SAUSALITO, Calif. -- I love the USBCell rechargeable battery from Moixa Energy because: 1. It eliminates the need for an often redundant piece of hardware; and 2. It will outrage privacy advocates and Libertarians.

The USBCell is essentially a rechargeable nickel metal hydride battery with a USB plug attached on top. A cover with a positive nodes slides over the plug so it can be used in flashlights, cameras and other devices.

Attaching the USB interface reduces the amount of power that can be stored in the battery, admitted CEO Simon Daniel during a hallway chat at the GoingGreen conference taking place this week. If a supercharged AA nickel metal hydride can store 2500 milliamp hours, the USBCell might do 1300 or 1500.

Integrating the USB port, however, means that you can charge it by slapping it into the USB port of your computer. Thus, you don’t need to carry a charger on business trips as long as you have your notebook. Charging through a PC is also generally more efficient than charging with one of those store-bought chargers because the power supplies and other components in a PC are more efficient, he said.

Moixa’s AA batteries are already on sale in select stores. The company is also working on a lithium-ion battery with a USB interface for phones. (See photo.). The company will mostly make and design batteries and let others sell them under their brand names.

But where’s the privacy outrage? It comes in the software that Moixa has begun to couple with its batteries. The batteries will pop up ads and/or power saving tips whenever you plug into charge them. Let’s say you got a pair of the batteries with a game controller. The batteries will, if programmed in this way, begin to pop up ads and discount coupons for game devices. The ads are fairly unobtrusive and didn’t really bug me, but unanticipated advertising makes some people go bonkers. Expect puerile outrage in the blogosphere.

But that’s not all. Moixa is also developing software that can monitor your power consumption and how you use your products. Let’s say the software was put in a home charger or other energy managing device. By examining how you often you charge them and how much charge is needed, the software will be able to determine, conceivably, how much water you are boiling each time, he said. Thus, your batteries can begin to observe your behavior without you noticing. A program like this invariably would require customers to opt-in. It could also help reduce power consumption – one of the big challenges now is trying to teach people how they actually use electricity. In fact, there are a slew of companies and utility programs aimed at doing just this--controlling electricity flow while adjusting it to your lifestyle.

But there’s enough of a whiff of Big Brother in it to drive people like Declan McCullagh, a noted government watchdog, up the wall.

[Ed. note: Thank you, Simon.]

Software: it's going to be one of the fastest growing segments in greentech. Today, Sustainable Minds and Autodesk announced that they will collaborate on services and products that will effectively make it easier for manufacturers to design cleaner products. Sustainable Minds develops design software and provides information on different materials and components. Autodesk, which has been producing design software since dinosaurs ruled the earth, sells one of the world's more popular applications for software prototyping. Put the two together and manufacturers can more easily begin to study, for example, how swapping out traditional plastic for a bioplastic might impact the integrity or durability of a product. You could also use it to see how a product could be reduced in size (and thereby reduce shipping costs and energy) before performance is impacted. Energy efficiency can also be studied--a lot of work in recent years has allowed PCs fans to cool while consuming less energy. Meanwhile, GoodGuide came out of stealth mode late last night. It is a web service that compiles supply chain data that lets consumers, and potentially mass manufacturers, assess the environmental impact of their products. What? There's methyl ethyl keytone in my shaving cream? No wonder I feel so smooth and fresh in the morning. These efforts might sound squishy and directed toward the small segment of the population that are drawn to greentech to do good for the planet (and will actually act on that feeling), but it's bigger than that. Procurement managers at factories around the world have come to realize that commodity prices are going to inexorably rise over the next two decades. Thus, they have to start really thinking hard about getting to market with fewer raw materials. Retailers and middlemen are also determined to cut down the raw materials in the products they sell. it's good marketing, saves shelf space and can fend off problems down the road with carbon taxes. Nick Parker of the Cleantech Group told me last week that Wal-Mart is doing exactly that. Oh, and the software thing. You're going to see a lot more investment in it. Software companies are a lot cheaper to start than solar plants and people are beginning to understand how it can be used to create efficiency. (Even a high science VC like Steve Jurvetson will tell you that web 2.0 software provides more consistent returns than anything else.) You can credit companies like Fat Spaniel and SolarCity for putting the concept on the map.

