Recent Posts:

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.

In Smart Metering, Watch Out for Tendril

Michael Kanellos: July 29, 2008, 3:57 AM
Twenty. That's the number of major utilities that are experimenting with the TREE (Tendril Residential Energy Ecosystem) from smart metering start-up Tendril. Fifteen of the utilities are engaged in lab tests with the Boulder-based company, four are preparing field pilots and another will kick off a commercial rollout to consumers in the next few weeks. Collectively, these these utilities serve 56 million customers, according to CEO Adrian Tuck. It's a notable achievement and, in the increasingly crowded field of smart metering and automated energy management, it is the sort of metric that will underscore who is winning and who is falling behind. Why? Utilities will be the key players in this field for the next several years. In automated energy management, homes are outfitted with intelligent thermostats, power supplies, light switches and other pieces of electrical equipment that connect to each other and ultimately their power-supplying utilities via a series of wireless and wired networks. The electrical appliances in a home can then be throttled back to conserve power. Depending on the contract and relationship between the utility and the customer, the utility can control the system, or the customer can set up his or her own rules. The utility is the lynchpin because, in most cases, the utility will pay the bill and install the equipment. Most people can barely program their digital thermostats and they aren't going to rush out to Home Depot to replace them with new equipment. Thus, you need utilities to thrive. Comverge and EnerNoc, the early leaders in the field, did so through relationships with utilities. Tendril seems to be growing largely by being cooperative. The company's equipment is tuned to work with the most popular standard protocols, such as Zigbee. (Tuck actually worked on the low-power wireless standard.). The company also allow customers to set their own rules regarding energy consumption or leave that job to the utility. Tendril's Insight, a home control and information panel, provides homeowners with a constant, visual tally of how much electricity they are paying at any given moment. When the rate goes higher, the thermostat flashes red. The Insight also provides data on how much power you are consuming compared to similarly situated neighbors. Thermostat and power consumption settings can all be set from a PC. Granted, many other companies such as Threshold and Agilewaves tout similar features, but Tendril has put it together in a fairly smooth fashion. Almost every appliance in the house can thrive on less electricity, said Tuck. Garage freezers, for instance, can be put on a five minute on/five minute off rotation without risking a bout of botulism or freezer burn. The company charges around $1 per month per consumer to the utility. The actual hardware costs an additional fee, but you can plug in non-Tendril hardware into the system.). Consumers save around $100 a year threw lower energy consumption, said Tuck. Utilities can potentially save more; if enough customers sign up, it obviates the need to fire up peak capacity plants. The company, which started the year with 17 employees, will probably pass 100 in the near future, said Tuck.

Intel’s Solar Investment Surge

Eric Wesoff: July 29, 2008, 3:21 AM
Intel makes its third solar investment in the last month. Intel Capital continued its surge in the solar market with this morning’s announcement of a $12.5 million investment in precursor chemical company, Voltaix.  Founded in 1986, Voltaix makes electronic chemicals and gases used in semiconductor manufacturing and CVD precursors such as germane, used in the production of advanced PV cells. Voltaix’ materials are intended for in thin film PV cells using amorphous silicon, CdTe and CIGS (as opposed to wafered silicon).  The market share for thin film solar is only about 10% today but that share is expected to grow significantly over the next few years.   XsunX is one of Voltaix’ customers. Intel just spun out SpectraWatt with a $50 million investment, joined by Cogentrix Energy, PCG Clean Energy and Technology Fund, and Solon AG.  SpectraWatt manufacturers and supplies PV cells to solar module manufacturers. Intel’s third recent solar play was a $38 million investment in German company Sulfurcell as part of an enormous $134 million infusion to build a plant to make solar cells using thin film CIS or CIGS. Other investors included Climate Change Capital Private Equity, AIG, Demeter Partners, Zouk Ventures and BankInvest. On one hand, it’s nice to see a major global player like Intel jump into the solar fray.  On the other hand, they’re more than a bit late in their sudden discovery of the $20B photovoltaic market. Intel once made a similar discovery of an overheating optical networking market in the late 90s.  They made some big acquisitions and many VC investments but few if any of those bets paid off and they ended up closing, selling, or abandoning those units.  Let’s hope that this is not a repeat of that late entry.

