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This Deal Matters: Cool Planet Energy Systems Closes Series D Funding; Corporates Bet on Advanced Biofuel and Rising Activities in Asia

Leo Zhang

cool planetCool Planet Energy Systems, the Colorado-based developer of advanced drop-in fuels and biochar, announced a $50.7 million investment and the closing of the company’s $100 million Series D growth equity round. Cool Planet’s latest investors include Concord Energy Holdings, a Singapore-based crude oil trading company, which led the round with existing investor North Bridge Venture Partners. Other existing investors include BP Ventures, ConocoPhillips, Energy Technology Ventures, Exelon Capital Partners, General Electric, Google Ventures, NRG Energy, and Shea Ventures. The new investment, along with Cool Planet’s strategic corporate investors, will help to expedite the company’s 10 million gallon per year biofuel facility in Louisiana. The timing of this deal is significant in that it demonstrates corporate interests in bio-based drop-in fuels, especially given the ongoing commercialization struggle of another high-profile drop-in fuel company, KiOR, which private investor Vinod Khosla has recently committed an additional $25 million from his personal trust to continue supporting the company.

This deal also matters as it is the second deal of back-to-back investments into biofuel companies, following a $60 million growth equity round raised by LanzaTech just a week ago. Notably, we have observed increasing …

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Oil & Gas Industry’s Embrace of Clean Technology – Catching Up with Jean-Michel Gires of Chrysalix

TroyAult

The majority perception of the term “cleantech” dictates that folks often think my company, Cleantech Group, must be entirely uninterested in working with large traditional players in the oil & gas (O&G) industry. Indeed, this couldn’t be further from the truth. In fact, our data from i3 and my interview with Jean-Michel Gires, former President & CEO of Total E&P Canada and now the newest Venture Partner at Chrysalix Energy Venture Capital, reveal that the O&G industry is embracing clean technology more closely than ever before.

O&G Corporates Partnering with Proven Innovators

Cleantech start-ups often have it tough. Those developing technologies that require more capital and time to scale than traditional “tech” startups lead some investors to argue that the sector just doesn’t fit the traditional venture capital model. And, like biomedical start-ups, some cleantech start-ups often face highly-regulated or otherwise-entrenched traditional industries where innovation is slower to take root.

It is with this backdrop that we see large O&G companies as important drivers of cleantech innovation. Large balance sheets allow for impactful investments and we’re seeing more and more O&G majors starting to embrace innovation more directly with dedicated venturing arms and co-investments with industry peers (see chart at …

As Goes LanzaTech, so Goes Cleantech

Greg Neichin

If you are in the cleantech sector and had not previously heard about Lanzatech, you likely have now.  The company raised a big, $55.8M round last week that has been widely applauded and covered.  Students of the company had seen this coming for awhile.  Lanzatech was the highest ranking company in the Asia Pacific region in our Cleantech 100 survey earning it “APAC Company of the Year” at our gala banquet last year.  It was featured as part of GTM’s Trendspotting post on the Top 12 Greentech Startups to Watch in 2012.   We’ve made Lanzatech our featured “Company of the Week” in i3 this week, but it may just turn out to be cleantech’s company of the year (and its only January!).  Here are the top reasons that I think Lanzatech exemplifies a number of key themes happening in cleantech:

1.) Cross-Border Financings – I have previously written about Chinese and Korean investors taking large stakes in Western cleantech companies.  Now we can add the Malaysians to that list.  The round was led by the Malaysian Life Sciences Capital Fund and included participation from Malaysian state oil company, Petronas.  With the US venture community still experiencing …

Cleantech ROI: Follow the signal, not the noise

Josh Gould

I recently celebrated my birthday and, as is typical of such events, it initiated some self-reflection.  One area of reflection involved career choice.  I wondered: Are those of us dedicating valuable time and careers to cleantech making good decisions?  Putting aside the role that cleantech may play in avoiding a planetary/environmental disaster, what about a strictly practical or financial perspective?  Will cleantech provide us with good returns on our capital (or time)?

Those of us in the industry clearly have confirmation bias.  Quite simply, we’d all like to think we aren’t wasting our time (and money).  But what points might we make to outsiders evaluating the industry as an investment thesis?  Here’s a few:

  1. Follow the signal, not the noise: We at Cleantech Group have monitored the ups and downs of the industry since we helped define it as an investment category a decade ago (see here).  We’ve seen results change significantly from quarter to quarter.  While these findings are valuable in helping investors refine tactics, it’s important to recognize that cleantech markets are being driven by macro trends that will play out over the next few decades.  These include issues like urbanization, geopolitical instability, international competition, global resource scarcity, and the need for greater productivity and efficiency.  These trends will ebb and flow over time, but will not go away anytime soon.  This is why we believe the cleantech opportunity will

It’s not a War on Imported Oil; it’s Kinetic Energy Policy

David Cheng

This week, President Obama laid a goal to reduce America’s imported oil (11 million barrels per day) by a third in 10 years, which he deemed was reasonable, achievable, and necessary.  Obama outlined four mechanisms to achieve this goal: boosting domestic oil production, increasing natural gas use in fleet and public transport, encouraging biofuels and improving the efficiency of passenger vehicles.  However, presidents dating back to the 1970s have also laid out similar goals with disappointing results.  This time may be different though.  As Secretary Chu said in response to the speech: “I think technologically, we’re much closer than we ever were.”

