Author: Terrence Murray

Soitec knows semiconductors, and that’s a good thing when — like this French company did back in December — you acquire a solar photovoltaic panel maker. André-Jacques Auberton-Hervé and partner Jean-Michel Lamure launched Soitec in 1992 with 1 million francs (€200,000 / $273,000) in startup capital as a spin-off of LEITI, a laboratory of the French atomic energy commission (CEA). Soitec is headquartered in Grenoble’s (home of the 1968 Winter Olympics) technology cluster. Today, the company has a market capitalization of about €1 billion ($1.37 billion) and is the world’s leading supplier of silicon-on-insulator (SOI) wafers for the microelectronics industry.

Eager to leverage its knowledge of semiconductors outside of the electronics sector, last December Soitec plunged into the renewable energy business with its acquisition of German concentrating photovoltaic (CPV) company Concentrix Solar for €55 million. Soitec’s goal is to become a leader in the CPV market, covering the U.S., Middle East, Europe and Asia.

CPV technology involves using mirrors or other optical devices to focus, or concentrate, the sun’s rays on photovoltaic cells. By concentrating solar energy, a CPV modules use less photovoltaic material to generate the same amount of electricity as a flat-plate photovoltaic panel — that results in higher sunlight-to-electricty conversion efficiencies for CPV modules. The trade-off is that CPV modules must be kept pointing directly at the sun, requiring relatively costly and complex tracking equipment.

GER: Tell us about Soitec and the business that has so far fueled much of its growth.

André-Jacques Auberton-Hervé: We launched Soitec in 1992 as a technology provider to the chip industry. Today, our principal technology is the Smart Cut process, which has allowed us to manufacture silicon-on-insulator (SOI) wafers on an industrial scale. Our technology eliminates current leakage in semiconductor chips, making the chips more efficient in computation applications. Our customers include major chipmakers  AMD and IBM, as well as cell phone and gamebox makers.

GER: Why did you acquire Concentrix Solar?

AJAH: We could not ignore a market that was opening to us. Semiconductors are now such an integral part of the CPV technology, so the Concentrix acquisition was a natural step for us to take as part of our ongoing evolution. The acquisition also allows us to lower our dependence on the up and down cycles of the semiconductor industry. It diversifies our revenue stream while continuing to use our core competence in semiconductors. As part of our research leading up to the Concentrix acquisition, we looked at various semiconductor materials being used in the photovoltaic industry, and found that materials used in the manufacture of CPV modules are among those we specialize in. So, it became evident to us that CPV offered Soitec the best entry point into the renewable energy business.

GER: Soitec and Concentrix share a number of similarities, what are they?

AJAH: For one, we are both offshoots of large national research labs. Concentrix is a spin-off of Germany’s Fraunhofer Institute for Solar Energy Systems and we are a spin-off of a lab at the French atomic energy commission. Also, we have both successfully transitioned from the lab to become full-fledged businesses, something that a lot of R&D-focused ventures fail to do.

GER: You’ve developed a technology that’s assured Soitec long-term revenues, why take a risk and invest in a new business?

AJAH: The Concentrix acquisition actually allows us to diversify our business, which until recently was largely dependent on a single industry. Concentrix’s CPV technology is commercial-ready, which means we can rapidly deploy it in key markets. There are also various macro factors that support our strategy. Solar and renewable energy in general is experiencing unprecedented growth in part because of large, long-term, government-backed stimulus programs and other subsidies like feed-in tariffs. The price of PV panels is also falling and that will help us compete with solar-thermal companies to help develop large-scale solar projects.

Concentrix’s annual production capacity averages 25 megawatts. Over the next 24 months we would like to grow that capacity to 100 megawatts annually.

GER: What are your goals with Concentrix over the next 12 months?

AJAH: Concentrix is a fully integrated company. This means that we control the whole manufacturing process, which is a shift from our core SOI business where we intervene as part of an existing process. In terms of specific goals, Concentrix’s annual production capacity averages 25 megawatts. Over the next 24 months we would like to grow that capacity to 100 megawatts annually. In terms of efficiency, the Concentrix solar cell has a 37 percent efficiency but we’re confident that we can double that efficiency above 50 percent.

GER: Now that you are an operator in the renewable energy sector, what markets are you targeting?

AJAH: We are going to go after markets that enjoy good solar resource and strong subsidy programs like feed-in tariffs. We’re looking at the global sunbelt across Europe as well as North America and Asia. Rather than become a plant operator, we are a systems provider to developers of large-scale solar power plants. Over the medium to long term, we could open manufacturing lines outside of Germany, possibly in the U.S., but as is, we’re confident we can continue to supply overseas markets from Concentrix’s German plant.

Image: Soitec

One Block Off the Grid (1BOG) raised $5 million in Series A financing from cleantech venture capital fund New Enterprise Associates (NEA).

Founded in 2008 in San Francisco, 1BOG provides discounted solar installations to small businesses and homeowners. To date it has helped install about 600 residential solar electric systems. 1Bog says it plans to use the financing to expand beyond the U.S.

