The Next Wave of Smart Grid Funding?

Smart grid has been the buzzword on utility, entrepreneur and investor's lips in 2009. 

Funding the smart grid has certainly been on the Obama administration's agenda – as evidenced by the billions being funneled into this sector (see Jeff St. John's pieces about the winners and losers in this contest).

Venture Capital investors have been talking about smart grid investments for a while now. Foundation Capital's Steve Vassallo even authored a "Smart Grid Manifesto" to "help drive a single point of view across our four Smart Grid portfolio companies." Vassallo writes, "Smart Grid and smart pricing together answer the riddle of how you get market forces to make a difference in a monopoly environment." 

Foundation's smart grid investments include EnerNoc, Silver Spring Networks, eMeter and Control4.

Another theme amongst VC investors in 2009 has been the capital efficiency of smart grid plays. In other words: Don't expect too many Solyndra or Nanosolar-magnitude deals from the VC community in 2009 or 2010. 

That said, in looking at the numbers, although funding in smart grid is recovering:



It's a bit surprising to see the small proportion of smart grid deals relative to VC in greentech as a whole:



So are VCs talking and not diving in?  Are they looking to see the outcome of Silver Spring Networks' utility roll-out? Are we only in early days? 

Or will these initial forays into Advanced Meter Infrastructure and Home Energy Networks give way to a bigger and steadier wave of other smart grid technologies like Vehicle to Grid, EV charging stations, data management and analytics, network optimization tools, and independent energy storage operators?

The next few quarters will tell. Smart people in Greentech Media's smart grid practice see a new smart grid innovation and investment wave about to break.

Bloggage From SPI, Part 2: A Hopeful CPV Panel

I moderated a panel on Tuesday on Concentrating Photovoltaics (CPV) at the Solar Power International show in Anaheim.

I am an unlikely choice for the CPV moderator role as I have not always heaped praise on the CPV industry (see here and here). 

But I kept an open mind, and our panel explored the progress that CPV has made and the challenges that lie ahead.

Our panelists:

• Hansjörg Lerchenmüller, CEO, Concentrix Solar  

• Mark Crowley, President and CEO, SolFocus 

• Joseph Budano, CEO, Energy Innovations   

• Jerry Bloom, Partner and Chair, Energy Practice at Winston & Strawn  

Jerry Bloom, a longtime energy and renewables attorney at Winston served as a reality check – reminding us that solar competes with 4 cent per kilowatt hour coal and cheap nuclear power. And that renewables face an uphill battle in making inroads in the dominant energy energy mix.

But the CEOs of these CPV firms, selected for this panel because they are on the cusp of full-scale commercialization, are driven and optimistic and they made these points:

• CPV is just at the beginning of its cost curve.  Concentrix' Lerchenmüller sees CPV achieving costs of 30 cents per Watt in a few years.

• CPV with high-efficiency triple-junction solar cells behaves better than silicon in high temperatures.

• CPV doesn't require water like CSP and unlike CSP scales to smaller deployments.

• Notably, the price of capex for CPV is much less than that of other PV technologies: $0.10 to $0.15 per Watt compared to First Solar at about $1 per Watt and a-Si at about $3 per Watt.

• CPV, at least for these three firms, is becoming a "bankable" and credible technology.

NREL CPV expert Sarah Kurtz noted that the anticipated timeline for CPV has been far exceeded with Energy Innovations and the company's 1200 sun system claims a module efficiency of 29 percent. 

All of the CEOs expected the prices of the solar cells to drop. Lerchenmüller spoke of the parallel between those cells, which are essentially LEDs, having to follow the falling price trajectory of LEDs whether they come from Emcore, Spectrolab, Azure Space or one of the newcomers like Cyrium or Solar Junction.

And impressively, between the three CPV firms on the panel – there is the potential for almost 100 megawatts of factory capacity within the next year.

These firms still face the competitive challenge of plunging silicon costs and the difficult financing environment.   But, of the more than 45 VC-funded CPV firms, many of them doomed, these three hardy firms have a decent chance of surviving and succeeding.

Geothermal From GreenFire: The Lowest Cost Energy (+ CCS)

"CO2-G [CO2 Geothermal] is projected to have the lowest cost of any form of energy and is the only source of energy that permanantly sequesters carbon."

Those are the words of Mark Muir, co-founder of GreenFire Energy, a startup with an innovative twist on geothermal energy. 

Conventional geothermal energy entails tapping a heat source at relatively shallow depths and capturing the heat as steam to turn a turbine. Enhanced Geothermal Systems (EGS) create geothermal energy in hot dry rock by sending pressurized water down an injection well. Water travels through fissures, capturing the heat of the rock when it is forced out of a second well as hot water, which is then converted into electricity via a steam turbine or a binary power plant.  The cooled water is sent back into the earth to heat up again.

