Clean-tech investment leaps 83% in year

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Clean-tech investment leaps 83% in year

Deborah Gage, Chronicle Staff Writer

Tuesday, August 5, 2008

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U.S. venture investments in clean-technology companies climbed to a
record $961.7 million in the second quarter of 2008 - up 41 percent
from the first quarter and 83 percent from the same quarter last year,
according to a new report.

"We expect to see robust activity" in the future, said Jeff Grabow,
head of Ernst & Young's clean-tech unit for the Pacific Northwest,
which issued the report based on numbers from Dow Jones VentureSource.
"It's not just energy - there are a host of markets, from fuels to
electricity to storage to efficiency to water treatment."

Just over half the clean-tech investments in the second quarter went
to companies that generate electricity or other forms of energy.

One of the biggest deals was in Oakland, where BrightSource Energy -
which is developing solar power plants in Southern California and has
an agreement to sell power to PG&E Corp. - raised $115 million from
VantagePoint Venture Partners of San Bruno and several other
investors.

Clean technology includes products and services that use natural
resources or reduce the negative environmental impact of their use.

Companies focused on energy efficiency accounted for 20 percent of
investments, down slightly from the first quarter, and alternative
fuels fell 44 percent to 13 percent of investments. That market ebbs
and flows based on the price of commodities, Grabow said.

But because of the high price of oil - which nearly doubled between
June 2007 and June 2008, according to the Department of Energy - as
well as rising global demand for energy and corporate investments in
clean technology, venture investment will also keep growing, he said,
and clean-technology companies should also boost the lagging market
for initial public offerings.

Three of the 10 IPOs in the United States in the second quarter were
clean-tech companies, and seven more are expected to go public soon.
Two of them are backed by venture capital. There were also 115 clean-
tech mergers or acquisitions in the first half of the year.

Clean-tech investing accounted for 9 percent of total venture
investments in the second quarter.

Grabow said clean technology looks similar to the early days of
biotechnology, which grew in the 1970s with the opening of Genentech
in South San Francisco.

Clean-tech companies now are small and tend to require a lot of
capital, he said, but corporations will start to invest in or acquire
them because the technology is so important.
Bay Area companies prosper

Five Bay Area clean-technology companies were among those that raised
money in the latest quarter.
Company City Amount
BrightSource Energy Oakland $115 million
Nanosolar San Jose 50 million
Aurora Biofuels Alameda 20 million
EMeter San Mateo 12.5 million
EoPlex Technologies Redwood City 12 million

Source: Ernst & Young

E-mail Deborah Gage at dg...@sfchronicle.com.

This article appeared on page D - 1 of the San Francisco Chronicle