In a prepared statement, 1BOG CEO David Llorens said:

Our ability to secure Series A funding in a tepid economic climate is testament to our sound strategy to meet consumer demand for clean energy while strengthening overall public perception and support of solar.

Also, yesterday Los Angeles-based renewable energy focused private equity fund Craton Equity Partners announced an $8 million investment in Propel Fuels, a retailer of alternative fuels for motor vehicles.

Craton’s investment is part of a $12 million equity-funding round that also included returning investors Nth Power and @Ventures.

Propel says it will use the investment to expand its service station network in California. Propel currently owns and operates eleven alternative fueling stations in Seattle and Sacramento, which sell ethanol (E85) and biodiesel fuels.

We caught up with investigative journalist Russ Choma for a quick chat about  his latest article tracking where the green stimulus dollars are ending up. The story is part of  the Investigative Reporting Workshop’s ongoing series, “Blown Away: America’s billions for clean-energy jobs are flying overseas.”  Choma’s latest article was reported in coordination with ABC’s World News Tonight with Diane Sawyer and the Watchdog Institute, a non-profit investigative journalism group based at San Diego State University.

Green Energy Reporter: This is the second installment in your ongoing Blown Away series for the Investigative Reporting Workshop, how did you get interested in this story?

Russ Choma: Last year I was reporting on infrastructure investments for a trade publication in Washington and in doing that got interested in the renewable energy industry and its use of stimulus dollars. In my daily reporting, I realized that foreign renewable energy companies were getting a majority of the stimulus dollars. Not only that, but that these taxpayer dollars were not even going to any U.S. subsidiary but largely supporting overseas workers.

GER: Yes. On the overseas jobs: In your article, you write that a lot of the stimulus-funded cash grants have actually ended up financing jobs in Europe or Asia. Can you give us some specific examples?

RC: Sure. One project we tracked was the Meadow Lake Wind Farm in Indiana, developed by Horizon Wind, the U.S. subsidiary of EPD Renewables, which is a Portuguese company.  Meadow Lake uses Vestas wind turbines that were likely made in Denmark, where Vestas is from. The massive steel towers supporting these Vestas turbines were not U.S.-made but actually manufactured in Vietnam by a company called CS Wind. We found that out because we tracked the bill of lading, listing the ship and the cargo issued by the ship, and it clearly stated that these towers were headed to Meadow Lake in Indiana.

GER: But does the government have a choice? Could U.S. companies alone absorb the billions of dollars in stimulus money?

RC: Well, if all along the point of this stimulus was to erect wind turbines or deploy more solar panels across the U.S., then yes, it would be money well spent. But from the beginning, the stimulus was sold as a job-creation machine. So, we have to ask ourselves: Is the stimulus building a clean energy industry, or is it financing offshore industries in Asia and Europe that are in effect building this industry for us? So far, most of the jobs created by the stimulus are short-term and are found at the end of the renewable energy value chain. They are construction jobs to erect and place the steel towers or PVs, and maintenance jobs.  The long-term, well-paid jobs are overseas and, have, over the past year partly been supported by U.S. taxpayer money.

GER: So, how do we ensure more stimulus money stays in the U.S.?

RC: Well, first of all, as an investigative reporter, in doing this piece my mission wasn’t to find and endorse a solution, but to report on potential fixes to this problem. As part of my reporting, I did talk to plenty of people who had ideas. Many of my sources proposed tweaking the direct cash grants so that it incentivizes job creation and is not just a financial hand out. That’s what something like the manufacturing tax credit does and it’s been very successful. Application from U.S.-based manufacturers for the tax credit last year peaked at around $7 billion. That’s more than double what had been expected.  If anything, something like the manufacturing tax credit shows that this country has the skills and capacity to make things like wind towers, turbines or blades.

Element Power, a Portland, Ore.-based renewable energy developer backed by Hudson Clean Energy Partners, has acquired a 1,400 megawatt-project pipeline from EcoEnergy, a wind developer headquartered outside Chicago, in Elgin, Ill.

Over the past year Element Power has grown its renewable energy portfolio to 25 gigawatts, buying solar and wind projects across 25 states, the company said in a release issued yesterday.

Element Power and EcoEnergy did not disclose which projects were included in this transaction.

The EcoPower Website lists a string of wind projects in the upper Midwest region that are either in construction or in development. They are: the 200 megawatts EcoHarmony West wind farm in Minnesota’s Fillmore County; the 200 megawatts EcoPoint facility near Peoria, Ill; and the 200 megawatts expansion of the EcoHarmony West project, dubbed EcoHarmony East, which EcoPower lists as being in “early development.”

Last year New Jersey-based Hudson Clean Energy Partners closed its debut fund, Hudson Clean Energy Partners, L.P., securing $1.024 billion in capital commitments, slightly above the $1 billion it initially set out to raise.

Image: G Heyde, Flickr

Pacific Gas and Electric (PG&E) has scored $2 million in funding from the California Energy Commission to finance a portion of a $20 million energy storage project that’s expected to start operating at the end of the year. PG&E will pay the balance of the project.