Here's to not taking time off. Back in the summer of 1958, Jack Kilby, a new employee at Texas Instruments, hadn't accrued enough vacation time to take off the days at the end of August when TI shut down. Instead, he stayed at the job and sketched out an idea he had been contemplating. It was the integrated circuit. After the vacation, Kilby's boss reviewed the sketches told him to go ahead. On September 12, 1958, he tested a prototype for company executives (see picture below.). It worked. Although Kilby's prototype did not become the essential building block for the chip industry (the integrated circuit Intel co-founder Robert Noyce showed off a short time later turned out to be design everyone adopted), Kilby was first. And in 2000, he got a Nobel Prize for it. (Noyce would have probably shared the award but he had died years earlier.) And what does it have to do with clean energy? Semiconductors and software are the essential building blocks for the energy efficiency business. The cleanest kilowatt is the one that doesn't get used. Utility CEOs like PG&E's Pete Darbee say that efficiency is a higher priority than solar. Trilliant, Gainspan, Tendril, SynapSense and a whole host of companies are exploiting WiFi, ZigBee and other PC-centric technologies for data centers and smart meters. VCs in recent quarters have begun to wake up to energy efficiency and put more money into these companies. Devising chips and software to save energy is also in some ways easier than trying to build solar or geothermal plants. The technology challenges are somewhat understood and many of the companies that will make products for this market already have factories. Thus, there's no massive capital outlay required. TI, in fact, unfurled a new line of microcontrollers this week (see second picture) called Piccolo, which can control the power consumed by air conditioners and other devices. Freescale has also been active in lately in this market, helping a company devise a system for increasing gas mileage on scooters.

Copenhagen—The employee of the decade in green tech is scum. University College Dublin (UCD) has come up with a way to recycle old plastic bottles and containers with microorganisms. The end result—the thing that comes out of the bacteria’s digestive system--is a new piece of plastic. The difference, however, is that the plastic that comes out of the process is biodegradable. It can go safely into a landfill and will disappear over time, said Kevin O’Connor, the lead researcher on the project during a presentation at Copenmind, a university tech transfer conference taking place this week. If the process can be brought up to an industrial level, it could help the world get rid of the nation-sized mass of plastic that humanity has generated. Right now, there are two general ways of dealing with old plastic. Some countries, like England and Ireland, ship it to other countries after doing the green thing and recycling. Plastic bottles have a low recycling value; hence, a lot of the plastic ends up in landfills forever. (But the Irish are big into recycling—a 15 cent tax on plastic bags dropped their use by over 99 percent, O’Connor said.) The other method to “recycle� plastic is to burn it. Sweden, Switzerland, Germany and other countries practice it. It yields useable energy, but it’s not the cleanest practice in the world either. UCD’s process works like this. Polypropylene (plastic) is cooked until it turns into a styrene oil. The oil is then fed to microorganisms, which metabolically turn it into globules of fatty acids. When 60 percent of the bacteria consists of those fatty acids, the microorganism is split open and the harvested fatty acids are converted to a biodegradable plastic. See why bacteria make such good workers? Try to do that to your new hire from Cal State Fullerton and the first thing he’ll do is file a worker’s compensation claim. It’s good plastic too. The glass transition temperature—the temperature that makes it brittle—is a low minus 43.3 degrees Celsius, so it’s freezer safe. You can heat it to 278 Celsius. “But it will degrade in a compost heat at 32 degrees because the microorganisms (in the landfill) release enzymes,� he said. Industrial microbiology is the basis of a number of other start-ups, including Cambrios (microbes making industrial chemicals) and AgraQuest (biopesticides). Melting the plastic into an oil requires energy. The overall balance, however, is better than if you made a second, separate bottle, O’Connor asserted. A kilogram of plastic yields 350 grams of new plastic. The missing oil goes to the microorganism: they feed off the oil to grow. The group has filed for a few patents. Next year, it wants to move out of the lab and do a multi-kilogram recycling center with a large waste company. Keep your eye on Ireland in cleantech and advance science, by the way. For years, the Irish tech industry primarily concentrated on serving as an outsourcing destination for multinationals. But in about 2000, the government—realizing that Ireland was no longer a low-cost center—began to invest in technology transfer center and incubators. The pitch made to scientists is straightforward. Unless researchers can’t come up with interesting commercial applications, funding may get cut during austerity times, Pat Frain, who runs NovaUCD (the school’s incubator) told me earlier this year. Plus, you might become incredibly wealthy. Other incubation centers in Ireland are working on ocean power, semiconductors and material science. (See this masterpiece of cinema for more.) Another interesting project at UCD: BiancaMed, which has a wireless device that can tell you what happens to your body while you sleep. Whether or not the incubator program ends up creating successful start-ups, however, won’t like be known for another five years.

