Archive for August, 2010

Man invents machine to convert plastic into oil

Since the story first broke, a lot has happened. One reason for this could be that food is being poisoned. Collecting rainwater is now illegal in many states. Your intake is being controlled. For more information, visit the following articles as well:

Raiding organic food stores. A sign of new times?

Collecting rainwater now illegal in many states as Big Government claims ownership over our water

Why do people in America refuse to take active interest in their future?

S 510, the Food Safety Modernization Act of 2010, may be the most dangerous bill in the history of the US. It is to our food what the bailout was to our economy, only we can live without money.

“If accepted [S 510] would preclude the public’s right to grow, own, trade, transport, share, feed and eat each and every food that nature makes. It will become the most offensive authority against the cultivation, trade and consumption of food and agricultural products of one’s choice. It will be unconstitutional and contrary to natural law or, if you like, the will of God.” ~Dr. Shiv Chopra, Canada Health whistleblower

It is similar to what India faced with imposition of the salt tax during British rule, only S 510 extends control over all food in the US, violating the fundamental human right to food.

Monsanto says it has no interest in the bill and would not benefit from it, but Monsanto’s Michael Taylor who gave us rBGH and unregulated genetically modified (GM) organisms, appears to have designed it and is waiting as an appointed Food Czar to the FDA (a position unapproved by Congress) to administer the agency it would create — without judicial review — if it passes. S 510 would give Monsanto unlimited power over all US seed, food supplements, food and farming.

In the 1990s, Bill Clinton introduced HACCP (Hazardous Analysis Critical Control Points) purportedly to deal with contamination in the meat industry. Clinton’s HACCP delighted the offending corporate (World Trade Organization “WTO”) meat packers since it allowed them to inspect themselves, eliminated thousands of local food processors (with no history of contamination), and centralized meat into their control. Monsanto promoted HACCP.

In 2008, Hillary Clinton, urged a powerful centralized food safety agency as part of her campaign for president. Her advisor was Mark Penn, CEO of Burson Marsteller*, a giant PR firm representing Monsanto. Clinton lost, but Clinton friends such as Rosa DeLauro, whose husband’s firm lists Monsanto as a progressive client and globalization as an area of expertise, introduced early versions of S 510.
S 510 fails on moral, social, economic, political, constitutional, and human survival grounds.

1. It puts all US food and all US farms under Homeland Security and the Department of Defense, in the event of contamination or an ill-defined emergency. It resembles the Kissinger Plan.

2. It would end US sovereignty over its own food supply by insisting on compliance with the WTO, thus threatening national security. It would end the Uruguay Round Agreement Act of 1994, which put US sovereignty and US law under perfect protection. Instead, S 510 says:


Nothing in this Act (or an amendment made by this Act) shall be construed in a manner inconsistent with the agreement establishing the World Trade Organization or any other treaty or international agreement to which the United States is a party.

3. It would allow the government, under Maritime Law, to define the introduction of any food into commerce (even direct sales between individuals) as smuggling into “the United States.” Since under that law, the US is a corporate entity and not a location, “entry of food into the US” covers food produced anywhere within the land mass of this country and “entering into” it by virtue of being produced.

4. It imposes Codex Alimentarius on the US, a global system of control over food. It allows the United Nations (UN), World Health Organization (WHO), UN Food and Agriculture Organization (FAO), and the WTO to take control of every food on earth and remove access to natural food supplements. Its bizarre history and its expected impact in limiting access to adequate nutrition (while mandating GM food, GM animals, pesticides, hormones, irradiation of food, etc.) threatens all safe and organic food and health itself, since the world knows now it needs vitamins to survive, not just to treat illnesses.

5. It would remove the right to clean, store and thus own seed in the US, putting control of seeds in the hands of Monsanto and other multinationals, threatening US security. See Seeds – How to criminalize them, for more details.

6. It includes NAIS, an animal traceability program that threatens all small farmers and ranchers raising animals. The UN is participating through the WHO, FAO, WTO, and World Organisation for Animal Health (OIE) in allowing mass slaughter of even heritage breeds of animals and without proof of disease. Biodiversity in farm animals is being wiped out to substitute genetically engineered animals on which corporations hold patents. Animal diseases can be falsely declared. S 510 includes the Centers for Disease Control (CDC), despite its corrupt involvement in the H1N1 scandal, which is now said to have been concocted by the corporations.

Fresh food that lasts from eFoods Direct (Ad)

7. It extends a failed and destructive HACCP to all food, thus threatening to do to all local food production and farming what HACCP did to meat production – put it in corporate hands and worsen food safety.

