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Energy Odds and Ends: Seaweed, Iraq, DOE and More

Eric Wesoff: May 1, 2009, 12:23 AM

Yes, But How Will This Impact the Price of My Sushi?

South Korea will invest $275 million over the next decade to grow seaweed forests off its coast and increase the country's ability to produce biomass energy. The biomass would be used to produce a target of 400 million gallons of ethanol per year by 2020 or roughly 10 percent of the country’s petroleum-based fuel usage.

Most of the algae farming and algae investments in the U.S. and Europe are focused on microalgae.  Seaweed, which is already sustainably farmed in Asia and is a multi-billion dollar market, is considered macroalgae.

$418 Per Gallon

According to Biofuels Digest, Professor George Poste of Arizona State University, a member of the Defense Science Board of Department of Defense, and an adviser to Burrill & Company, a VC firm, claimed that the cost of providing fossil fuels to the military in Iraq is $418 per gallon.  He believes that the Department of Defense is ready to invest in biofuels research to control the cost of fuels for troops in “forward areas.”

$777M for Energy Frontier Research Centers (EFRCs)
The White House announced that the U.S. DOE Office of Science will invest $777 million in 46 new Energy Frontier Research Centers (EFRCs) over the next five years.

Supported by funds from President Obama’s American Recovery and Reinvestment Act, the EFRCs will bring together groups of leading scientists to address fundamental issues in fields ranging from solar energy and electricity storage to materials sciences, biofuels, advanced nuclear systems, and carbon capture and sequestration.

Demand Response Factoid

The cost of generating electricity during peak-demand periods can be up to 10 times more expensive than during other periods, and 100 hours of peak demand (about one percent of the hours in a year) can account for as much as 20 percent of annual electricity expenditures.

Electric Town Car Launched in the U.K.

Michael Kanellos: April 30, 2009, 4:55 PM

The Electric Car Company today began to sell its all-electric town car. Technically, it's a Citroen C1, a very small economy car, that's been surgically retrofitted to run on electricity rather than gas (see dazzling photo here).

The car costs about $25,500 in U.S. dollars (note: we are unclear about whether that includes an anticipated $7,500 tax credit or any battery or other incidental charges). If anything, the car will let Londoners avoid the congestion tax.

It is not going to be confused with a Tesla Roadster. The car tops out at 60 miles and hour and only goes 60 to 70 miles on a charge. It takes about six to seven hours to charge. That puts it in roughly the same category as the Think City. The Think City gets 112 miles on a charge, but tops out at 62 miles per hours. The Think, however, costs about $28,000 and that doesn't include the $183 monthly charge for the battery. Hence the skepticism about the price of the ECC.

Expect to see a lot of experimentation in electric cars over the next three years. Some will make it. Many won't. But it will be fun.

DOE Lab Develops Smart Charging Device for Electric Rides

Ucilia Wang: April 30, 2009, 2:02 PM

Looking for a device that automatically charges your electric car during the time of day when power is cheap? The Pacific Northwest National Laboratory has put taxpayers’ money to good use by developing such a device, the "smart charger controller."

The lab, part of the national lab system run by the U.S. Department of Energy, announced its invention Thursday and said the device could save consumers $100 to $150 per year. Major automakers such as Toyota, Nissan and General Motors plan to start selling all-electric or plug-in hybrid electric cars over the next two years. Many companies have been working on developing technologies that would speed up the charging time and make it easier for consumers to charge their cars while they are out and about.

If electric cars become popular, then there will be a huge demand for electricity. Utilities are already trying to figure out how to handle this demand, particularly during peak hours. They, and other electric-car promoters, have surmised that people will do most of the charging at home at night, when power demand is lower and electricity is priced more cheaply. But consumers don't always behave as expected. To avoid using gasoline to run the plug-in hybrids when battery packs are depleted, consumers will have to be able to charge their cars during the day.

The lab said its smart charging controller would communicate with the power grid to get pricing information and allow consumers to program the time and price point for charging their cars. The controller would interrupt charging if the grid is over-tapped and grid operators need time to bring new power sources online to balance the load. The device can be installed in a power cord, charging station or the car itself.

So, this is not just a fancy science project for the Richland, Wash.-based lab. It’s looking for businesses deals to commercialize the technology.

