Green Tech

BOSTON--Oil giant BP and George Soros' investment firm are putting millions of dollars into a company that has isolated a microbe that can create ethanol.

Qteros, formerly called SunEthanol, on Tuesday announced the $25 million series B round of funding, which was led by venture capital firm Venrock and Battery Ventures. Other investors were BP, Soros Fund Management, and first-round investors Long River Ventures and Camros Capital.

(Credit: Qteros )

Massachusetts Gov. Deval Patrick--a clean-energy industry backer--announced the funding and new company name at the Fourth Conference on Clean Energy here Tuesday.

The basis of Qteros is the Q Microbe, a micro-organism discovered in the woods near the Quabbin Reservoir in western Massachusetts by University of Massachusetts professor and now Qteros chief scientist Susan Leschine.

The naturally occurring bug is able to efficiently produce ethanol from the cellulose in plants, according to Qteros. The company has spent the past year breeding different strains of the bug to enhance certain characteristics and make it more productive.

The money it raised will be used for further product development and to build a pilot ethanol facility next year, using agriculture residues, sugar cane bagasse, and corn stover as feedstocks. After that, it intends to do a larger demonstration facility in 2010 and then operate a commercial-scale plant in 2011.

The microbial approach to making ethanol, called consolidated bioprocessing, is a potential breakthrough in cellulosic ethanol production.

Many start-up biofuels firms are developing different methods for converting wood chips, grasses, and agriculture or forest residue into the liquid fuel ethanol, which is a gasoline additive.

By using microbes to make cellulosic ethanol, Qteros intends to streamline a multi-step process and entirely eliminate the use of expensive enzymes, which can account for roughly 30 percent of production costs.

"Using the Q Microbe as a keystone piece eliminates large amounts of capital, large amounts of cost, and makes the process economic," said Qteros CEO William Frey who led BP's biofuels business before joining the company.

Another company pursuing a similar path is Mascoma, a well-funded ethanol company spun out of the University of Dartmouth. It, too, is developing micro-organisms to make ethanol without enyzmes, but its scientists are genetically engineering the microbes.

Qteros Executive Vice President Jef Sharp said that optimizing a naturally occurring microbe alllows Qteros to make ethanol "without the lengthy, expensive, and genetic engineering requirements of taking another bug to do it."

Rather than build ethanol plants itself, Qteros plans to license its technology to ethanol producers which plan to diversify from corn ethanol into other feedstocks, said Frey.

WASHINGTON--Congress may be looking for some quick ways to prop up a stumbling economy as it heads into a lame-duck session this week, but members of the information technology sector are urging lawmakers to keep the bigger picture in mind as they craft economic and energy legislation.

As staffers on Capitol Hill know all too well, the growth of technology has created an economy increasingly reliant on energy consumption, as BlackBerrys, laptops, and other devices become everyday necessities. The right policies, however, can make IT growth a part of the energy solution rather than the problem, IT representatives said Monday at a forum, in a congressional office, hosted by the Information Technology & Innovation Foundation.

Information technology could reduce the expected growth in carbon emissions by one third over 10 years, said Daniel Castro, a senior analyst with the ITIF.

Link Hoewing, assistant vice president of Internet and technology issues for Verizon, tells an audience on Capitol Hill on Monday about the ways IT can reduce energy consumption.

(Credit: Stephanie Condon/CNET News)

Information and communication technology has "great promise in driving economic growth as well as reducing emissions," added David Isaacs, director of government affairs for Hewlett-Packard, but "policy should drive these results."

The ITIF laid out policy proposals to spur short-term economic growth as well as long-term IT innovation in its October report, "Timely, Targeted, Temporary and Transformative: Crafting an Innovation-Economics Based Stimulus Package." The proposals include providing a tax credit for investments in health IT, a tax credit of 50 percent for investments in energy efficient equipment, and providing $735 million for computers and broadband for low-income families with children.