8. It deconstructs what is left of the American economy. It takes agriculture and food, which are the cornerstone of all economies, out of the hands of the citizenry, and puts them under the total control of multinational corporations influencing the UN, WHO, FAO and WTO, with HHS, and CDC, acting as agents, with Homeland Security as the enforcer. The chance to rebuild the economy based on farming, ranching, gardens, food production, natural health, and all the jobs, tools and connected occupations would be eliminated.

9. It would allow the government to mandate antibiotics, hormones, slaughterhouse waste, pesticides and GMOs. This would industrialize every farm in the US, eliminate local organic farming, greatly increase global warming from increased use of oil-based products and long-distance delivery of foods, and make food even more unsafe. The five items listed — the Five Pillars of Food Safety — are precisely the items in the food supply which are the primary source of its danger.

10. It uses food crimes as the entry into police state power and control. The bill postpones defining all the regulations to be imposed; postpones defining crimes to be punished, postpones defining penalties to be applied. It removes fundamental constitutional protections from all citizens in the country, making them subject to a corporate tribunal with unlimited power and penalties, and without judicial review. It is (similar to C-6 in Canada) the end of Rule of Law in the US.

For further information, watch these videos:

Food Laws – Forcing people to globalize

State Imposed Violence … to snatch resources of ordinary people

Corporate Rule

Reclaiming Economies

Make Electric Power in Your Basement?

Make Electric Power in Your Basement?

Solar is great if you have a good roof. But what if you don’t? Why not make kilowatt-hours in your basement? Small residential Combined Heat & Power (CH&P) boilers that run on natural gas can effectively cut the greenhouse gas emissions in half, because these boilers don’t just make hot water, they also make electricity.

A few companies are now introducing residential-sized CH&P units that are about the size of a clothes dryer, and make from 1 KW to 6 KW of electricity, just the amount of power needed in an average home using from about 300 kWh a month to about 900 kWh (you’d need to look at your bill to see your monthly usage, but most of us are in this range.)

Then the hot water produced is more than enough to supply the needs of average homeowners. And great for homeowners in cold climates who want to do radiant heating as well as hot water (as well as get the electricity!) (more…)

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Anxiety and optimism

Anxiety and optimism

Wondering what the general emotion of the cleantech venture sector is right now?

The three posts I put up today (here, here and here) should paint the picture pretty well.

Things are happening. Deals are getting done. Startups are making progress, moving into production and revenue phases. Some exits are taking place. Emotion: Cautious optimism.

But funding remains tight. And companies are having to take inside-led rounds to get by. Moving into production phases makes that challenge even more acute. Investors are backing their companies through a few months hoping they’ll be able to unlock additional funding quickly, from one source or another. But economic jitters continue, while a large number of cleantech venture investors are out of dry powder and already or soon to be out raising money from somewhat skeptical LPs. So the funding spigot seems unlikely to open back up really soon. Plus, the US Senate pulled the rug out from under everyone, stealing critical momentum. Emotion: Anxious.

For many cleantech companies, particularly those involved in production of solar, biofuels, vehicles and batteries, it really feels like a pressure period right now.

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A look at how bad 2009 was for solar companies

At Canaccord Genuity’s very good sustainability dinner in Boston this week, I had an enjoyable conversation with CG’s Marc Marano, a leader on their cleantech team. He told me about some pretty interesting data they’d pulled together on the solar industry.

We’re all familiar already with what a down year 2009 was for financings, but perhaps no sector was harder hit than solar panel manufacturers. Marc’s team had pulled together a list of all the financings in the solar sector for the five quarters Q1 2009 through Q1 2010. And looking over their tally, I see 18 follow-on rounds during that period to solar panel manufacturers or their suppliers.

Twelve of those rounds were insider rounds, often bridge financings. And two of the remaining ones were led by a corporate investor not an institutional investor.

Basically, during those five quarters almost no VCs were writing big new checks to follow-on rounds. They were backing their existing solar panel plays, and making small Series A investments. Marc notes that things have been better since then (including a couple of deals his group helped), but still…

It’s a wonder we haven’t seen even more of a shakeout than is already going on in that sector. I suspect we’ll soon start being able to tell eventual winners from losers with a little more clarity…

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Orion raises first urban wind tower in Manitowoc County

From a news release issued by Orion Energy Systems:

MANITOWOC, Wis. — Aug. 12, 2010 — Orion Energy Systems Inc. (NYSE Amex: OESX) on Thursday raised the first urban wind tower in Manitowoc County, which will help offset energy consumed at the company’s technology center.