The large-scale sodium sulfur battery to be used as part of this project is a four megawatts system with a 28-megawatt-hour storage capacity that is manufactured by Japan’s NGK. Once installed and operating, the NGK battery will be the largest stationary battery energy storage system in California, according to the CEC.

The NGK battery will likely be located in Silicon Valley, PG&E tells us.

California utilities, like PG&E, have been signing a record number of PPAs with solar and wind farm operators to meet state standards requiring them to produce 20 percent of their electricity from renewables by 2020.

This rush for renewables  by California utilites has created its own set of issues. One is reliability. Unlike gas-fired or coal-fired plants, wind and solar generation are not constant. One way to ensure that green power is piped through the grid on sunny or rainy days or windless days is by deploying large batteries that can store the electricity and offload it when need it.

“This demonstration project is one of the steps we are taking to ensure more reliability as our generation portfolio continues to use more renewables,” a PG&E spokesman told GER.

Separately, PG&E  is also looking to build a $300 million underground storage facility that  will use compressed air to store enough wind-based energy to generate some 300 megawatts worth of electricity. The utility has applied for a $25 million federal grant to fund initial research in view of developing this project.

Germany’s conservative government is now considering a 16 percent cut in the country’s solar feed-in tariff, which utilities are obligated to pay solar power producers. That’s slightly higher than the 15 percent cut that was being discussed up until now.

Bloomberg News, citing local German media, reports that the steeper subsidy cuts would come into effects on June 1. They were originally set to go into effect on April 1 and a couple of weeks ago we reported that the German Environment Ministry was considering delaying the proposed cuts from April 1 to May 1.

Cuts in the feed-in tariff for solar power generated on farmland remains unchanged at 25 percent and will come into effect on July 1.

Solar thermal power developer Ausra tapped Greentech Capital Advisors as its financial advisor in its acquisition yesterday by Areva, the Paris-based company best known as a maker of nuclear reactors.

Areva was advised by Deutsche Bank.

Just this summer, UBS’s former co-head of investment banking, Jeffrey McDermott launched New York -based Greentech Capital this summer with a group of Wall Street partners.

Among the partners are Canadian Andrew de Pass, former head of sustainable development investments at Citigroup, and Goldman Sachs alum Timothy Vincent, who leads Greentech Capital’s project finance business.

We have called Greentech Capital and Deutsche Bank and will post any updates.

Areva spokesman Jarret Adams tells GER that no decision has been made on whether Ausra will keep its name or will operate under the Areva brand.

Adams confirms that with the support of Areva’s large balance sheet, Ausra is now back in the utility-scale solar power business.  It was just a year ago that Ausra CEO Robert Fishman said that with his company unable to secure financing,  it would instead focus on solar thermal systems for the distributed generation market.

Adams said that Areva plans to keep  Ausra’s 70 employees, who are for the most part based in the company’s Mountain View, Calif., headquarter.

Adams declined to disclose how much Areva paid for Ausra. He did say that the French company “paid market price.”

Infinia, a Kennewick, Wash.-based developer of solar power technology, that includes Paul Allen as an investor, seeks to raise $75 million of equity financing to scale production so it can go commercial by June of this year.

AltAssets, citing a regulatory filing, reports that the company has already raised $11.5 million.

Participating in this funding round are Texas-based Equus Total Return, a closed-end fund that trades on the New York Stock Exchange, as well as Power Play Energy, a Connecticut-based green energy-focused private equity fund and GLG Partners, a  hedge fund manager based in London.

Besides Paul Allen’s Vulcan Capital, Infinia’s Website also lists Bill Gross’s IdeaLab as an investor.

Infinia has developed a dish-like devise, which uses curved glass mirrors that act as solar concentrator, collecting solar energy that then power a reciprocating solar Stirling engine, to generates electricity.

This is a repost by Russ Choma, a Washington-based independent investigative journalist and regular contributor to the American University’s Investigative Reporting Workshop. The story is the latest installment  in the Investigative Reporting Workshop’s  ongoing series, “Blown Away America’s billions for clean-energy jobs are flying overseas.” The Investigative Reporting Workshop reported this story in coordination with the Watchdog Institute , a non-profit investigative journalism group based at San Diego State University.

By Russ Choma

Money from the 2009 stimulus bill to help support the renewable energy industry continues to flow overseas, despite Congressional criticism and calls for change, according to a new analysis of the program by the Investigative Reporting Workshop.

The Workshop was the first to report last October that more than 80 percent of the first $1 billion in grants to wind energy companies went to foreign firms. Since then, the administration has stopped making announcements of new grants to wind, solar and geothermal companies, but has handed out another $1 billion, bringing the total given out to $2.1 billion and the total that went to companies based overseas to more than 79 percent.

In fact, the largest grant made under the program so far, a $178 million payment on Dec. 29, went to Babcock & Brown, a bankrupt Australian company that built a Texas wind farm using turbines made by a Japanese company.

