The Electric Drive Battery and Component Manufacturing Initiative

I don’t want to have to import a hybrid car. I want to build a hybrid car here.” – President Obama in Warakusa, Indiana, 5 Aug 2009.

On 5 Aug 2009, the Obama administration announced the recipients of the grants for the electric vehicle industry, i.e. the $2.4 billion Electric Drive Battery and Component Manufacturing Initiative (part of the American Recovery and Reinvestment Act). Barack Obama was in Indiana while Joe Biden was in Michigan, the 2 states getting the most electric vehicle money, to announce the list of 48 grants that will be administered by the US Department of Energy (DOE).

The biggest individual grant, at $299 million, went to Johnson Controls, a Holland, Mich., firm that has struck a deal with Ford to provide batteries for future vehicles. The second biggest grant, at $249 million, went to startup A123 Systems, a Romulus, Mich., company with links to Chrysler.

It’s significant for A123Systems since the program’s goal of getting technology into large-scale production within 2-3 years and the requirement for awardees to share costs tends to tilt the scales away from younger ventures. A123 has requested as much as $438 million but the $249 million grant could help bring the GE Energy Financial Services’ backed company closer to its long-planned IPO.

The Big Three automakers will also receive the grants. GM is receiving 3 grants totaling $241.4 million, Ford will get 2 grants totaling $92.7 million and Chrysler will get 1 grant of $70 million.

You can view a list at WSJ here or the full original DOE list here.

The announcement came after several intense months of applications and lobbying. About 257 companies applied, seeking $9.6 billion total. Among those companies were a number of venture-backed startups. Analysts and investors said the DOE seems to be playing safe in selecting the 48 companies, picking big names and companies that plan to build plants in Michigan, the home of the ailing US automobile industry which won 11 grants.

For the smaller companies including venture-backed firms, the outcome was a let-down. Many of those left out of the awards have production lines in Asia and were willing to start up manufacturing in the US to support the deployment of electric-transportation technologies.

Boston-Power was one of the companies to lose out on the DOE grant with its $100 million application. It already has manufacturing facilities in Taiwan and is currently building another plant in China. It has now applied for a $100 million grant from the US Department of Defence, which is likely to announce the recipients in October.

Another company, International Battery Inc, whose main investor is Digital Power Capital, an affiliate of PE firm Wexford Capital, did not get the grant. It will continue to expand its capacity in the US and still hopes the DOE will make some funding available for entrepreneurs.

If you look at the maps here and here, you will see that while Michigan is a winner, California is a loser (comment: I’m surprised!). No awards were made to companies planning to set up manufacturing plants in the state.

“The decision is a real blow to California’s clean transportation technology industry and the state’s clean energy initiatives,” said Paul Beach, president of Quallion LLC, in a statement. Quallion’s bid to help it build a $200 million plant in Palmdale, Calif., wasn’t selected, and it will continue to pursue that plan with other funding opportunities, both from the government and private sector. The company is controlled by billionaire Alfred E. Mann, and is already a supplier for military vehicles and medical devices, and it has been profitable for the past six years, said Beach, in an interview.



Boston-Power Loses Out on DOE Grant, Aims for DOD Fund
Battery Grant Winners!: A123Systems Rakes in $249M
Feds Give $2.4B to 48 Auto Battery and Electric Drive Projects
DOE juices battery companies with $2.4B in stimulus funds
The real reason for Obama’s $2.4 billion electric car grants
VC-Backed Companies Left In The Cold By DOE Battery Grants


Guardian reveals the top 100 Europe’s hottest clean technology companies

The Guardian/Library House CleanTech in this 18 Sep 2008 article highlighted a group of the most promising private companies (investment-only companies were excluded) in Europe focusing on clean technology, with ­companies selected on the basis of their potential for future growth and ­beneficial environmental impact.

Advisory board members who selected the companies (how the companies were chosen here):
Uwe Albrecht, Managing partner, Siemens Venture Capital GmbH
Peter Baines, General partner, Advent Venture Partners
Clennel Collingwood, Investment manager, TTP Ventures
Luciano Diana, Head of Cleantech Energy Equity Research, Morgan Stanley
Ben Goldsmith, Partner, WHEB Ventures
Alex Hook, Investment manager, NESTA
Bakhrom Ibragimov, Principal, Virgin Green Fund
Alok Jha, Journalist, The Guardian
Hamish Sandison, Partner, Field Fisher Waterhouse LLP
Patrick Sheehan, Partner, Environmental Technologies Fund
Felix von Schubert, Partner, Zouk Ventures
Adam Workman, Investment partner, CT Investment
Stephan Decher, Founding partner, Clean Capital
Jürgen Habichler, Managing director, Mountain Cleantech
Andrew Humphrey, Clean energy analyst, Morgan Stanley
Stuart McKnight, Managing director, Ascendant
Maurizio PetitBon, General partner, Kreos
Andreas von Richter, GE Energy Financial Services Capital

The complete top 100 list is found here. The top 10 list (out of 100) are shown here:

Company Sector What they do Product status Based Founded Employees
1 Odersun Solar power Design and manufacture of thin-film flexible solar cells Shipping Germany, Frankfurt 2002 90
2 Deep Stream Technologies Distribution and management ‘Embedded intelligence’ circuits for power management Shipping UK, Bangor 2003 52
3 CamSemi Electricals Low cost, low power standby mode technology Shipping UK, Cambridge 2000 57
4 SiC Processing Industry Hydrocyclone technology to improve solar cell production Shipping Germany, Hirschau 2000 Undisclosed
5 Marine Current Turbines Marine power Tidal turbines Development UK, Bristol 1989 15
6 Sulfurcell Solartechnik Solar power Thin film solar technology Shipping Germany, Berlin 2001 60
7 Pelamis Wave Power Marine power Wave energy technology Shipping UK, Edinburgh 1998 70
8 Solarcentury Solar power Mass market solar technology Shipping UK, London 1998 100
9 Nujira Electricals Low-power mobile-phone and radio transmission Testing UK, Cambridge 2002 47
10 Atraverda Electricals Conductive ceramics for power storage Development UK, Abertilly 1991 8

