The Best & Worst Biofuel Startups

Amid the rubble of the first generation of biofuel projects focused on ethanol derived from corn, a new landscape of biofuel tech has taken shape. As Lux Research puts it in a report released today, the companies range “from backyard brewers to billion-dollar industrial giants,” working in five key technology categories: fermentation, gasification, synthetic biology, chemical processes, and the political darling, algae. No single category offers a silver bullet for renewable fuels. Rather, Lux finds that each of the five categories “hosts promising producers and future failures.”

Given the amount of money pouring into these technologies from both public and private sources, how can we distinguish between the likely winners and losers? Based on factors like revenue per employee, patents, performance metrics, production capacity and other data, Lux has identified gaps between long-shot ventures that would make risky investments and weak partners, and companies with disruptive core technologies and other key characteristics that make them promising targets for mergers, acquisitions or licensing deals.
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The Algae Fuel Backlash: Here Come the Skeptics

algaefuel2Judging from the flurry of venture-capital deals, big oil company investments, and attention from politicians on startups creating biofuels from algae, it might seem like the world has fallen in love with the technology to power vehicles with pond scum. But after all of the algae euphoria this summer, we’ve started seeing a few signs of an algae fuel backlash, with several prominent investors publicly questioning the economics of algae fuel.

At the AlwaysOn’s GoingGreen conference, outspoken cleantech investor Vinod Khosla said his firm has aggressively been looking at algae technologies, but hasn’t found one viable plan after looking at “maybe two dozen.” “The economics of algae don’t seem to work,” he said.
(You can watch the video here by clicking on “Renewables at Scale.”)
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SG Biofuels: Amasses World’s Largest Jatropha Library, Aims For $1/Gallon Oil

SGB_logoIn the rush to grow energy crops for producing alternative fuels, jatropha has often been heralded as the most promising because it can be grown on marginal land. But so far jatropha hasn’t lived up to the hype — requiring too much water and producing too little yield — prompting some early investors, like oil giant BP, to give up on the crop. But a young Encinitas, Calif.-based startup, SG Biofuels, says the problem with these early efforts was that they put the cart before the horse.

The firm has spent the last three and a half years amassing what it says is the largest and most diverse library of jatropha genetic material in the world. The team scoured India, Southeast Asia, and most importantly Central America, the native home of the shrub, to build the firm’s library. “This is the foundation for any effective crop improvement program, and we were shocked that no one had done that,” SG Biofuels CEO Kirk Haney told us. “That is step one, but many jumped to step five by putting [jatropha] in the ground and crossing their fingers.” 
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BP Ups Algae Fuel Stakes, Pledges $10M for Martek Deal

marteklogoExxon isn’t the only big oil firm that’s placing a significant bet on algae fuel. Today BP announced a new joint development agreement with Martek Biosciences (s MATK) to work on making microbial oils for biofuels, with an initial investment of up to $10 million. Martek has been working with algae for over two decades (largely producing dietary supplements derived from micro algae), and the companies plan to “establish proof of concept for large-scale, cost-effective microbial biodiesel production through fermentation,” over the course of several years.
This isn’t BP’s only foray into algae. The British oil giant was an early investor in Synthetic Genomics, Craig Venter’s firm that’s using genetics to tweak algae to produce fuel, and which recently scored a massive $600 million deal with Exxon. Read More about BP Ups Algae Fuel Stakes, Pledges $10M for Martek Deal

Vid-Biz: Upfronts, TiVo, Hulu

Broadcast Networks Cut Upfront Ad Prices; estimates peg the decline at 15 to 20 percent off last year, dipping to $7.5 billion, a dollar figure not seen since 2001. (The LA Times)
TiVo Gets Rovi’s Data; DVR service will get access to Rovi’s metadata, which includes info on more than 1 million TV series episodes, 400,000 movie titles and 13 million music tracks. (Multichannel News)
More Online Video Ads vs. Higher Prices, That is the Question; CBS trying to figure out how many ads viewers will tolerate, Hulu just wants to charge more for fewer ads. (BusinessWeek)
Pure Pwnage Going to Canadian TV; web series gets an eight episode order from the Showcase channel. (Tubefilter)
More than Half of Americans Have an HDTV; 53 percent of U.S. households have HDTVs (it was 35 percent in 2008) according to CTAM; 69 percent of those have HDTV service. (Multichannel News)
Sims Creator Looking Beyond Games; Will Wright considers himself an “entertainment designer” and is working on new ideas that go into TV and movies. (The Hollywood Reporter)

The Last Frontier for P2P VOD: Your Patience

Imagine you’re watching a movie via Internet-based VOD, one of those flicks you choose purely for the action scenes. Problem is, the dialogue is horrendous. What do you do? Skip ahead, of course. Such skipping can be a major technical challenge, however, especially if your VOD provider uses P2P technology to deliver its video streams. But five researchers from Spanish ISP Telefonica and UC Irvine have come up with a way to solve this problem.