Based on average wind speed, the 20-kilowatt wind turbine is expected to generate up to 32 megawatt-hours a year. The wind turbine was manufactured by Oshkosh, Wis.-based Renewegy.

The monopole tower is the first urban wind turbine in Manitowoc County. Urban wind is the process of generating electricity through wind power to be used at an adjacent load center in an urban setting, significantly reducing the inefficiencies of transmitting and distributing electricity generated in rural areas.

“Urban wind is smart because the turbine is located at the load center, eliminating the need to transmit and distribute the power over long distances, which can result in the loss of up to 15 percent of the energy,” said Orion CEO Neal Verfuerth. “Like Orion’s growing suite of energy solutions, which now includes efficient lighting, wireless control systems and renewable solar technologies, urban wind will create permanent distributed load reductions — delivering capacity to the stressed energy grid and delivering energy savings to the end-user.”

“I’m proud to be standing here today for the erection of the first wind tower in the city of Manitowoc,” said Mayor Justin Nickels. “It’s truly amazing to have a company like Orion that, like the city of Manitowoc, continually looks to the future. We’re proud to have Orion in Manitowoc and to work with them to continue offering technologies that provide real energy solutions.”

About 40 people watched from the balcony of Orion’s tech center as two hydraulic lifts erected the fully assembled wind tower into place.

U.S. Rep. Thomas Petri, R-Wis., said the wind tower and Orion’s suite of products and services that deliver permanent distributed load reductions will “make our country stronger, help us consume less, yet have a higher standard of living.”

“Orion is a change agent in the energy sector,” Petri said. “You’re looking at the problem in a different way and thinking of new solutions to energy use.”

State Reps. James Soletski, D-Green Bay, and Ted Zigmunt, D-Francis Creek also attended the event, along with media, civic leaders and Orion employees.

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Ontario goverment, power authority try to make good on controversial tariff reduction proposed for ground-mount PV solar projects

The Ontario government and its energy planner, the Ontario Power Authority, sparked a big firestorm after announcing last month that they wanted to reduce the feed-in-tariff rate for small ground-mount solar PV projects to 58.8 cents per kilowatt-hour from a very rich 80.2 cents. The move caught many off-guard, and while there was a lot of grunting about the reduced rate, most were unhappy with the sudden and arbitrary nature of the announcement, which undermined the business plans of many companies that were participating in the program in good faith. Bottom line: it undermined confidence in the entire program, even though from a megawatts perspective it only dealt with a tiny portion of green power.

After a brief consultation period it seems the government and Ontario Power Authority took the industry’s complaints to heart, even though my own sources told me just recently that the government was being pig-headed and planned to stick with its proposal. In the end, they caved in to pressure — a very smart face-saving move, I might add. The price reduction will still take place, but it will be reduced to 64.2 cents, not 58.8 cents, and it won’t apply to anyone who applied to the program before July 2, 2010, meaning the OPA plans to honour the original 80.2 cents for those who meet that cutoff. This decision is a big gesture, because the plan under the original proposal was to only honour the 80.2 cents for those minority of projects that had already received a contract or conditional offer. That means the more than 10,000 applications that were going to be tossed out (with project proponents forced to reapply under the new rate) will now be honoured at the 80.2 cent rate so long as they applied before July 2.

There’s a small catch, however. Commercial aggregators will no longer be allowed to participate in the microFIT program, but will still be able to participate in the larger FIT (10 kilowatts and up) program. The government didn’t like the idea of aggregators merely leasing rooftops and then building and owning the systems, saying it defied the spirit of the program, which was to get households, farmers, communities, First Nations, etc… to participate directly on their own. I have to say, I *completely* agree with them there.

The OPA also announced it will be establishing a new advisory panel that will provide advice on program evolution, including the two-year FIT review process. The advisory panel will be made up of industry, academic and other stakeholders. I should point out that an attempt will be made to accommodate commercial aggregators of smaller projects, but it will be done outside of the microFIT program using a different set of rules to be established partly by the new advisory panel.

“The OPA has received almost 19,000 microFIT applications since the program was launched less than a year ago. More than 6,100 conditional offers have been sent to applicants and almost 800 microFIT projects are now feeding clean energy into Ontario’s grid,” according to the agency’s release today. “The OPA is working to respond quickly to microFIT applicants. Most ground-mounted applications that have been submitted will be processed by the end of September.”

Kudos to the government and OPA for putting meaning back into the word “consultation.” Showing a willingness to listen and change direction restores confidence in the process and the program, and the fact an advisory body has been set up to avoid future surprises can only help.


