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Clean energy on a roll

Lot's of good news here in Silicon Valley lately on the cleantech front.

Much of it was under way before Hurricane Katrina hit, but investors and other experts are saying the oil spikes caused by the hurricane damage -- New Orleans is a major oil hub -- may push investors to renew their efforts in the sector. It may mean that borderline projects -- the ones that VCs were on the fence on -- might now get funded. We met with Jack Harrington, of Palo Alto's ATV, late last week. In the past, he's focused on communications, but he's looking at energy deals more intensely. Ways to draw gas out of coal, one of America's more abundant commodities, were of interest, he said. Katrina might speed things up.

Scott Mize, president of the Foresight Nanotech Institute in Palo Alto, told us last night that the U.S. culture is "crisis-driven," that we wait until events like Katrina to push us over a tipping point --at which point we launch into action. What Katrina exposed, he said, was the flaw in the nation's energy system, one that remains unable to store energy, and one that is still centralized -- and thus one prone to bottlenecks. He'll be revealing a vision to change that at an upcoming conference in late October.

Other events reveal mounting interest in clean power:

--Sunnyvale's SunPower, which makes...

...high-end solar cells for buildings or homes, has filed to raise (free registration) as much as $115 million in a public offering.


--Berkeley's solar energy company, PowerLight, scored $3 million from San Francisco's Bay Area Equity Fund, a venture capital fund that invests in companies for profit but also to generate "positive social and environmental returns," according to VentureWire (sub required). PowerLight's solar photovoltaic products use silicon semiconductors to convert sunlight into electricity, along more traditional lines (as opposed to the new non-silicon start-ups out there), but which tries to lower the cost of the installation and usage process. The Bay Area Equity Fund is managed by J.P. Morgan. According to VentureWire, the fund also seeks to invest in companies that improve the San Francisco Bay Area's low and moderate income neighborhoods.

--Earlier in August, the Cleantech Venture Network, which does research in the sector, said clean-tech investments exceeded $336 million in the first quarter of this year, which was a fourth straight quarterly increase. This is up 4.8% from the same quarter a year ago and up 10.3% from Q1 2003.  It also added the following, which caught our eye: "A majority of early stage activity was centered in California, where Silicon Valley sees the potential in cleantech investment." So, in fact, we may be building a cluster of activity here that some people thought wasn't going to happen.


--There's crazy stuff like "zero-point" energy, being pushed by Magnetic Power, a company north of SF, in Sebastopol, but obviously still very much in the lab phase. (Thanks Rob, for the tip).


--Silicon Valley venture firm, Kleiner Perkins, has apparently invested in several clean-tech companies lately, including in EEStor Inc., a Cedar Park, Texas startup that is developing breakthrough battery technology, and Vinod Khosla, who invests separately from Kleiner these days, but joins them in several investments, has seeded $500,000 to Methanotech, a Pasadena company focused on producing methanol via “biological processes,” though it isn't clear whether Kleiner was involved on this one. Business Week and Private Equity Week had the news on those.

--And this is a little further south in Cal.: There's a massive concentrated solar power "plant" (500 MW) being installed in California's Mojave desert. Check out this story. Not a bad development, considering the blackouts that hit southern California last month.

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I think this is just the beginning of a major trend. If oil prices continue to climb investors will look at alternatives such as wind energy, solar energy, biodiesel and so on. In Germany we have a law in order to "subsidize" (if you ask the responsible politicians it is not a subvention) the generation of renewable energies via higher prices garanteed to the producers. One only has to look at the stock charts http://finance.yahoo.com/q/bc?s=ps4.f+slx.f+soo1.f+swv.de+sww.f&t=1y&l=on&z=m&q=c&p=&a=&c= of solar energy companies which went public in germany during the last one or two years. They have been the BIG gainers during the last year. Please note that the shares of Solarworld (SWV.DE) had a split and not a 50% drop as shown in the chart.

Olaf Kortlüke on September 10, 2005 1:00 AM
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