Expect More Solar Mergers This Year

March 3, 2010

Solar energy is not the easiest of businesses. Profit margins are thin as over production continues to push solar cell prices lower.

"A lot of companies aren't going to be around anymore," says K Scott Son, director of finance at Suntech America

Meanwhile, banks remain reluctant to finance big projects, unconvinced they will produce power cheaper than coal and natural gas plants.

Sure, demand has recovered modestly since the depths of last year’s recession. But not enough to head off a period of consolidation with stronger companies swallowing up weaker ones to capture market share and improve the bottom line.

“A lot of companies aren’t going to be around anymore,” predicted K. Scott Son, director of finance at Suntech America, at last week’s Cleantech Forum. “It’s only a matter of time before there is consolidation.”

The pairing has already begun. Last month, U.S. SunPower said it would acquire SunRay Renewable Energy, the Italian solar plant developer, and late last year, Siemens agreed to buy solar thermal company Solel from Israel. MEMC has also put money on the table. It scooped up solar farm developer Sun Edison.

Companies can pick up additional margin by expanding vertically, says Ullas Naik of Globespan Capital Partners

More deals will follow. It makes sense for companies to “vertically integrate,” in other words, expand from manufacturing solar cells to building solar plants, says Ullas Naik, managing director at Globespan Capital Partners. They can pick up additional margin.

They also will create larger companies more likely to qualify for bank financing. Banks are less likely to lend to a project if they fear the solar panel supplier won’t  be in business 25 years from now to stand behind a product warranty.

Suntech is one company looking to expand into “distribution,” says Son. “It’s a way of ensuring our panels will be used.”

It’s also a way of bringing stability to a fragmented industry where big suppliers see attractive prospects for growth.

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Posted by Mark Boslet

[Video] Intel Confirms Launch Of “Westmere” Server Chip Mid-March, Details Cloud Security Functions

March 2, 2010

Intel server chip chief Kirk Skaugen confirmed the imminent release of the company's first 6-core chip since the ill-fated Dunnington

At a security event last night in San Francisco, Intel vice-president Kirk Skaugen confirmed the release date of Intel’s next-generation lineup of 32-nm Xeon server processors, including the first six-core Xeon chips since 2008 (Dunnington).

“In about 2 weeks it’s highly anticipated that we’ll be announcing this Westmere processor… When you buy that [chip], you should be able to get your return in about 5 months. But we’re probably most excited about – relative to just another crank of energy and performance – is the security features that are going into the processor,”told Skaugen to reporters during a media event hosted by security company RSA.

Scheduled in March 16, Intel will release a dozen dual-socket, 32nm Xeon processors as well a workstation version (Core i7) of the six-core chip.

“But what probably we’re most excited about – relative to another crank of energy and performance – is the [2] security features that are going into the processor,” added Skaugen.

The 2 new security features included in the Westmere line are:

  1. 7 new instructions call AES-NI, that will deliver encryption and decryption up to 9 times faster and up to 2 times more SSL functions than in the past;
  2. Trusted eXecution Technology (TXT) that is integrated in the processor, the chipset and Intel motherboards. “So for example, if you’re using VMotion to dynamically move a workload from a server to another, you want to set policies that say “I’m only going to move a workload to a server I know the secure root of trust has been verified… So, if I’m on a non trusted server I won’t be allowed to run [an application] on a trusted server, and vice-versa… all these kind of policies can be set up at the cloud level through the software that will be enabled on top of these new hardware,” said Skaugen.

Intel claims cloud domination

The Intel executive also provided reporters with some interesting statistics:

  1. a little under 40% of the world’s servers today are still single core;
  2. Xeon servers represent about 90% of the cloud infrastructure.

“With this new chip, everything that you know and love about Intel on energy efficiency, you’ll still get. So you can retire 15 single core servers and put in one Westmere server that is going to have the same performance, but you also going to get the trusted execution technology that can deliver that new secure root of trust,” concluded Skaugen.