Itron Sees 1Q Revenues Shrink

Jeff St. John: April 30, 2009, 1:08 PM

Itron Inc. (NSDQ: ITRI) reported Wednesday that its first-quarter 2009 revenues fell amid a shrinking 12-month pipeline for new smart meter contracts — a sign that $4.5 billion in smart grid stimulus funding isn't enough on its own to counteract the ongoing recession and utilities' conservative spending plans.

The Liberty Lake, Wash.-based company reported first-quarter revenues of $388.5 million, below analysts projections and down 19 percent from revenues of $478 million in the same quarter in 2008.

And while Itron's long-term backlog for smart meter contracts rose to a record $1.5 billion — up from $683 million in the same quarter last year — its shorter-term, 12-month backlog fell to $471 million in the quarter, down from $552 million in the same quarter last year.

That was due to the wrapping up of a number of contracts in 2008, as well as "the expected timing of future AMI shipments," Itron told investors Wednesday.

And therein lies the rub. Itron is a market leader in two different kinds of advanced meters — the older, automatic meter reading (AMR) kind that send but do not receive data, and newer "smart" meters with two-way communication capabilities to link utilities with their customers.

But those newer AMI (advanced meter infrastructure) deployments aren't happening as fast as previously predicted. San Diego Gas & Electric, which has a $260 million contract with Itron, has scaled back its deployment plans for this year (see Security Concerns Behind Slowdown in Itron Rollout?).

Another big Itron customer, Southern California Edison, is also expected to deploy fewer smart meters this year than previously planned (see SCE Preps $1.63B Smart-Meter Program). Itron has two other large-scale AMI contracts with Texas utility CenterPoint Energy and Michigan utility DTE Energy.

Analysts have been concerned about utility spending on smart meters for some time (see Itron Reports Strong Third Quarter). Utilities can be slow to adopt new technologies and must get regulator approval for big projects like building smart meter networks.

"We see Itron's results as not much of a surprise given the weak macro-economic backdrop," analysts with Thomas Weisel Partners said in a research note.

The ongoing recession has utilities postponing decisions on how fast they will deploy smart meters, Itron told investors. That has led the company to withdraw any earnings guidance for 2009, beyond predicting that annual revenues will be about the same or slightly lower than those in 2008.

And the much-vaunted $4.5 billion in smart grid stimulus funding might not be such a big help for smart meter makers as previously predicted, observers have noted.

That's because the Department of Energy has put a tentative $20 million cap on individual grants for commercial-ready projects, while many of the larger-scale smart meter deployments run into the billions of dollars (see Smart Grid Stimulus: What to Expect).

Under pressure from utilities, DOE might decide to lift that cap for certain projects, the Washington Post noted last week.

Update: Where is Sapphire Energy’s $100M?

Michael Kanellos: April 30, 2009, 12:15 PM

Sapphire Energy, which wants to make fuel out of genetically modified algae, is one of the five or six of the 50 or so algae companies worth following. It is taking an interesting and arguably controversial approach to raising algae -- it wants to raise genetically modified algae in open ponds, a feat that some competitors argue will be difficult. It also wants to harvest hydrocarbons straight from algae, not a lipid like most everyone else. This could save a few expensive refining steps.

Earlier this year, Sapphire provided algae fuel to a Continental test flight, but the algae didn't come from Sapphire's process. Instead, it came from a Hawaiian company that vehemently eschews genetic modification.

Just as important as the science, it has had tremendous success in raising money from top-notch firms. Last year, it announced it has raised over $100 million from investors, including Venrock, Arch Ventures and Cascade Investment (the venture arm of the Gates family).

But when you look at the documents filed with the SEC, the $100 million isn't fully documented. So far, Sapphire has filed only to Reg D forms, which private companies are supposed to file 15 days after getting funds. Look at Optisolar's Reg D filings and you can chart the progress of how that that company raised $322 million.

One of the Reg D forms is dated December 27, 2007 stating that it sold approximately $3 million worth of shares to two investors. Another from July 2007 states that it sold about $1 million worth of shares.

So where is the paper for the remaining $97 million? A spokeswoman for Sapphire said that the company was granted "an exclusion." She could not elaborate further but said she would get back to us. The money, however, has been raised, she added, and it is not contingent upon Sapphire hitting scientific milestones.

Here is the update from Tim Zenk, Vice President, Corporate Affairs, Sapphire Energy.