The same day the Workshop’s first reported on this story a consortium of American and Chinese companies announced a deal to build a $1.5 billion wind farm in Texas, using imported Chinese turbines. Company officials said they planned to collect $450 million in stimulus grants for the project. The deal would create dozens of jobs in the U.S. and thousands in China. The news provoked outrage among lawmakers, particularly after the Energy Department seemed to take a neutral stance, declining to say whether it would reject such an application… READ FULL STORY HERE

Graph: Investigative Reporting Workshop, American University

The explosion at a natural gas-fired power plant under construction on Sunday killed at least five people and injured 12. The plant, located in Middletown, Conn., is owned by Kleen Energy Systems,  a special purpose company owned by Energy Investors Funds (EIF), an energy-focused private equity fund with substantial investments in renewable energy.

Besides natural gas-fired power plants, EIF also controls biomass, hydroelectric and geothermal power plants.

In a statement released yesterday, EIF said:

Energy Investors Funds wishes to express our enormous sympathy and concern for the workers at the Kleen Energy plant and their families. We strongly value their contributions, efforts and dedication. We are fully cooperating with authorities, and will provide further comment once more information becomes available.

On Monday, officials said they believed everyone at the plant has been accounted for. Also, the U.S. Chemical Safety Board sent seven officials to determine the cause of the explosion.

EIF owns 80 percent of Kleen Energy. An outfit known as White Rock Holdings owns the balance.

David Gelbaum, has taken over as chief executive officer of Entech Solar, a Fort Worth, Texas-based developer of concentrating solar modules. Gelbaum knows the company well for being one of its major investor via his cleantech-focused venture capital fund Quercus Trust.

Gelbaum takes over for Frank Smith, who became Entech’s CEO in March 2008, reports Earth2Tech.

A year ago Quercus was the third-most active venture fund investing in cleantech. Earth2Tech reports that Quercus is invested in at least 48 renewable energy and cleantech companies.

Gelbaum and his Quercus fund are notoriously discreet and publicity -shy. Given that one can wonder if Gelbaum will be willing to take a more active roll commercializing Entech’s silicon photovoltaic cells.

Areva, one of the world’s largest maker of nuclear reactors, has acquired Mountain View, Calif., -based solar-thermal equipment maker Ausra, which had been on the auction block, talking to potential buyers at least sine November.

Paris-based Areva and Ausra did not disclose financial or other terms of the deal.

In a prepared statement Ausra CEO Robert Fishman said:

By acquiring Ausra, Areva has taken a major step forward to achieve its strategic ambition in renewables. The Group intends to become the world leader in the Concentrated Solar Power market…

Areva expects the market for concentrated solar power plants to grow by at least 20 percent over the next decade, to reach an estimated installed capacity of over 20 gigawatts by 2020.

This past year has been a wild ride for Ausra. Unable to secure financing to develop its large utility-scale solar project, Fishman last year said the company would walk away from that business and instead focus on selling and deploying selling solar thermal systems for the distributed generation market.

To oversee the sale of these smaller projects, last year it hired Thomas Caulfield as president and COO from chipmaker Novellus Systems

So is Ausra back in the utility-scale business? Yes, it certainly looks like it.  It’s now backed by Areva’s significant balance sheet, which itself is backed by the French government, the company’s majority shareholder, will make a lot easier to convince project finance banks to lend.

Fishman will stay on as head of Areva’s newly formed global solar business unit, which will operate out of Ausra’s Mountain View, headquarter.

Ausra backers include: Khosla Ventures, Kleiner Perkins Caufield & Beyers, KERN Partners, Generation Investment Management and Starfish Ventures.

The acquisition is expected to close in the next few months, subject to customary regulatory approval.

One of Energy Secretary Steven Chu’s early promises upon taking over at the Department of Energy a year ago was that he would speed up the award of the loan guarantees.

So far though only one loan guarantee has actually been funded. The guarantee was secured by Solyndra, the California maker of thin-film photovoltaic cells, which scored a $535 million in September that it will use in part to finance construction of a new manufacturing facility in California.

Three renewable energy developers are close to securing funding. They are: Beacon Power, a developer of carbon-fiber flywheel technology,  Red River Environmental Products, which develops carbon cutting technology and Nordic Windpower, a maker of low cost two-blade turbines.

It seems that more loan guarantees are on their way.

On Thursday, speaking at Retech 2010 in Washington, Doug Schultz, head of the loan-guarantee program at the DOE, said the agency was planning to sign conditional loan guarantees with 10 to 15 additional renewable energy and energy efficiency projects in the next six months, reports Dow Jones News.

To fulfill Secretary Chu’s promise and ensure a rapid deployment of the loans, the DOE has contracted a third-party company to administer the program. An announcement on that is expected in the next couple of weeks.

To get a loan guarantee applicants have to first secure a lender that will then apply to the DOE on their behalf.

Separately, Dow Jones, citing unnamed source at the DOE, reports that a second project, a solar-thermal power plant, is very close to securing a loan guarantee.

This week, Green Energy Reporter traveled to Washington, D.C. for the annual Renewable Energy Technology conference (RETECH). The event was held at the cavernous Washington Convention Center where, maybe because of the size of the place or because of the impending blizzard, attendance seemed thin.  Aside from the looming snowstorm, on the minds of the people who made it to the conference were two issues: cap-and-trade and access to capital.

