Solar Tops Venture Investing But Watch Out Below

July 1, 2010

Overall, the second quarter appears a stable investment period for venture capital and clean tech.

A breakdown of second quarter clean-tech investment categories shows the prominence of solar

Venture capital firms poured $2.02 billion into 140 companies despite a relatively tumultuous three months in the public markets. This global total nearly matches the $2.04 of the first quarter and is up 43 percent from last year (an almost pointless comparison given the depths of the global downturn last year).

What’s really interesting in Thursday report from the Cleantech Group and Deloitte is the amount of money VC continued to put into solar start-ups, despite the prevailing wisdom that these cash-intensive investments so popular several years ago had seen their day. Without that money – $811 million – venture investing looks depressed and should signal a warning for the rest of the year.

Solar drew the largest chunk of the money, and big deals were the fashion of the day. Solyndra took in $175 million; BrightSource claimed $150 million; and Amonix, a developer of a concentrating photovoltaic technology, won $129.4 million from Kleiner Perkins Caufield & Byers and others.

The conclusion one might draw is that VCs continue to think solar will be a big money maker and a substantial piece of the world’s energy future. But there are a variety of factors at play, some not so sanguine. Solyndra took its money after withdrawing an IPO that was unlikely to be welcomed on Wall Street. There may have been no alternative except for venture investors to walk away from money already spent.

BrightSource, too, had special needs. It is trying to secure its first solar thermal plant in the Southwest desert and faces an end-of-year tax credit deadline and a September 2011 construction deadline for its $1.37 billion in federal loan guarantees. It needs to have a lot happen between now and then, including taking in private money to match the public funds.

The second largest category, biofuels, roped $301 million. But this total also needs to be examined closely. Of the amount, Amyris captured almost $109 million. The company is shortly headed to the public markets for an IPO, so is a special investment case. Virent Energy Systems, a Wisconsin biofuel maker, attracted an additional $46 million from Shell and Cargill (not typical venture sources), and Kior of Texas took in $40.

The remaining categories of smart grid and energy efficiency posted investments of $256 million and $147 million, respectively.

In other words, while the quarter appeared stable, several large deals with special needs were responsible for a big slice of the total. Without them, a stable seeming clean-tech venture capital environment might be down in the dumps.

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Posted by Mark Boslet

Better Place Moves Ahead In China; GE Prepares Charging Station Rollout

June 16, 2010

Clean-tech venture capital is hard to come by, and the smart grid still moves at a glacial pace.

But General Electric is making good on its thrust into charging stations, and Better Place is revving up its efforts in China.

These were the key takeaways from Tuesday evening’s Cleantech Enterpreneurs: Think Global, Think EU event in Palo Alto.

Better Place has had more success in China over the past 90 days than anywhere else in the world, say Communications Vice President Joe Paluska

The session’s overall message was clear: electric cars are hot, but capital-intensive projects are not. And corporations steadily show interest in green technologies even if they not quite sure when the payback will come.

Here is what was said:

*General Electric said it will unveil a suite of electric car charging station products in several weeks. The company has a modular approach to product design, letting customers buy just what they need. The package will include both hardware and software, and a complete set-up will sell for about $2,500.

The company announced in February a partnership with Ohio-based Juice and promised the first joint offerings would be available by the end of June under the Plug Smart name. Watch out Coulomb Technologies, the giant has arrived.

Smart grid deployment around the world is slower than expected, says GE government relations specialist Kevin Decker

*Better Place expects to kick off a battery swapping pilot project in China, perhaps later this year. The company anticipates China will step up its commitment to electric cars in the same time frame adding new cities to the more than dozen already committed to promoting electric cars.

“We’ve had more success in China in the past 90 days than we’ve had in 2½ years” elsewhere, said Joe Paluska, vice president of communications.

In April, the company took a first step into the Chinese market by partnering with the automaker Chery Automobile to develop electric-car prototypes with switchable batteries. The company said at the time it hoped to secure a pilot project.

*Despite the excitement over electric cars, the deployment of the smart grid around the world is slower than expected given the billions of dollars being spent, said Kevin Decker, U.S. engagement leader in GE’s government-relations arm.

“The smart grid is going to be big,” he said. “It’s not big yet.”

*Venture capitalists continue to be cautious with cash and start-ups find it hard to get funding in Silicon Valley, said Chief Operating Officer and founder of Calisolar, Kamel Ounadjela.

“I would not be able to raise money today with the same story,” said Ounadjela. The company raised more than $170 million since it was formed in 2006.

*However, corporations are investing. Sheeraz Haji, president of research firm Cleantech Group, said investments were up 180 percent from the fourth to the first quarters, with several billion dollars committed. Companies such as Boeing and Raytheon are participating.