Follows is a video excerpt of Skaugen comments:

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Posted by TechPulse 360

Ford Boasts Its Escape Hybrid Gets Up To 120 MPG, Tests Smart Grid Software

March 2, 2010

Ford with great excitement announced an expanded alliance with Progress Energy of North Carolina to test its plug-in hybrid electric vehicle, the Escape.

But buried in the press release issued Tuesday were several more interesting facts. First, Ford in partnership with almost a dozen utilities in North America has now logged more than 160,000 miles on a fleet of 21 Escape prototypes since mid 2007.

The Escape plug-in hybrid is testing Ford smart grid recharging software system

Second, during the testing, the prototypes using electric power and a gasoline engine achieved up to 120 MPG.

In one sense, it is surprising the vehicles haven’t covered many more miles. But considering the program probably started slowly and gained momentum in recent months, the company is obviously collecting some useful data.

What is unfortunate is that Ford did not offer more information on mileage. For instance, it didn’t explain what conditions led to the 120-MPG achievement. Nor did it offer an average MPG.

But it is interesting to note that substantial improvements in endurance are possible, even as carmakers complain about federal demands for an improvement in their fleets’ efficiency.

The Ford Escape hybrid is scheduled to go on sale in 2012, and the company claims it can travel up to 35 miles with little or no gas. Its batteries take up to eight hours to recharge with household current.

With respect to Progress Energy, the company has been testing one plug-in Escape in Raleigh since February 2009. It will now test a second car, a 2010 Escape with what Ford calls “the industry’s first vehicle-to-electric ‘smart’ grid communications and control system.”

The goal of the system is to allow drivers to take advantage of less expensive electric rates by deciding when and for how long to recharge their vehicles.

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Posted by Mark Boslet

Obama Administration Spending Will Boost Clean Tech Innovation, Survey Finds

March 2, 2010

The $111 billion the Obama Administration has set aside for clean-tech projects and companies will boost the industry and accelerate innovation in the U.S., according to a survey of business leaders.

The study by Deloitte found that 70 percent of clean tech company leaders believe the stimulus funding will provide an advantage to the industry as it competes with Asian and European rivals.

The Deloitte study found 70 percent of clean tech companies believe the money will give the industry an advantage, says Director Brian Goncher

And yet, 72 percent of the executives derided the spending, in one sense, for picking technology winners and losers in a still evolving landscape, said Deloitte Clean Tech Practice Director Brian Goncher, who presented the work at the Cleantech Forum in San Francisco.

Obama Administration officials have earmarked $31 billion in grants and $5 billion in tax credits for clean-tech initiatives. Ninty-five percent of both accounts have been allocated, though only a tiny portion of the money has been spent.

The administration also will award $75 billion in loan guarantees, with only $18 billion committed so far.

The survey contacted 70 clean-tech companies, 60 percent of which didn’t apply for money. Of those that did apply, 65 percent sough grants, 22 percent, tax credits and 13 percent, loan guarantees.

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Posted by Mark Boslet

[Video] RSA, VMware, Intel Unveil Trusted Cloud Vision

March 2, 2010

EMC collaborates with VMware and Intel to deliver proof of concept for business-critical security, compliance and control in the cloud

RSA Chief Art Coviella at the conference media reception

At a media reception tonight, RSA president Art Coviello unveiled a proof of concept for measuring and monitoring the security of a cloud infrastructure.

The concept that will make its debut tomorrow, at this week’s RSA Conference in San Francisco comprises of a hardware root of trust provided by Intel in its next-generation server processor (Westmere), a secure virtualisation environment and a security information and event management.

“What is more important, because this is about virtualisation (the enabling technology for the cloud infrastructure), is that we are building the security in [the cloud infrastructure] before we have massive deployments of cloud infrastructures. That was not happening 14 or 15 years ago. That, I think, is the biggest news that is coming out of this conference,” explains Coviello.