In some ways, the two initiatives are interlinked. As the back-and-forth in Congress for and against the pricing of carbon goes on, the renewable energy business, like any business, wants long-term certainty. Yes, the Obama administration has rolled out some popular funding programs, like the direct cash grants, but these are limited over time, subject to renewal, and so continue to leave the country with no real long-term policy when it comes renewable energy.

Cap-and-trade, many of the attendees said, by establishing a regulated market, would open up investments in carbon cutting technologies and in doing so help anchor the long-term certainty that many in the industry say is missing.

But will President Obama and Congress be able to make cap-and-trade happen this year?  As GER wrote, opinions are split. Some cleantech executives and policy influencers are confident that by the end of the year the U.S. will have some sort of carbon pricing scheme in place. It could be cap-and trade or it might also be cap-and-dividends. Others are more pessimistic, arguing that the momentum for carbon pricing has fizzled away. Susan Preston, a partner at CalCEF, a $30 million clean energy investment fund in San Francisco, citing fatigue for the issue on Capitol Hill and beyond, says that while she supports cap-and-trade, she doesn’t think it will pass this year. “On cap-and-trade? I am willing to concede,” she says.

So, if not cap-and-trade, or at least not this year, then what could instill the sort of clarity cleantech companies and investors are asking for?  Various options are making their way through Congress. One is the formation of a government-backed Green Bank, which would provide cheap funding to renewable energy developers as well as capital for cutting edge, high-risk technologies. A couple of bills were introduced this year supporting the initiative but they remain stalled in the slow and heavy legislative process.

Another option could be a federal Renewable Electricity Standard that would force power utilities to generate a portion of their electricity from clean energy.  A recent study released this week, estimates that a federal RES mandating that utility generate 25 percent of their power from renewables by 2025, could add 274,000 new green energy jobs.  This is the sort of data that could justify having an RES provision inserted into one of the jobs bills Congress is debating right now.

In the clean energy race while the U.S. remains stuck on the starting blocks, debating what sort of policy it wants to implement, China is charging ahead and executing it own ambitious policy and in doing so disbursing billions of dollars to support the construction of wind and solar farms. According to data released this week by the Global Wind Energy Council, last year the country doubled its wind capacity and installed more wind turbines in 2009 than either Europe or the U.S., which last year added 9,922 megawatts of new wind capacity.

BP and Royal Dutch Shell (both companies support cap-and-trade) came out with fourth quarter earnings this week. On its cleantech business, BP Chief Executive Tony Hayward didn’t divulge anything new, saying that over the coming year the company would continue to focus on its biofuel business. It would also grow its U.S. wind power portfolio, lower production costs at its solar panel business, and oversee a large investment in a carbon storage project in the United Arab Emirates.

As for Shell, it announced a $12 billion joint venture with Cosan, one of Brazil’s largest producers of sugar-based ethanol. The deal confirms the Anglo – Dutch company’s biofuel-focused renewable energy strategy set in motion last year when it said it would drop all new investments in wind, solar, and hydrogen energy.

VC Alert

Vulcan Power Company, a Bend, Ore. developer of geothermal energy projects, raised $108 million in private equity funding from Denham Capital, an energy-focused investment firm. Tesla Motors, which raised over $220 million in venture capital, filed for an Initial Public Offering.

Rambling

This week also marked a milestone of sort for the renewable energy industry when Chinese photovoltaic solar panel company Yingli Green Energy announced that it would join McDonald’s, Budweiser and other blue-chip brands as a tier one sponsor of the upcoming FIFA Word Cup in South Africa. This marks the first time a green energy company – and a Chinese company, for that matter – sponsors a World Cup event. Yingli did not disclose how much it paid for the right to plancard its logo in stadiums and other venues, but according to press reports, the price tag for tier one sponsorships starts above the $100 million mark.

Financing in the renewable energy sector has improved but conditions remain challenging, despite the billions of government money that are now supporting the industry.  When it comes to funding “we’re not there yet,” starkly assessed Michael Ware, a managing director with Good Energies, one of the world’s largest cleantech-focused private equity fund, at a panel at the Renewable Energy Technology conference (RETECH).

“The [renewable energy financing] markets have not returned to normal,” Ware says. “Credit markets remains tight and private equity and venture capital development fund hard to find,” he adds.

Underscoring the challenging state of plays is the steep debt – to – equity ratio now structuring project finance deals.  At the peak of the market, a developer could borrow up to 80 percent of a project’s development cost. However, in the current environment, financing is typically structured on a ratio of 50 percent debt and 50 percent equity. Loan tenors have also tightened, averaging seven – to – 10 years, “we would need 17- to- 20 year tenor,” Ware points out.

Over the past year, in an effort to grease the funding wheel, the Obama administration has launched various initiatives, including the very popular direct cash grant program. It’s also eased access to production and investment tax credits.  Of all three programs the most popular are probably the direct cash grants, which are available to developers with projects that either go in service in 2009 or 2010, or if construction start in 2009 or 2010. There’s word that Congress is looking to extend the program.