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Posted by Mark Boslet

White House Feels Heat On HAN Standards

May 28, 2010

The White House is feeling industry pressure to complete an initial set of HAN standards as fears of a smart-grid information bottleneck grow.

Pressure falls on NIST to finalize home area network standards for smart grid

The heat is coming from appliances manufacturers who hope to enlist administration support in the National Institute of Standards and Technology review now underway to assure interoperability among competing standards and protocols.

NIST published a “roadmap” document in January with a preferred list of smart grid and home area network standards, but a schedule for final selection doesn’t appear to be in place. The aim of the review is prevent market confusion and divergence, and to promote open communications. NIST hopes to establish 77 smart-gird standards over the next few years with 14 this year.

“This has to be done as quickly as possible, “ concedes John McDonald, a general manager at GE and chair of the governing board of NIST’s Smart Grid Interoperability Panel. “There has been a lot of pressure at the White House.”

Among the leading candidates in the initial HAN standards race are the wireless technologies Zigbee and Wi-Fi and the powerline technology HomePlug. Determining a final list will provide big benefits if utilities are to deliver on the promise of demand response and greater system efficiency. Utilities need an effective distribution system with reliable two-way communications extended into the home if they hope to lower residential loads during high demand periods –perhaps by delaying defrost cycles in refrigerators or reducing power to stove tops.

California is waiting for national action so it doesn't place standed assets in the field, says CPUC Utiliites Energineer Wendy Al;-Mukdad.

From the industry perspective, standards will lower products costs and simplify development. At GE, a new hybrid water heater comes with a Zigbee connector on its side instead of integrated inside. That way it can be replaced if standards favor a different technology. However, integration would make the product less expensive to manufacture.

Product design is of particular important to companies such as Whirlpool, which promises to have 1 million smart dryers in the market by the end of 2011.

NIST’s next step is to broaden its examination of technologies beyond the Unites States to determine how technology development in places such as Japan and China might influence deployment here.

Despite the work ahead, McDonald says he is serious about getting the standards work completed sooner rather than later. It that means changing the leadership, then a change needs to be considered, he says.

He adds: “If we don’t have the house situation worked out, it’s going to be a bottleneck.”

The fallout from the lack of standards is already being felt in places such as California, where the California Public Utilities Commission put off smart grid decisions for fear of placing non-standard equipment in the field.

The commission wants to make sure utility investments don’t become “stranded assets,” said Utilities Engineer Wendy Al-Mukdad at this week at the ConnectivityWeek conference in Santa Clara. As a result, “We’re waiting for a lot of the national action on standards and protocols” to conclude.

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Posted by Mark Boslet

Will Powerline Find Converts In The US?

May 27, 2010

Powerline networks have gotten a bad rap in the United States. This may be changing.

Early networks that U.S. utilities set up for one-way meter reading were slow, giving the impression the technology was pokey.

Echelon says its participation in the Duke Energy smart grid trial is raising the technology's profile.

Powerline also has been plagued by noise, or harmonics, from busy electric wires and suffered higher costs. Transformers inadvertently filter network communications and the expense of outfitting them with repeaters to boost the signals proved greater in the U.S. than in Europe, where powerline found converts, because transformers here serve fewer homes.

These objections could be softening. Smart-meter maker Echelon says its participation in the long-delayed Duke Energy smart-grid rollout is winning new attention for the technology. Duke’s grid is the first large-scale smart-meter trial in the U.S. using powerline.

The trial shows that it can do the job, and utilities appear to be giving it consideration for future deployments, says Steve Nguyen, director of corporate marketing at Echelon. “That’s the feedback we’re getting on the street from our sales team,” Nguyen said at the ConnectivityWeek conference in Silicon Valley.

Echelon has shipped Duke 150,000 smart meters, 80,000 of which have been deployed in Ohio pilot. The advantage with powerline is that Duke can view its smart grid as more than just a network of smart meters used for home-energy monitoring.

The company can use powerline, which connects meters to transformers, to monitor and manage energy use by streetlights, and to assess power quality in its transmission lines, Nguyen says.

Up to now, U.S. utilities have favored cellular networks and proprietary wireless technologies in their smart grids. This is in contrast to Europe, where Echelon has the majority of its 100 or so smart grid deployments and trials.

The question is whether this is about to change.

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Posted by Mark Boslet

Cisco Unveils First Smart Grid Hardware And Customers

May 25, 2010

Cisco Systems kept its promise to build industrial strength smart-grid hardware, unveiling on Tuesday its first router and switch.

The Silicon Valley networking giant has made no secret about its interest in this potentially lucrative market. But so far its efforts have appeared sluggish, with few utilities other than Duke Energy climbing aboard.