GreenFire dispenses with the water and instead uses carbon dioxide as the geothermal "feedstock."

"Geothermal ends up with the lowest cost – but conventional geothermal has big cooling towers and pumps. Hopefully we can get away from all that," adds Muir.

He projects that Carbon Dioxide Geothermal (CO2-G) can have a lower LCOE than any other scalable form of energy.

According to the CEC (California Energy Commission), there are 43 operating geothermal power plants with an installed capacity of about 1,750 megawatts in California, almost two-thirds of the United States' 3 gigawatts of geothermal generation. Geothermal energy production in the U.S. is a $1.4 billion industry – far bigger than the U.S. solar market.  And unlike solar, geothermal power is baseload power – available 24 hours a day, 365 days a year. Iceland gets over a quarter of its electricity from geothermal sources.

GreenFire's CO2 can come from natural sources or from the emissions of coal plants.

One of the largest natural deposits of CO2 is located in the the St. Johns Dome, a region extending across Arizona and New Mexico. It is a perfect site for GreenFire because it has the CO2 resource, a thermal reservoir, access to transmission lines and there are two power plants right at the dome and four more within a 200-mile radius. GreenFire is in a joint venture with Enhanced Oil Resources, the company with the leases to the CO2.

So, in addition to producing low-cost geothermal power, CO2-G can actually find a use for the carbon captured from coal plants.

This is important. Coal provides 50 percent of the U.S.'s electricity and according to EPRI, The Electric Power Research Institute – coal is here to stay. EPRI predicts that coal will continue to dominate our electrical production. But in order to meet any carbon legislation, it's going to have to be coal with carbon capture and sequestration (CCS). 

The U.S. DOE will be making $55 million available to develop advanced carbon capture technologies at existing power plants. An economical technology for CCS has not yet emerged. 

Although not involved in reducing the cost of carbon capture, Greenfire believes they can save up to $25 per ton in total CCS costs (which are predicted to be in the range of $40 to $80 per ton once the process becomes commercial). The energy for for carbon capture could be a third of the plant's output. CO2-G essentially provides the power for the Carbon Capture.

We covered available CCS technologies such as membranes, solvents, solid sorbents and condensed-phase capture in an article earlier this year.  

GreenFire has the option of harvesting the kinetic energy from the wellhead. Since CO2 expands much more than water – it creates a highly pressurized situation.  That expansion's kinetic energy can be harnessed by a new type of energy transducer, the "free piston linear alternator," from the likes of Greenwell Renewable Power.

GreenFire is a small company and is looking for funding.  Muir estimates that he'll need about five years and substantial backing to put together a demonstration site. "It's not inconceivable for the money to come from smart VCs" but the likely source would be funding from the coal industry, "because its a matter of life and death in a carbon constrained world," according to Muir. 

Muir estimates that 5 percent of the world's coal plants might be eligible for the GreenFire CCS technique.

Bloggage From Solar Power International, Part 1

With more than 18,000 attendees and about 900 exhibitors in Anaheim, Calif. (right near Disneyland) – Solar Power International is the largest solar trade show in the U.S. I'll be posting as frequently as I can from the event.

Last night was the opening reception with nearby fireworks and thousands of people milling to the sounds of the cover band that follows me around from city to city.  They played "Brown Eyed Girl" and "Play That Funky Music White Boy."  It was not funky.

The solar industry has succeeded in moving through an entire business cycle – from boom to bust to its current recovery. Trade shows have their own phases and cycles and SPI is now in the swimsuit models and "spokes model" in hot pants phase.

I spoke with a few PV inverter companies and they have an interesting problem – long lead times.  There is a components shortage and certain large inverter companies are quoting a five month (!) lead time. 

I ran into Greg Kelly (Sr. VP of Bus Dev) and Mike Childers (Chief Commercial Officer) of Miasole. Interesting news from them: They have achieved UL approval on their CIGS solar panels and are touting a 10.5 percent efficiency.  They claim a 60-megawatt capacity with 60 megawatts to come and look for a capex of 50 cents per watt.

More soon.

Smart Grid Backlash

How can you be against the smart grid? Or against smart meters?

Isn't it like being anti-motherhood or anti-apple pie or anti-education? Apparently not, according to a recent citizen uprising in Fresno. And a recent smart grid panel I moderated.