One company that’s benefited from these various government-backed funding streams is General Electric, which after staying on the sideline for much of the year, recently closed a string of deals with Horizon Wind Energy.

Besides cap-and-trade a lot of clean energy project developers and funders attending RETECH, say a federal Renewable Electricity Standard or a government-backed green bank are all initiatives that could provide long-term certainty and ease access to funding.

This morning, at the crack of dawn, Green Energy Reporter caught a flight out of Chicago for Washington to attend the Renewable Energy Technology Conference, also known as RETECH.

Just about anyone involved in the renewable energy food chain seems to have converged to the Washington Convention Center to attend the two-day event.  Exchanging business cards over coffee and lunch are a myriad of policy makers, industry lobbyist and executives.

When not trying to figure out whether to leave town tonight, to beat the blizzard that’s expected to blanket the region tomorrow, RETECH attendees are also asking questions on cap-and-trade and in particular if it has a chance of ever becoming law of the land.

Unlike some of our more dire predictions, industry pros we’ve talked to since arriving in town are definitely more upbeat.

The consensus is that some form of carbon pricing provision, it could be Cap-and-trade, will likely be inserted it into one of the climate change and energy bills currently making their way through the Senate. And based on yesterday’s outburst by Senator Lindsey Graham (R- S.C.), support for the carbon-cutting, scheme might actually run deeper than we’ve ever imagined.

Jim Presswood, federal energy policy director at the Natural Resources Defense Council (NRDC), told a panel that of all the green policies, cap-and-trade remained the most important. “Cap-and-trade is a critical component to any long-term renewable energy policy,” he said.

Presswood later told us that he does not believe cap-and-trade is dead. “We will see something emerge, we are not pessimistic on cap-and-trade.”

One alternative to cap-and-trade is the CLEAR Act, proposed in December by Senators Maria Cantwell, (D-Wash.), and Susan Collins, (R-Maine). The legislation is also dubbed cap-and-dividends because it would sell emission permits to polluters but would use a lot of the proceeds to send checks, averaging $100, to every American. These dividends would in effect help offset the expected higher cost of energy in a carbon-constrained world.

Jeff Anderson, executive director with the Clean Economy Network, an industry trade group in Washington, concedes that while CLEAR has largely been ignored by the media, in the halls of Congress, where as an industry lobbyist he spends a lot of time, “there is a lot of traction for the legislation.”

He warns though that CLEAR has not yet gone through the legislative pressure cooker and it could end up being a lot more complicated and a lot less attractive once it’s been dissected by Congress.

CLEAR and its dividend program, says  Anderson could,  void of a comprehensive climate change bill, be tucked into an energy and jobs bill.

Earlier this week Royal Dutch Shell announced a joint venture with Cosan, one of Brazil’s largest producer of sugar-based ethanol. The deal confirms what’s been known for a while. When it comes to renewable energy, for Shell, it’s all about biofuels. 

Shell had dipped its toe in various wind projects in the recent past. It was a partner in the 613 megawatts London Array facility, but it walked away from that project and last year it announced that it would drop all new investments in wind, solar and hydrogen energy. At the time, Then-Chief Executive Officer Jeroen van der Veer justified the decision by arguing that investment returns in wind or solar power were too small.

In terms of biofuel, the Cosan deal buys Shell some time.

Cosan produces sugar-based ethanol, however much of the R&D these days focuses on developing non-food-based biofuels, such as algae-based biofuels, which unlike sugar or corn, does not require large tracts of land to grow. Also, its use does not tighten regional food supply. This summer Shell competitor Exxon Mobil announced a $600 million partnership with Synthetic Genomics, a developer of  algae-based biofuel launched by J. Craig Venter, the scientist known for decoding the human genome in the 1990s.

Shell has also invested in next-generation biofuel as it holds a stake in Codexis, a California company that develop enzyme-based biofuel.

But as Shell’s new CEO Peter Voser, recently pointed out next-generation biofuels, of the sort being developed by Codexis and Synthetic-Genomics, are still a couple of decades away from going commercial.

So, until algae-based biofuel and other next generation biofuels become commercially viable, with the Cosan investment Shell will benefit from ongoing and growing demand for traditional sugar and corn-based biofuel in part bolstered by government-mandated blending requirements in North America and Europe.

As part of the deal, which was announced Monday,  Shell will contribute $1.6 billion in cash to the joint venture. It will also contribute assets including 2,740 service stations that will distribute Cosan’s sugar-based ethanol. For Cosan, the joint venture opens Shell’s extensive European and North American distribution network.

Green Energy Reporter’s ranking of the top ten players in green energy for the month of January is out! Taking the lead for the January ranking are British Prime Minister Gordon Brown and his Energy and Climate Change Secretary Ed Miliband (#2 last month). These two are implementing bold green strategies whose impact will be felt well after they leave office, and based on recent polls, showing Conservative leader David Cameron well ahead of  Brown, that could happen soon.