Cisco's Connected Grid line built with special features for the grid, including a greater resistence to extreme temperatures and electromagnetic fields.

This could be ready to change. Along with the new products – engineered with special features, such as an ability to resist strong electromagnetic fields – the company named several utilities now testing the products and said it expects them to become customers. They are San Diego Gas & Electric, Southern California Edison, Enel Group in Italy and E.ON Westfalen Weser in Germany

Cisco also introduced a brand name for its line of hardware: Connected Grid. And it said additional products were on the way, included an in-home energy display expected in several months that could put the company in head-to-head competition with vendors such as EcoFactor and Tendril.

To design products for the market, “we really needed to start from the ground up,” says Brad Tips, product manager for substation automation.

The new router and switch target the substation market, where extreme temperatures and electric fields make for difficult conditions. Standard routers and switches would not likely survive the 15 years or more utilities demand, said Tips.

Cisco says its Connected Grid Router 2010 and Switch 2520 will withstand temperatures from 40 below zero to 140 degrees Fahrenheit. Traditional products operate in a narrower 32-degree to 100-degree range.

They also will operate in high electromagnetic fields, withstand abnormal electrical surges and run with no fans or moving parts to eliminate the likelihood of failure. The Switch 2520 has optional support for powerline over Ethernet with a similar feature expected for the router.

The products will cost more than traditional networking gear – a base price of $5,900 for the router and $5,400 for the switch. But Cisco says they will competitively stack up with gear from suppliers RuggedCom, GarrettCom, Hirschmann Automation and Control, and Encore Networks.

Cisco had promised its first smart grid products within nine to 12 months of last May’s push into the market space, so it claims to be on time. The two products will be available commercially by August.

Along with new consumer-facing products, Cisco said it would unveil what it calls field-area network gear, such as pole-top routers expected to work out of doors in neighborhood settings. It withheld additional information on the in-home consumer display.

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Posted by Mark Boslet

Defining The Smart Grid

May 24, 2010

Much like a first-time political candidate, the smart grid is a public unknown in need of defining. A new survey suggests there is ample potential for shaping favorable views.

The EcoAlign survey found that a quarter of respondents said they would use the smart grid either daily or weekly, suggesting that if it is built, they will come.

The survey, conducted by marketing agency EcoAlign, is not the first to find public awareness of the smart grid is low. Sixty-nine percent 1,000 people contacted online in May had not heard of the smart grid, women in particular. Only 22 percent of women were aware of the term compared with 41 percent of men.

Once presented with a description, public attitudes were generally favorable. Forty-three percent identified the benefit of the grid as lower utility bills. Another 37 percent showed an interest in analyzing their electricity consumption, and an additional 37 cited lower energy use as a reason to monitor the grid.

The survey also suggests public use could be greater than anticipated.  Many experts worry a nonchalant consumer will find little motivation to monitor energy and use smart meters and smart appliances to schedule the operation of a washing machine for off-peak hours, or cut the electrical flow to a refrigerator on hot summer afternoons.

The survey suggests the opposite might be true. Half of respondents found the ability to examine their energy use to be “extremely” or “very” appealing. This was higher among younger people and those with higher energy bills.

What’s more, about quarter said they might use the smart grid one a day or at least weekly, with the average respondent anticipating 12 times a month.

The existential dilemma facing the industry is the one facing many young industries: if you build it, will they come? At least one survey suggests they just might.

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Posted by Mark Boslet

Grid Storage Boom Looks Many Years Away

May 18, 2010

Grid storage is in its infancy today and is likely to stay that way, contrary to the hopes of an increasing number of venture investors.

Experts claim the demand for methods to storage energy on the electric grid will rise over the next several years, but at a slow pace. Fueling this trend is the build out of solar power plants and wind farms, which produce power at irregular intervals and therefore need to store it for future use, and the introduction of reasonably priced electric cars.

A grid storage flywheel test takes place in Massachusetts. But analysts see only 17 percent growth in grid storage over five years.

So far, few technologies are up to the task. Lithium batteries for too expensive, flywheels untested, hydrogen storage too energy intensive and molten salt thermal too developmental. Among the most promising at present are the more traditional compressed air and pumped water, despite the need for an uphill reservoir or an available underground mine.

Clearly progress will be made on these and other emerging technologies. But when it will arrive is anyone guess.

According to ABI research, the expected boom in grid storage is many years away. Today, electric grids have 128 GW of storage attached to them. That will grow to only 150 GW globally in five years, or about 17 percent over the period – clearly not enough to satisfy the desires of venture capitalists, who frequently call grid storage one of their hottest themes.

