3i, Europe's largest venture capital firm, has announced it will abandon its early stage venture operations. In 2000 3i's venture portfolio covered 750 investments worth $4.8 billion. However, the tech crash later that year forced 3i to write down close to $2 billion. By September 2007 the company's overall venture investment had fallen to roughly $1.4 billion, with new investments totaling $130 million during the first six months of 2007, or five percent of its total investments. A 3i spokeswoman said the company is "recognising the opportunity in growth capital and later stage investing." 3i has previously invested in greentech companies like Konarka, EnOcean, PelamisWave, Nanostellar, and Smart Fuel Cell. Suntech Power has locked in an eight year polysilicon supply from South Korea's DC Chemical. The $631 million deal kicks off in 2009, with specified delivery amounts coming every year until 2016. Suntech has been fairly busy recently, taking a $100 million minority stake in Nitol Solar and an 11.7 percent stake in Hoku Scientific. These moves are largely a response to Suntech's disappointing earnings and guidance report, which forced the company to take a major hit after it disclosed a failure to lock in long term poly supply in the face of rising feedstock costs. In a related deal, DC Chemical has signed a $200 million contract with GT Solar for polysilicon deposition reactors. The deal is GT Solar's largest to date. John Hutton, Britain's business secretary, will make a speech today calling for an ambitious expansion of the UK's nuclear capacity.Hutton will speak in front of the UK's largest union on the economic benefits of this expansion, which will require a nearly $40 billion investment, create 100,000 new jobs, and include the replacement or upgrading of almost all of the UK's nuclear reactors. The speech coincides with a state visit from French president Nicholas Sarkozy, who is expected to sign a nuclear cooperation agreement with British PM Gordon Brown.

Cellulosic ethanol company Verenium may be on its way out. The company's 10-k, filed on March 17, says the company did not generate sufficient revenue to offset its CAPEX and operations. Verenium's form states "there can no assurance that we will be able to obtain any additional sources of revenue, corporate partnerships, federal and state grant or other financing on acceptable terms, or at all." If the company is "not able to reduce or defer our expenditures, secure additional sources of revenue or otherwise secure additional funding, we will be unable to continue as a going concern, and we may be forced to restructure or significantly curtail our operations, file for bankruptcy or cease operations." As of December 31, 2007 Verenium had accumulated a deficit of $437.1 million. I heard they have nice office furniture... Les Echos is reporting Iberdrola has offered EdF a 20 percent stake in a bid to stem the French company's takeover plan. Though Iberdrola CEO Ignacio Sanchez Galan is denying any such offer, a source close to the deal is also saying Galan demanded a 40 percent premium on the share price. An Iberdrola spokesman went so far as to say "we deny that we have offered EdF a stake. This report is false." EdF has turned down the 20 percent offer, maintaining their plan to buy the entire company in conjunction with ACS. Why is Iberdrola such a big prize? Spain's energy demand has grown faster than the EU average every year for the past ten years, with renewable energy accounting for an increasingly large percentage of this demand. Earlier this month Spain's national grid operator REE clocked 28 percent of electricity supply, 10,032 MW, coming from wind power. Of this record total, Iberdrola provided nearly 4,500 MW. It is also the world's largest wind operator with roughly 7,400 MW under management and an additional 48,000 MW in the pipeline. The California Air Resources Board is expected to reduce the state's zero emissions vehicle mandate by 90 percent from 25,000 to 2,500 cars produced between 2014 and 2017, and a total repeal of the long-term 75,000 vehicle mandate. I feel like we've been here before. CARB is under pressure from auto manufacturers, who claim developing production quality batteries will cost them an additional $2 billion over the next ten years. Instead, car companies are pushing for heavier mandates for hybrids, which have higher margins than ZEVs and rely on existing technology. Tesla CEO Ze'ev Drori has taken CARB chairwoman Mary Nichols to task for this idiocy.

Commodities are trading down this morning on declining consumption and a short rise in the dollar against the Euro and Yen. May contracts for crude oil are down 1.8 percent since the weekend, opening this morning at $100.02 after a 7.6 percent decline at the end of last week. A Goldman Sachs report released on Thursday has crude oil falling to $90 a barrel by April on the same downward pressures that have moved the price over the last five days. Agricultural contracts follow the same deflationary pattern, with May corn falling 9.3 percent to $5.07 per bushel and May soya dropping 10.8 percent to $12.07 per bushel. This weekend's drop in corn prices is likely a small blip in their upward march, which has pushed the value of farmland up 88 percent since the beginning of the ethanol boom. A recent study from the Nebraska Farm Real Estate Market Survey found Nebraska farmland jumped 23 percent per acre 2007, and is up 88 percent from 2003. On February 1, Nebraska farmland was selling for $1,425 an acre, a price supported almost entirely by ethanol subsidies. The same can be said of U.S. biodiesel makers who, despite a $1 per gallon subsidy, have largely failed to deliver. Case in point is Kreido Biofuels, which announced a third construction delay on their 50 million gallon North Carolina plant, now slated to open in the fourth quarter. Kreido CEO Ben Binninger pegged the delays to "current adverse biodiesel market conditions" and the need to raise $25 million in additional financing. Market conditions aren't the only constraining factor for greentech these days. "Nevada is not even close to meeting its RPS," says Mark Johnson, CEO of Golden Sierra Power. That state is now reconsidering the legality of third party ownership of renewable energy systems. PPA's in Nevada have come under pressure recently from utilities in the state, who claim PPA providers are illegally competing with them for electricity sales. They have received support from the Nevada PUC. Looks like federal policy may not be the only thing throwing dirt onto a possible PPA downturn. Scottish First Minister Alex Salmond has raised competition concerns over the EdF bid for Iberdrola. EdF already has 5.1 million customers in the UK, and an Iberdrola takeover would make EdF the UK's second largest energy provider through Iberdrola's Scottish Power subsidiary. The nearly $140 billion deal is facing competition from E.On, as noted last week, with the German company planning to break up Iberdrola's assets. In other ongoing Iberdrola news, the New York Public Service Commission has again delayed consideration of the Spanish utility's deal for Energy East, citing the need to consider "whether that acquisition is in the public interest."