First the panel. I moderated a relatively contentious panel at the Netherlands America Foundation on Thursday night. Execs from smart grid hardware and software startups including:

• Tony de Rijk, CEO of iDo Technology 
• Joris Jonker, CEO of Home Automation Europe  
• Rich Celio, CTO of Applied Power Technology  

All chimed in with the warning that:

• A $2.2 billion meter deployment would have a questionable ROI if most of the savings came from reduced truck rolls 
• The smart meters were not smart enough
• Consumers don't want Big Brother controlling their thermostat and appliances

Even a panelist from the SF PUC was dubious of the value of the smart meters. As for the firms themselves, APT has been profitably integrating smart energy systems in the enterprise for 15 years – deploying smart energy before the term was invented.  iDo and HAE are start-ups looking to add intelligence to the building or home energy system but not at the meter.

On to the citizen uprising...

Excerpts from an October 22 article in The Fresno Bee:

More than 100 people packed a town hall meeting in downtown Fresno to vent their frustration with PG&E's newest metering technology – SmartMeters – that customers say has led to faulty spikes in utility bills. "The meters, in my opinion, are not very smart," PG&E customer Joe Riojas told Senate Majority Leader Dean Florez, D-Shafter. The meeting lasted four-and-a-half hours. No one spoke in favor of the Smart Meters.

Many customers brought their PG&E bills to show Florez their skyrocketing costs. For example, Don Vercellini of Fresno said his bill recently went from $500 a month to $1,173. "It's straight-out fraud. I want my money back," he said.

Florez complained that the technology for customers to check usage will not be in place for years.

Said Florez: "People don't see the value [in this program]. They just see higher cost, and that makes them angry."

You wouldn't like Fresno when it's angry.

Jeff St. John blogged about it here. According to St. John's reporting: Those complaints have focused attention on PG&E's $2.2 billion, 10 million smart meter deployment, with the California Public Utilities Commission demanding that PG&E find a third party to investigate.

But PG&E has already tested many customers' smart meters – made by General Electric and Landis+Gyr and networked by Silver Spring Networks – and have not found any problems with how they're working, according to PG&E spokesman Denny Boyles.

Rather than malfunctioning meters, PG&E thinks the higher bills have come from its two rate hikes in the past 12 months, plus a hot summer that led to many Central Valley residents cranking their air conditioners to beat the heat, Boyles said.

With the feds ready to launch another wave of smart grid funding – it would be helpful for the public to actually want these products and services. And to actually feel some immediate benefit and value from the smart grid.

It can't be just about benefits for the utilities.

Zenn and Them Old EEStor Blues

The EEStor music catalog continues to expand.

This summer's EEStor tribute folk song from James Schultz, Quaker songwriter, was a Guthrie-esque ode to EEStor's Dick Weir and Zenn's Ian Clifford and their saga of permittivity and barium titanate purity.  Schultz has released a bluesy new hit single entitled "The EEStor Blues" in which he sings (sort of sings) of being  "tired of the old NDA, no new net news blues," and laments the demise of the City Zenn. He once again manages to get barium titanate into the rhyme scheme, unique in the history of song.

In September, Zenn Motors Chief Executive Ian Clifford told Reuters that the company discontinued its plans to sell its own highway-speed EV. Instead, Zenn is betting on EEStor, the secretive startup claiming a radical advance in ultracapacitors, that will allow EVs to charge faster and go 250 miles on a single charge at low cost. Zenn abandoned its car manufacturing business to focus on the EEStor alchemy and a drivetrain built for other auto vendors. 

EV maven Darryl Siry and former blogger on these pages writes in Wired:

"This change in strategy represents a moment of clarity for Zenn – recognition that the entire value of the company lies with its speculative bet on EEStor’s game changing technology claims, and not with the expected value of its now abandoned car business.  Which means that if you attribute today’s $169 million market capitalization of Zenn Motor Cars entirely to its 10.7% stake in EEStor, the secretive and mercurial startup can announce another questionable milestone: an implied value of more than $1.5 billion."

In the words of EEStor skeptic, frequent commenter and fabled gadfly, Steve Pluvia, "EEStor is nothing more than a vehicle for a Canadian pump-n-dump, specifically Zenn Motors. Zenn has a powerful Canadian hype team supported by a crooked bucket shop (Paradigm Capital), paid promoters and degenerate gamblers. Experts in the field of EEStor’s technology do not believe the claims in their product... The trade here is to short Zenn on all pops from here forward."

Investor Vinod Khosla is also skeptical of the company and it appears as if early investor Kleiner Perkins chose not to re-up on their investment when Zenn raised their ownership stake.

In the truthy column, apparently UL has received a request to test the mythic EESU and a firm called Polarity has received a contract from EEStor to integrate Polarity’s high power HV to LV converter into EEStor's EESU.

If EEStor is real and its technology is a game changer that disrupts the world of automotive transportation – then Zenn, Weir, KP, Paradigm, Ed B. are brilliant technologists, investors and futurists.  If EEStor is a scam, we get an illustrative story of technical disingenuousness and a naive public and investor team.

And we get a few good songs. Thanks Brother Schultz.