Weekly Investor Round Up

The big story of the week is that the U.S. Treasury and Department of energy announced the first round of cash assistance for renewable energy projects under the Recovery Act program that provides up-front funding in lieu of the 30% tax credit previously offered for clean energy projects. A total $502 million was awarded to 12 projects representing 840 megawatts (MW) of potential generating capacity. Ten of the projects are wind farms. The DOE expects to award about $3 billion dollars under the program, and additional announcements are expected in the next few weeks.

Well-known venture capital firm Khosla Ventures announced that it has raised more than $1 billion for renewable energy and clean technology funds, including funds from outside investors for the first time. According to a Reuters report, the money will be allocated into two new funds, one for high-risk projects and another for early and mid-stage firms. Both funds were oversubscribed, suggesting that a 2Q09 turnaround in venture funding may have legs.

Norwegian electric car company Think Global AS raised $47 million and will move production to Finland. U.S. company Ener1, Inc. (Nasdaq: HEV) will lead this investment round, boosting its stake in the company to about 31%. Ener1 is the parent company of EnerDel, the manufacturer of lithium-ion battery systems used in the Think City vehicle. Finnish automaker Valmet Automotive will contribute about $4.3 million to the equity investment and will move production of the Think City cars from Norway to Finland later this year. Think, which sells its vehicles for about $45,000 has been struggling financially this year after narrowly escaping bankruptcy and temporarily shutting down production in January.

Terra Firma, a private equity firm in the United Kingdom, has acquired U.S. wind power company Everpower Wind Holdings. The deal was worth around $350 million, according to a Reuters report, which cited a source familiar with the transaction. Renewable energy fund Good Energies was a previous investor in the firm, which has a development pipeline of about 800 MW worth of projects and one 62-MW wind farm in service. Terra Firma is best known for buying music publisher EMI in 2007.

Siemens (NYSE: SI) is investing $15 million for a 40% stake in Arava Power Company, an Israeli developer of solar power plants. Siemens said the equity investment will make it possible to build Israel’s first commercial solar farms–to be located in the region between the Dead Sea and the Red Sea. Siemens will handle project management including engineering and construction of the photovoltaic plants with a total output of 40 MW.

Geothermal companies AltaRock Energy and Raser Technologies (NYSE: RZ) both announced setbacks this week. California-based AltaRock, which has received funding from the Department of Energy and Google.org, suspended its demonstration project north of San Francisco after encountering what it called "geologic anomalies." The company said it will continue to develop its geothermal technology and search for another test-drilling location.

Raser announced that the Department of Energy denied its loan guarantee application for its East Thermo project. The news sent the company’s shares down, but the company said it has other funding options for the project, located near its operating Thermo No. 1 plant. Raser also said it has other projects in later development stages that may be more appropriate for loan guarantees.

Duke Energy (NYSE: DUK) announced plans to build and operate its ninth U.S. wind farm–a 200-MW project near Casper, Wyoming. The Top of the World project will be built on about 17,000 acres of private and public land and is expected to be in operation by the end of 2010. Electricity output from the wind farm will be sold to Rocky Mountain Power, which is a subsidiary of PacifiCorp.

WoodPellets.com, a direct-to-consumer retailer of wood pellet heating fuels, announced it has successfully completed an $11 million financing round led by Monitor Clipper Partners. The company, which saw more than a five-fold growth in revenue in 2008, said it will use the new funds to expand beyond its core market in the U.S. Northeast. The company plans to reach out to new customers in the Midwest, Pacific Northwest and Mid-Atlantic. Stoves, boilers and furnaces that burn wood pellets are becoming increasingly popular as heating oil prices have climbed in recent years. The wood pellets are generally sourced from waste wood produced by other industries.

Nissan North America (NNA) (Nasdaq: NSANY) announced that it will deploy methanol fuel cells made by Oorja Protonics to power its material handling equipment (called tugs) at its Smyrna, Tenn., assembly plant. Nissan extensively tested the fuel cells made by the California-based company, before deciding to employ them on about 60 tugs. Methanol is an alternative liquid transportation fuel that is derived from various sources including wood, grass, landfills, natural gas and coal. Nissan said it will get rid of more than 70 electric battery chargers that were consuming almost 540,000 kilowatt-hours of electricity annually. The fuel cells will provide a constant charge that puts less strain on the tugs electrical systems and batteries. The fuel cells are also expected to save significant manpower hours in changing and charging batteries.

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