Considering a Nuclear Future on Eve of British Energy Sale

Daniel Englander: July 29, 2008, 2:20 AM
British Energy, the UK's nuclear power monopoly, will likely be sold to Electricité de France this week in a deal valuing the company at close to $25 billion. Though negotiations are ongoing and the parties are still apart on the precise value per share of British Energy (EdF thinks the 750p per share valuation a bit too rich), both sides are expecting to end the week with the largest transfer of wealth from Britain to France since Jane Birkin married Serge Gainsbourg. For some, the sale has aroused feelings of economic nationalism. Unlike in the U.S., where we prefer to keep our state-owned enterprises at least nominally private, the Europeans have no problem taking an active position in their largest companies. The British government owns 35 percent of British Energy, while the French governments owns close to 85 percent of EdF. Dieter Helm, an Oxford professor and energy expert, said the sale means "essentially handing the British nuclear industry to the French government." For a country looking to jumpstart their nuclear power industry, I don't think you could do any better than handing it over to the French. They've got nuclear in spades. Britain's decision to move ahead with its nuclear modernization plan, which involves building 10 subsidy-free reactors in the next 25 years at a cost of $140 billion, is flawed for two reasons. Well, three, if you count handing it over to the French. I don't. First, the plan will lead to a reorganization of the British electricity supply industry, effectively killing the only good thing Maggie Thatcher accomplished in her time as PM. The British electricity supply industry was restructured in the early 1990s, a move that paved the way for electricity trading on wholesale power markets and presaged our own move toward deregulation. Restructuring broke up the traditional vertically integrated monopolies, which controlled generation, transmission and distribution, and retail service, and required that generation companies sell their power in bulk through a combination of spot trading and forward agreements to utilities over independently owned wires. This was done to spur competition, to reduce the overhang of depreciating capital stock, and to make generation more efficient. British Energy, incidentally, is one of the largest participants in the wholesale markets - though their presence as an independent power producer is due largely to series of regulations and subsidies that look more like life support than red tape. That the bid-in price of nuclear energy runs close to £0.00/kWh no doubt makes for some serious liquidity problems in the wholesale markets. EdF, which already has a significant presence in Britain, would control about 20 percent of the country's installed capacity after the sale goes through. The only way to sustain generation capacity of this size without subsidies is to re-integrate the company and rely on some form of rate-of-return regulation to push costs to the consumer base. In other words, an indirect subsidy paid for by the British people. Removing such a substantial amount of capacity from the British wholesale market will do more than ruin what little liquidity that currently exists. It will also raise entry barriers for independent power producers, and slough of investment in new capacity. With all this nuclear capacity about to come online, maybe the UK doesn't need another CCGT plant. But it does need to build a lot more offshore wind - about 33 GW worth - to fulfill its EU obligations. Market failure on the supply side will make this a lot tougher. Second, and perhaps less talked about, are the significant water requirements of nuclear energy. Power stations generally account for about one third of all water consumed in Europe, though nuclear power stations have water requirements as much as 83 percent greater than those of other types of generators. In the Summer of 2006, much of Europe's nuclear capacity had to be taken offline because the heat wave roiling the Continent created drought-like conditions that made generating nuclear power extremely difficult. EdF, which generates more than 75 percent of France's electricity from its nuclear power stations, was forced to buy electricity on the spot markets to meet demand. Incidentally, after the British Energy sale goes through, there may not be a spot market big enough to pick up excess load in case this happens again. Water scarcity is not the only problem. Nuclear plants are also tied to severe water pollution and irradiation as well as ecosystem disruption as fish and plant life are exposed to water inflow pipes and heated outflow. It's possible that if the deal moves forward this week, British and EU regulators may force some kind of competitive output arrangement. This would throw a bone to the independent power producers, but probably not the fish.