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Stunning Cleantech 2012

It’s been a busy, ummm interesting year.  We’ve tracked profits to founders and investors of $14 Billion in major global IPOs on US  exchanges and $9 Billion in major global M&A exits from venture backed cleantech companies in the last 7-10 years.  Money is being made.  A lot of money.  But wow, not where you’d imagine it.

5 Stunners:

  • Recurrent Energy, bought by Sharp Solar for $305 mm, now on the block by Sharp Solar for $321 mm.  Can we say, what we have here gentlemen, is a failure to integrate?  This was one of the best exits in the sector.
  • Solyndra Sues Chinese solar companies for anti-trust, blaming in part their subsidized loans????????  Did the lawyers miss the whole Solyndra DOE Loan Guarantee part?  It kind of made the papers.
  • A123, announced bought / bailed out by Chinese manufacturer a month ago, now going chapter bankruptcy and debtor in possession from virtually the only US lithium ion battery competitor Johnson Controls?
  • MiaSole, one of the original thin film companies, 9 figure valuation and a $55 mm raise not too long ago (measure in months), cumulative c $400 million in the deal, sold for $30 mm to Chinese Hanergy just a few months later.  (Not that this wasn’t called over and over again by industry analysts.)
  • Solar City files for IPO, finally!

 

My call for the 5 highest risk mega stunners yet to come:

  • Better Place – Ummmmmmmmmm.  Sorry it makes me cringe to even discuss.  Just think through a breakeven analysis on this one.
  • Solar City – a terrifically neat company, and one that has never had a challenge driving revenues, margin, on the other hand . . .
  • BrightSource – see our earlier blog
  • Kior – again, see our prior comments.  Refining is hard.
  •  Tesla – Currently carrying the day in cleantech exit returns, I’m just really really really struggling to see the combination or sales growth, ontime deliveries, and margins here needed to justify valuation.

I’m not denigrating the investors or teams who made these bets.  Our thesis has been in cleantech, the business is there, but risk is getting mispriced on a grand scale, and the ante up to play the game is huge.

 

Battery Breakthrough?

by Richard T. Stuebi

I recently was sent an article about electric cars. It profiles the Lightning GT, a 700 hp electric sports car that can accelerate to sixty mph in four seconds. To me, the news is not so much about the Lightning GT as it is about the batteries being used in the car.

The claim is that the battery, a Lithium-ion (Li-ion) type called Nanosafe being developed by a company called Altairnano, is able to provide a useful operating range of 250 miles, a full recharge time of 10 minutes, and a useful life of 12-20 years through 15,000 charge/discharge cycles.

If a battery can produce this kind of performance, and if large-scale production can enable the battery pack to be profitably sold at a few thousand dollars, mass adoption of electric vehicles cannot be far behind. This is because recharging an electric car from an socket produces a “fuel” that costs about the equivalent of $0.60 per gallon — about 1/6th the current cost of gasoline at the pump.

That’s a game-changer that could end our addiction to oil. While potentially a big threat to the big petro-companies, such a development would be a huge boon to electric utilities, which all of a sudden would have a major overnight load to soak up off-peak excess capacity.

And, the big long-term winner would be the environment. Even if the electricity comes from coal, the emissions profile of an all-electric car is much better than even a highly-efficient gasoline or diesel car. If the electricity is produced by renewables such as solar and wind, then we’re talking about virtually a zero-carbon car.

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.

Heavy-Duty Vehicle Trends for 2008

By John Addison (2/8/08). Most oil consumption and greenhouse gas emissions from transportation are not from passenger vehicles; they are from the heavy-duty vehicles, ships, and planes that move all our goods, serve public transit, and provide the infrastructure that keeps cities running. Heavy-duty operators have often been years ahead of passenger vehicle owners in using advanced technology to do more with less fuel.

Hybrids. Wal-Mart operates 7,000 trucks that in 2005 drove 872 million miles to make 900,000 deliveries to its 6,600 stores. Wal-Mart has set a goal of doubling the fuel efficiency of its new heavy-duty trucks from 6.5 to 13 miles per gallon by 2015. 26 billion pounds less of carbon dioxide would be emitted over 15 years as a result. Demand for oil is also reduced with over one billion less gallons of diesel required over that 15 year period.

Wal-Mart is defying the conventional wisdom that hybrid technology is of little help for large trucks that already have efficient diesel engines. Wal-Mart delivers goods from regional warehouses on an optimized route to its stores. Routes often involve heavy stop-go city driving. With hybrid technology, every touch of the brakes causes energy to be captured. Where trucks previously idled with engines running, hybrids can run all auxiliary power with the engine off, using large battery stacks for the electricity.

