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Big bucks this month for renewable energy

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cleantech1More than $1.5 billion from two sources, one private and the other public, is going for renewable energy and clean technology projects.

The private venture capital firm Khosla Ventures said earlier this month that it closed on more than $1 billion in funding under two new venture funds with at least two-thirds of the money allocated for clean-tech investments, according to Samir Kaul, a general partner at the Menlo Park, CA firm.

On the same day the Department of Energy and the U.S. Treasury Department announced $503 million in government cash grants to 12 companies that are developing renewable energy projects.

Kholsa Ventures was founded in 2004 by Vinod Khosla, the founder and first CEO of Sun Microsystems. The firm offers venture assistance, strategic advice and capital for entrepreneurs working mainly in clean-tech areas such solar, battery, high efficiency engines, lighting, greener materials like cement, glass and bio-refineries for energy abd bioplastics, and other eco-friendly technologies.

In the two new venture funds announced early this month Khosla closed on a roughly $250 million Seed Fund designed to make investments of around $2 million each, Kaul says.

The firm also closed Khosla Ventures III at about $800 million, which will back companies with initial investments of $5 to $10 million.

This was Khosla’s first foray into raising funds from outside investors and the largest clean-tech funding by a single venture capital firm since 2007.

California Public Employees’ Retirement System (Calpers) was an investor along with other unidentified pension funds, university endowments and foundations.

Kaul estimated both funds will be invested over the next three to five years, adding that Khosla is looking into various sub-sectors of clean-tech with a special focus on building materials and bioplastics.

Those “are very big markets and they are growing and there’s a lot of consumer demand,” he said.

Current bioplastics investments by Khosla include Draths Corp. of Okemos, MI and Segetis Inc. of Golden Valley, MN. Its building materials portfolio includes two California companies, Soladigm of Santa Rosa and the cement company Calera Corp., of Los Gatos.

So far this year Khosla has added seven new portfolio companies in the clean technology sector. These include Skywatch Energy in solar, HCL CleanTech Ltd. in cellulosic sugars, Hybra-Drive Systems LLC in efficiency, and Rayspan Corp. and SeaMicro Inc. in information technology.

Stimulus grants awarded by DOE and Treasury are in the first round of about $3 billion in direct payments to companies in lieu of tax credits that will eventually support an estimated 5,000 biomass, solar, wind and other renewable energy production facilities.line “These grants will help America’s businesses launch clean energy projects, putting Americans back to work in good construction and manufacturing jobs,” said Energy Secretary Steven Chu.

Companies receiving the most money involved wid farm projects, including the Penascal wind farm ($114.1 million) in Sarita, TX; the Locust Ridge II, LLC wind project ($59.2 million) in Shenandoah, PA; the Canandaigua Power Partners, LLC wind project ($52.4 million) in Cohocton, NY; and the Wheat Field wind farm ($47.7 million) in Arlington, OR.\line Iberdrola Renewables Inc., a subsidiary of Spain’s Iberdrola SA was awarded $294.9 million for five wind projects, bringing the company’s investment so far in U.S. wind power to about $1 billion. The 12 winning projects could produce 840 megawatts of electricity, representing a 3 percent increase in total U.S. renewable electricity generation capacity, the Energy Department said.

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Written by William DiBenedetto

15 September, 2009 at 9:12 am

Small Step: U.S.-China Agree on Clean-Energy Research Center

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china_windThe transformation to a globally green and sustainable mindset eventually will happen if enough small steps are taken.

With that perspective in mind the agreement between United States and China to establish a jointly owned clean energy research center fits, or let’s hope so. The agreement between the planet’s two most prolific polluters involves an investment of only $30 million, but maybe it’s a precursor of more to come.

Under the memorandum of understanding signed recently by U.S. Energy Secretary Steven Chu, Chinese Minister of Science Wan Gang, and Administrator of National Energy Administration Zhang Guo Bao, each nation will contribute $15 million to set up the research facility, which will have headquarter sites in each country.

According to the DOE the center will “facilitate joint research and development on clean energy by teams of scientists and engineers from the U.S. and China, as well as serve as a clearinghouse to help researchers in each country.” The “priority topics” will initially include energy efficiency, clean-coal including carbon capture and storage, and clean vehicles.

“Working together, we can accomplish more than acting alone,” Chu said.

Facility locations haven’t been determined. The department says the objective is for initial operations to begin by year-end.

A fact sheet distributed by DOE says collaboration “on science and technology (S&T) has long been a cornerstone of overall U.S.-China cooperation.” The first agreement between the two countries after relations were normalized in 1979 was on S&T cooperation.

DOE currently manages 12 agreements with China under that S&T framework on a variety of energy, sciences and technologies including: building and industrial energy efficiency, clean vehicles, renewable energy, nuclear energy and science, and biological and environmental research.