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In Defense of Bill Gates

In Defense of Bill Gates
By Devon Swezey and Rob Atkinson

Originally posted at the Huffington Post.

If you want to understand why we haven’t made any measurable progress on energy and climate change for the last 30 years, there’s no better place to look than the visceral partisan reaction to Bill Gates’ recent call for major federal investment in energy innovation.

Gates has been speaking out publicly over the last few months–first in a blog post on his website, then in a talk at the TED conference, and now as part of the American Energy Innovation Council–for radical energy innovation to drive carbon emissions to zero. In a climate discourse dominated by targets and carbon caps, Gates has provided a refreshing and clear-eyed look at the first-order importance of direct public investment to develop clean, affordable technologies to replace fossil fuels on a global scale.

But proving once again that no good deed goes unpunished by both the right and the left, Gates was roundly criticized by partisans on both sides for speaking truthfully about the enormous climate and energy challenge.

On the left, environmental advocates attacked Gates for daring to suggest that innovation will be critical to dramatically reducing greenhouse gas emissions, recycling the tired mythology–repeated ad nauseum by Al Gore–that “we have all the technologies we need” and “all we lack is political will.”

On the right, libertarians and conservatives, while not hypnotized by the myth that clean energy is an affordable alternative to fossil fuels today, attacked Gates for proposing a substantial role for government in innovation, conveniently ignoring the long and successful history of government investment in developing nearly all the high-tech products we take for granted today.

Both the left and the right are wrong and Gates is right. The intense reaction from both sides to Gates’ message shows why so little progress has been made on shifting away from fossil fuel energy over the last 30 years.

The Off-the-Shelf Mythology: We Don’t Have All the Technology We Need

After publishing his article and speaking at TED, climate and environmental advocates on the left immediately attacked Gates for centering on the need for breakthrough technologies and radical technology innovation to solve climate change and sustainably power the planet.

Climate blogger Joe Romm of the Center for American Progress called Gates’ position “myth-filled,” and “suicidal,” and dismissed the need for R&D investment on the scale that Gates advocates.

David Roberts of Grist, an influential online environmental magazine, penned an article titled “Why Bill Gates is Wrong,” arguing that “new social arrangements” with existing technology are as important as new technology in creating a sustainable future.

The idea that “we have all the technology we need” is not new. Indeed, it has been a mantra for the environmental left for over 30 years. In 1976, Amory Lovins, the President of the Rocky Mountain Institute (RMI) and one of Joe Romm’s mentors, predicted that by the year 2000 renewable energy, excluding hydroelectricity, would supply nearly one-third of U.S. energy consumption. The actual contribution of these energy resources in 2000 was 3 percent. In 1984, Lovins, who is considered a national energy efficiency guru, predicted that “we see electricity demand ratcheting downward over the medium to long-term.” In fact, America’s electricity consumption increased nearly 66 percent over the following 20 years.

Despite the fact that Lovins’ many predictions have been so obviously wrong for so many years, he has gained notoriety and attracted high-profile disciples who continue to preach that we don’t need new technology. Top of the list is Former Vice President Al Gore, who told the Daily Show’s Jon Stewart that “we have all the tools we need” to solve global warming. Joe Romm repeatedly dismisses the need for breakthrough innovations, calling it an “illusion.”

Against this view is the consensus among energy experts and scientists that innovation, both incremental and radical, is necessary for a whole suite of technologies in order to achieve global carbon mitigation goals. Most clean energy technologies remain much too expensive to gain the necessary market penetration, especially in low and medium-income countries. This view is shared by leading energy scientists like Nate Lewis of Cal Tech and Secretary of Energy Steven Chu, the latter of who has repeatedly argued that Nobel-caliber breakthroughs are needed in areas like solar photovoltaics, advanced batteries for vehicles and energy storage technologies.

These experts also recognize the need for prioritizing major government investments to develop these technologies and make clean energy cheap. Last year, 34 Nobel prize winning scientists wrote a letter to President Obama calling on him to honor his commitment to investing $150 billion in energy R&D over 10 years, writing that “rapid scientific and technical progress is crucial to…reducing greenhouse gases at an affordable cost.”

Take the case of solar. Issues like system reliability, integration with existing systems, control infrastructure, and installation economics pose key technical issues that must be addressed if we want to have greater penetration than the forecasted 5 percent to 10 percent in the next decade. The integration of a high volume of inverter-based photovoltaic systems will require not only a smart grid, but also advances in present-day inverters. Sophisticated algorithms need to be designed to ensure interactive controls like passive monitoring and active control that will allow PV systems to disconnect when necessary but stay on-line when drops in utility voltage and frequency levels occur. Currently, the technology is not there to support massive movement to solar PV.

