Posting in Energy
The energy industry is going to a tumultuous, exciting place to be in 2012. Here's what will impact the industry this year and seven startups to watch.
I've put together a list of some startups that we should all keep an eye on. I encourage SmartPlanet readers to offer up their own predictions for the industry; or share what startups we should watch this year. I'll provide a final roundup towards the end of 2012 of what I (and SP readers) got right, wrong or missed.
What will shape the industry in 2012
Domestically, we'll see innovation and investment in both fossil fuels and cleantech. North Dakota will continue to grapple with the challenges of becoming an oil boom town; and growing discontent over hydraulic fracturing -- an unconventional natural gas drilling technique -- could lead to tighter regulations and spur oilfield service companies to improve their technology.
A number of expiring tax credits, tariffs and incentives will force some industries to adjust and adapt. For example, refiners will no longer receive the $0.45 per gallon volumetric ethanol excise tax credit for blending ethanol with gasoline and imported ethanol will no longer be subject to a $0.54 percent gallon tariff, which will bode particularly well for Brazil's sugarcane ethanol industry.
New government efficiency standards will give rise to burgeoning market, notably the LED industry. And expect further, painful consolidation in the solar market.
Finally, presidential election year politics will cause some disruptions. Expect several hot-button energy issues to take center stage in the first half of the year.
Startups to watch
Aquion Energy: This energy storage startup has developed a nontoxic modular battery that uses cheap, benign materials like sodium and water. The company raised $30 million in a venture financing round last fall and is in the process of selecting a site for its first high-volume factory in the United States.
Aquion's founder Jay Whitacre has enjoyed early and consistent support from high-profile investor Kleiner Perkins Caufield & Byers. Aquion's battery -- if it proves to be as reliable, low cost and maintenance free as its creators claim -- could remove a primary obstacles to the widespread adoption of clean energy.
Transphorm and Enphase Energy: These two startups partnered in 2011 to develop a cost effective, high efficiency solar inverter that uses a single semiconductor device material gallium nitride -- and not silicon, the more commonly used material in inverters.
Transphorm, which emerged from stealth mode in early 2011 with backing from Google Ventures and Kleiner Perkins among others, says its has developed a power conversion device using gallium nitride that can eliminate up to 90 percent of all electric conversions.
Enphase makes small distributed microinverters, a new techie spin on the traditional solar inverter that converts direct current into alternating current for the grid. Enphase filed an IPO in 2011, but has yet to move forward with its public market debut.
Together, these companies could find a way to convert solar power more efficiently.
Soraa: This Khosla Ventures-backed startup uses the semiconductor gallium nitride rather than sapphire in its LED and laser technology. The company has raised $88.6 million last fall to commercialize its products, which it says achieve a high enough light output to justify using an expensive substrate like gallium nitride.
TerraPower: The nuclear startup backed by Bill Gates made some big moves in 2011. Execs from TerraPower, which is developing a traveliing wave nuclear reactor, visited with potential partners, investors and energy experts in the United States, China, France, India, Japan, Korea and Russia. Last month, Reliance Industries, the Indian conglomerate run by Mukesh Ambani, took a minority stake in TerraPower.
Still, a deal (with any country or company) to develop the nuclear reactor has yet to be announced. Expect more visits and fact-finding missions -- and maybe even an agreement -- in 2012.
OPower: The energy management startup has developed software that integrates consumer demographics, energy consumption data and behavioral analytics to help households change and ultimately reduce their power consumption. Home energy management is a crowded field that saw big names like Microsoft and Google exit in 2011.
OPower not only held on, it moved forward with a partnership with Facebook to develop an energy app to be launched in 2012; and separately into a deal with Honeywell to sell a connected thermostat. The smart thermostat marks the company's entrance into hardware (even though technically, its developing the software side of the device).
According to Gigaom's Katie Fehrenbacher, the company is mulling an IPO. Stay tuned.
Aurora Algae: Algae jet fuel powered a growing number of aircraft in 2011 and the U.S. military continued to pour money into the alternative fuel. But one of the more interesting under-the-radar developments within the sector occured over at Aurora Algae.
Last month, the company announced it had developed a technique to create advanced-trait algae strains without introducing foreign genes for product development in the pharmaceutical, nutritional, renewable energy and animal feed markets. The company used the technique to nannochloropsis, a fast-growing unicellular algae that's capable of accumulating large amounts of oil.
I spoke to a number of folks last month over at Aurora Algae, including Leslie van der Meulen, the company's vice president of business development, who view this as a potential game changer within the industry. Why? They can now improve algae strain without introducing foreign genes, which means the organism's natural genetic background is preserved.
Photo: Flickr user seanmcgrath, CC 2.0
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