Week of April 5 – to – April 9, 2010
Ontario is reaping the benefits of its innovative cleantech regulation.
This week, Ontario issued some $8 billion in new renewable energy contracts as part of the province’s year-old feed-in tariff program. Ontario, Canada’s most populous province, has pioneered the use of cleantech as a catalyst to create a “green collar economy.” Besides the feed-in tariff program, the province has also implemented the Renewable Energy Standard Offer Program (RESOP), which backs renewable energy projects with long-term power purchase agreements with the Ontario Power Authority. These days, a bulk of the North American renewable energy projects securing financing is backed by RESOP power purchase contracts.
Back to the feed-in tariffs, in this latest round, the Ontario Power Authority announced 184 long-term power purchase contracts with wind, solar, hydro and landfill gas projects. Combined, these will generate about 2,500 megawatts of green power. Ontario claims its feed-in tariff has helped attract 694 green-energy projects since 2007, writes Techpulse360.
While the Ontario regime is, for the most part, lauded for being investor-friendly, one concern is its “local content” obligation requiring that some 60 percent of the equipment used to develop renewable energy projects be sourced in the province. Investors obviously frown at this limitation, but for the provincial government that’s the key provision that will help ensure that these new clean power generation projects actually create the well-paid green collar jobs the province is banking on for its long-term prosperity.
The closest thing the U.S. has to a clean energy policy thus far is the $80 billion allocated from the stimulus law to cleantech. Those stimulus dollars have helped unleash a steady flow of investments and have even convinced some companies to take the next step by going to the public markets to raise cash. Electric vehicle maker Tesla Motors, battery maker A123 Systems, and biofuel maker Codexis, have all issued – or are in the process of issuing – shares. Add to that list Spanish renewable energy developer Renovalia Energy which this week confirmed it was prepping a €250 million (USD $334 million) IPO for 25 percent of the company. U.S. geothermal developer Raser Technologies is also reaching out to investors, as it is planning a $25 million stock issuance managed by Cantor Fitzgerald.
The American Wind Energy Association further confirmed hat the U.S. renewable energy sector is growing in its annual report released this week. The report revealed that the U.S. added more wind capacity in 2009 — some 10,000 megawatts — than in any other year.
Key to this surge in new capacity has been the stimulus program. But with many of its programs reaching their halfway life, as we’ve said before, the industry is aching for clarity and is pushing for a comprehensive clean energy law.
We also learned this week of a possible “casino for wind” deal. An industry source told us that the Mashpee Wampanoag tribe in Massachusetts might lift its opposition to the Cape Wind offshore wind project in exchange federal authorities would let the tribe develop a casino. So far no one is talking on the record, at least to us, but we will keep you posted.
VC Watch
Yahoo! Europe former Managing Director Toby Coppel is joining Richard Branson’s cleantech-focused private equity fund Virgin Green Fund as a partner in London.
San Jose, Calif. Chromasun has raised $3 million in a Series A Round of funding led by Danish investor VKR Holding.
Sakti3, the discrete battery developer based in Ann Arbor, Mich., raised $7 million in a Series B funding round, led by Beringea and which included Khosla Ventures as a returning investor.
Energy Investors Funds has formed a joint venture with Saint Augustine, Fla. -based NTE Energy to build and operate hybrid power generation facilities in the U.S.
Rambling
This week Senators Kerry, Lieberman and Graham are expected to unveil their energy and climate change bill, which, if approved, could finally bring this country the long-term clean energy policy it lacks. Beyond the political debate about whether cap -and-trade is really just another tax, what’s forgotten in the bantering are the benefits of such legislation. One is certainty, the crucial commodity that would help uncap new investments, fund crucial R&D and in doing so, ensure that the U.S. leads the greentech revolution, one of President Obama often stated goals. For an example of how smart regulation can help do that, look at Ontario, which is now reaping the fruits of the pioneering climate change and energy legislation it signed into law a few years back.
Image: iStockphoto