Our latest ranking also includes promising companies prepping for possible IPOs as well as on investors putting their money, where so far only a few have….  One such investor is Microsoft founder and Chairman Bill Gates, who last month announced he was spending $4.5 million on various geoengineering projects. This is a risky proposition but not a  surprising one coming from someone who dropped out of Harvard to launch the startup that’s become Microsoft!

As we like to remind you, every time we publish out ranking, our top- ten list is based on the players’ influence over green energy policy and their ability to move the debate. Other factors that we take into account in making our monthly selection include industry and popular support for their positions, access to capital to fund innovation and the success of their ventures.

1: British Prime Minister Gordon Brown/Secretary of State for energy and Climate Change Ed Miliband

From small-scale to ginormous-scale, British politicians rolled out complex plans in the last month to put the country on track to meet 15 percent of its energy needs from renewable sources by 2020. First, they announced a £75 billion ($120 billion) offshore wind project – the so-called Round Three program administered by the independent Crown Estate – that will put thousands of turbines on the country’s seabed. Nine separate consortia won contracts to build the projects. The projects could support 70,000 jobs by 2020, according to Brown.

Then, just this week,  Ed Miliband announced new feed-in tariffs for small-scale and home producers of renewable energy. Homeowners could be paid hundreds of pounds from electricity they generate, even if they use it themselves, Miliband said.

Of course, there are enormous challenges, from lack of manufacturing plants that could actually build these offshore turbines to limited offshore connections to the national electricity grid. There’s also the simple matter of getting citizens to buy into green energy. But these projects show ambition that is distinctly lacking elsewhere in the world.

Image: PA

2: Germany’s Governing Coalition

One thing is certain: Germany’s generous feed-in tariffs for solar energy are going to decrease sometimes soon. But will they go down by 15 percent? 25 percent? And will the cuts come on April 1? May 1?

The debate reflects splits among the members Germany’s governing coalition and within the dominant party, Chancellor Angela Merkel’s Christian Democrats. Environment Minister Norbert Roettgen, a Christian Democrat, was pushing the 15 percent cuts for April 1 but backed off under pressure from his own party. He recently sought support from the junior coalition partner Free Democrats but was told that the cuts are too extreme.

Businesses have complained that the cuts are coming too fast and will hurt the industry and shed jobs. The uncertainty has prompted big investors like Gabelli & Co.’s SRI Green Fund to decrease their solar holdings.

The coalition government is starting to look a lot like the U.S. Senate in its ability to mangle good things.

3: The U.S. Wind Industry

The American Wind Energy Association (AWEA) released its year-in-review data in January, and what a year it’s been for the U.S. wind industry. Entering 2009, in the midst of the global financial crisis, AWEA actually predicted a 50 percent decline in the construction of new wind farms. But then the $765 billion stimulus stepped in and helped turn the expected decline into a 40 percent surge. Backed by unprecedented stimulus monies through 2009, U.S. wind developers added 9,922 megawatts of new wind-generated electricity, bringing the country’s total wind power capacity to 35,000 megawatts.

4: Dalton McGuinty, premier of Ontario, Canada

It wasn’t the biggest deal of the month – that prize goes to the UK’s £75 billion offshore wind project – but it may have been the boldest. On Jan. 21, McGuinty announced an agreement with Samsung C&T Corp. and Korea Electric Power Corp. to build a $7 billion, 2,500-megawatt wind and solar project.

But McGuinty’s grand plan goes beyond providing renewable energy to Ontarians. He hopes to turn the province into a hub of green energy manufacturing in North America and, to that end, Samsung will recruit other manufacturers into the region.

Critics have slammed McGuinty for negotiating with foreign companies in secret, guaranteeing 500 megawatts of limited transmission capacity to the project and not getting written assurances for the 16,000 jobs he has promised. But the deal is a win-win for McGuinty: if it succeeds, he’ll be the patron saint of Canada’s green energy industry. If it fails, he’ll be already long gone from office.

5: eSolar

China has started lowering barriers to Western cleantech companies doing business within its borders, hoping to reap the benefits of their innovative technology.  One example of this open door policy is the recent decision to scrap the requirement that 70 percent of wind turbines used in the country be made there.

Pasadena, Calif.-based eSolar’s deal to build a two gigawatt concentrated solar power (CSP) plant in China is another.

The deal, announced this month, is a partnership with China’s Penglai Electic to deploy utility-scale solar thermal power plants across the country over the next 10 years. This project, with construction slated to begin this year, will be the first large scale CSP project in the country.

The projects will use eSolar’s modular power tower technology which uses a field of flat mirrors called heliostats to focus solar energy on tower-mounted receivers where water turns to steam that is piped to a conventional steam power plant to generate electricity. The projects will be “hybridized” by being near biomass power plants — the combined power facilities should be able to generate electricity around the clock.

The Google-backed company has been rolling at a quick pace lately, picking up a new CEO and rapidly deploying its technology. If it is successful in China, the company could be poised for a bright future.

