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A123 Systems

A123 Systems continues to outperform the advanced storage market, helping it once again earn the top spot on our list of Top Ten Startups. Since we last checked in with A123, the company has solidified its place as the world’s leading producer of nanophosphate batteries, expanded its manufacturing base with a new production facility in China, and become a critical part of the evolving EV market.

The company’s fast-charging, high-cycle lithium ion batteries are based on a proprietary nanophosphate electrode technology developed by the founders at MIT. Improvements in energy density and impedance have helped A123 solve the overheating and combustion problems typically associated with lithium ion batteries, winning them a growing list of development partners and supply contracts. Toyota execs must be kicking themselves for turning down A123’s recently patented technology a few years back.

But A123 has more than just its technology to stand on. The company has signed a bevy of development partnerships and supply agreements the company with leading EV, engineering, and automobile companies. Last month General Electric handed the company a $20 million check and an invitation to its Global Research Center. A123 is also working with General Motors on the commercialization of its Chevy Volt, and with BAE Systems to produce hybrid buses. Finally, and most importantly, A123 has signed a production contract with Think (another GE-funded company and GTM’s #8 startup) to supply batteries for the Think City, which is due to hit showroom floors later this year.

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GridPoint

As consumer demand for distributed generation and plug-in hybrids grows, so too will strains on the power grid. Add this challenge the growing number and types of green power generation sources and you start to get a serious problem in energy supply and demand management. While we’re continually surprised at the growing number of green technologies available for power generation, we’re even more surprised at the virtual lack of utility involvement in helping to manage this capacity. Fortunately, GridPoint has stepped in to help utilities manage two-way energy transfers, smoothing the way for a seamless transition to a distributed grid and a balanced power load.

GridPoint’s SmartGrid Platform operates in much the same way as an Internet service provider. The GridPoint Energy Manager acts like a modem, transmitting information about the distributed load from homes and businesses to a centrally located GridPoint Operations Center. Energy control applications for both utilities and consumers provide real-time information, helping utilities smooth out surges and outages in the grid. These scalable systems are able to incorporate emerging technologies like advanced distributed storage and plug-in hybrids.

The D.C.-based company recently announced a partnership with Duke Energy to begin testing of a utility-scale smart charging system for PHEVs, a major milestone in smart grid construction. GridPoint also raised $15 million at the end of March, bringing its total funding to roughly $102 million since 2003. As part of the deal, GridPoint named former CIA director James Woolsey and CERA head Daniel Yergin to its board. As if that wasn’t enough, the World Economic Forum named GridPoint a Technology Pioneer at its annual Davos meeting in January 2008.

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Project Better Place

Not content to compete with discrete parts of the global transportation infrastructure, Project Better Place’s CEO Shai Agassi has instead decided to replace the entire thing. Project Better Place aims to create an integrated electric vehicle transportation network providing vehicles, charging stations, batteries, and an innovative financing package – what Agassi refers to as “the virtual oil field”. Except that PBP’s version of the Detroit-Houston nexus is located in Israel – and Denmark, announced recently – and includes partners Renault-Nissan, the State of Israel and DONG Energy. Good thing Agassi learned a few tricks about integrated network architecture as Product and Technology Group president at SAP, a job he quit in April 2007.

Though some have criticized the potential for PBP to excessively drain Israel’s water supply, in many other respects the desert country is the ideal place to launch this program. Short driving distances between major cities, a high cost of imported fuel, and a densesolarenergy supply (along with a fairly well established CSP sector for powering those recharging stations), all help in speeding the transition towards an electric vehicle infrastructure. Replace sun with wind and Denmark has virtually the same qualities.

Does this mean PBP isn’t scalable to places where it may be needed the most, like the U.S. and China? Right now, probably not. But by the time the Renault-Nissan EVs arrive in 2011, the energy and policy landscape may be more amenable to such a disruptive project. Ultimately, PBP offers a plan for concrete progress instead of a flashy prototype and, with $200 million raised from Morgan Stanley, VantagePoint Ventures, Israel Corp., and private investors like former World Bank president James Wolfensohn, some real credibility in delivering a game-changing product.

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BrightSource

When BrightSource founder Arnold Goldman pulled an Elwood Blues on his old Luz International team and told them “I’m thinking of putting the band back together” a lot of us were skeptical of another utility-scale CSP company entering the market. To the outsider many of today’s leading solar thermal companies are hard to differentiate. But only BrightSource has the Power Tower, and that made all the difference.

BrightSource brings together over twenty years experience building utility-scale CSP plants, starting with predecessor Luz International’s Solar Energy Generating Systems, which, during the 1980s and 1990s, generated close to 90 percent of the world’s solar power. The company’s DPT 550 system uses flat mirrors, which are less costly than traditional parabolic mirrors, to focus thermal energy on distributed, water-filled towers, creating steam to drive a turbine. BrightSource mirrors track the sun in two dimensions, focusing energy directly onto the PowerTowers, while the choice of water over heating oil improves conversion efficiency.