Congress can also encourage businesses to include IT solutions in their green energy policies by incorporating IT policies into cap and trade legislation, which is sure to be drafted next year, said Link Hoewing, assistant vice president of Internet and technology issues for Verizon.

Industry representatives at the forum also encouraged legislation creating more tax incentives for ICT, broadband deployment, and utility decoupling, among other things.

The government can encourage efficient energy use across the economy by leading by example, they said. The General Services Administration, Castro pointed out, set a goal of getting 50 percent of its eligible workforce to telework at least one day a week, thereby reducing the energy consumed commuting and at the office.

Cisco has already been working with governments at the municipal level to integrate smart technologies into the cities' infrastructure, said Jennifer Sanford, senior manager of international trade and environment, global policy, and government affairs for Cisco. She said the company has so far worked with Amsterdam, Seoul, and San Francisco city governments.

In San Francisco, for instance, Cisco worked with city officials to enable the bus system to wirelessly send out information about bus locations.

"One of the main reasons people don't use public transportation is they find it unreliable," Sanford said. "Now people can find out if a bus is near them and if public transportation is a viable option."

While President-elect Barack Obama has said he intends to include investments in clean-energy technologies within an economic stimulus package, there are policy pitfalls lawmakers will need to avoid, speakers on Monday said.

Green technology procurement standards should not focus on creating component efficiency that could possibly cause holistic inefficiency, warned Matt Krupnick, government affairs policy counsel for Dell. Additionally, policies that do not harmonize with policies elsewhere in the world may lead to less-than-optimal results.

"We're a global company with global sales," Krupnick said. "When we're designing to standards like Energy Star, if those are different than what Australia does, then we need to design to the lowest common denominator."

A sampling of green-tech news with quick commentary.
• EPA Coal Decision Levels Playing Field for Wind, Solar - Wired.com
  A good parsing of the EPA coal ruling's impact on clean tech. My sense is that we should expect more legal wranglings over EPA oversight over greenhouse gas emissions. More here.
• Renewable energy may end up scarred, but stronger - International Herald Tribune
  Another pulse-check on the renewable energy industry, again showing concerns in short term and optimism over long term.
• UK coal agrees to windfarm venture - The Independent
  Venture seeks to construct wind farms at coal mines.
• Google exec Dan W. Reicher considered for energy secretary - NYTimes.com
  Wouldn't be surprising--Reicher is heading Google.org's energy push and is a former energy department official.
• At Exxon, Making the Case for Oil - NYTimes.com
  The print headline for this profile of mighty Exxon was "Green is for sissies." The clean-tech angle: they could be players in carbon capture and storage.
• Thomas Friedman | The Daily Show | Comedy Central
  Thomas Friedman talking up his book, "Hot, Flat, and Crowded," in which he argues that the U.S. needs to invest heavily in clean-energy technology to be competitive economically.
• Animation: RecycleBank Single Stream Recyling
  If you ever wondered how high-tech recycling worked.
• CMEA Ventures to Raise $400M Fund - Red Herring
  This mirrors something Kleiner, Perkins, Caufield & Byers has already done: create a fund for late-stage rounds to commercialize start-up technology.

The anxious auto and clean-energy industries have received positive signals from President-elect Barack Obama in the past two days.

In an interview with 60 Minutes broadcast on Sunday, Obama said he intends to pursue a government stimulus package that includes investments to promote clean technologies, even though oil prices have fallen dramatically during 2008.

Interviewer Steve Kroft asked whether cutting oil imports was less important now that the price of oil has plummeted from $147 a gallon earlier this year to under $60.

Obama: It's more important. It may be a little harder politically, but it's more important.

Kroft: Why?

Obama: Well, because this has been our pattern. We go from shock to trance. You know, oil prices go up, gas prices at the pump go up, everybody goes into a flurry of activity. And then the prices go back down and suddenly we act like it's not important, and we start, you know filling up our SUVs again.

And, as a consequence, we never make any progress. It's part of the addiction, all right. That has to be broken. Now is the time to break it.