Wal-Mart has more than 100 hybrid light-duty vehicles. Now Wal-Mart sees bigger potential savings in heavy-duty Class 8 trucks. Wal-Mart plans to replace Peterbilt 386 big-rigs with hybrid versions of the same truck by 2009. Wal-Mart Clean Fleet Report

Plug-in Hybrids. PG&E is one of 14 utilities in the nation participating in the pilot truck program, sponsored by WestStart‘s Hybrid Truck Users Forum (HTUF), a hybrid commercialization project bringing together truck fleet users, truck makers, technology companies, and the U.S. military, to field-test utility trucks with an integrated hybrid power-train solution.

This new Class 6/7 hybrid truck is built by International incorporating the Eaton (ETN) hybrid drive system with a 44kW electric motor. Eaton has produced more than 220 drive systems for medium and heavy hybrid-powered vehicles. Vehicle configurations include package delivery vans, medium-duty delivery trucks, beverage haulers, city buses and utility repair trucks – each of which has generated significant fuel economy gains and emission reductions. Fleet customers for Eaton hybrid power have included FedEx Express, UPS, Coca-Cola Enterprises, The Pepsi Bottling Group, and the 14 public utility fleets into which were placed 24 hybrid-powered repair trucks.

Idle-off. In many heavy-duty fleets, engines idle 40% of the time at stops for many auxiliary needs including air conditioning, heating, running electronics inside the cab and more. These auxiliary functions can now be powered with the batteries in hybrid powertrains, with auxiliary power units such as fuel cells, and with truck-stop electrification. Heavy-vehicles can now be programmed to automatically idle-off after a prescribed amount of stop time, such as California’s five-minute law. Idle-off is possible by GPS location, such as specific bus stops. Wal-Mart alone estimates savings of $25 million with idle-off and APUs for its 7,000 trucks. Transit operators save millions of gallons of fuel and keep passengers happy with electronic air conditioning without diesel fumes.

Natural Gas. There are about five million natural gas vehicles in operation globally. These vehicles consume 238 million gasoline gallon equivalents. That amount has doubled in only five years. CNG vehicles are popular in fleets that carry lots of people: buses, shuttles and taxis. Natural gas fleets are likely to double again in the next five years. Los Angeles County Metropolitan Transportation Authority (LAMTA) serves over ten million people with the nation’s largest natural gas fleet, comprised of over 2,000 CNG buses. A growing number of riders enjoy higher-speed service with LAMTA’s bus rapid transit.

To help clear Southern California air, the Ports of Los Angeles and Long Beach established a $1.6 billion Clean Truck Superfund to purchase 5,300 alt-fuel trucks by 2010 out of a total fleet of 16,800 Class 8 trucks. All are likely to be Westport LNG systems installed in Kenworth T800 trucks.

Hydrogen Fuel Cells. Many passenger cars have the potential to meet all driver needs by plugging in for a nightly recharge of batteries in electric vehicles. Buses running 16 hours daily and climbing 12% grades can also be electric, but most need the added electricity provided by hydrogen fuel cells. Over 3,000,000 people have ridden these vehicles in Europe and the U.S.

Energy Security. The Army’s NAC is pursuing hybrid truck technology to significantly reduce the Army’s fuel consumption and logistics needs, to provide field-generation of power and to provide quiet, stealth operations. The U.S. Army has a fleet of over 246,000 vehicles with a goal to reduce fuel consumption by 75% by 2010.

Green Supply Chains. ConAgra has contracted with Nova Biosource Fuels to convert food processing waste into biofuel, greatly helping with waste regulations. This provides Nova Biosource Fuels with a low-cost feedstock for high-quality biodiesel. ConAgra has guaranteed the purchase of 130 million gallons per year. California-based State Logistics, has grown its business by providing more-sustainable shipping options for companies like Clif Bar. Prologis will only build USGBC LEED certified distribution centers.

On February 20, fleet managers, vehicle technology leaders, government leaders, other experts and stakeholders will gather in San Diego to discuss their success in all of these areas at the Clean Heavy-Duty Vehicle Conference 2008.

“Clean Heavy Duty Vehicle 2008 highlights the vehicles and fuels that will actually cut our greenhouse gases and reduce our dependence on oil,” said John Boesel, President and CEO of WestStart-CALSTART, a leader in spurring green tech in transportation. “The conference brings together the key business and political leaders helping bridge the technological and financial gaps to bring clean transportation solutions to market.”

