Not In China yet, It's U.S.
Despite the slow economy, venture-capital funding of clean-tech start-ups in the USA and abroad is on pace for a record year, according to a report released Tuesday.
In the second quarter, venture funding for nearly 100 biofuel, solar, wind and clean-water start-ups hit a quarterly record of nearly $2 billion — a 58% jump from the same time last year, says the Cleantech Group, a market research firm in San Francisco.
The rise in clean-tech funding comes despite a limping U.S. economy and weak markets for initial public offerings, mergers and acquisitions — the traditional "exit strategies" for entrepreneurs and venture capitalists hoping to sell their stock publicly or sell to a larger company.
"Interest in clean tech continues to show robust growth, despite the impact of economic headwinds and credit market restraints," says John Balbach, managing partner at Cleantech.
Venture firms, start-ups and corporations are pouring more dollars into clean technologies because of higher energy and commodities prices, tightening supplies of oil, tougher regulations on carbon emissions and other economic factors, says Brian Fan, Cleantech's senior director of research.
At the same time, venture capitalists are shifting more of their assets from the traditional sectors of software, medical devices and biotechnology into the clean-tech arena in the USA, Europe, Israel, China and India.
"Investors and entrepreneurs are making two big bets," Fan says. "How do we replace coal as the primary fuel for electricity generation, and how do we replace oil as the primary fuel for transportation?"
Much of the funding is going to young companies working on:
•Solar thermal technology. Start-ups such as eSolar, SkyFuel and BrightSource Energy are building large-scale, solar thermal technology that creates steam to run turbines.
•Second-generation biofuels. Range Fuels, Aurora BioFuels, Greenline Industries and other start-ups are using algae, cellulosic ethanol and materials other than food crops.
Clean-tech investments and technologies are getting more attention mainly from companies in the auto, transport, shipping and petrochemical industries, which are paying higher prices for raw materials, Fan says.
Clean-tech start-ups still have a long way to go, though. Fan estimates it will take five to 15 years before clean-tech products and services are embraced by mainstream corporations and have a large impact on the economy and the environment.
"We're still in the very early stages of the game," Fan says. "But once growth companies prove their technologies, fine-tune their business models and build sales channels to customers, we'll start seeing a steady progression of acquisitions by large companies."
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ETHANOL-PRODUCTION WITH BLUE-GREEN-ALGAE
University of Hawai'i Professor Pengchen "Patrick" Fu developed an innovative technology, to produce high amounts of ethanol with modified cyanobacterias, as a new feedstock for ethanol, without entering in conflict with the food and feed-production .
Fu has developed strains of cyanobacteria — one of the components of pond scum — that feed on atmospheric carbon dioxide, and produce ethanol as a waste product.
He has done it both in his laboratory under fluorescent light and with sunlight on the roof of his building. Sunlight works better, he said.
It has a lot of appeal and potential. Turning waste into something useful is a good thing. And the blue-green-algae needs only sun and wast- recycled from the sugar-cane-industry, to grow and to produce directly more and more ethanol. With this solution, the sugarcane-based ethanol-industry in Brazil and other tropical regions will get a second way, to produce more biocombustible for the worldmarket.
The technique may need adjusting to increase how much ethanol it yields, but it may be a new technology-challenge in the near future.
The process was patented by Fu and UH in January, but there's still plenty of work to do to bring it to a commercial level. The team of Fu foundet just the start-up LA WAHIE BIOTECH INC. with headquarter in Hawaii and branch-office in Brazil.
PLAN FOR AN EXPERIMENTAL ETHANOL PLANT
Fu figures his team is two to three years from being able to build a full-scale
ethanol plant, and they are looking for investors or industry-partners (jointventure).
He is fine-tuning his research to find different strains of blue-green algae that will produce even more ethanol, and that are more tolerant of high levels of ethanol. The system permits, to "harvest" continuously ethanol – using a membrane-system- and to pump than the blue-green-algae-solution in the Photo-Bio-Reactor again.
Fu started out in chemical engineering, and then began the study of biology. He has studied in China, Australia, Japan and the United States, and came to UH in 2002 after a stint as scientist for a private company in California.
He is working also with NASA on the potential of cyanobacteria in future lunar and Mars colonization, and is also proceeding to take his ethanol technology into the marketplace. A business plan using his system, under the name La Wahie Biotech, won third place — and a $5,000 award — in the Business Plan Competition at UH's Shidler College of Business.
Daniel Dean and Donavan Kealoha, both UH law and business students, are Fu's partners. So they are in the process of turning the business plan into an operating business.
The production of ethanol for fuel is one of the nation's and the world's major initiatives, partly because its production takes as much carbon out of the atmosphere as it dumps into the atmosphere. That's different from fossil fuels such as oil and coal, which take stored carbon out of the ground and release it into the atmosphere, for a net increase in greenhouse gas.
Most current and planned ethanol production methods depend on farming, and in the case of corn and sugar, take food crops and divert them into energy.
Fu said crop-based ethanol production is slow and resource-costly. He decided to work with cyanobacteria, some of which convert sunlight and carbon dioxide into their own food and release oxygen as a waste product.
Other scientists also are researching using cyanobacteria to make ethanol, using different strains, but Fu's technique is unique, he said. He inserted genetic material into one type of freshwater cyanobacterium, causing it to produce ethanol as its waste product. It works, and is an amazingly efficient system.
The technology is fairly simple. It involves a photobioreactor, which is a
fancy term for a clear glass or plastic container full of something alive, in which light promotes a biological reaction. Carbon dioxide gas is bubbled through the green mixture of water and cyanobacteria. The liquid is then passed through a specialized membrane that removes the
ethanol, allowing the water, nutrients and cyanobacteria to return to the
photobioreactor.
Solar energy drives the conversion of the carbon dioxide into ethanol. The partner of Prof. Fu in Brazil in the branch-office of La Wahie Biotech Inc. in Aracaju - Prof. Hans-Jürgen Franke - is developing a low-cost photo-bio-reactor-system. Prof. Franke want´s soon creat a pilot-project with Prof. Fu in Brazil.
The benefit over other techniques of producing ethanol is that this is simple and quick—taking days rather than the months required to grow crops that can be converted to ethanol.
La Wahie Biotech Inc. believes it can be done for significantly less than the cost of gasoline and also less than the cost of ethanol produced through conventional methods.
Also, this system is not a net producer of carbon dioxide: Carbon dioxide released into the environment when ethanol is burned has been withdrawn from the environment during ethanol production. To get the carbon dioxide it needs, the system could even pull the gas out of the emissions of power plants or other carbon dioxide producers. That would prevent carbon dioxide release into the atmosphere, where it has been implicated as a
major cause of global warming.
Honolulo – Hawaii/USA and Aracaju – Sergipe/Brasil - 15/09/2008
Prof. Pengcheng Fu – E-Mail: pengchen2008@gmail.com
Prof. Hans-Jürgen Franke – E-Mail: lawahiebiotech.brasil@gmail.com
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