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Archive → April, 2010

Codexis – An example of “integrated innovation”?

I’m at the Lux Research Executive Summit today. You can follow my twitter stream from the conference.

Lux Research Director Michael Holman (who also happens to be a PhD chemist) just gave a presentation discussing the shortcomings of the venture capital model for bringing innovations in physical sciences to market (especially in materials science, energy, and the environment). VC investments worked well for tech companies like Google, which raised a mere $25 million of venture funds before going public.

Another problem is that scientists with lab-discovered innovations do not always pick the right markets and applications for their discoveries. Holman suggests that physical sciences start-ups would be better off partnering in their early stages with the venture and partnership arms of larger corporations.

Corporate partners have a clear understanding about where new technologies are most needed, and they know a great deal about the potential market sizes. Still, most early-stage start-ups are very concerned about being taken over or co-opted by corporations that might not care about the smaller firm’s health and possible future. Holman suggests that agreements that include particular financial incentives can help smooth the way.

One company that Holman says successfully partnered with corporate ventures is Codexis, a biocatalysis firm targeting renewable fuels, pharmaceuticals and chemicals. Codexis went public last week and raised $78 million, a strong result in a fragile economy. (Though Codexis originally hoped to raise a cool $100 million). Though the firm did raise some venture money, it partnered early and widely with firms like Chevron, GE, Pfizer, and Shell. Holman says firms like Codexis benefit from the insights of corporate partners and can even speed up their time to market for their products or to exits like IPOs.

How Green is Your University?

It’s been so many years since I applied to college that I had forgotten all about those Princeton Review books designed to help high school students select an institution of higher learning.

This year, Princeton Review has teamed up with the U.S. Green Building Council to publish a guide to green campuses. I took a moment to look up how my alma mater, The University of Virginia, made out in the green rankings.

It turns out that there aren’t any rankings. But I enjoyed reading about the steps the University has taken in recent years to become more sustainable, especially since I  majored in Environmental Sciences way back in [redacted] when few people could even define “sustainability.”  (Actually, that last bit is still a little tricky).

Thomas Jefferson’s university has been busy since my graduation. According to the guide, in 2007 it decreed that all new buildings would be LEED certified. UVa is developing a carbon reduction plan, has decreased its water usage and spends 16% of its food budget on local and organic food.

So I’d like to send out an enthusiastic Happy Earth Day to the University of Virginia, and especially to all the great professors and students in the department of environmental sciences.

Amyris files for $100 million IPO

While I enjoyed a few days of R&R, my colleague Alex Tullo reported on the news that Amyris has filed for an IPO.

Amyris makes genetically engineered bacteria. The designer microbes eat cane sugar and produce various chemical or fuel precursors. The company has already gained some fame for helping to develop a biotech route to artemisinic acid, a precursor for the antimalaria compound artemisinin. Now Amyris says it will be making farnesene, which can be converted to diesel and several commercial products.

Amyris may have been embolded to file its S1 after Codexis’ similar move back in January. Codexis is a biotech firm focused on ezymes for biofuel, pharma, and chemicals production. Both firms are seeking to raise $100 million in capital.

Biofuels: EU tackles indirect land use changes

A recent fly in the ointment for agriculturally-produced biofuels has been efforts by various researchers and government bodies to tabulate CO2 reductions for the whole lifecycle of various types of biofuels. These lifecycle assessments often favor some biofuels over others.

Businesspeople involved in ramping up production at biofuel companies tend to bristle at the mention of the phrase “indirect land use changes.” Basically, the idea is that demand for biofuels will put land into agricultural production that is currently fallow. If the non-agricultural land has trees or grasslands on it, clearing the land takes away a natural CO2 sink, and that basically ruins the math behind the CO2 reduction from the resulting biofuels.

The concepts behind land use changes can be a little hard to understand, but it’s easy to follow the take-up of the idea by merely tracking the wave of outraged press releases when governments include ILUC in their renewable fuels calculations.