Stay tuned for more exciting progress in 2008.

John Addison publishes the Clean Fleet Report.

AQMD Orders 30 more PHEV

By John Addison (3/19/07) South Coast Air Quality Management District (AQMD) is ordering 30 more plug-in hybrid electric vehicles (PHEV) that are likely to achieve over 100 mpg. Ten will be Toyota (TM) Priuses converted to PHEV by Hymotion using A123 5kWh lithium nanophosphate polymer batteries. 20 will be Ford (F) Escapes converted to PHEV by Quantum (QTWW) using Advanced Lithium Power batteries.

Total investment in the 30 vehicles and charging stations will be $3,777,843. AQMD will contribute most of the money. The vehicles will be placed with cities and commercial fleets that will pay the normal price of the hybrid vehicles. The recent contract award gives AQMD participants the opportunity to make additional purchases of the awarded vehicles. The winning vendors will also participate in cost sharing.

If you drive 10,000 miles per year, then you average about 27 miles per day. 80% of the time, a U.S. driver does not exceed 50 vehicle miles in one day. Since most U.S. households have two vehicles, millions could have one be an electric vehicle with a range of greater than 50 miles. The gasoline powered vehicle could take care of the occasional distance trips. Yet, families and friends resist the idea of sharing cars. Many also insist that each car be ready to go hundreds of miles on a moments notice.

Southern California is home to thousands of battery electric vehicles (BEV). Most are specialized utility vehicles limited in range and in speeds of 25 mph. New EVs with greater range and freeway speeds are coming from companies like Phoenix Motorcars and Tesla Motors.

The plug-in hybrid electric vehicle (PHEV) may be ideal for people who like the green benefits of running on electricity, but require extended range. PHEVs can potentially handle most trips in electric-only mode. The Priuses ordered by AQMD only run in electric mode at least than 35 miles per hour. PHEVs can be plugged into garage outlets for evening recharging. PHEVs can plug into other charging stations, although there is a lack of industry standards.

AQMD has been achieving over 100 mpg in its test of a Toyota Priuses modified to be a PHEV using Valence batteries. AQMD has also seen success with two PHEV DaimlerChrysler Sprinter Vans. One uses NiMH batteries. The other Saft li-ion batteries. Five more PHEV Sprinter Vans are planned for carrying passengers. Major Southern California electric utilities and the City of Santa Monica have also been early owners of PHEVs.

The idea of plugging-in is not new. We are in the habit of recharging our mobile phone every night. Soon, we may also be recharging our vehicle every night. Hymotion is planning on making PHEV conversion kits available to consumers later in 2007. Hymotion is targeting a price of $9,500 installed for the Prius. PHEV enthusiasts are likely to convert. Since the conversions normally void Toyota and Ford factory warranties, many consumers will wait for the OEMs to make their own offerings. Fleet conversion kits are now offered. Green Car Congress Article

PHEV awards are being made in increasing quantities. These financial awards and the successful implementation of the vehicles will encourage major automotive OEMs to start selling their own PHEVs. Toyota and GM have formally announced PHEV development. GM owns about 15% of Quantum, which in turn owns 19.9% of Advanced Lithium Power. No OEM has committed to a specific timeframe for PHEV commercial sales. Mitsubishi will start selling a commercial EV in 2010 in Japan; target price is under $20,000.

This article is copyright John Addison with permission to excerpt, reproduce and publish. This article appears in full at the Clean Fleet Report. http://www.cleanfleetreport.com

John Addison is the author of the upcoming book Save Gas, Save the Planet. John is looking for added stories about how people are using their EVs, PHEVs, couples who share one car, and people who live car-free. If you have a story that you are willing to share in the book, please contact John at johnaddison1@gmail.com.

Cleantech: The Problem and Solution

Two interesting cleantech reports came out in the last couple of days. One talking about the problem, the other the solution.

On the problem side, as reported in USA Today, a team of researchers working at Texas A&M found that increased pollution in Asia, primarily from the rise of industrialism in China over the last 10 years, is affecting weather patterns over the Pacific and even into the US West Coast.

I guess the last 10 years of environmentalists harping over the growth in “dirty Chinese coal plants” had some real merit.

On the solution side, the 2007 Clean Energy Trends report authored by Clean Edge, came out this week.

The highlights from my review of their document:

$2.4 Billion in clean energy (as distinct from cleantech) venture capital investment in 2006, up 2.4x from 2005.

They project $220 Billion in market for Clean Energy by 2016.