Opportunities abound for U.S.-China cooperation on clean-energy technologies. It makes sense, and maybe eventually cents, to start somewhere.

In the world of diplomacy just getting to this point qualifies as significant. But in the real-world climate-change battle the follow-through is what we should watch, and especially whether the research center is sidetrtacked by the ‘clean-coal’ delusion.

Written by William DiBenedetto

28 July, 2009 at 11:10 am

Dow and Exxon boost algae biofuel

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algae-2When Dow Chemical Co. and ExxonMobil get into the algae biofuel game it’s a sure sign that algae as a reasonable go-to alternative and renewable energy source has entered the big leagues.

Or is it? Is it more than the typical and familiar corporate lip service using green lipstick? For that answer, stay tuned.  It might take awhile.

Dow, Exxon and more recently the Department of Energy are giving algae biofuel major street cred while gaining huge PR benefits in the mainstream press and (ahem) the blogosphere.

Earlier this month Dow announced a hook-up with Algenol Biofuels Inc. to construct and operate a pilot-scale algae-based integrated biorefinery that will convert CO2 into ethanol. The planned location covers 24 acres at a Dow site in Freeport, Texas. Financial details of the deal were not disclosed.

Algenol has developed a third generation biofuel that makes ethanol directly from CO2 and seawater using hybrid algae in sealed clear plastic photobioreactors, a process the Bonita Springs, FL company has patented as its “Direct to Ethanol” technology. This process produces more than 6,000 gallons of ethanol per acre per year. That smokes the 400 gallons of ethanol per acre produced from corn.

The National Renewable Energy Laboratory (NREL), the Georgia Institute of Technology and Membrane Technology & Research, Inc. are also involved in the project mix with Dow and Algenol. They are contributing science, expertise, and technology to the pilot project, which they say will create a “breakthrough process for ethanol production.”

Algenol has also applied for a grant from the U.S. Department of Energy to conduct the pilot. Upon approval of the grant, Dow and the other collaborators will work with Algenol to demonstrate the technology at a level that proves it can be implemented on a commercial scale.

Meanwhile DOE last week announced funding of up to $85 million over a three-year period from the American Recovery and Reinvestment Act for the development of algae-based biofuels and advanced, infrastructure-compatible biofuels. The department said it wants leading scientists and engineers from universities, private industry, and government “to collaborate in developing a thriving domestic biofuels industry.” The collaborations “will allow different sectors in the biofuels industry to work together on new technologies for producing advanced biofuels that can be brought to market without requiring major modifications to the existing fueling infrastructure.”

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Written by William DiBenedetto

21 July, 2009 at 10:04 am

Biofuel, biomass production boosted by new ARB regs

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bucolicskyTwo years after Gov. Schwarzenegger issued an executive order requiring low carbon fuel standards, the California Air Resources Board (ARB) voted Thursday by an overwhelming margin to adopt a regulation implementing the governor’s initiative.

It calls for a 10 percent reduction of greenhouse gas emissions from California’s transportation fuels by 2020.

This appears to give a big boost to alternative fuel production and distribution in the state. Regulators said they expect the new generation of fuels to come from the development of technology that uses algae, wood, agricultural waste such as straw, common invasive weeds such as switchgrass, and even from municipal solid waste.

ARB, a department of the California Environmental Protection Agency, says the new reg is aimed at “diversifying the variety of fuels used for transportation,” and will boost the market for alternative-fuel vehicles and achieve 16 million metric tons of greenhouse gas emission reductions by 2020. (ARB by the way is also commonly referred to as CARB, but since the agency refers to itself as ARB that’s what we’ll use.)

“The new standard means we can begin to break our century-old dependence on petroleum and provide California with greater energy security” said ARB Chairman Mary D. Nichols.

ARB’s analyses say that to produce the more than 1.5 billion gallons of the biofuels needed, more than 25 new biofuel facilities will have to be built and will create more than 3,000 new jobs, mostly in the state’s rural areas.

The regulation requires providers, refiners, importers and blenders to ensure that the fuels they provide for the California market meet an average declining standard of ‘carbon intensity.’ This is established by determining the sum of greenhouse gas emissions associated with the production, transportation and consumption of a fuel, also referred to as the fuel pathway.

“Economic mechanisms will allow the market to choose the most cost-effective clean fuels (those with the lowest carbon intensity) giving California consumers the widest variety of fuel options,” the agency says.

Seeking to enhance private sector and federal investment into alternative fuel production and distribution, California is also providing funding to assist in the early development and deployment of the most promising low-carbon fuels. The Alternative and Renewable Fuel and Vehicle Technology Program, managed by the California Energy Commission, will provide approximately $120 million dollars per year over seven years to deploy the cleanest fuels and vehicles.

That comes to $840 million, a very decent chunk of change.

Arnold issued the executive order requiring the low carbon fuel standard (LCFS) in early 2007. The standard does not become binding until Jan. 1, 2011.

