In the post-Lehman/global financial meltdown era it’s been repeatedly said that the money power has left Wall Street for the shores of the Potomac in Washington.
This is not just a talking point, but a stark reality for whole industries — the renewable energy sector among them– which have come to rely on Washington for their mid-to-long-term survival.
The government’s pivotal role as a funder of last and first resort was glaringly apparent this week with the announcement that BrightSource Energy was offered a $1.37 billion loan guarantee (if it meets certain conditions) from the Department of Energy. The BrightSource loan guarantee dwarfs the $535 million thin-film photovoltaic cell maker Solyndra got last year, which, until now, was the largest such loan guarantee.
BrightSource, based in Oakland, Calif. will use the DOE’s financial backing to structure financing to support construction of the 440 megawatt Ivanpah Solar Power Complex, located in a six square mile (15.53 square kilometer) area on the Nevada side of the Mojave Desert.
How crucial is the government financing for BrightSource? A banker we met in Austin this week at the Renewable Energy Conference & Expo (See, here or here for our conference coverage), probably said it best. “Without the loan guarantee that project would have been D.O.A,” he told GER. He adds, “For project finance banks the days of lending to the multi-billion solar thermal power projects are over.” At least for now…
There was a lot of buzz this week surrounding Silicon Valley fuel cell developer Bloom Energy, which on Wednesday officially launched its Bloom Box. The $800,000 conracsion has been described as a “power plant in the box” and generates electricity, using natural gas, methane or biofuel.
The Bloom Box rollout was a fine-tuned PR-led exercise that began Sunday with a 60 Minutes segment and ended Wednesday with the official unveiling of the “Box.”? Bloom Energy and its VC backers — the company has raised $400 million in venture capital since its launch in 2001 –?? inundated the media? with PR-approved messages,? highlighting the Box’s green creds.
However, pretty quickly some media questioned whether the Bloom Box was really green since it does produces CO2. GER reblogged one critic by? Silicon Valley blog TechPulse 360. Also read this piece by Todd Woody or this one.
This week also saw two significant policy developments. One was in Germany, the other in Washington.
In Germany, after months of anticipation and speculation, the country’s conservative coalition finally released the draft of its long-awaited cuts to its solar feed-in tariff subsidies. The cuts were not as bad as expected with cuts of 15 percent for solar parks built after July 1. This is three months later and 10 percent less than what had originally been floated, when the plan first emerged.
Earlier this week in Washington, Environmental Protection Agency (EPA) Administrator Lisa Jackson said her agency won?t start regulating carbon emissions and other greenhouse gases?as part?of its recently issued ?endangerment finding? until 2011. That deadline should give plenty of time for opponents of this regulated approach to try to derail the EPA’s plans. Already, the agency’s endangerment finding is? facing a pile of lawsuits (16 at last count) from the U.S. Chamber of Commerce and other carbon-dependent industries.? These plaintiffs can also count on Senator Lisa Murkowski (R- Alaska), who has vowed to curb the EPA’s regulatory powers.
Intel, via an outfit known as the Invest in America Alliance,? rolled out a $3.5 billion VC investment initiative that will invest in cleantech and other? U.S.-based technologies.
We learned that a group of unnamed, U.S.-based venture funds was in talks with Husk Power Systems,? a startup that’s developed?a system that turns rice husks into biogas to fuel mini power plants. The company initially secured funding from the Overseas Private Investment Corp., a government agency and Royal Dutch Shell ‘s philanthropic arm, the Shell Foundation.
Montreal-based waste-to-biofuels company Enerkem got a CDN $53.8 million ($51.15 million /??37.55 million? / ?33.54 million) round of financing from one of its lead investors, garbage hauling company Waste Management.
And — as we wrote earlier — Bloom Energy, which is backed by a string of heavyweight investors including, Kleiner Perkins Caufield & Byers, officially rolled out its Bloom Box fuel cell.
On Friday, Silver Spring, the SmartGrid software developer, which has raised $275 million in venture capital since its 2001 launch, announced it had hired Morgan Stanley and Jefferies & Co. to underwrite a possible IPO.
As some of you know, this week Green Energy co-editor Terrence Murray traveled to Austin, Texas to cover the Renewable Energy World Conference & Expo. A diverse crowd of startups, well funded Chinese wind companies and seasoned project finance bankers and lawyers converged to the city’s convention center, a few blocks from the Texas State Capitol for the two-day event.
Two themes emerged from the conference:
The first is China. Chinese renewable energy companies should not be underestimated; they are ready to grab market shares in the U.S. and other overseas markets and they have the money to do so.
The other is the state of U.S. Capital Markets. While markets are on a much more solid footing compared to a year ago, funding remains hard to get for most cleantech companies, even for those with bullet-proof projects.? What’s emerging is a new paradigm for all industries, not just cleantech. Today, when it comes to financing large projects, the DOE or the Treasury Department are the “lead underwriters” and traditional banks play second fiddle.
Image: Flickr, Grundlepuck