Their 5 Trends to Watch:

  • Carbon Finally Has a Price…and a Market – They note the major advances including California’s GHG law push. We agree. But like wind and solar, we pioneered it, but Europe is leading it today.
  • Biorefineries Begin to Close the Loop – They are big on the advances of cellulosic ethanol. We remain cautious here.
  • Advanced Battery Makers Take Charge – They note the coming rise of lithium ion in the automotive sector. We agree.
  • Wal-Mart Becomes a Clean Energy Market Maker – They note major moves by Wal-Mart to go green. Long a shareholder of Wal-Mart myself, I definitely agree. We have been saying for a while that when it comes to cleantech, startups talk the talk, the big boys walk the walk.
  • Utilities Get Enlightened – They note that utilities are getting on the climate change band wagon. We would add that corporate venture is back, in a new and possibly smarter form.

You can download their report from the Clean Edge website. We have written on each of these topics before. Onwards and upwards in cleantech.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog and a Contributing Editor to Alt Energy Stocks.

Could Solvent-Free Manufacturing Technology Help Make Lithium Polymer Batteries a Reality?

I had a chance to chat with Dr. Klaus Brandt, EVP of Lithium Technology Corporation (Ticker symbol LTHU.PK). LTC has been in the business of Lion battery development for over 10 years. They are focused on large energy content / high power applications, primarily using lithium polymer technologies.

The Company was formed 4 years ago through a merger of a German battery startup called and LTC. Dr. Brandt is the Executive Vice President of LTC and Managing Director of their GAIA GmbH subsidiary, joining GAIA in April, 2005. A 25 year battery industry veteran, Gaia is his 5th battery company. He previously worked for Duracell (US) and VARTA (Germany), Moli Energy & Ionity. He holds a PhD, Physics from Tech Inst of Munich.

They haven’t disclosed much on their customers, but are focused on the military markets (especially for unmanned vehicles, like UAVs, they have one announced participation with Phoenix), and in niche industrial markets like robotics. The holy grail opportunity, of course is the EV, HEV and Plug-in hybrid automotive markets, where LiOn technology has an opportunity to displace NiMh, if it can drive costs down far enough. So far LTC has been working on early demonstrator projects in this area, but doesn’t appear to have hit the big one yet.

A quote from a recent press release on some of LTC’s activities in the plug-in hybrid sector.

“LTC has powered a project in conjunction with Innosys Engineering in which a four passenger Daihatsu Cuore was converted into an electric car using the lithium-ion batteries and a three-phase asynchronous electric motor. The battery, built with cells manufactured by LTC subsidiary GAIA, has a capacity of 25 kWh and an approximate highway range of 180-200km (100-125 miles) at 90-100km/hr (56-60 mph). These results are similar to the expected performance of the recently announced Volt slated to be made available by General Motors in 2010. “The technology is here today. LTC has it, and we’ve demonstrated it,” says Dr. Brandt. “Price is the biggest factor holding back the production of these more environmentally friendly, fuel efficient vehicles. By committing to work together, the auto manufactures and battery companies can bring the cost down and make cars like the Volt an affordable reality for the consumer.” LTC’s technology was recently highlighted in a video produced by Plug-In Partners, a national grass-roots initiative to demonstrate to automakers that a market for flexible-fuel PHEVs exists today. The full video discussing the economic and environmental benefits of PHEVs can be viewed on the Plug-In Partners website.

The piece featured a project in which LTC provided cells to the University of California, Davis Hybrid Electric Vehicle Group for the conversion of a Chevy Equinox to a PHEV as part of the Challenge X: Crossover to Sustainable Mobility engineering competition. The lithium-ion battery has the same capacity as the original metal hydride battery but with half the weight. The battery can be charged by either the internal combustion engine (ICE) or a standard AC household electrical socket and can drive over 40 miles on the overnight electrical charge. The converted vehicle has a fuel economy of 36 mpg in the city, and 38 mpg on the highway, as compared to the original Chevy Equinox range of 19 mpg city and 25 mpg highway.”

As a result of the merger with Gaia, Arch Hill Ventures, NV, the venture capital firm behind Gaia, now has a dominant stake in the company. I couldn’t find much information on Arch easily available, though.

The company trades over the counter in the US, and has struggled financially (revenues are around $2 mm/year), and it loses money, and the stock price for the last several years has reflected this. Of course, it doesn’t help that the company doesn’t seem to have filed a 10-K or 10-Q since May of 2006. In December the company earned a reprieve raised $3 mm in a Series C Preferred Stock at a valuation on the order of $23 mm, and converted about $2.4 mm in debt.