With a special appearance by Eric Wesoff... The re-election of José Luis Rodriguez Zapatero in Spain this month has cleared the way for foreign suitors to starting sizing up potential bids for Iberdrola, Spain's largest utility. Électricité de France SA and Actividades de Construcción y Servicios SA, a French utility and Spanish construction company, have announced plans to launch a simultaneous bid on Iberdrola and Unión Fenosa, Spain's third largest utility. The deal would be worth at least $134 billion, though it may face opposition from French state-controlled EdF. EdF's plans would break up Iberdrola through an acquisition of Unión Fenosa, which would let ACS - another Spanish construction company and UF majority stakeholder - acquire Iberdrola and sell Scottish Power (owned by Iberdrola) to EdF.This deal have some impact across the pond, where Iberdrola owns PPM Energy, the country's third largest wind power producer. Iberdrola is also finalizing its $4.6 billion bid for Energy East, which would give it access to nearly 3 million customers from New York to Maine. However, the Energy East acquisition is facing strong opposition from the New York Public Service Commission and Sen. Charles Schumer. The PSC is concerned the acquisition may drive up rates while having no significant impact on renewable energy capacity. Ultimately, they're concerned about a replay of this deal. New England's GT Solar signed a $200M contract with DC Chemical of South Korea, adding to their recently signed $49M reactor contract with China's Trina Solar. GT, with~$80M in revenue in 2006, filed their S-1 with the SEC in preparation for an IPO almost a year ago. Unlike Ascent Solar, Bear Stearns was not an underwriter. It’s obviously a shaky time for public markets, even for solar IPOs. GT Solar build and sells CVD polysilicon reactors and other PV manufacturing equipment. Solyndra, a stealthy solar company located in Fremont, CA, closed a $79M funding round in April of 2007 for what was rumored to be a variation of CIGS technology (we heard “CIGS on wires�, whatever that is). Investors included CMEA Ventures and Redpoint Ventures. According to CNET scuttlebutt, Solyndra is looking for new funds and proposing, well, ridiculous, valuations for an unproven technology and zero revenues. What did they spend all that money on? They staffed up big-time according to LinkedIn. In addition to hiring shiploads of engineers, they look to have hired or contracted bunches of HR people and recruiters. This makes sense as they had to replace what looks like the core of their founding team. Jonathan Michael, their original CFO, has left the company, as has Ratson Morad, a VP Enginering, and Benny Buller, another VP Engineering, now with DayStar and First Solar respectively. And there are several other former Solyndrites listed. Why would a company worth a billion dollars be shedding employees and especially their core founding team? Inquiries to their investors and other people within Solyndra remain unanswered. John Garamendi, California's Lt. Governor, spoke in Palo Alto at the Silicon Valley offices of Pillsbury Winthrop on the always scintillating subject of Cap and Trade policy for Green House gases. Here are quotes from his talk:

• “I don't know what it will look like, but I believe we will see a viable Cap and Trade program for GHGs in the next 2 years.â€?
• “If we do this right, I think we're going to have a robust financial profit opportunity.â€?
• “The politics are dicey. The Governor (Arnold Schwarzenegger) and Lt Governor want to move to cap and trade but there are opponentsâ€?

Here, Mr, Garamendi did a little environmentalist bashing – saying that environmentalist organizations were concerned about the losers, with toxic materials being dumped in area of low wealth.

• “That doesn't have to happen in an auction with real money.â€? Said Garamendi (vs. allocations as per the less than successful EU scheme)
• His message, “it is extremely important for CA to act on this issue and use market inducement to control GHGs. It is a combination of market and regulatory actions - working together to achieve a good goal.â€?

