Energy Business

Alternative Energy Watch: Google Invests in More Wind; Another Federal Loan Guarantee; Clean Energy Acquisitions (GOOG, EIX, GE, FSYS, RTK, AMRS, CDXS, FTFL, AMAT, LCRX)

Today’s wrap-up of alt energy news includes a look at the latest investment by Google Inc. (NASDAQ: GOOG) in wind energy, another federal loan guarantee for a solar farm, and two acquisitions in alternative transportation fuels.  Even the semiconductor equipment players are getting in on the action.

Google has announced a $100 million investment in the $2 billion Shepherds Flat wind farm project in Oregon. This follows an earlier investment of $168 million in a concentrated thermal solar project being built by BrightSource Energy in southern California and two other projects, one wind and one solar. Altogether, Google has invested more than $350 million in renewable power generation.

The Shepherds Flat project, the world’s largest wind farm at 845 megawatts, has signed a power purchase agreement with Southern California Edison, a division of Edison International (NYSE: EIX). The developer, Caithness Energy, will use a total of 338 2.5-megawatt turbines supplied by General Electric Co. (NYSE: GE).

Google’s investments are intended to provide a financial return to the internet search giant. The investments are not a feel-good gesture. A wind farm can generate electricity at a cost as low as $0.06/kWh. That same kilowatt-hour sold in southern California can fetch $0.15 or more. That’s a pretty nice return, and that return is what Google is after. At some point, Google may be able to buy power from one of the plants it has invested in, driving down the company’s cost of electricity, which is its second highest expense after staff.

The US Department of Energy has approved a $2.1 billion loan guarantee for Solar Trust of America LLC, which is building the world’s largest solar thermal plant in the southern California desert near the city of Blythe. The plant will eventually generate 1,000 megawatts and Solar Trust has already signed a power purchase agreement Southern California Edison.

The loan guarantee will help build the first two of four planned units at the Blythe project, and is the largest loan made by the DoE. The department has guaranteed more than $21 billion in loans to clean energy projects, and is trying to speed through more applications before the end of the current federal fiscal year, when federal budget cuts threaten to end the program.

Fuel Systems Solutions, Inc. (NASDAQ: FSYS) has completed its $6 million acquisition of NaturalDrive Partners LLC, which was announced earlier this month. Fuel Systems designs, makes, and sells components and systems for gas-powered vehicles. NaturalDrive worked with Fuel Systems on a gas-powered van based on General Motors Co. (NYSE: GM) vehicle, and the acquisition should help Fuel Systems take advantage of the growing interest in natural-gas powered vehicles. Fuel Systems stock is down about -2% today, at $27.41, near the low end of its 52-week range of $23.10-$42.65.

Another clean-tech fuel company, Rentech, Inc. (AMEX: RTK) has acquired a majority stake in ClearFuels Technology Inc., a company in which Rentech already owned a 25% stake. ClearFuels is developing biomass-to-energy projects that would convert sugar cane bagasse to biodiesel. The company also hopes to convert biomass, including cellulosic, feedstock into synthetic jet fuel.

Rentech and ClearFuels already jointly operated a bio-refinery project that received a $23 million federal grant to fund part of a demonstration-scale gasifier. The biofuels business has not been kind to companies trying to get to commercial scale. Many, like Amyris Inc. (NASDAQ: AMRS), Codexis Inc. (NASDAQ: CDXS), and FutureFuel Corp. (NASDAQ: FTFL) have had to diversify into cosmetics and other products to stay afloat.

Rentech shares are up about 0.5% at around noon today, to $1.16, within the 52-week range of $0.69-$1.48.

Finally, in a story related to yesterday’s look at solar equipment makers, Taiwan Semiconductor Manufacturing Co. has just purchased about $100 million worth of equipment from three suppliers, including Applied Materials Inc. (NASDAQ: AMAT) and Lam Research Corp. (NASDAQ: LRCX). Applied Materials took about half the total.

Paul Ausick

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