Obama said a consensus exists among policymakers that a stimulus package is required to prop up the deteriorating economy.

Addressing the question of a bailout for cash-strapped U.S. automakers, Obama said that giving them government money with conditions is the best policy.

He said that allowing the U.S. automakers to collapse would be a disaster but that handing them a blank check won't solve the problem. Instead, he said that the various stakeholders need to come up with a plan for a "sustainable auto industry." From the interview:

So my hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all the stakeholders coming together with a plan (for) what does a sustainable U.S. auto industry look like? So that we are creating a bridge loan to somewhere as opposed to a bridge loan to nowhere."

Meanwhile, in his weekly radio address on Saturday that was broadcast as a video online, Obama reaffirmed his plans for long-term investments on green energy.

"It means investing $150 billion to build an American green-energy economy that will create 5 million new jobs while freeing our nation from the tyranny of foreign oil and saving our planet for our children," Obama said.

Energy and environmental policy were certainly not the top topic of the president-elect's public statements, given the pressing nature of the economic crisis and executing the transition between administrations.

But Obama's recent statements, as well as those from his advisers, indicate that energy remains a high priority. The idea is that an energy policy focused on clean technologies can address environmental problems while stimulating the economy.

"The president-elect will move quickly on climate change," Jason Grumet, a high-level Obama campaign's lead energy and environment adviser, told a conference on carbon trading last week.

In addition to spending on energy infrastructure, Obama's energy plan calls for incentives for energy efficiency, a national renewable energy mandate for utilities, a low-carbon biofuels standard, and a cap-and-trade system for reducing greenhouse gas emissions.

Biofuel start-up Mascoma has laid off a handful of employees, including President Colin South and other executives.

The total number of eliminated positions was between 5 and 10, CEO Bruce Jamerson said Friday.

Mascoma is one of few well-funded companies that have developed technology to make cellulosic ethanol from nonfood feedstocks. General Motors and refiner Marathon Oil are investors.

Click on the image to see a photo gallery of Mascoma's lab, where scientists are engineering microbes to produce ethanol.

(Credit: Mascoma)

Jamerson said Mascoma continues to hit its technology and business milestones. But he and the board felt that it was prudent to cut costs, including personnel.

Because of the upheaval in the capital markets, Mascoma cannot go public to raise additional funds, and institutional investors are being more cautious now. So the company is positioning itself to hold on to cash as long as possible.

"I'm trying to get ahead of this," Jamerson said. "I don't want to find out that in six months, things are more challenging. Then when you make cost reductions, it's even harder."

The company raised $61 million in equity earlier this year. It has also gotten Department of Energy grants, and money from New York and Michigan, to build its first pilot facilities.

The state grants are not in jeopardy, Jamerson said. "I met with the governor of Michigan the other day. It's a priority for them. It will create a lot of jobs in northern Michigan," he said.

The clean-tech sector overall is feeling the effects of the financial-market turmoil. Public companies, such as solar providers, have seen their stock prices drop. Firms looking to raise late-stage financing or project financing to commercialize their technology are also facing difficulty, according to investors and entrepreneurs.

Ethanol producers that use corn as a feedstock are suffering from a significant drop in corn prices since earlier this year. VeraSun declared bankruptcy, and Pacific Ethanol reported a significant third-quarter loss earlier this week.

A sampling of green-tech news with quick commentary.

• Adviser: Obama will act quickly on climate change --Reuters
  A high-level Obama energy adviser says to expect fast action on climate and energy. The clean-tech industry hangs on every word.
• Bailout turns on automakers' viability--WSJ.com
  One idea being floated: that public money be contingent on automakers' investing in more fuel-efficient cars.
• Gore says no to 'Climate Czar' role--The Washington Times
  Former VP Al Gore not interested in a government job.

