Week of: March 22, 2010 – March 26, 2010
Solar Millennium is not in trouble, its finances are solid and it only hired an auditing firm to dispel ongoing negative market rumors surrounding the German solar company. In essence, that’s what the company’s flacks told G.E.R. in an email response to questions we sent them several days ago.
A number of questions do, however, surround the company. Obviously, it’s never a good sign when a high-profile CEO resigns 75 days into the job. That’s what happened two weeks ago, when Utz Claassen suddenly stepped down. A few days later, the company hired Deloitte to review its books. A few days after that announcement, Solar Millennium appointed Chief Financial Officer Thomas Mayer as its CEO.
To recap the past two weeks, Solar Millennium has lost a newly appointed CEO, begun a five-year audit of its financial performance and appointed a new CEO.
So far the market has adopted a “wait-and-see” attitude. Commerzbank analyst Robert Schramm recently told Bloomberg News he would likely wait on the sidelines until the audit findings are released. On Friday, Solar Millennium closed in Frankfurt at $20.99, down 3.36 percent.
In Berlin, the German parliament continued debating a draft law, which among other actions would cut solar feed-in tariffs for rooftop photovoltaic panels by 16 percent. The largely ceremonial upper house of parliament stepped in the ongoing debate, calling for the cuts to solar power incentives to be no deeper than 10 percent, Reuters reported on Friday. The upper house doesn’t have the power to stop the law, but as the representatives of the regional governments running Germany’s 16 federal states, their call clearly indicates that state governments are against the law because they fear it will negatively impact on local jobs.
Chevron, the California oil and gas company, has rolled out a demonstration solar farm at a test site in Bakersfield, Calif. Over the next three years, Chevron will test six types of thin-film solar photovoltaic panels and a crystalline silicon technology. Chevron eventually plans to ink a supply contract with one, possibly more, of the PV panel makers. The panels are to be deployed across the oil company’s refineries and oil and gas fields. The tests underscore how Chevron’s use of renewable energy differs from its competitors. While Chevron uses renewable energy to improve efficiencies within its core oil and gas business, companies like BP or even Exxon Mobil see green energy as a potentially new untapped revenue stream.
Bill Gates, like Chevron, has been investing in several early stage renewable energy startups. One of his more interesting investments is in TerraPower, a developer of small-scale nuclear reactors. The company, which remains years away from going commercial, last week announced it was talking to Japan’s Toshiba to jointly develop small nuclear generators. Toshiba owns Westinghouse, the U.S. nuclear reactor maker. Like a number of cleantech companies, with great but expensive ideas, TerraPower is cash hungry. An alliance with Toshiba would help resolve that issue and improve its chances of growing into a viable, profit-making business.
With offshore wind development largely stalled in the U.S., General Electric is turning to Europe to market its offshore turbines. The continent is plowing ahead, developing its coastlines. GE wants to be part of that growing market, and this week announced it would invest €340 million ($453 million) to develop and expand its wind turbine operations in the United Kingdom, Norway, Sweden and Germany. The U.K. this year announced a $119 billion project to build thousands of wind farms off its coastline.
Coal is cheap but politically expensive. That likely was the thinking behind Blackstone Group’s decision to pull the plug on the development of the 750-megawatt Toquop coal-fired power plant in Nevada. Instead, Sithe Global, a Blackstone portfolio company, will convert the project into a 700-megawatt natural gas-fired power plant with a 100-megawatt solar photovoltaic power plant. The decision comes as Congress is set to debate legislation that if implemented could cut the profits of Blackstone and private equity investors. Going green might be a way to encourage lawmakers (including Senate Majority Leader Harry Reid, D-Nev.) not to support the bill.
VC Watch:
TerraPower, the developer of small-scale nuclear reactors and a portfolio company of Intellectual Ventures, is in talks with Toshiba to develop small nuclear reactors.
PV cell maker SpectraWatt raised $41.4 million in convertible debt to expand its manufacturing capacity. Investors included Goldman Sachs-owned Cogentrix Energy.
Calera, a California developer of technology that turns CO2 into building materials, has received a $15 million private equity investment from coal producer Peabody Energy, the world’s largest private-sector coal company.
Zurich-based Emerald Technology Ventures led a $5.6 million financing for TerraLUX, a Boulder, Colo., company that makes LED solid-state lighting products.
Genomatica, a San Diego-based maker of green chemicals, has raised $15 million in a Series C financing led by TPG Biotech, a unit of Texas Pacific Group.
Rambling
Word came out this week that the long-awaited Senate climate change and energy bill would not have a cap-and-trade provision. For months the Senate has been trying to find a way to include a carbon-pricing provision in any climate change bill. But repeated attempts to bring lawmakers from carbon-dependent states on board, including efforts by Sen. John Kerry (D-Mass.) seem to have largely failed.
Pricing carbon is difficult to implement. Just this week, France shelved its own plan to tax carbon, arguing that it would hurt the competitiveness of French businesses.
In the U.S., cap and trade has been entangled in its own political debate. What seems forgotten is that the market-friendly measure could help the U.S. get the long-term energy policy it currently lacks—and needs.
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