So is grid storage setting itself as one of the big disappointments of the new decade? According to ABI Research Director Larry Fisher:” Over the coming decade, as countries across the globe strive to meet their renewable energy targets, they will come to understand the need for energy-oriented storage. However, while such storage will serve to keep power costs low in the long run, each such implementation requires hundreds of millions of dollars to install and test, which will create a near-term rise in end-user electrical rates.”

Think 2020.

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Posted by Mark Boslet

Google Opens The Kimono On PowerMeter, Says Consumer Use High

April 29, 2010

The easy access to home energy data is a serious constraint to smart grid innovation.

But you would never know it from the success of Google’s PowerMeter, the online software that lets homeowners monitor their power consumption.

Forty-six percent of PowerMeter users check their energy use three times a day or more, says Google's Edward Lu

The growth in the use of the free product is high and consumers find it “sticky,” says Edward Lu, program manager of advanced products at the Internet search titan.

Eighty-six percent of users view their energy use once every three days, Lu said at GreenNet conference in San Francisco. Forty-six percent look at it three times a day or more.

Lu said Google has partnerships with 10 utilities, but expects more from the online product. New features are being tested, including a way to interface with electric cars. Google doesn’t yet have a business model in mind, but that isn’t holding back development, says Lu.

Despite its success, Google is quick to say that the incomplete access to consumer data is slowing its innovation, just as it is constraining development at the more than 100 other established companies and start-ups developing software, home displays and other products for the emerging home energy market.

Lu acknowledges that there is a mismatch between the speed of companies, such as Google, and the slower pace of utilities and regulators. By next year, companies may expect to see the data, he says, but it is likely to be another before many states and utilities finally open the gates.

Other innovators view the landscape in a similar manner. Access to consumer data is a key constraint, says Adrian Tuck, CEO of the smart grid display company Tendril. “Without it, the market will not flourish.”

Tuck says that only 10 of the 50 U.S. states are moving in the direction of open access. On the list are California, New York, Texas, Connecticut, Massachusetts and Pennsylvania. The others are not.

At Microsoft, the company hopes to sidestep some of the restraints. Last month it struck a deal to put its Hohm home energy management software inside Ford’s electric Focus.

“We see this as a business” selling services to utilities and selling online ads for consumers to see, says Troy Batterberry, product unit manager. More auto partnerships are on the way, he added.

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Posted by Mark Boslet

Smart Meters And Social Networks

April 28, 2010

Finland has long been a leader with smart meters and smart grids. It is no surprise then the small Scandinavian country has big plans for its smart –power infrastructure: the melding of smart grids, cloud computing and social networks.

The result could be a collection of virtual micro grids and more grassroots power management.

Finland's vision for its smart grid includes micro grids and social networks

Finland’s eagerness to deploy a modern energy infrastructure has much to do with the country’s harsh winters. Energy use per capita is among the highest in the world and domestic resources are limited largely to hydropower.

The desire to give consumers more control over their energy use led the country to require that all homes have smart meters by 2013 – among the most ambitious deployment targets in the world. About half of Finland’s 5.3 million people have smart meters today.

With the completion of the rollout, several new innovative services will become available, including the freedom for citizens to create virtual micro grids to share and manage power.

If a friend has solar panels and produces excess power, he or she can share that power with neighbors, says Seppo Yrjola, principal innovator at Nokia Siemens Networks, which is helping with the rollout.

“That’s really a virtual power plant,” Yrjola said at the Nordic Green II conference. “I think the venture capitalists are very excited” about the investment opportunities.

Finland’s vision goes where few other countries dare tread. Yrjola says the goal is to enable people to create micro grids much as they form groups of friends on social networking sites. In that sense, cloud computing, social networks and smart grids will intersect in 2013 or 2014 after the smart meters and accompanying network infrastructure are installed.

The notion is that villages, districts and communities will be able to form micro grids and negotiate for cheaper power. No one knows how the system will be used, says Yrjola.

The completion of the rollout should enable other services as well. Renewables, such as solar, will more easily plug into the grid and information on real-time pricing will be available. Consumers also will be given more control over their home appliances.

“We are building the infrastructure,” he says. It is up to consumers to decide how to use it.

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Posted by Mark Boslet

Cisco Makes Two Smart Grid Hires

April 28, 2010

Cisco Systems, hoping to rev up its smart grid business, added two industry veterans to its executive ranks.

The network equipment giant said on Monday it hired Paul De Martini from Southern California Edison, where he was vice president of advanced technology. De Martini will serve as the chief technology officer of Cisco’s smart-grid team.

Laura Ipsen, senior vice president of the unit, also last month named Jeff Taft global smart grid architect. Taft was mostly recently with Accenture and has 25 years of experience in the energy and technology businesses.

De Martini was leading the utility’s smart grid strategy and is charged with accelerating Cisco’s business.

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