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Solar Industry Could Use More Transparency

The non-profit Silicon Valley Toxics Coalition has released a report analyzing the sustainability of solar module manufacturing, and the results are quite interesting. Unfortunately, the coalition did not hear from many companies that it surveyed – it estimates that respondents to the survey (14 out of 60) represent about 24% of the 2008 module market share. Still, as it’s the first time the report has been issued, it’s a useful start.

Based on the responses, the STVC graded module makers on four broad sustainability metrics: extended producer responsibility and takeback, supply chain monitoring and green jobs, chemical use and life-cycle analysis, and disclosure. You can read more about the criteria on the coalition website.

Two important sustainability snags that the report exposed was the need for companies to plan to take back, recycle and otherwise handle end-of-life issues for their solar modules. Six companies reported setting aside financing for this. Another issue is the use of hazardous materials in the modules – the most common bad actors are lead and cadmium.

The largest producer to respond to the survey was First Solar, which received a fairly positive score of 67 points out of 100. But many solar firms we’ve heard a lot about recently did not respond to the survey including Nanosolar, Solyndra, SunPower, Suntech and Trina.

Is it time for solar module makers to begin to benchmark and disclose their sustainability efforts? Perhaps SVTC’s report will reach consumers and businesses who are trying to choose among the leading module producers. Or possibly this is a role that solar industry trade groups can take on, similar to the work the American Chemistry Council does with its Responsible Care program.

On Not Dismissing Gas-powered Cars

The New York Times Green Inc.’s Gerard Wynn clears some of the dust away from the scuffle between proponents of biofuel versus electric-powered transportation in a column published yesterday. He points out that given the barriers to entry for both technologies, today’s gasoline engines still have some miles on them.

The all-electric Fisker Karma

C&EN’s research into the type of lithium ion batteries likely to be used in all-electric cars (like the kinds with 40+ mile electric range and 8 hours to charge overnight) suggest that the price of an electric car would need to include about $20,000 just to cover the cost of the battery. Since much of the cost now is for the materials going in to the battery, this is not a hurdle that high adoption rates and scaled-up manufacturing would easily solve. Government incentives and rebates will be required to make these cars affordable for the foreseeable future.

Last week, the Cleantech Group released its first quarter estimated figures for venture capital investing in cleantech. The report showed transportation was the number one sector attracting funds. The two biggest rounds raised were for firms engaged in the electric car revolution: $350 million for Better Place and $140.3 million for Fisker Automotive. (I’m hoping to get a “review copy” of the Fisker Karma) It’s important to note that compared to most cleantech funding rounds, these are both huge – larger than most by around a factor of ten.

Making electric cars attractive to the consumer market is not the only way to get them on the streets. The Obama administration can direct the GSA to purchase electric fleet vehicles, and many private fleet operators may find electric vehicles to be a good deal.

But back to gasoline-powered cars – they can still be a good deal for the environment. When I finally bought a car after several years of going without, I knew my low-mileage driving meant a hybrid car would not make sense for me. I bought a small, used Mazda with good gas mileage. But the mileage could be better – today’s cars can, and should, be made smaller, lighter, and with technologies that prevent the majority of energy in the gasoline to be wasted from heat and friction with the road. For example, my colleague Alex Tullo wrote recently about new formulations for tires that help drivers save on gas.

What do you think is the best bet for green driving?

U.S. Green Manufacturing Jobs: Win some, lose more?

It must feel like running in quicksand.

This past Tuesday, U.S. Secretary of Labor Hilda Solis traveled to Hopewell Junction, New York (in the southeast part of the state) to bask in the glow of 37 new jobs at a new 60 MW SpectraWatt solar plant. SpectraWatt is a venture-backed start-up that makes high performance silicon solar cells. Over the next year and a half the firm plans to expand capacity to 200 MW and employ 150 workers. (See story from the Times Herald-Record)

BP Solar facility in Frederick, MD

But four days earlier, a much older and more venerable solar operation, BP Solar, announced that has ceased production of solar silicon wafers and cells at its facility in Frederick, MD. Jobs lost – 320. Almost exactly a year ago, BP Solar had stopped module assembly at the plant, costing the region 140 jobs. In Friday’s press release, BP blamed the shut-down on the up to 50% drop in prices for solar modules, and said it would shift all production to joint ventures and outsourcers in China and India.

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