Green Energy Reporter

May 3 – to – May 7, 2010  

Google's latest greentech investment

Cleantech developers! Are you scrambling for financing?  Is your project backed by a PPA? Has it secured regulatory approval but is not making it past bank credit committees? Call Google. Yes, the search engine giant, is  now directly investing in renewable energy projects. A little less than a year after the company’s green leadership announced a shift in its cleantech strategy, Google invested $38.8 million in a North Dakota wind farm developed by NextEra Energy. This is Google’s  first ever-direct investment in a wind power plant. 

In a blog post announcement, Google manager Rick Needham indicated that more investments were in the pipeline. Back in 2007, Google launched RE <C (renewable energy less than coal), and vowed to invest hundreds of million dollars in cutting edge cleantech companies. And over the past three years the company has plowed $50 million intovarious companies, including smart grid technology developer Silver Spring Networks, utility-scale solar developer eSolar and geothermal developer AltaRock Energy. 

Google, however, hasn’t found enough projects to invest in. So last year, company officials announced they would use some of their cleantech dollars to fund in-house R&D efforts. That was a milestone for the search giant.  Then, last December Google said it was considering investing in renewable energy projects by directly backing  wind and solar power plant developers. Google, in less than a year, has morphed from cutting edge venture capitalist to a more traditional investor in solid infrastructure projects. 

One company that might want to put Google’s green team in its rolodex is Enel Green Power, the clean energy subsidiary of Italian power company Enel.  Over a year ago the power company mentioned that it was considering spinning out its clean energy subsidiary in a €4 billion ($5.09 billion) Initial Public Offering (IPO).  What promised  to be one of the largest cleantech IPOs, likely had a roaster of A-list investment banks vying for the advisory mandate.  However, after weeks of missed deadlines (the company did not enlist bank advisers last month, as was expected) word came from Rome that Enel might fold its IPO and instead look to forge a strategic partnership with outside financial and strategic investors (Google?). 

A financial partnership would give Enel executives greater say in running the company, since they would not have to deal with the pressures of a diluted shareholder base.  Also, given how cleantech IPOs have fared lately, Enel might actually do better raising capital from a few strategic investors with an understanding of the business’s long-term rationales. 

There is more to Liechtenstein, the tiny land-locked principality nudged between Switzerland and Austria, than mountains and bank secrecy.  There’s also Hilti, a local tool maker, which this week announced the acquisition — for an undisclosed amount – of Albuquerque, N.M., Unirac, a solar mounting systems company. The deal solidifies Hilti’s access to the North American solar market and offers Unirac a pipeline to sell its products in Europe. 

Back in Washington, on Friday, Senators John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) said they would release their climate change and energy bill early next week without Senator Lindsey Graham’s (R-S.C.) support.  It will be difficult for the legislation to garner the 60 votes it needs to pass. The two senators might be betting that the massive oil spill in the Gulf of Mexico will help them generate some support. That, at least, has been the Obama administration’s take on the disaster.  Administration officials argue that, in the wake of the massive rig explosion, ensuing spill and the earlier West Virginia mining disaster, green energy is not only cleaner but safer.

VC and PE Watch 

Global Environmental Fund sold portfolio company Unirac, the solar mounting systems maker, to Hilti, a tool making company headquartered in Liechtenstein. 

Ford Tamer left cleantech-focused venture capital fund Khosla Ventures (KV) last month and is considering chief executive slots at KV portfolio companies as well as none-KV companies, Vinod Khosla told G.E.R. in an email. 

Berkeley, Calif., -based Alphabet Energy, which has developed technology that recovers waste heat and turns it into electricity, secured $1 million in seed funding from Claremont Creek Ventures and the CalCEF Clean Energy Angel Fund. 

Nualight scored €9.1 ($12.04 million) funding led by Climate Change Capital Private Equity (CPE), a London-based investment fund. 

Rambling  

Cape Wind closed the week with a power purchase agreement with National Grid for half of the expected output of its 420-megawatt offshore wind farm. This is another piece of good news for the developer, which now backed by a federal permit and a likely long-term PPA, can now start to seriously tackle how it will finance this project, whose development costs are  estimated at around $1 billion.  Underscoring the high cost of green power, National Grid agreed to buy Cape Wind’s electricity for 20.7 cents per kilowatt-hour, which is double the typical rates in New England. This premium could sway the Massachusetts Public Utility Commission, which has to approve the deal, to ask the two sides to renegotiate a lower price. That’s what happened in Rhode Island, where the state PUC rejected a proposed contract between National Grid and the Deepwater Wind project off Block Island, because the electricity rates in the PPA were too expensive. 

Image: Google