Perhaps the greatest indictment of the left’s dismissal of breakthrough technology is an honest assessment of the scale of the global energy and climate challenge. In 2007, humans consumed roughly fifteen terawatts (trillion watts) of energy. Humans will need to produce roughly 60 terawatts of energy annually by 2100, if every human on earth is to reach the level of prosperity enjoyed by the world’s wealthiest 1 billion people. Even assuming an increase in energy efficiency of 30%, global energy demand would still triple by century’s end.

To give a sense of scale, providing 10 TW of carbon free power, less than one-third of what will likely be necessary by the end of the century, would require the equivalent of building 10,000 new 1GW nuclear reactors, or a new nuclear reactor every other day for the next 50 years. This is, quite simply, an impossible task with current technology. Radical innovation to reduce the costs and improve the performance of low-carbon energy technologies is the only possible path forward.

The Lone Inventor Mythology: Government Investment is Key

On the right, conservatives and libertarians dismissed Gates for acknowledging a substantial government role in innovation; something they know is better left to the private sector.

James Pethokoukis, a right-leaning business and economics columnist for Reuters, suggested that Gates’ “Big Government” plan is “a long-shot at best,” arguing that there is “no clear-cut evidence” that government R&D provides any economic benefit.

Robert Michaels, an Adjunct Scholar at the libertarian Cato Institute, urged Gates to remember how he made his fortune ostensibly free from government intrusion:

“Can you imagine where you (Gates) would be now had there been a National Computing Strategy Board to coordinate research and investments? None of us really want to know what might have happened, although there is a chance we would have gotten something better than Windows Vista.”

But alas, as with most libertarian critiques, blind disdain for anything involving the government has led them to misunderstand (or deliberately misrepresent) the history of government involvement in technology innovation.

Against the “lone inventor” mythos that is so widely propagated in the United States, it has been clearly documented that most of the U.S. technologies that we now take for granted today, including jet engines, microchips, computers, and the Internet, were the result of direct investment and support from the public sector–the same thing that Gates and Co argue is needed to drive innovation in new clean energy technologies today

There is a pervasive collective amnesia among not just libertarians and conservatives but increasingly mainstream environmentalists like Joe Romm–who perpetually derides massive public investment in clean technology as “Big Government”–about the critical role that the U.S. federal government has played in developing the technologies that have driven waves of U.S. economic prosperity.

Personal computing is one clear example. The story of the PC is consistently misrepresented as the genius of lone inventors tinkering away in secluded garages. In reality, from the beginnings of the computer industry, federal agencies promoted critical research into computing hardware and deployed early computers throughout the federal government. Indeed, the roots of IBM come from early contracts with the Census Bureau. Moreover, not only did government provide the key support for research, including often bringing researchers from the public and private sector together to better share and commercialize results, but computer, semiconductor and software technologies were, according to economics professor Vernon W. Ruttan, “nourished by markets that were almost completely dependent on the defense, energy, and space industries.”

The story is the same for microchips, where public procurement played the key role in allowing early semiconductor firms like Fairchild, Texas Instruments and Intel to not only sell enough chips to gain needed revenue to reinvest in R&D but to get the scale needed to bring down prices. Throughout the early 1960′s, the federal government bought virtually every microchip that firms could produce–so many that the price of a microchip fell from $1,000 per unit to $20 per unit in the span of a few years.

The Education of Bill Gates

Gates himself was an early preacher of the view that private sector and the magic of the free market created the PC industry. Defending his company on the day the Justice Department brought an anti-trust suit against Microsoft in 1998, Gates declared, “The PC industry is leading our nation’s economy into the 21st century…there isn’t an industry in America that is more creative, more alive and more competitive. And the amazing thing is all this happened without any government involvement.”

Yet, to his credit, Gates has since taken a hard look at the facts and recognized the important role government has played. Indeed, he now willfully acknowledges that he owes much of his career to early government investments in information technology, telling the Washington Post:

“The Internet and the microprocessor, which were very fundamental to Microsoft being able to take the magic of software and having the PC explode, were among many of the elements that came through government research and development.”

The private-sector executives of the American Energy Innovation Council point to similar government investments across a whole host of technologies that led to the development of world-leading industries:

“Federal programs have been responsible for a wide range of game-changing technologies: new unmanned aircraft systems save the lives of American soldiers serving overseas; the Internet was born from military programs; and many of the most important medical breakthroughs of the last century came from our world leading investments in medical science research at our universities and laboratories.”