The goal is to:

  1. provide a better visibility into actual conditions within the bottom-most layers of the cloud, within physical and virtual machines, giving organizations the ability to verify secure conditions in what was formerly the “black box” of the cloud;
  2. enable finer controls to enforce differentiated policies in private clouds, such as what types of physical hardware virtual machines may run on and which tenants or business units may co-reside and share resources;
  3. streamline Compliance by providing automated processes for collecting, analyzing and reporting infrastructure-level activities and events.

Follows, a video excerpt of Coviello’s introductory comments.

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Running A Bloom Box May Not Be As Cheap As The Company Hopes

March 1, 2010

Bloom Energy’s new commercial fuel cell is billed as an effective way for companies such as FedEx or Coca-Cola to cut greenhouse gas emissions from the electricity they use. But at what price?

The low costs of operating a Bloom Energy Server rely on state and federal subsidies that aren't available everywhere

Making the new Energy Server pay may not be as easy as the secretive Silicon Valley star-up may like.

Bloom officials argue their tool-shed-sized power box produces electricity at less than the cost of buying power over the grid from utilities. But their 8 cents a kWh to 10 cents a kWh projection for the 10-year life of the machine adds in generous government incentives that may or may not remain in place.

Without the subsidies, the Bloom box hums a different tune. According to an analysis from Lux Research, electricity costs without the incentives are 13 cents a kWh to 14 cents a kWh, with about 9 cents coming from $700,000 to $800,000 cost of buying the 100 kW cell. The remainder comes from the cost of fuel, such as natural gas or methane.

The average retail cost for electricity in the U.S. is 11 cents a kWh.

The Bloom alternative may make sense in a state such as California, where customers can take advantage of a 30 percent federal tax credit and a $2,500 per kW state rebate. New York and Connecticut also have fuel-cell rebates, as do many countries around the world. But making the Bloom box pay in jurisdictions without the subsidy is another question.

While Bloom Energy offers the compelling notion of a less polluting, lower cost alternative to traditional fossil fuel energy, the reality is more work needs to be done. Mass-producing the boxes should lower their costs. FedEx predicts its investment in the Energy Server should pay for itself in five years. It will be interesting to see what the equation for Bloom’s next generation power box looks like at that time.

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Posted by Mark Boslet

Ontario Jump Starts Venture Capital Industry In Push For Clean Tech Silicon Valley

March 1, 2010

Ontario is eager to be a major player in clean tech.

With top research universities, entrepreneurial talent, a diverse population and a commitment to renewable energy, many of the ingredients are in place. Just last month, the Canadian province attracted Samsung, which will build plants to make wind turbines and solar modules.

Ontario has the opportunity to build a clean-tech cluster like Silicon Valley, says Deputy Minister George Ross. "One of the things we've been lacking is capital."

“We do believe there is an opportunity to build a cluster like Silicon Valley,” says George Ross, deputy minister at the ministry of research and innovation. “One of the things we’ve been lacking is capital.”

To remedy that, the province set out to build a clean-tech venture capital industry. That meant attracting C$205 million for a fund of fund to serve as a source of money for venture firms. Of the total, C$90 million came from the government.

It also meant setting aside C$29 million in government funds for seed-stage investments in young companies, and a C$250 million government fund to co-invest alongside VCs.

In late February, XPV Capital, the first new venture firm, closed its inaugural fund. Ross says he anticipates four more funds will close within a year. The target size for a fund is about C$100 million.

Start-ups also are getting money. So far, C$9.8 million has been invested in 20 companies, according to the ministry.

“The whole goal is to move money quickly into those companies,” says Ross. “We’re more or less a silent partner.”

Coupled with a commitment to renewable energy and efforts to create a climate for companies to prosper, “it’s a comprehensive strategy,” he adds.

Let’s see if it has the size and scale to work.

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Posted by Mark Boslet

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