Florida is rolling ahead with a set of comprehensive energy and climate-related bills aimed at making sure the peninsular state isn't swallowed up by rising sea levels. The Florida Public Service Commission approved the state's first wide-ranging net metering law on March 5. It covers systems ranging from 10kW to 2MW, and expands coverage from PV to nearly all renewable power sources. Another bill making its way through the Florida legislature calls for a cap-and-trade system in the state, the creation of a seven-member Florida Energy and Climate Commission, a 2.25 percent RPS by 2009 that increases to 5 percent by 2021, and 10 percent renewable fuels standard by 2010. Hoku Scientific finally has some news not related to how badly their factory construction is going. The Hawaii company, whose specialty is digging holes in Idaho, has re-upped their supply contract with GEC, a polysilicon reactor maker. The new contract will give Hoku the equipment to produce as much as 8,000 metric tons a year. Now they're just missing a factory. In other fun solar news, Evergreen Solar is slated to run out of money by mid-2008. With a $400 million CAPEX - $115 million above estimates - the company has been unable to keep pace with an increasingly commoditized sector. It is estimated Evergreen will only be able to raise $200-$300 million on the debt markets in 2009. I've been following this deal for awhile now, but it looks like it might finally happen. Lunar Energy, a British tidal company, has signed a deal with Korean Midland Power to build a 300 MW tidal farm by 2015. I've estimated this deal at around $1 billion dollars, but production scale-up for Lunar and Rotech (Lunar's technology partner) may drive this price down significantly. Regardless, this is the largest announced ocean power farm to date, blowing away the 10.5 MW farm announced last month by Marine Current Turbines and PelamisWave's long-planned 22.5 MW wave plant in Portugal.

Growing export demand for American coal, combined with incrementally slowing domestic production, are responsible for the large increases in spot market prices for benchmark coal products. Central Appalachia coal is up 93 percent on the year, while Power River Basin coal is up 64 percent. But where's it all going? China, South Africa, and Indonesia, once major coal exporters, are cutting exports to fuel domestic growth. U.S. coal is mostly finding its way to Europe and Japan, where a weak dollar and highly subsidized mining make relatively less expensive coal all the more welcome. This is good news for the coal industry, as growing domestic opposition to power plant construction and increasing financial scrutiny may have a limiting effect on U.S. growth. But just because these plants aren't being built doesnt't mean there not a problem. Carbon emissions in the U.S. hit their single biggest one-year increase in nine years during 2007. Emissions were up 2.9 percent over 2006 levels. Not to worry - the RGGI just completed it's first physical trade, a swap between Koch Supply & Trading and Texas Environmental Partners for CO2 valued at $7 per ton. Umm, yeah... Vinod Khosla asks "what is the cheapest way in dollars per ton to reduce carbon emissions from automobiles?" And then answers himself in that highly predictable way that only Vinod knows how to do. He is "confident that cellulosic biofuels, without significant land use impact or biodiversity impact, can achieve costs of $1.25 per gallon in less than three years and below $1.00 per gallon in five to 10 years." Maybe so. But he's got some new material too - "challenging much of the conventional wisdom on internal combustion engines offers significant potential." Hey, that sounds kind of familiar. Washington State is declaring war on its data centers. But for all the wrong reasons. In the past Microsoft and Yahoo have enjoyed a close to $1 billion tax break on data center construction but, in a year of budget shortfalls in the state, the state government has turned its sites on previously exempt revenue sources. A new interpretation of the construction tax states "manufacturing does not include 'the production of computer software if the computer software is delivered from the seller to the purchaser by means other than tangible storage media.'" The cloud is dead in Washington.

It looks like the SF Public Utilities Commission is ready to move beyond rooftop solar. The SFPUC has put out a $50 million request for proposal for "qualified firms interested in financing, developing, designing, constructing, operating and maintaining two solar photovoltaic power plants." With the installed cost per MW currently around $4 to $4.5 million, each proposed plant would have a capacity at or above 5 MW, though this might rise with falling supply prices. But where are they going to put all this stuff? The SFPUC is holding a pre bid meeting this morning on the 6th Floor of 1155 Market St. at 9 a.m. Maybe they picked up some good ideas from our PPA and Finance show yesterday. Or maybe they should turn the Bay into a bioreactor. New Zealand biofuel company Aquaflow Bionomic Corp. has recently appointed Des Ashton, a dashing aviation engineer, to a consulting position with the company in a sign that it may partner with Air New Zealand in their quest to achieve algae-powered flight. Last week Continental Airlines announced they would make a biofuel-powered flight, partnering with GE and Boeing on the project. At the end of February, Richard Branson conducted a similar experiment with a Virgin Atlantic 747 fueled by babassu nuts and love. Yesterday was a tough one for Conergy AG. The renewables company is struggling through a corporate restructuring after posting a significant net loss for 2007. In addition to widespread layoffs, the company has been spinning off (or attempting to spin off) its bioenergy, wind, and solar thermal assets in order to concentrate more on PV production. Conergy's stock dropped 8.5 percent yesterday after the abrupt resignation of COO Pepin Dinandt. Dinandt was apparently very attached to the Austrian solar thermal plant Conergy sold recently. The Regional Greenhouse Gas Initiative, a state government-backed carbon market in the Northeast US, has set September 10, 2008 as the date of its first emissions auction. The RGGI is comprised of ten Northeastern and Mid-Atlantic states whose governors have agreed to mandatory emissions reductions in the absence of federal leadership. This is the US's first mandatory emissions reduction program, and it will be supported by a cap-and-trade system. RGGI's second auction will take place on December 17, 2008.