This is not to say that entrepreneurial drive and risk taking were not also critical to America’s innovation success story in the second half of the 20th century. Of course they were. But what made America the leader of the world is that we combined both factors: brilliant entrepreneurs like Gates and a visionary federal government willing to make the kinds of investments needed to foster technology revolutions.

Why the Left and Right Reject Innovation

So why do both the right and left not only ignore the message but shoot the messenger that we need clean energy innovation? There two main reasons. First, admitting that we need innovation threatens the core project of both: the left’s job of getting more government, the right’s of getting less.

The left fears, perhaps with some truth, that if policymakers realize that we don’t actually have the technology needed to address climate change, they will balk at putting in place carbon caps. In contrast, the right fears, again probably with some justification, that if policymakers realize that we don’t have the technology, they will empower government to play a key role in developing it.

But there is a deeper reason for the left and right’s attack on the apostles of clean energy innovation. Neither pay much attention to innovation and neither think the government has much to do with it. For the left, government’s job is to regulate business, (e.g., cap carbon emissions) not help them. How they meet these caps is their problem, not our problem. For the right, government’s job is to get out of the way and let the magic of the market do its thing. For them, if we don’t have a technology, by definition it means we don’t need it. For to admit anything else is to admit that the market alone is not the final arbiter for technologies; the government is.

But, ironically by attacking the message that we need a robust clean energy innovation policy both the left and right are likely to have their worst fears realized. For the left, without clean energy innovation climate won’t get solved. For the right, without clean energy innovation big government regulations, and the significant costs they impose, will be the only, albeit inadequate, path forward.

So how do we go forward? Gates has pointed the way (as has Breakthrough and ITIF). Gates and company call for public investment of a similar scale as in the last half of the 20th century to catalyze both incremental and radical innovation in the energy sector. Their conclusion is the same as a growing “energy innovation” consensus among Nobel scientists, high-tech businesses, and leading think tanks and universities.

To break the deadlock stalling the transition to clean energy technologies in the United States and around the world, at minimum, direct federal funding for energy R&D of the scale that Bill Gates advocates–$16 billion per year–is necessary to make clean energy cheap. Even greater investment would in fact be quite prudent.

If we are ever going to deal with our energy and climate challenges, then both the left and the right need to take a cold hard look at the facts, instead of attacking Bill Gates for injecting a needed dose of realism into the climate debate.

Rob Atkinson is President of the Information Technology and Innovation Foundation, a Washington, DC-based think tank. He is also author of The Past and Future of America’s Economy: Long Waves of Innovation that Drive Cycles of Growth. His focus is on IT and innovation and policy to support them.

Devon Swezey is Project Director at the Breakthrough Institute and co-author of “Rising Tigers, Sleeping Giant.”

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Rare Appearance by Metaline Falls, Hidden under Hydropower Reservoir
“Metaline Falls has been submerged since Boundary Dam was built in 1967,” a Light spokesperson told me. “It has been visible during drawdown events like this one, the last time being 1983.”

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Study: Wind Energy Could Fulfill 24% of India’s Power Demand by 2030

A recent study has noted that with the right and sustained incentives to the wind energy sector, it can generate as much as 24 percent of India’s total power demand by 2030.

The study conducted by the Global Wind Energy Council and the Indian Wind Turbine Manufacturers Association found that India needs a national level revolution in the wind energy sector similar to the National Solar Mission which aims at installing 20,000 MW of solar energy power plants by 2022.

While wind energy is the most popular renewable energy resource in India and, at 12,010 MW, comprises of nearly 70 percent of the total renewable energy generation capacity installed in India. As far as installed capacity is concerned India is the fifth largest wind energy market however, there is a huge gap in the installed capacity and the actual generation. (more…)

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Learnings from the Gevo S-1

Learnings from the Gevo S-1

S-1s are great. You can’t learn everything about a company from them, but you can learn a heck of a lot. And when the company is pretty indicative of an entire subsector, you can use that company’s data to help illustrate trends across a market.

Gevo’s S-1 is well worth reading through. Because the company is, I think, fairly illustrative of what many venture-backed “2nd generation biofuels” stories have looked like. I don’t have any insider knowledge of Gevo, so it’s also a good one for me to talk about simply from what’s in the S-1 and available to all…

Here are some interesting (to me, at least) tidbits:

1. The funding path [caveat - this is all as estimated and perhaps miscalculated from the info available in the S-1, treat accordingly]

Gevo was founded in 2005, as cleantech was heating up, by some CalTech researchers. It was seeded along the way (it appears to be in several different Series A rounds or tranches) by Khosla Ventures.