If you use the right windows in a single-family residence, “You can save tens of thousands of dollars in energy cost over the life of a building,� said Steve Weiss, VP of Marketing at Serious Materials, a developer of eco-friendly building materials. The startup recently acquired Alpen Windows, an energy-conscious window manufacturer. “After you’ve taken care of walls, insulation and ducts – you’re left with windows, which is why we acquired Alpen,� said Kevin Surace, the firm’s CEO. “The R value of most windows is terrible, the best is R3. The [Department of Energy] has been trying to raise the R value of windows for years but the only people who talk about R value is us and Alpen Windows. That’s why we bought them.� You can use the best drywall and insulation on the market and still end up losing all of your heat through your windows through �especially bad frames,� according to Weiss. Serious Materials looks to improve the abysmal performance of today’s windows “at the low end to R5 and eventually to R11.� R value is a metric signifying a material’s ability to resist the flow of heat. The higher the number – the higher the resistance and the greater the insulation level. The unit is used by Energy Star, a joint effort of the US DOE and EPA, aimed at saving energy through efficiency. CEO Kevin Surace enthusiastically rattled off some statistics:

• Nine percent of global energy goes to passenger cars, but 52 percent is tied to buildings, and 12 percent of global energy usage goes to inefficient building materials.

Serious is well-funded by NEA, Foundation and Rustic Canyon. Unlike many of the VC-funded start-up firms we cover, the company is already generating significant revenue.

British consumers may soon feel the pinch of higher water rates. Between 2010 and 2015, British water utilities claim they will need to make £27 billion in infrastructure investments to comply with the EU-wide Water Framework Directive, which requires water utilities to comply with new water conservation and pollution standards aimed at adapting to climate change-related water shortages. Ofwat, the UK's water regulator, received the proposals Monday amid criticism from British consumer groups who claim ratepayers are having trouble coping with similar rate increases for gas and electricity service. British Gas, for example, raised its service rate 44 percent this month. The rate increase will go to pay for efficiency improvements aimed at driving individual use down from 150 liters per day to 130 liters per day. The highest rate applications have come from Bristol Water and Southern Water, which collectively serve seven million customers. Bristol Water has proposed an infrastructure improvement plan that will raise average annual rates from £149 to £187 next year, representing a 26 percent increase over inflation. Southern Water's 23 percent rate increase will raise annual bills to £426 by 2015 to pay for investments worth £2.6 billion. United Utilities, another large water provider, has asked for a 2.7 percent annual increase over five years to fund a £4 billion investment plan aimed at creating annual efficiency gains of around 1.5 percent. All companies have said the rate increases are necessary to comply with the new EU conservation and pollution standards. While the rate increases understandably create distress for consumers, they represent an interesting opportunity for water-focused greentech companies and investors. The efficiency-focused infrastructure improvements will require water technology far more advanced that what is currently deployed. While some of this technology is deployed already in places like the water-conscious United Arab Emirates, much of it has yet to move from the prototype phase. Nothing will help that more than £27 billion worth of RFPs, especially when the issuers' other choice is to face a hefty EU fine. While Ofwater will probably accept rate increases smaller than those proposed, driving down the amount of total investments, the work required to meet this demand will drive further innovation in water technologies. As far I'm aware, the improvements to be made in Britain between now and 2015 represent the largest concerted effort to rebuild a water industry anywhere in the world. If done correctly, as with all things greentech, the high initial capital expenditures will result in long-term cost savings as resource efficiencies drive down operating costs and service rates. Greentech VCs would do well to get some of their water companies in front of the British utilities. This brings up a related point. Electricity and gas rates have increased in recent years as a result of constrained power supplies, demand levels rising above forecasts, and structural shifts in the natural gas industry. The proposed increase in water rates also stems from use and resource constraint issues. In the power, heat, and water supply industries, however, increasing rates have played a large role in moving green technologies further into the mainstream. But just who should bear the cost of this? Passing costs onto consumers is a common practice in regulated industries. Companies in these sectors are required to negotiate tariffs, and rates of return are strictly supervised by regulatory authorities. This helps (sometimes) to keep rates down and preventing utilities from taking advantage of their natural monopoly status. However, as markets move, utilities are forced to renegotiate, often with undesirable consequences for consumers. But if utilities were unregulated and rates were set to monopoly pricing, wouldn't this drive down demand (or drive up efficiency and conservation)? So maybe regulators should pay. After all, they're the ones who force utilities to keep costs down, though often with limited success. They also force utilities to keep the water on for people who can't or won't pay their bills. And the utilities themselves? Faced with a set of perverse regulation-based incentives, utilities do their best to keep investments and improvements at a minimum. Anything else would raise the ire of shareholders. The answer is a combination of all three. The EU follows the polluter pays principle, which means utilities should bear a considerable portion of the investment burden. Regulators, however, in sticking with their mission of public service should view the infrastructure improvements as a investment in future conservation and insurance against water shortages and drought. Consumers increasingly need to come to grips with their legacy of overuse. When water is in short supply, demand becomes relatively inelastic. Hang out in the desert for a bit with a box of Fiji Waters and you'll see what I mean. Or just ask the Gulf Arabs, who must desalinate more than 95 percent of their drinking water and still face a potentially devastating shortage. GE has found one of their biggest growth opportunities in that market. The UK's water situation represents a similarly significant opportunity for companies developing even newer, more innovative technologies. Perhaps the British Government will use this opportunity to build their own water tech industry. The demand is certainly there.