SolFocus' array concentrates sunlight hundreds of times with mirrors onto high-performance solar cells.
(Credit: SolFocus)
• SolFocus boosts solar efficiency--Greentech Media
  Concentrating photovoltaics upstart boasts 25 percent efficiency in converting solar energy to electricity.
• Electric-powered future two years away?--Forbes Auto
  A briefing on the vehicle-to-grid concept, which optimists say is mostly about integrating existing technology.
• Flipswap announces $14 million capital investment--Press release
  More money going to firms that develop software for trading in cell phones.
• Desktop workstations serious power drain for big companies--Environmental Leader
  Energy usage in IT tends to focus on data centers but desktops, often left on overnight, are major consumers as well.
• Best of what's new 2008--Popular Science
  A look at some interesting green-tech companies, from materials to home wind power.
• Ethanol firms join forces against critics--The Des Moines Register
  Complaining that ethanol's getting a bad rap, ethanol makers band together for PR campaign.
• Is carbon capture and storage the fix?--BusinessWeek
  A visit to a testing facility for carbon capture and storage, promoted as a key to solving climate change but criticized as risky.

On the surface, OPT's PowerBuoy resembles any ordinary ocean buoy.

(Credit: Ocean Power Technologies)

Ocean Power Technologies announced Thursday that it will be installing a water-power buoy system to tie into Hawaii's Oahu Island power grid.

The New Jersey-based company makes ocean buoys that harness the energy of ocean waves to generate electricity that is then sent back to shore via underwater cable.

Through a partnership with the U.S. Navy, Ocean Power has been developing technology that could supplement electricity needs for the military in Hawaii .

"We are pleased to be a part of the Navy's effort to develop and commercialize new technologies to reduce the Navy's dependence on fuel shipments for power generation facilities, and to meet its strategic goals and other sustainability initiatives," George W. Taylor, Ocean Power's chief executive officer, said in a statement.

The company's PowerBuoy, which on the surface resembles an ordinary ocean buoy, is about 12 feet wide and 55 feet long. As the buoy is jostled by naturally occurring offshore waves, it moves a piston-like device located at its core up and down. The electricity generated by the system, which is typically placed in about 100 to 150 feet of water, is then sent back to shore via a standard submarine transmission cable along the ocean floor.

The water-power buoy is loaded with onboard sensors and communications tools that allow it to be monitored and instructed from Ocean Power's headquarters in New Jersey. But the device can autonomously adjust the way it pumps to accommodate changes in ocean waves and maximize its effect.

The U.S. Navy contributed $300,000 to funding this particular installation. But Ocean Power announced in early November that it has won a $3 million contract with the Navy to develop its PowerBuoy for use in conjunction with data gathering and communications.

Ocean Power also has the support of the U.S. Marine Corps. This latest PowerBuoy system will be placed about one mile off the coast of Marine Corps Base Hawaii (MCBH) at Kaneohe Bay and will be connected to Oahu's power grid.

This is the third PowerBuoy that Ocean Power has installed within the last two months.

The Navy and Marine support is a coup for Ocean Power, which struggled with its IPO, and perhaps even for the ocean energy industry as a whole.

Ocean energy proponents have been swimming against a current of lackluster interest because of logistical issues like infrastructure costs, and the unpredictable nature of the energy source.

Google on Thursday joined a smart-grid trade association that promotes energy efficiency in the power grid and home-energy monitoring.

The group, called Demand Response and Smart Grid Coalition (DRSG), includes companies that manufacture networked electricity meters and software for sharing information between consumers and utilities.

Google is increasingly active in the energy business. Through its Google.org philanthropy, it has invested in a few clean-energy ventures.

In September, it announced a partnership with General Electric to lobby for clean-energy policies and to develop smart-grid software.

GE makes smart-grid hardware and software, products that let consumers participate in utility-sponsored energy-efficiency programs. A homeowner could, for example, schedule the dishwasher to run at off-peak times or have the thermostat adjusted.

There are a number of companies that makes software and gadgets for viewing home energy use, a product area where Google has yet to launch a product.