In 2007, the company raised a $3M Series B, from Virgin Fuels. Around that time they started ramping up R&D expenses. So it appears that the company had met some lab-scale indicative technical milestones and raised some money to hire researchers to figure out how to scale the technology to the pilot stage. Apparently there was a lot of optimism around what these early indicative results looked like, because from what the S-1 implies (piecing together share amounts, price per share, etc.) the Series B was done at a $22.5M pre-money. Also at the same time, additional Series A-4 capital was raised — Khosla Ventures putting in one final tranche at a slight discount to the Series B? Unclear.

In 2008, the company raised a $17M Series C, with new investors Burrill and Malaysia Life Sciences Capital Fund alongside existing investors. This round saw a pretty big step-up in valuation, to a $48M implied pre-money. It appears that much of that step-up is attributed to having licensed a key piece of the IP from UCLA.

In 2009 they raised a $33M Series D, at a pre-money greater than $80M, with oil company Total as the new money. By now the company had opened up that pilot facility, had begun construction on their first demo-scale plant, moved to Colorado, formed a partnership with a key commercial/production partner, and started ramping up the G&A spend. Undoubtedly, much of that round was intended to finance the construction of that plant.

Earlier this year they raised another $33M in a Series D-1. At a very big step up in valuation, to an implied current post-money of $314M. But there are some interesting features to this valuation. If the company IPOs this year, those shares get re-valued to 75% of the IPO price. If the company IPOs instead next year, those shares get re-valued to 60% of the IPO price. If the company doesn’t IPO by the end of next year, the price per share of the D-1 is effectively cut in half retroactively. So the management team is pretty motivated to make this IPO happen.

Gevo isn’t the most capital-intensive biofuels play I’ve seen, but it’s still typical of this type of play in terms of the amounts that have been raised along the way. And you can see how the investors have guided the company through that, with the step-ups at what look to be pretty typical biofuels company proof points, and the inclusion of strategically-minded investors to provide those step-ups. Good benchmarks for other companies to keep in mind.

2. What project developers?

Gevo, like other 2nd gen biofuels players, is clearly wrestling with the challenges of both 1st time project finance, and then the overall drying up of project financing for biofuels altogether (not exactly en vogue at the moment). They’re not expecting to have commercial revenues until 2012 (!) but they’re already having to plan around this significant problem.

For capital efficiency’s sake, they’re looking to do retrofits of moribund ethanol projects, and have partnered up with ICM (an ethanol plant engineering firm) to identify and build out the first such plant.

And they’ve formed their own subsidiary which will be funding the projects, at least during the development stage. So not dependent upon 3rd party project developers, but doing it themselves. TriplePoint provided some debt financing to enable the first such project.

It’s an interesting illustration of the difficulties of go-to-market for new techs of this type, and also some interestingly creative thinking and partnership-making around it.

3. What customers?

You can’t go public without revenues… er, at least you can’t go public without customers, right? So Gevo has several big customers lined up for 2012 when they start commercial production, including: LANXESS, Total, Toray, United Air Lines, and CDTECH.

Of course, since that’s out in 2012, those customers aren’t going to lock themselves into any unbreakable commitments in 2010. So those are non-binding letters of intent.

**fingers crossed**

That having been said, there is indeed an existing market for isobutanol, so it’s not a complete gamble that they’ll be able to sell out initial production. As long as they can sell at market prices…

4. The venture / project finance IPO

The company has about as much cash as capital that they took in from the Series D-1. Their cashflow statement suggests they’re burning about $5M/qtr in cash, and they’ve committed to buying an ethanol facility for around $20M (including retrofit costs).

This is in many ways a venture capital / project finance fundraising. Not your classic IPO liquidity event… Is that a bad thing? Not necessarily, there’s plenty of examples of companies that appropriately tapped into the public markets to finance energy projects, even for more unproven plays like wildcatting. But this IPO should be viewed by reporters and cleantech GPs/LPs through that lens.

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Why THESE companies are IPOing

Why THESE companies are IPOing

As an active investor in the cleantech market I’m definitely hoping we can start to see some successful exits. I, like others, am pining for a few successful IPOs with stellar returns that can be good beacons of hope for the rest of the sector’s bets. When there were practically zero venture-backed IPOs across all sectors, you knew there was a backlog of cleantech companies that were lining up to IPO and couldn’t. And of course now that the IPO window is re-opened slightly, it’s not surprising to see venture-backed cleantech startups jumping in and filing to go public.