Flat mirrors allow BrightSource to deploy larger systems at lower relative cost than companies using parabolic arrays. These significant cost reductions were enough to convince PG&E to sign with BrightSource for a potential 900 MW system at a cost of $2 billion to $3 billion. Under the deal, BrightSource will build an initial 100 MW system by 2011, with two 200 MW systems going up in each of the following years. The contract also contains an option for an additional 400 MW system. Though the company has only taken $50 million VC money to date, the PG&E contract is the biggest deal in the history of solar energy.

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Luminus Devices

While DIY energy efficiency is considered the easiest way of reducing our reliance on fossil-fuel powered electricity, pulling the plug on DVD players and switching off computers at night are hardly enough to get the average consumer excited about saving the planet. Instead, energy efficiency needs to be backed up by crowd-pleasing technologies that make our lives (and our TVs) brighter. Luminus Devices accomplishes this with a line of solid state lighting technologies that suck even less power than the most efficient CFL bulbs or LCD flat panels.

The Billerica, MA-based company’s PhlatLights are multiple-use, small point light sources based on photonic lattices that extract and direct light from the LED. This means TVs equipped with PhlatLight bulbs turn on faster, and produce sharper images and brighter colors than any other lamp-based TV. But how does this benefit anyone other than Al Gore fanboys straining to see the big guy’s Keynote presentations from An Inconvenient Truth on their Samsung HL-T56892 56 inch 1080p high-def rear projector? Well, when measured against plasma and LCD flat panels on same-size TVs, PhlatLights routinely draw 50 percent to 75 percent less energy. So, whether you’re searching for Mark Wahlberg’s third nipple appearance in Shooter or blissing out to sea turtles on Blue Planet, Luminus Devices helps you feel a little less guilty about destroying our future.

Investors seem to think so too. The company recently raised $72 million in a D round led by Braemer Energy Ventures, with help from CMEA Ventures and the Paladin Capital Group. Big D rounds usually make us a little apprehensive, though the solid state lighting market isn’t exactly popping off. Not just yet anyway. The company has also landed a slew of awards, 11 patents, and some big name partners like Samsung, LG, and Toyota.

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Coskata

What makes one biofuel company different than the rest? Vinod Khosla has funded most of them, so that’s not a defining characteristic. Each claims to have a special refining process using a proprietary thermal cracking/membrane distillation/algae fermentation method. They all want to raise $300 million for a trans-continental network of 500 million gallon mega-refineries. And, oh yeah, a good number of them fall into bankruptcy. While we recognize it’s impossible to replace the international energy infrastructure off a few VC rounds, many of these companies don’t seem to share our viewpoint.

We like Coskata because they apparently agree with us. Since announcing a goal of refining cellulosic ethanol for $1 per gallon earlier this year, Coskata has been busy signing up major partners like General Motors and, we hear, Chevron, while definitely not announcing any new mega-refineries. The company’s two-step refining process gets them off the hook from becoming dependent on any single feedstock – CEO William Roe says Coskata will burn anything ranging from tires and garbage to low-water biomass to carbon monoxide. The different feedstock streams are then fed to microbial colonies living on membranes, which turn the syngas into liquid fuel.

Save for a single 40,000-gallon pilot plant set to open in 2010, Coskata has largely shied away from commercializing its refining process. Instead Roe has set out on the road to technology licensing, which saves the company from the capital risk of rising commodity and construction prices and the sales and distribution problems that have left a number of biofuel companies out in the cold. Since raising $10 million in 2006 from Khosla Ventures, Advanced Technology Ventures, and GreatPoint Ventures, Coskata hs become the biofuel company to beat. The company raised an additional $19.5 million in March, and will announce the mystery location of its pilot plant at the end of April.

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Bloom Energy

Bloom Energy wants to take you off the grid. We think. Since we last profiled Bloom Energy at the #6 spot on our Top Ten Startup list, the company has yet to update their website or release a product. However, buzz about the company keeps growing and, with it, our interest in what we think they’re planning to do.

Common consensus is that Bloom Energy is developing a 100 kW kW ceramic core regenerative solid oxide fuel cell for distributed generation in homes and business. A key innovation in their technology is its ability to process nearly any kind of hydrocarbon-based fuel, ranging from natural gas to ethanol to methane to biodiesel. Considering the current energy distribution infrastructure, having a 100 kW fuel cell running off pre-existing natural gas lines would allow for easy integration in nearly any home without having to worry about acquiring and storing other kinds of fuelants. Energy created from the fuel cell may be used to generate heat, electricity, cooling, and (maybe) hydrogen. The company has worked with the University of Tennessee, the Department of Energy, and (possibly) Cypress Semiconductor on field tests.