Early reaction to the regulation was a little mixed, especially from ethanol producers concerned with ARB’s controversial calculations surrounding the emission impact of its ‘indirect land use change’ on sugar and corn ethanol.

The Brazilian Sugarcane Industry Association (UNICA) said sugarcane ethanol “passed a critical test” when ARB passed the LCFS. While UNICA “continues to provide evidence that sugarcane ethanol’s carbon intensity is even lower than initially calculated” by ARB, the decision “means sugarcane ethanol will be in greater demand in California in the years to come.

“The verifiable 90 percent greenhouse gas reduction delivered by sugarcane ethanol provides a source of low carbon fuel that achieves the goals of California’s ambitious regulation, with room to spare,” said UNICA President & CEO Marcos Jank following the vote in Sacramento.

“We congratulate California for leading the world in encouraging low carbon fuels. But any realistic evaluation of carbon emissions from sugarcane farming in Brazil must reflect the strict policies being implemented and action already taken to phase out sugarcane burning, increase mechanical harvesting and expand cogeneration output,” said Joel Velasco, UNICA’s chief representative in North America.

Velasco says that with CARB determined to push forward with indirect land use calculations, the best available data and research should be considered before rushing to conclusions. “Indirect land use changes must accurately represent the dynamics of Brazilian agriculture today. We are confident that a data driven analysis will conclude that indirect land use change from sugarcane cultivation in Brazil is marginal at best,” he added.

Growth Energy, a group comprised of U.S. ethanol producers, said meanwhile that ARB “voted to enact a standard that unfairly penalizes biofuels as compared to other fuels, including gasoline.”ethanol-plant

General Wesley Clark, co-chairman of Growth Energy, said, “We’re disappointed with the board’s vote. This was a poor decision, based on shaky science, not only for California, but for the nation. It is unfair to selectively single out the indirect effects of one fuel pathway while ignoring the significant indirect effects of all other fuels, including petroleum. Today’s decision puts another road block in moving away from dependence on fossil fuels and stifles development of the emerging cellulosic industry.”

Growth Energy said ARB unfairly penalizes biofuels by adding the “indirect land use change” figure to the carbon intensity of biofuels.

It argued that applying indirect effects only to biofuels set an unequal standard since other fuels also have indirect greenhouse gas emissions effects. However, Growth Energy said it is “pleased the ARB has agreed to continue its study of indirect effects, including indirect land use change as well as the indirect effects of all other transportation fuels.”

“The inclusion of an indirect land use change penalty against ethanol is not based on universally accepted science, puts our industry at an unfair disadvantage and would likely lead to increased dependence on foreign oil and stall efforts to create a greener economy,” said Tom Buis, Growth Energy’s CEO. “We’re very supportive of a low carbon fuel standard because ethanol is a low carbon fuel. Corn ethanol can thrive if all fuel pathways are calculated on a level playing field.”

My admittedly unscientific and perhaps naïve reaction to the above is that this is huge: Finally there is a decision that gives all types of biofuel some real direction and impetus. Calculating the “indirect” impact of land use on fuel pathways strikes me as inherently inexact and will always be subject to interpretation and debate. The bar has to be set somewhere and ARB has done this.

To view the regulation, all 374 pages of it, click here.

Written by William DiBenedetto

24 April, 2009 at 1:34 pm

AE Biofuels, Pearson Fuels fuel up

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butte_scaledaebAE Biofuels signed a “strategic agreement” to supply cellulosic ethanol to Pearson Fuels in California.

Pearson, based in San Diego, is developing a network of renewable fuels filling stations in the state. In fact the company built the first E85 fuel station in California six years ago.

As usual, financial details of the deal were not disclosed. The companies only disclosed that under the terms of the agreement, the Cupertino-based AE Biofuels (stock ticker: AEBF) will supply Pearson with cellulosic ethanol “and other biofuels” for distribution through renewable fuels filling stations in California. They will also use available government programs to develop additional renewable fuels filling stations in the state.

Also, AE recently signed an agreement with Merrick & Company to commercially implement AE Biofuels’ “patent-pending enzyme based technology for the conversion of non-food biomass into ethanol and other materials through the design of new biofuels facilities or the conversion of existing biofuels facilities.”

Merrick, based in Golden, CO, is an $85 million provider of engineering and architectural design-build, procurement, construction management, and geospatial services.

Under this agreement, which also features no financial disclosures, AE and Merrick will “work to deploy AE’s next-generation biofuels technology to address the significant demand for cellulosic ethanol created by the revised Renewable Fuels Standard (RFS).”

The Energy Independence and Security Act of 2007 increased the RFS to 36 billion gallons of renewable fuels, the majority of which must be advanced biofuels, such as cellulosic ethanol.

Written by William DiBenedetto

23 April, 2009 at 9:32 am

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