The S-1. Such a troublesome document. Unconfirmed rumors have swirled in recent weeks that Black & Decker, the large power tool maker, wasn't happy with battery maker A123 Systems. Black & Decker is the largest customer for A123 and accounts for over half of the company's revenue. We called the company in July and A123 said that the relationship and contract with Black & Decker was still in place and that the tool maker was buying all the batteries "that we can supply." We have no reason to doubt it and the contract with Black & Decker is clearly still in place. But information about the company's revenue contained in A123's filing with the SEC that may give some people reason to ponder if something is going on between the two companies. On page 57 of the S-1, A123 says that demand has declined from its "most significant customer." An increase in revenue in the first quarter of 2008 to $10.3 million from $8.1 million in the first quarter of 2007 was due to the acquisition. See below: "The increase in product revenue was primarily due to sales of $2.2 million generated by Enerland, which we acquired in August 2007. This increase was partiallly offset by a decrease in demand from our most signficant customer and its affiliates during the three months ended March 31, 2008 compared to the three months ended March 31, 2007." Note. The S-1 doesn't state that revenue from the significant customer has declined as a percentage of the whole because of additional customers. And it doesn't say sales to that customer declined because of product delays or techincal issues. It is because of "a decrease in demand." In other words, A123's significant other bought fewer batteries in the first three months of the year than in the year before. Now, there could easily be a lot of explanations here. The decrease in demand could have been because of a lull in research projects at the customer. "Significant" could also mean something other than the largest customer in terms of revenue: GM is a significant customer for A123 because it will get the company into the automotive space. Economic circumstances beyond anyone's control could have caused this. Or it could be that the toolmaker added some technical requirements to its orders, which A123 needed time to install. A123 could not comment because it's in the quiet period. On page 12, A123 rolls out the laundry list about risks they face, including a loss of a big customer. It's boilerplate language and can't be taken as evidence that the relationship is rocky in any way. Still, it lays out how much the small company depends on the toolmaker for revenue. "Our strategic plan assumes that we will epxand our revenue base through the acquisition of new customers in new and emergin markets; however, Black and Decker and its affiliates have represented 70.7% of our total revenue since inception through March 31, 2008 and represented 55.1% of our total revenue in the quarter ended March 31, 2008. If in the near term we were to lose Black & Dcker as a customer, or if we were to lose revenue due to its inability or refusal to continue to purchase our batteries or pay our invoices, our business, results of operations and financial condition could be harmed."

On other notes, losses are increasing faster than revenues, but that's largely because of expansion. Revenue in 2006 came to $34.3 million and net losses for the year totalled $15.8 million. In 2007, revenue climbed to $41.3 million but net losses nearl ydoubled to $31 million. The number of full-time employees, however went from 227 at the end of 2006 to 904 at the end of last year.