6: Bill Gates, Chairman, Microsoft

Bill Gates founded one of the world’s most successful software companies. Today, he’s also one of the world’s most ambitious philanthropist. Given that unique background, Gates’ actions carry weight. In an interview last week Gates mentioned that he had invested some money with Vinod Khosla’s Khosla Ventures. As we’ve noted that Khosla’s fund is not your “mom and pop” cleantech fund, as it tends to go after cutting edge outfits backed by promising, out-of-the box ideas. One of its investments is in LS9, the developer of enzyme-based diesel fuel.

A few days after talking about his Khosla investment, Gates announced that he would spend $4.5 million to fund geoengineering projects. You don’t get more cutting edge than that — geoengineering seeks to deliberately change climate pattern on a global scale to mitigate the impact of climate change.

7: Solyndra

Could Solyndra, the California maker of thin-film photovoltaic cells, turn out to be the Google of the solar power industry? It’s certainly a favorite of early stage investors who invested $198 million in the company by the end of 2009. It also was one of the first renewable energy company to score a coveted loan guarantee, which it plans to use to build a new plant.

Solyndra only started selling its panels in the summer of 2008, but in that relatively short time, it’s scored some impressive sales, including the December deal worth $105 million with Italian installer Sun System. In total, over the past two years, Solyndra has registered more than $2 billion in backlog orders.

What’s more, in what promises to be one of the most talked about cleantech Initial Public Offerings (IPO) of the year — and a lucrative pay-out for its VC backers — Solyndra filed with the Securities and Exchange Commission in December for an IPO that, by some estimates, could raise up to $300 million.

8: Tesla Motors

It’s been a while since a U.S. automaker filed for an initial public offering – Dwight Eisenhower was president the last time it happened.

But if ever there was a company with the gumption to make history, it’s Tesla. The company is seeking $100 million from its IPO, a step up from A123’s $57 million IPO last fall. Cleantech companies will be watching closely to see how Tesla is received by investors.

Tesla is not expected to make a profit – or even have a product once its ultra-exclusive Roadster goes out of production in 2011 – until it rolls out the planned $57,400 Model S car in 2012. The company needs the cash to build its vehicle but it already has 2,000 buyers who have plunked down deposits of $5,000 to get their hands on the Model S. That’s moxy.

9: Senator-elect Scott Brown (R-Mass.)

Senator-elect Scott Brown won’t be sworn in as Massachusetts freshman senator until next week, but his stunning victory in Massachusetts last month was interpreted by many talking heads as a game changer, killing any chance of President Obama signing a climate change bill into law.

That may be true based on Brown’s stance on health care reform — he’s said he would vote against it. One could deduce that he would also vote “nay” on climate change, another cornerstone policy of the Obama administration. But the reality is that not much is known about Brown’s stance on climate change.  If he has any position on the matter, it’s likely to be influenced by the fact that he represents a state that just a year ago helped put Obama and his cap-and-trade/climate change agenda in the White House.

So, while on paper Brown’s election has certainly complicated things, the jury is still out whether it’s a game changer for climate change and other key bills.

10: The Carousel Fraud

Last month’s indictment by Belgian prosecutors of three Britons and a Dutchman for failing to pay 3 million Euros ($4.19 million) in taxes on carbon trading transactions is terrible news for supporters of a U.S. cap-and-trade system. The scheme, known as the “carousel fraud” involved buying credits in one country that allows credits to be sold without charging Value Added Tax (VAT) and then selling these credits to buyers in another country that requires VAT to be collected. That’s the sort of close-to-the edge financial scheme that’s fueled calls for a pitch fork revolt against Wall Street over the past year.

The fraud validates the anxiety many people feel about creating a huge, new financial market to curb emissions. Could traders replicate this scheme in the U.S.?  Not necessarily, because in the U.S., cap and trade would be governed by one set of taxation rules. But given its lackluster support, what’s for sure is that cap and trade certainly can’t afford too many bad PR days of the sort brought on by the carousel fraud.

Interior Secretary Ken Salazar toured the proposed site of Cape Wind’s offshore wind farm yesterday.

Boston-based Cape Wind has been working for years to launch the development of a 420-megawatt offshore wind farm off Cape Cod, on the Nantucket Sound.

The developer thought it was seeing light at the end of the tunnel back in December when it officially began negotiating the terms of a long-term power purchase agreement with National Grid. But shortly after the talks began Cape Wind was thrown another curve ball when the National Register of Historic Places ruled that the Nantucket Sound was eligible for listing in its register, a decision that ensures more delays in the already long permitting process.

But in Salazar Cape Wind, and other offshore wind developers, have an ally. Since taking over at the Interior Department, he has been an ardent defender of offshore wind development. His visit yesterday could be interpreted as tacit support for the beleaguered project.

As part of his daylong visit Salazar boarded a Coast Guard vessel and toured the proposed site where Cape Wind wants to erect 130 turbines over a 25-square mile area of federal waters.

Salazar also met with members with the Mashpee Wampanoag tribe, which opposes the wind farm saying its construction would violate ancestral lands that holds potent cultural and historical significance.

Watch the Salazar press conference and the protests both for and against the Cape Wind project:

Video: Cape Cod Times / Image: AP