In Germany the company is manufacturing cylindrical cells, and packaging them into batteries, and doing some prod development, along with EU sales. In the US Dr. Bradnt says they do a limited production of flat cells, the US sales and marketing, as well engineering and assembly of batteries for American customers.

But aside from all that, I asked Dr. Brandt to give me a summary walk through of the technology, what makes it neat, and what the cost and performance advantages are.

The brief from their website:

“LTC’s unique technology allows for the production of very large cells with a high capacity and high power capability.

LTC’s wholly owed affiliate GAIA Akkumulatorenwerke in Nordhausen, Germany employs a unique patented extrusion process for producing electrodes for lithium ion cells. This process is environmentally friendly (no solvent) and eliminates the need for expensive explosion proof coating and solvent recovery equipment. Using high speed winding and a unique assembly technology, large cylindrical cells are manufactured. In our Plymouth Meeting facility, we have the capability to build large footprint flat cells and stack them to form large batteries. Our proprietary technology includes critical composition, processing, and packaging aspects of the battery. Our coating, lamination and extrusion know-how enables us to achieve uniformity and consistency through a range of application techniques. Batteries for the consumer, transportation, and industrial markets require different electro-chemical systems that we believe can be easily accommodated by our extrusion process.”

According to my conversation with Dr. Brandt, LTC has two core technologies. The first is this extrusion process for a part of the cell manufacturing for either LiOn or Lithium Polymer batteries. The uniqueness is a way to avoid the use of large amounts of solvents in the process of manufacturing electrodes from electrode powders.

Normally, you make electrodes by a coating process. Taking electrode powders and mixing them in an organic solvent with has a binder and any additives dissolved in it. This results in a fairly viscous slurry with typically more than half organic solvents . Then battery manufacturers typically use a coating process (usually a printing type roller process or some sort of foil through narrow slit, controlling deposition quality mechanically) to coat the slurry onto a current collector, usually a thin metal foil, and in a post process step heat the electrode to evaporate the solvent, which by volume is often greater than the active material.
Typically the make-up of the solvents used is key intellectual property for the battery manufacturer, but most are highly volatile and toxic chemicals, and need to be recycled in some sort of a closed loop system that is generally equipment and energy intensive (read costly, and not very green).

The LTC process is different. LTC runs an extrusion process as follows – make the electrode powders into mixture of powder materials directly with a special polymer binder, which flows under some pressure and temperature, and extrude the mixture into a film sheet. The process runs in the range from 200-300F up to 350-400F, and uses off the shelf plastic extrusion equipment. As second step, LTC then laminates the film to the foil. The lamination allows good control of all kinds of properties. The whole thing is roughly similar to low temperature polymer membrane construction process.

The trick is the mix of the polymers. If mix isn’t right you can’t keep mechanical consistency or can’t control thickness of the film and uniform distribution of the components. The polymer mix also affects the binding properties.

They claim the process does not really affect the cell manufacturing or the electrolyte relative to other processes. And Dr. Brandt says it has applicability for lithium ion as well as lithium polymer.

The advantage – no solvent extraction, cleaning, and recycling process equipment, and reduced energy use. Basically a more efficient, greener, cleaner process. LTC estimates their process can reduce a cost structure on the order of 5-10% improvement over conventional technology, a big improvement in battery manufacturing techniques.

The main challenges are those similar to all lithium ion and lithium polymer battery manufacturers. In the area of automotive and HEVs, they need to address cost. Scale of production is obviously a main cost down concern for LTC at this point, but materials costs are a close second. Like all lithium polymer technologies, the materials in general are still quite high.

On the performance side, Dr. Brandt walked through another interesting technology development.

They are able to build relatively large systems at a similar power density and power rate to smaller systems compared to other manufacturers, especially useful in areas like submarine and UAV batteries.

They also get high power and excellent charge/discharge rates – on some cell types up to 80% of the energy in 2 – 3 minutes.

The trick here is LTC’s technology to manage the thermal issues in the way they make the electrical connections between electrodes and terminals in the wound cells. LTC essentially makes electrical connections at every turn of a wound cell, directly connecting each cell to the terminal, using massive (relatively) terminals. They do it with a special trick they have developed to easily allow a large number of the multiple connections.

All in all, a fascinating story. One I will have to follow closely and see how well the company pulls through its recent financial straits.

Author Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding contributor of Cleantech Blog, and a Contributing Editor to AltEnergyStocks.com.