Boosting domestic oil production

The rational environmentally-sensitive capitalist (or capital-sensitive environmentalist) agrees that a comprehensive energy policy in the US has to include some form of domestic production of fossil fuels in the near term.   I don’t want to get into a shouting match on Gulf of Mexico or ANWR drilling.  Instead, I want to focus on the new technologies in oil and gas.  While traditionally conservative, the oil and gas majors are now looking at new enabling technologies to improve exploration or operational efficiency.   For example, KPCB-backed NEOS is attempting to improve the …

Biofuels 2.0: Going back to the future?

Josh Gould

I should start by pointing out I’m not Cleantech Group’s biofuels analyst (my colleague Stephen Marcus in London has that well-deserved title).  Nor do I claim to have deep expertise in biofuels.  My focus is on energy storage and energy efficiency.

But recent developments have led me to pay more attention to biofuels.  The most obvious development is an oil price climbing past $100 a barrel.  By conventional wisdom – about which we should always be skeptical – we are still in the early stages of an economic recovery.  As that recovery strengthens, we typically see upward pressure on the price of oil.  Given that we are “starting” at $100, it seems there is at least the potential for very high oil prices.  And this is to say nothing of potential effects from ongoing political turmoil in the Middle East.

The difficulty for oil companies (or cleantech investors, for that matter) is making investment decisions today about companies, technologies, and refining capacity that will not be fully realized for years.  While few are on record betting on continued high prices, investors are making predictions with their wallets.  Witness recent biofuels deals by major oil companies (here or here). …

On site: BlackGold Biofuels in action

Kate McArdle

Last week, I went with a few of my colleagues to visit San Francisco’s Water Pollution Control Plant, where one of the Entrepreneur Showcase presenting companies, BlackGold Biofuels, has a facility that turns sewer grease into biofuel. The grease found in sewers is a big concern for utilities, and San Francisco alone estimates it spends $50 million/year on costs associated with sewer grease. BlackGold’s system not only alleviates the grease problem, it turns it into a profitable product.

Over at the plant, Emily Landsburg, BlackGold’s CEO, and Alexandre Miot, a Process Engineer at the plant, gave us a tour of BlackGold’s setup, which is the first commercial facility of its kind in the U.S.

The day I can fly to our New York Forum and not worry about emissions

Stephen Marcus

With many of my U.S. colleagues busy attending the Cleantech Forum New York this week, I (sitting at my desk in the London office with a great sense of FOMO) have been musing about how, one day, I may go to our event across The Pond in an environmentally friendly manner. Perhaps I will swim? Alas, I have a fear of sharks. Take a boat? I’ve been known to suffer from seasickness from time to time. Fly in a solar power plane? I do actually want to live, although two Swiss scientists seem to think it’s a possibility.

Then I came across the idea of using biofuels for commercial aircrafts as a drop-in substitute to traditional kerosene aircraft fuel. Now you’re talking! In my soon to be published report entitled “Embarking on a new Journey: Aviation biofuels are preparing for take-off” I analyse how over the next 10 years, the agriculture, oil refining and airline industry will cooperate in order to bring significant quantities of biofuels into the overall jet fuel mix.

With airlines suffocating under high and volatile oil prices (fuel now accounts for 26% of airline operating costs) and the imminent introduction of the aviation …

Top-10 drivers of cleantech investment in India

Guest Analysts Shawn Lesser and Prashant Maniar

India is the 5th largest power generator in the world and is projected to be the 3rd largest by 2030. Its peak power deficit already stands at 12.6% and is expected to grow significantly in the coming years. The World Bank has predicted that 60% of India’s aquifers will be in critical condition in 15 years time.

For India, continuing its growth momentum while sustaining a healthy environment is a critical imperative. Cleantech can help ensure that these two goals are met.

1. India’s coal tax could raise $650 million for cleantech innovation – As of 1 July 2010, the Indian government began levying a tax of Rs 50 (~$1.1) on every tonne of coal mined in the country as well as that imported from abroad. The tax has the potential of raising $650 million in revenues which will be put towards a “Clean Energy Fund” for the research, development and deployment of renewable energy technologies.

2. Hydro is flowing strong - Hydro electric power generation accounts for 23% of India’s power generation capacity. Moreover, there is currently 46 GW of hydro capacity either completed or under development. Interestingly, only 3.5% of completed projects have been developed by the private sector. …

The B.S. Barometer

Josh Gould

I recently had a discussion with a colleague about the boundaries of clean technology.  He was quick to point a fundamental responsibility we have to provide “B-Squared alerts.” B-Squared he explained is the B.S. Barometer. We had a good chuckle about his terminology.  But now I realize that a good “B-Squared” is useful not just for us, but for the industry as a whole.  How does the cleantech industry violate the B-Squared rule?  That’s a topic worthy of a book – not a blog entry – so I’ll limit my discussion to three common instances:

1.       Unclear or nonexistent value proposition

Can a company point to a quantifiable value proposition where it makes economic sense to buy their product or service instead of the others on the market?  Sounds very basic, but many commentators have (rightly) pointed out that some cleantech companies are either obfuscating their value proposition, or are missing one entirely.

Take biofuels, for example.  Biofuels were all the rage in the 2006 – early 2008 boom days of high gas prices and a strong economy.  But many of these companies went bust in the subsequent credit crunch.

However, that doesn’t mean biofuels necessarily lack a value …