Sunday, November 20, 2011

Energy Storage Solutions Leading Cleantech Investment

 "The report of my death is an exaggeration."
- Mark Twain

After three quarters of investing in 2011, last year's rumors of the death of cleantech investing seem quite exaggerated.

Innovators in energy storage produced some stunning cleantech deals during the third quarter of 2011, raising a total of $514 million in capital across 34 deals.  This represented 23% of the 2.23 billion in capital investments across 189 cleantech deals worldwide (followed by 16% in solar, 10% in energy efficiency and 8% in transport).

"Advanced storage technologies have gone from nice pilots to actual deployments. And the other thing that has changed is the level of interest among big corporates – big players on the grid are making equity investments in these companies", said Sheeraz Haji, CEO at Cleantech Group.

The top 3 venture capital deals in energy storage were either fuel cell or lithium ion battery companies:
  • Bloom Energy, a California-based developer of solid-oxide fuel cell technology, raised $150 million.
  • Boston-Power, a Massachusetts-based producer of lithium-ion batteries, raised $125 million.
  • ClearEdge Power, an Oregon-based manufacturer of silicon-based stationary fuel cells, raised $73.5 million.

$150 million was raised by Bloom Energy, maker of  solid oxide fuel cells.

Bloom also  assembles these fuel cells into an energy server it calls the Bloom Box, which converts natural gas or biogas into electricity. The Bloom boxes have attracted high-profile customers including Google, eBay, Adobe, and Walmart to successfully compete against a crowded field that includes FuelCell Energy, Ceres Power, ClearEdge Power, and others.

This $150 million round was funded by Kleiner Perkins Caufield & Byers, New Enterprise Associates and others in September.  The deal was marketed as a “pre-IPO” round at a $2.7 billion pre-money valuation.  This latest round would push Bloom’s private financing somewhere around $600 million.

New funds should help the company scale up manufacturing, lower costs, and potential expand its operations beyond the subsidized California market.

$125 million was raised by Boston-Power, is a startup producing lithium-ion batteries in  Westborough, Mass.

The largest and fastest growing market for these batteries is electric vehicles, thought the product is capable of many applications.  Saab has agreed to use Boston-Power's batteries in its electric car projects.  Good news for Boston, considering that competition, in the EV market is fierce, with competitors including LG Chem, A123, Panasonic, and Sony now getting into the game.

Dr. Christina Lampe-├ľnnerud, says their lithium-ion battery has the highest energy density, and fastest charge, and is safe and green."

The $125 million round was led by GSR Ventures, a VC firm with operations in China and offices in Beijing and Silicon Valley. Existing investors Oak Investment Partners and Foundation Asset Management also invested

Investment will enable Boston-Power to build a factory in China capable of producing 400 megawatt-hours of batteries or 18 million units of the "matchbox-sized" prismatic lithium-ion cells. The funding will be used to build the factory along with a technical development center helped out in no small part by generous subsidies from China's government.  In concert with this investment, Boston is moving a number of positions and responsibilities from its Massachusetts offices to China.

$73.5 million invested in ClearEdge Power

ClearEdge was already the global leader in stationary fuel cell production (uninterruptible power supplies (UPS), combined heat and power (CHP), and residential power). These funds will be targeted toward growing customer adoption in key markets, as well as developing and commercialize new products.

This news comes on the heels of 480 percent growth in year-over-year revenue for ClearEdge, which has created over 150 high tech jobs in the last three years.

The largest contribution came from investor Artis Capital Management, followed by Austrian Gussing Renewable Energy, Southern California Gas Company, and Kohlberg Ventures.

A recent Pike Research report estimated that the stationary fuel cell industry has seen a 27 percent compound annual growth rate in the past two years, as technology costs are continuing to fall, new companies are coming into the space and adoption is gathering steam.  The report estimates sales will exceed 1.2 million units per year by 2017.

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