January Top 10 Players In Green Energy

by Terrence Murray, Chicago - February 28, 2011

1: The Obama State Of  The Union

There is nothing like an inspirational State of the Union address to remind us that the presidency is, among other things, a bully pulpit. So when Barack Obama used his State of the Union speech in January to call for massive federal investment in green energy research and development, he instantly thrust green power into the national spotlight. Of course, the president and his republican opponents disagree on whether the increased level of spending on green energy is an investment in the country’s future or yet another example of government excess the country can ill afford, but Obama gets points for laying out a vision. He may win some political points as well if he can paint himself as shepherding the U.S. towards a cleaner, greener, and more energy secure future while simultaneously painting republicans as dour green power cynics.

2: China: The Green Energy Superpower

China has its share of critics. Its human rights record remains abysmal, its undervalued currency makes American politicians howling mad, and its status as a global power worries both the U.S. and Europe. However, when it comes to green energy the country definitely has more admirers than detractors. So when Chinese President Hu Jintao arrived in the U.S. in late January for a four-day state visit, even Hu’s harshest critics had to grudgingly agree that his policies have put China well ahead of the U.S. in green energy infrastructure. China accounted for 21 percent of all global green investments last year, thanks largely to steps taken under Hu’s leadership. In remarks published on the Huffington Post, Energy Secretary Steven Chu that when it comes to green energy, the U.S. has one goal: Beat China. “The United Sates is competing for leadership in energy innovation,” Chu wrote. President Hu, your state visit made the US realize how far behind it is in the green energy race, so you and your Washington sojourn deserve pride of place on this list.

3: Jerry Brown Sees the Forest for the Trees

Stories about fiscal crises in state governments are decidedly dog bites man narratives these days. Perhaps no state has a direr fiscal situation than California, where newly elected Governor Jerry Brown is busy trying to close a $25 billion budget gap. However, while the budget is taking up much of the 72 year old governor’s time, he is also sticking with his commitment to green energy. In his first speech after being sworn into office Brown reiterated his goal of generating 20,0000 megawatts of renewable energy in California by 2020. With stints as a big city mayor, California attorney general, California governor, and a couple of presidential campaigns already behind him, Brown has said that his future political ambition is limited. However, his ambition to attract a larger amount green energy investment to California makes him a player despite his state’s lingering budget woes. At this stage in his career with his no nonsense stance on green energy he may be that one in a million politician; one who cares about the future rather than just his future.

4:  GE, NRG, ConocoPhillips: A Venture Capital Threesome

While some observers are bemoaning the relative dearth of venture capital in the green power sector, G.E.R. believes there is still plenty of money out there to support green energy. To prove our point look no further than Energy Technology Ventures, a fund set up by GE, NRG Energy, and ConocoPhillips. Certainly the fact that the $300 million fund is planning to finance approximately 30 early-stage renewable energy/cleantech companies over the next four years helped win it a spot on this list. However, more importantly, Energy Technology Ventures is ConocoPhillips’ first major foray into green investing and NRG’s first corporate investing program. Energy Technology Ventures makes this list because it demonstrates not only that green is still capable of attracting cash, but also because it shows new players are putting up capital and old players are willing to invest in new ways.

Terra-Gen: Creative Financing

At a recent conference, a banker, who’s currently helping a couple of renewable energy projects get financing, noted that while money is available, accessing it remains long and difficult. Against this backdrop, the leaseback announced last month, supporting Terra-Gen’s 150-megawatt Alta Wind I project in California, is worth highlighting. Amidst an ongoing  difficult funding climate, New York-based Terra-Gen and its team of experienced project developers has scored some serious financing, including the leaseback transaction.  As we’ve noted, once-popular leasebacks are creeping back after a long hiatus – an indication that, while dollars remain hard to get, (unlike two years ago) they are on the sideline, available for the right projects.

6: Sequoia Capital $1.3B Fund

Despite concerns of a possible second Web bubble, which would happen at the expense of cleantech investments, our reporting shows that experienced green investors are continuing to raise funds, among them, Sequoia Capital. Last month the California firm secured $1.3 billion for a new fund, that will likely be partly invested in green energy companies. Sequoia’s current green portfolio includes startups like SunRun, a San Francisco-based leaser of solar panels. It has also put some money in Oorja, a Fremont, Calif. fuel cell maker. Not all venture capitalists are back scouring the Web for the next Facebook. Outfits like Sequoia and Khosla still see (long term) value in green energy.

7:  Khosla Ventures, Bold Investor

Khosla founder, Vinod Khosla

Risk and outside-of-the-box thinking seem to drive Khosla Ventures’s investment strategy, the pioneering clean energy-focused venture fund launched by Vinod Khosla, a co-founder of Sun Microsystems. Khosla Ventures’s portfolio companies include some of the green power sector’s most cutting edge players, including LS9, a maker of enzyme-based diesel. It has also invested in HCL CleanTech, a developer of technology that turns cellulosic biomass into fermentable sugars. Khosla’s latest bet is Ciris Energy, a Colorado company that’s developed technology that biochemically converts coal to methane. While some VC investors have had second thoughts when it comes to cleantech, Khosla continues, convinced that in the long run its educated but risky investments will payoff.

8: Goldwind USA, A Chinese Developer In America

The last time a Chinese company announced plans to construct a U.S.-based wind farm, Washington went haywire, with Senator Chuck Schumer (D-N.Y.) calling on the Obama White House to not fund the project. No such thing has happened to Goldwind USA, the Chicago-based subsidiary of China’s Urumqi, China-based Xinjiang Goldwind Science & Technology Co. Over the past year, the company has discreetly hired former First Wind CFO Tim Rosenzweig and then built its American portfolio by acquiring a couple of Midwestern projects, including one in Illinois from Irish developer Mainstream Renewable Power. The wind company is now in talk with banks to arrange financing for these projects and through it all it has managed to stay out of the political spotlight. A stealth approach that could payoff as the Chinese company comes online with its PPA-backed projects.

9: Global Energy Investors,  A Long-Term Green Investor

Massachusetts-based Global Energy Investors views the solar and wind sector as a long-term play. That’s a healthy indication for an industry – partly backed by venture capital funds – with midterm aspirations. Last time we talked to GEI founder David Richardson, he told us they were set to close on their $200 million inaugural fund. The firm plans to invest that money in operating wind or solar power plants, backed by long-term purchase agreements. “We’re going to be looking for small power plants that generate cash flow,” Richardson told us.  He is actually looking for the same sort of stable returns he got as a bond investor at Dwight Asset Management Company, the bond fund he helped launch and which currently has $80 billion under management.

10: Solar Junction, From The Lab To The Market

Solar Junction, a developer of concentrated solar PV panels, is working hard to get investors to participate in a fourth round of funding it will use to make its Concentrated solar PV panels a commercial success. On paper, CPV technology generates more power than conventional panels. But unlike conventional PVs, CPVs have yet to become a commercial success. Solar Junction seeks to change that. Backed by its venture investors, including Draper Fisher Jurvetson, it hopes its fourth round of funding will help push its solar technology one step closer to a commercial home run.

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