“As we have publicly stated on September 17, 2008,  Sapphire Energy had raised substantially more than $100 million.  Sapphire’s investors include ARCH Venture Partners, Wellcome Trust, Venrock and Cascade Investment, LLC. We felt it was more effective to make a public statement about our primary funding sources as a means to validate the  financial depth of Sapphire Energy.  Additionally, our funding is not dependent on reaching specific milestones nor is it a tranche arrangement.   Other than to reiterate previously made public statements approved by the management and its board of directors, Sapphire Energy’s policy is to not comment on company financial matters, either past, present or future.”

Reg D is fairly easy to avoid, said David Niebauer, a securities lawyer in San Francisco. The SEC doesn't enforce violations.

Still, "public statements should be consistent with Reg D filings," he said. After all, why decline to state something on an official form (that doesn't require much disclosure) that you've already said publicly.

Who Will Be First Solar’s Next CEO?

Michael Kanellos: April 30, 2009, 12:00 PM

It's either the best or the worst job in solar, depending on your perspective.

Michael Ahearn, CEO of First Solar, announced that he'll be stepping down from that role and that the board is already looking for a replacement. He will stay on as executive chairman but mostly focused on policy.

First Solar, of course, is the relentless manufacturing machine of solar. Net income more than tripled in the first quarter, a time when other solar companies and the industrial world in general is crumbling. The company also continues to drop panel prices.

Whoever takes over the job will instantly be one of the most powerful people in solar.

But, man, is that going to be a tough act to follow. Whoever comes next will certainly have to contend with a lot of comparisons. So who will they get? The possibilities are:

1. Bruce Sohn. The former Intel exec has been First Solar's president for about two years and helped hone the manufacturing processes that helped make First Solar what it is today. He has also been on the board since 2003. Sohn understands manufacturing, supply chain and sales. Moreover, this is a company that prizes loyalty. It took nearly two decades of tweaking before success finally hit, and Ahearn and several investors trudged through the bad times together. Hiring interally sends a strong message.

He really is the overwhelming favorite. But since we have to list others, some candidates could include:

2. Craig Barrett. He ran Intel for years, understands manufacturing, and he lives in Arizona. And he's well connected with government leaders, national labs and universities around the globe. If they wanted a roving ambassador type to give First Solar a bigger profile globally and give Sohn steadily more responsibility, it would be tough to do better. Another Intel possibility: Sean Maloney. First Solar needs marketing help and Maloney can do that while satisfying the company's need for a gearhead.

3. Steve Chan. Hear me out. Chan is the relatively young chief marketing officer at Suntech Power Holdings and the guy who helped build their presence here. Taking Chan would hurt Suntech and give First Solar some needed marketing skills. But in all likelihood, First Solar would move Sohn up, pick someone else internally to fill Sohn's spot, and then make Chan head of marketing. First Solar, by the way, has been pretty adept at picking off technical talent from competitors. It wooed Solyndra chief scientist Markus Beck last year.

4. Mike Splinter or Richard Hill. The CEOs of, respectively, Applied Materials and Novellus. No one wants to work in semiconductor equipment forever. Solar is growing faster.

5. Bob Moffatt or Linda Stanford. IBM is crowded at the top with a lot of executives with extensive accomplishments who have also been there for years. Only one will succeed Sam Palmisano in the Texas Death Cage Match coming in a few years.

6. Jeannine Sargent. The Hilary Clinton of solar: smart, aggressive, getting well known and valuable to a competitor. Before becoming CEO of Oerlikon Solar, she worked at Veeco. Well versed in semiconductors and Silicon Valley.

7. Martin Roscheisen. Just for the sheer entertainment value.

$250M Proposed for Marine Energy

Michael Kanellos: April 29, 2009, 5:03 PM

Representative Jay Inslee, a democrat long associated with clean energy, introduced the Marine Renewable Energy Promotion Act of 2009 in the  House of Representatives today. Senator Lisa Murkowski (R-Alaska) introduced companion legislation in the senate.

The bill, if passed, would give a boost to a form of renewable energy that has seemingly been trying to get off the ground for years. Several companies in the last few years have launched trial devices, but the results have been middling to comical: Tidal turbines in the East River have come up mangled while buoys off the Oregon coast got lost in the deep. The company funding the Pelamis wave devices in Portugal ran out of money.

Still, marine power potentially is more reliable than wind or some forms of solar. Hundreds of megawatts or gigawatts could be produced from waves and tides in the coming decade. Scotland is investing heavily into it. See this fine video for more as well as a glimpse of one of the most advanced tidal turbines out there: the 250-kilowatt prototype from OpenHydro.

And besides, everyone else is getting money.