But why are THESE the ones that are doing so? A123, Codexis, Tesla, Amyris, PetroAlgae, Gevo… Several with no or little revenue, really looking to 2012 or beyond for their significant revenue growth. Not all bad companies, that’s certainly not my point, some on this list may end up being very successful. But certainly not the exact same short list one would have come up with a year ago when guessing which companies would be READY (note: not WANTING) to IPO as soon as the IPO window reopened. And certainly a couple of stories with some real hair on them.

So why these companies? I’m increasingly believing that these companies aren’t IPOing as a result of the same reasons dotcom startups were IPOing in 1999. It’s not that there’s overexuberance, and investors and management are eager to put companies out into the market too early simply because they know they can get great returns from an overly optimistic stock market eager to get a piece of the Next Big Thing.

No, these companies are IPOing because they pretty much have to. The current investors are fatigued, new venture funders are hard to find, the companies are burning cash very quickly, and with the IPO window open getting another venture financing round from the stock market seems the best solution. Even if the IPO isn’t primed to “pop” and be a great IPO story. And in some cases, when you dive into the details of the S-1, you see that the existing funders have put the company in a position where it’s IPO or else…

These companies are also seeing their competitors file for IPOs, and they know that as a result these competitors are about to have good access to capital to go out and start the inevitable consolidation trend as the shakeouts continue in these sectors… So they want to also be among the acquirers, but are too low on cash, and so need to be able to tap into the public markets.

Plus, these companies are still struggling with that same old classic cleantech problem: The first commercial-scale project. For many biofuels, solar, battery and vehicle companies (ie: where VCs have mostly been placing their cleantech bets), no matter how capital-efficiently (or not) they try to get the company to be ready for commercialization, at some point they need to build out a large production plant, and project financiers won’t do it for an unproven technology. So these VCs have turned to (in order, as the options have dried up over time) other VCs, then hedge funds and “special” funds, then the government, then corporate JV partners, and now to public shareholders to supply the tens if not hundreds of millions of dollars necessary to build these first-time production plants.

So to paraphrase Obi-Wan, “These are not the IPOs you’re looking for”… This crop of cleantech IPOs doesn’t represent the upside of the sector. I don’t believe that the VCs are expecting that after taking into account this market and their 6-month lockup, an IPO today is their way to a massive IPO exit story.

Unfortunately, this wave of such IPOs hides the fact that there are many other cleantech startups that are now generating revenue, are profitable or within sight of it, and are seeing good signs of rapid market adoption. These are the companies that will eventually be the ones with the great IPO stories… but they’re taking the “let’s wait until we’re clearly ready and the market’s clearly ready” approach.

It’s almost a perverse selection bias — many of the best IPO candidates are waiting for better market conditions so they get the best exit, leaving companies that are worried about falling behind or falling out to slip out the IPO window while they can…

I just hope in the meantime, these early IPO stories don’t muddy the water too much for the sector.

[Note: While I don't have any direct exposure to any of the aforementioned companies, it's worth noting that I have indirect exposure to some of them]

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Wisconsin Public Service Commission Presented Final Recommendations For Rule to Site and Permit Wind Farms
This week the Public Service Commission of Wisconsin (“PSC”) received a final report from the Wind Siting Council (“Council”) that outlined their recommendations to standardize statewide rules to site and permit wind farms. As required under 2009 Wisconsin Act 40 (“Act 40″), the PSC appointed the Council to research and discuss various wind energy siting issues and provide recommendations that the PSC will utilize as they work to develop final rules to site and permit wind farms.
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St. Lucia Harnessing and Exporting Geothermal Energy

St. Lucia, a small Caribbean nation on the Small Antilles volcanic arc is getting ready to exploit one of their greatest natural resources:  geothermal energy.

The island has entered into an agreement with U.S.-based Qualibou Energy to develop a series of geothermal plants that will total an installed capacity of 120 MW, enough for the island of 175,000 to use and export.  About one-third of that energy will go toward powering St. Lucia with the rest being transmitted to neighboring Martinique through an underwater cable.

This set up is ideal for St. Lucia and the surrounding islands not only because they are rich with geothermal resources, but also because they currently have to import most of their energy — mainly petroleum — from Mexico and Venezuela.  This project will provide them with clean energy and allow them to be energy independent.

The first 12-MW phase of this development will be generating energy in two years with the rest to come online by 2015.

via Yale e360

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