GE, NRG Energy, ConocoPhillips Launch Green Energy-Focused VC — UPDATE

by Terrence Murray - January 27, 2011

GE, NRG Energy and ConocoPhillips, the oil and gas major, have committed to jointly invest up to $300 million in green energy and cleantech startups.

The three companies will carry out investments via their newly-formed Energy Technology Ventures fund, which could invest up to $75 million a year over the next four years to finance some 30 early-stage renewable energy/cleantech companies.

Energy Technology Ventures has already invested undisclosed amounts in three companies: Solar photovoltaic technology developer Alta Devices; Centennial, Colo. clean coal startup Ciris Energy and CoolPlanetBioFuels, a Camarillo, Calif. startup developing technology that converts low-grade biomass into sequestrable carbon.

The participation of ConocoPhillips in Energy Technology Ventures is noteworthy. It makes sense since the fund will invest across the whole energy spectrum, including in oil and gas. The fund’s overall green commitment also bolsters the Houston company’s overall thin green portfolio.

Despite a few biofuel and biomass investments, unlike other oil and gas majors, , Conoco has largely stayed on the sidelines when it comes to green investing. The company� last year. At the time Conoco CEO Jim Mulva, justified the move by saying that the climate change bill, passed by the House a few months earlier, “disadvantaged the transportation sector and its consumers, left domestic refineries unfairly penalized versus international competition.�

Conoco�s Richard Germain, who oversees alternative energy investment for the company, said Energy Technology Ventures, “will help.. accelerate the commercialization of new technologies.�

As for NRG, it says Energy Technology Ventures is its first corporate venture investment program. Over the past couple of years NRG has invested in a number of cutting-edge, VC-backed solar renewable energy projects, but� has rarely committed dollars to early-stage plays.

Energy Technology Ventures offers NRG Energy a first mover advantage that could ease the deployment of green technologies at some of� its renewable projects, explains Clint Freeland, NRG Energy�s senior vice president, financial structure.

�We have been active at deploying large renewable projects but much less when it relates to early stage investments,� Freeland tells G.E.R. � This ventures gives us the strong VC platform we were missing,� he adds.

GE�s VC team will oversee day-to-day management of the fund, according to Freeland. Out of the three companies,� GE is the most experienced early-stage investor. Over the past four years the company�s energy financing unit, GE Energy Financial Services, has invested about $200 million in 27 early- and growth-stage energy-related companies.

A management committee comprised of NRG and Conoco and — of course –� GE representatives will oversee all investment proposals. �This will be a very involved joint venture,� Freeland says, pointing out that Energy Technology is targeting up to 10 investments a year and could actually leading some of these financings.

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