The gang of five have developed a system called “Kangaroo” that promises to deal with jumpy VOD viewers by improving the architecture of the underlying P2P network. Kangaroo was field-tested during the 2008 Olympics, and its technology was presented at the 8th International Workshop on Peer-to-Peer Systems in Boston last week. While the details of this technology are admittedly a bit geeky, they help to understand illustrate why previous P2P VOD efforts like Joost and Babelgum failed and why smaller providers like Global Media Services/GridCast and MediaMelon need big content partners to make P2P work.

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Wal-Mart, BP Solar to Build More Solar Rooftops

The biggest retail chain in the world may not be the working man’s best friend, but Wal-Mart Stores (s WMT) is trying to make friends with the planet, picking Earth Day to say that it’s expanding its rooftop solar program along with partner BP Solar. The move could nearly double the number of solar photovoltaic installations at Wal-Mart stores in the U.S., with 10-20 new systems that turn out a total of up to 10 megawatts to go up in addition to the 22 that were originally planned.
walmart_palm_desert
First launched back in 2007, the program called for solar panels to be put on the roofs of a distribution center and a combination of 22 Wal-Mart stores and Sam’s Clubs, all in Hawaii and California, with the systems coming from BP Solar, SunEdison, and SunPower‘s (s SPWRA) PowerLight subsidiary. Solar panels have already been installed at 18 buildings under that plan, with BP Solar, part of oil giant BP (s BP), handling seven of those installations.
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Baby Steps in Hard Times for Cellulosic Ethanol Makers

With many of the next-generation ethanol makers being forced to drag their heels on plant construction during the downturn, it’s becoming rare to hear about progress on cellulosic ethanol plants. But here’s a small step for a small demo plant: Next-gen ethanol maker ZeaChem says it is still on track to start construction of its 1.5 million gallon per year demo plant in Boardman, Ore., this year, and the company says engineering work on the plant has already started with contractor CH2M Hill.

It’s a baby step, far from commercial scale production, but 7-year-old ZeaChem seems to be keeping on the steady track that it has set for itself. We took a tour of the lab last month, and witnessed the process by which the company takes a common microbe (found in termite guts and regular soil) and uses it to break down trees and plants into ethanol. The company claims its hybrid process, which combines the microbe steps with a gasification step, enables it to produce 40 percent more ethanol per ton of biomass than competitors.

In this economic climate, in which project financing for large plants has dried up, cellulosic ethanol makers are routinely pushing back plant construction plans. The financial whirlwind that hit at the end of 2008 was just sudden and intense enough to have left companies that were planning to spend hundreds of millions on building ethanol plants this year in the lurch.
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Verenium Forms BP Joint Venture, But Delays First Plant to 2010

Cellulosic ethanol maker Verenium (s VRNM) might have an important partner in UK oil giant BP (s bp), but it still can’t help the company from the pitfalls of the difficult capital markets. This morning Verenium says that it is moving forward with a previously announced joint venture with BP, using $45 million in investment dollars, but at the same time, Verenium says its first cellulosic ethanol plant likely won’t “break ground” until 2010. Originally Verenium had been hoping to start construction on that first plant before the end of 2009.

vereniumplant

Pushing back that date is an abrupt move from the cellulosic ethanol maker given that just a month ago spokesperson Morgen Grandjean told us that Verenium would still break ground on its first plant this year. He was responding to our story: Verenium Cranks Up Demo Plant — What Next?. And a week after our story ran, the company put out a press release saying it “anticipates breaking ground on this facility in the second half of this year.”
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SpectraWatt Suspends Factory Plans, Expects Production Delay

Intel (s INTC) solar spinoff SpectraWatt has put its plans to build a factory in Hillsboro, Ore., on hold after being unable to get enough financing, The Oregonian reported this week.

CEO Andrew Wilson told the newspaper that SpectraWatt is searching for an existing building that it could retrofit for less, and it is considering leaving the state. He also said the change of plans will delay SpectraWatt’s first solar-cell shipments by five or six months.

The company, which was raising a $50 million round of funding led by Intel in June, said then that it expected to ship its first solar cells from a 60-megawatt factory in the middle of this year. SpectraWatt didn’t respond to requests for more information Thursday afternoon.

The setback is the latest sign of tough times for solar companies. As a recession is making capital scarce, analysts are predicting an oversupply of solar panels that could lead to a pricing plunge. Jenny Chase, a senior associate for solar at New Energy Finance, expects some 4 gigawatts of panels to go begging this year.

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