Given founder K R. Sridhar’s background as Director of the Space Technologies Lab at the University of Arizona and his work at NASA on converting Martian gases into oxygen, we’re expecting big things from the company. Bloom’s technology and Sridhar’s background was enough to convince investors like Kleiner Perkins Caufield & Byers and Advanced Equities to the tune of $250 million, and that’s enough to sway us.

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Think

It seems nearly every month an electric vehicle company with a funny sounding name announces their version of a battery-powered soapbox racer for the edgy, enlightened and conscious urban driver. Rarely, if ever, do any of these companies announce significant partnerships with a leading battery company and a global conglomerate, design a car you wouldn’t be embarrassed to drive, or make credible projections about product delivery in major markets. Norway’s Think manages to check all three of these boxes with it’s zippy Think city and SUV lookalike Think Ox.

After Ford dropped the company as a subsidiary in 2002 (but not before investing close to $150 million in its technology), Think wandered around in the wilderness before raising close to $25 million in 2007 from a group of American and Norwegian investors including Sundt AS, Centra-group, Home Invest AS, Canica AS, the Heinz Family Trust and Wintergreen Advisers. With these funds, Think brought on board Porsche to help with its factory design and committed to deploying next generation lithium ion batteries in nearly all of its vehicles.

Since then, Think has partnered with battery leader A123 Systems and General Electric, which recently invested $4 million in the car company, and announced plans to begin selling its Think city in Norway and the UK within the first six months of 2008. The company plans to hit its 10,000-vehicle production target in 2009 and to begin selling into major markets in the U.S. by 2010.

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Suniva

For the past few years, shortage has been the name of the game for silicon PV. A globally constrained supply chain has created legions of polysilicon producers in China, spawned the growth of thin-film as a commercially viable alternative, and sent numerous PV companies back to the lab to cost-engineer silicon cells, wafers and ingots. Out of this effort has come a number of companies claiming declining wafer thickness or climbing conversion efficiencies. Suniva, on the other hand, has dug into its mighty bag of tricks to produce a PV cell with both qualities.

Suniva founder Dr. Ajeet Rohatgi, director of Georgia Tech’s University Center of Excellence in Photovoltaics, IEEE Fellow, and holder of U.S. Patent No. 5,520,271 – “Processes for Producing Low Cost High Efficiency Silicon Solar Cells,” is our dream founder. Using his research, the Georgia Tech spinoff is working its way toward commercializing PV cells a mere 100 microns thick with conversion efficiencies topping 18 percent. While not quite SunPower levels, Rohatgi believes he can broach the 20 percent barrier by 2010.

Suniva has done more than promise a breakthrough technology. The company has raised $55.5 million over two rounds since 2007, and is now in the planning phase for its commercial plant. The 25 MW facility will feature automated assembly lines for cell production with costs declining below $1 per watt as efficiencies improve. CEO John Baumstark is already predicting $10 million in revenues during 2008, with plans to hit profitability in 2009 on sales topping $100 million.

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Silver Spring Networks

Few greentech startups can say with any credibility their potential consumer market numbers in the hundreds of millions. Even fewer can make that claim without then explaining how their carbon-eating algae won’t also eat whales and, oh yeah, we’re not sure because it’s still in the Petri dish. Silver Spring Networks clears both of these hurdles, and only then because it’s an IP networking startup masquerading as a greentech company. But simplicity and scalability are the name of the game and energy, like information, wants to be free. And what better way to build a smart grid than on an open-platform architecture?

Silver Spring Networks’s approach to the smart grid relies on real-time networking between energy consumers and energy suppliers on open-platform Internet protocols. On the utility side, Silver Spring’s products combine wireless networking with software-based monitoring and control applications, which let utilities manage and meter electricity, water, and gas usage. Because Silver Spring’s network architecture is open platform, the created networks are open to all vendors, giving us a glimpse of what a seamlessly integrated national grid may one day look like. Consumers benefit too with real-time access to energy usage and rate and load monitoring.

Adding IP networking to the existing power grid is an essential element of building renewable capacity, while also helping to modernize and build efficiencies into a hopelessly outdated system. From the VC perspective, greentech companies like Silver Spring Networks are ideal investments – they don’t require massive capital injections for factory construction, the technology is available now, and the potential consumer impact is massive. This is why firms like Foundation Capital, JVB Properties, and Edison Electric Institute have invested approximately $67.4 million in the company since 2007, including a $17.4 million round in April 2008. The company also signed a deployment contract with Florida Power & Light in 2007 to build the largest IP-based power grid in the country. And, like its smart grid brother GridPoint (another GTM Top 10 Startup) Silver Spring Networks was honored by the World Economic Forum as a Technology Pioneer at its annual meeting in January 2008.