The other technology that the DRSG focuses on is demand response. Demand-response companies create software to dial down energy use at homes or businesses during peak times.

By lowering the lights at a supermarket during the day, for example, utilities can avoid having to turn on expensive and dirty "peaker" power plants. Businesses are paid for participating in these programs.

Demand response is another area that outsiders have speculated that Google could enter.

Other companies to join the DRSG on Thursday include demand-response company CPower (formerly called ConsumerPowerline), energy services firm Conservation Services Group, and smart -meter provider Corporate Systems Engineering.

Billionaire oilman T. Boone Pickens, who launched a high-profile campaign to reduce oil imports to the U.S., is being forced to delay a huge planned wind-farm project, according to published reports.

Over the past two days, Boone spoke at events where he said that the wind project is having trouble getting financing because of the credit crunch.

Investor T. Boone Pickens

(Credit: Pickens Plan)

He was also quoted saying that falling prices of natural gas, used in power plants, are making his wind project less economical.

Boone in July launched a public campaign, said to be funded with $57 million of Boone's money, to wean the U.S. off oil imports through a massive investment in wind energy and conversion to natural gas for vehicles.

Earlier this year, he also founded Mesa Power to oversee what would be the world's largest wind farm in Texas, able to make 4,000 megawatts of electricity, or enough to power 1.3 million homes.

Speaking at a Forbes Energy Conference on Wednesday, Boone said he has had to delay financing the project. But he characterized it as a temporary setback.

"When we were looking at the project, we felt like we could do it with 30 percent equity and 70 percent debt," The New York Times quoted Pickens saying on Wednesday. "The 70 percent debt is where we're having a little slowdown."

Mesa Power has already placed orders for the first phase of the Pampa Wind Project, 667 wind turbines from General Electric capable of generating 1,000 megawatts of electricity, enough to power more than 300,000 average U.S. households.

"The capital markets are problematic for everyone and...may lead us to scale back a bit," Jay Rosser, a spokesman for Mesa, told CNN in a statement. "But we are still going forward with our wind business."

The first phase of the project, projected to cost $2 billion, was supposed to come online in early 2011.

ElectraTherm, which has developed a relatively small machine for making electricity from waste heat, has raised $2.6 million and plans a follow-on round next year.

The Carson City, Nev.-based company's ElectraTherm Green Machine is designed to squeeze power from the heat thrown off at industrial facilities like factories, saw mills, or oil and gas operations.

A 50-kilowatt generator that runs on industrial waste heat.

(Credit: ElectraTherm)

The company intends to make units that range in size from 30 kilowatts to 500 kilowatts, enough to offset electricity use at an industrial facility. A 50 kilowatt unit can generate roughly what 40 U.S. homes consume.

The money from the $2.6 million Series A was from Michigan investor Interlaken and angel investors, said William Olsen, ElectraTherm's vice president of business development. He said the company intends to raise more money--in the range of $5 million to $8 million--early next year to expand manufacturing.

The company has made only a handful of units so far, including one installed at Southern Methodist University. But Olsen said the company is in discussions with utilities, oil and gas companies, and other industrial firms looking for energy-efficiency technologies.

"There's waste heat everywhere," he said. "We've been able to convince (potential customers) that the technology works. At this stage, it's just helping them deploy it."

The generator uses an organic Rankine cycle to convert heat into electrical energy. It channels heat to a refrigerant that is converted to a gas by the heat. The vapor pressure caused from that reaction turns a mechanism that is connected to a generator that makes electricity.

ElectraTherma certainly isn't the only company that has equipment to turn industrial waste heat into electricity. But its product design allows it to operate at relatively small scale and low temperatures, as low as 200 degrees, Olsen said.

When fossil fuels are burned, about two thirds of the energy content is wasted. The net effect of a heat-capturing machine is to squeeze another ten percent of energy from those fuels, Olsen said.

The cost for a 50-kilowatt system is $128,000. Depending on the cost of electricity, the payback is typically under three years, according to the company.