyrium, a fabless developer of advanced 3/5 PV solar cells, let me know that they will soon announce their $15M round B. Cyrium uses quantum dots to improve the efficiency of solar cells for use in concentrated photovoltaic (CPV) systems, currently a zero billion dollar market.  Potential end-customers are system vendors like Solfocus and Greenvolts. Competitors include incumbents Emcore and Spectrolab and other startups like Solar Junction and Quantasol. CPV system start-up Solfocus is also closing in on a (large) funding round, which we've blogged about previously. Cyrium has their sights set on achieving efficiencies of 40 percent to 45 percent, a figure that will has the potential to alter the economics of CPV.