GE Energy Financial Services

About: GE Energy Financial Services’ (GE EFS) experts invest globally with a long-term view, backed by the best of GE’s technical know-how, financial strength and rigorous risk management, across the capital spectrum, in one of the world’s most capital-intensive industries, energy. GE EFS helps its customers and GE grow through new investments, strong partnerships and optimization of its more than US$22 billion in assets. In renewable energy, GE EFS is growing its portfolio of more than US$4 billion in assets in wind, solar, biomass, hydro and geothermal power. GE EFS is based in Stamford, Connecticut.

Key Personnel:
Alex Urquhart, President & CEO
Kevin Walsh, Managing Director, Power & Renewables

Their investment focus is in Power, Oil & Gas, Water, Venture Capital, Renewable Energy, Pipelines & Storage and Global Growth.
Venture Capital
– Current Communications, Ocean Power Delivery, Sub-One Technology, A123Systems, Think Global, Advanced Electron Beams, Soliant Energy, Danotek Motion Technologies, TPI Composites, Southwest Windpower (GE EFS provides mainly equity to them, except equity & debt to Ocean Power Delivery).
Renewable Energy – Alsleben Wind Farm, Babcock & Brown, Comverge, EnxCo, Forest Creek, Krusemark Wind Farm, Kumeyaay Wind, Noble Environmental Power, REpower Systems, Denker & Wulf,Serpa Solar Plant, Tawhiri Power, Theolia, Airtricity, Plutonic Power, SunPower, Scholl Canyon Landfill Gas, Invenergy Wind, Stanton Wind, Enel SpA, Renewable Energy Systems Americas, Horizon Wind Energy, Fotowatio, ACCIONA Energy (GE EFS provides mainly project equity to them, with minority of debt, debt & private equity, assets-for-equity swap, debt & project equity).

News: In June 2009, GE EFS announced it has signed an agreement with EarthFirst Canada Inc. to consider purchasing up to 300-megawatt Dokie Ridge Wind Project, the largest wind farm project under construction in British Columbia. Subject to satisfaction of conditions, including due diligence and internal approvals, GE EFS has agreed to form a partnership with Plutonic Power Corporation which, provided the acquisition is completed, will own and operate the project, located 1,100 km northeast of Vancouver, near Chetwynd. The project would represent GE EFS and Plutonic’s first wind energy investment in Canada and an expansion of their relationship from hydroelectric power development into wind energy.

In April 2009, Noble Environmental Power received long-term capital from GE and other for 3 NY windparks. GE EFS invested more than $200 million in the portfolio, which includes the Noble Altona, Chateaugay and Wethersfield Windparks. A syndicate of banks and financial institutions provided long-term debt, including letters of credit, totaling approximately $440 million. This long-term capital structure replaces construction financing used to build the Noble windparks. Noble was mentioned earlier in this post and it is majority owned by funds affiliated with JPMorgan Partners which are managed by CCMP Capital Advisors.

Kevin Walsh speaks about GE invests in electric vehicles and battery technology in this video or on vodpod. He also has a presentation “Policy Options Shaping Private Investments in Clean Tech” dated 1 May 2009 here.

ge efs

GE Equity

About: GE Equity is the private equity investment arm of General Electric Capital Corp. specializing in buyouts, co-investments, secondary direct purchases, recapitalizations, limited partner investments, and growth capital investments. The firm invests in aerospace, clean technology, communications, energy, entertainment, financial services, business services, healthcare, media, satellites, security, sensing technology, transportation, and water. It seeks to invest in companies based in Asia, Europe, Latin America, Middle East, and North America. GE Equity was founded in 1995 and is based in Stamford, Connecticut with offices across the United States, Europe, South America, Australia, and Asia.
Note: Sometimes GE Equity is referred as “GE Capital, Equity” on its website.

Key Personnel:
Sherwood Dodge, President & CEO
Frank Ertl, CFO

The website doesn’t list its portfolio but its recent transactions (though it’s only updated to 2007 only). From the list, I selected a few companies related to cleantech:
China High Speed Transmission Equipment Group
(description: $22,100,000 Growth Capital investment in wind turbine gear box supplier in Feb & July 2007), Motech Industries (description: $20,500,000 Growth Capital investment in Taiwanese solar cell manufacturer in June 2007), Think (description: €3,000,000 Growth Capital in manufacturer of electric vehicles in December 2007).

News: In January 2009, TPI Composites, Inc., a supplier of wind turbine blades to Mitsubishi Power Systems and GE, announced it has received $20 million from GE’s investment arm, Landmark Growth Capital Partners, NGP Energy Technology Partners and Angeleno Group to support its growth. The Series B funding reflects an increase in the company’s valuation since Series A financing was completed a year earlier. The capital comes from GE’s Equity unit and GE Energy Financial Services, which has made several venture capital investments in wind turbine component manufacturers as well as provided project finance for wind farms.

Comment: I’ll look at GE Energy Financial Services in separate blog as it has its own Renewable Energy and Venture Capital portfolio. The press releases for both GE Equity and GE Energy Financial Services are found in its main GE website instead.

ge equity