GigaOM » Michael Ahearn

Organic waste recycling draws $110M from Gore, Kleiner & First Solar Chief

Katie Fehrenbacher — Thu, 12 Apr 2012 15:28:53 +0000

Harvest Power is raising $110 million from investors including Al Gore’s fund, venture firm Kleiner Perkins and a fund led by First Solar interim CEO Michael Ahearn to build out its facilities that turn organic waste into fertilizer and energy. Harvest Power builds and operates plants that use composting and anaerobic digestion technology to breakdown food scraps and yard clippings, and the technology not only produces fertilizers, but also biogas that can be used to produce electricity or be processed into compressed natural gas for transportation fuel.

The round was led by True North Venture Partners, the $300 million fund started by Ahearn and Ahearn will join the Board of Directors of Harvest Power. True North Venture Partners officially launched Summer of 2011 and this is one of the first investments I’ve heard coming from them. Oil refinery firm American Refining and DAG Ventures also participated in the round.

Trash giant Waste Management was a previous investor, but isn’t named in this round on the release. Back in January 2010 Harvest Power also announced a deal with Waste Management to access organic waste (feedstock for its recycling processes) from Waste Management’s operations across the U.S. and Canada, but I’m also not sure on the status of that deal. I’ll update this when I know more.

Founded in 2008, Harvest Power says it’s sold “millions of bags” of organic soils and mulches in 2011 and is in the process of building “two of the largest foodwaste to energy facilities in North America.” The company plans to complete construction of those plants this year, and has been operating seven other smaller sites.

Harvest Power previously raised $51 million about a year ago, putting its total funding raised to over $160 million. The company used part of that money to add recycling technologies, such as a high-temperature process to create synthesis gas. Syngas can be used to produce electricity, transportation fuels and other chemical products.

While Harvest Power Harvest is developing its own technology, it also makes use of others’ know-how. The company previously teamed up with Germany’s GICON Bioenergie to engineer and build processing plants using GICON’s anaerobic digestion technology.

The Wall Street Journal reports that the company — which makes money by selling fertilizer and power, as well as charging waste pick-up fees — generated less than $50 million in revenue in 2011, and expects to generate between $75 million and $100 million this year.

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Some good news: Fewer solar projects in Cali will fail in the future

Ucilia Wang — Fri, 03 Feb 2012 17:41:57 +0000

All of those wind and solar power projects you hear about being built in California actually have a pretty high failure rate of around 30-40 percent, according to regulators and utilities. So basically between a third to almost half of all those announced clean power projects won’t ever get built. But the good news is that about a decade after the state set its mandate that required utilities to buy an increasing amount of clean power, that failure rate is expected to come down significantly now that the these markets are maturing and utilities are seeing better prepared and managed projects.

“For the contracts we’ve signed in the last three years, we are seeing extremely low failure rates,” said Aaron Johnson, director of renewable energy policy and strategy and Pacific Gas and Electric, during the Photon Solar Electric Utility Conference in San Francisco Thursday. “We have 12 projects under construction now. Some are massive – in hundreds of megawatts.”

Developers these days tend to already have secured land and are often times far further along in the permitting process than those that were in the early days of bidding for contracts with PG&E, Johnson said. At the same time, the utility also is seeing more developers bidding for projects. Johnson said he expects the failure rate to drop based on the various recent analyses that PG&E has done in evaluating bids and contracts, but he said those analyses don’t add up to one number that characterizes the overall decline in failure rate.

So overall the state’s utilities are more confident that they can meet the state’s renewable energy mandate. But at the same time it also means that the clean power developers could see less deals coming their way — another hurdle for the battered solar and wind industries this year. “The green rush that you saw in the last few years in California is unlikely to return,” Johnson said. “We have a limited need for projects and have more players.

Fewer large clean power projects

The sentiment that California is no longer the land of abundant clean power opportunities for utility projects has grown over the past year as some of the large projects finally lined up financing and permits to start construction. First Solar’s interim CEO, Michael Ahearn, cited the dropping amount of new deals in California as one of the reasons that the company must seek opportunities elsewhere around the world in order to continue its growth.

Thanks in part to the federal government’s now defunct loan guarantee program, companies such as First Solar, SunPower and BrightSource Energy are building solar power plants that are hundreds of megawatts each.

California set its renewable energy policy in 2002 and increased the renewable power mandate to 20 percent by 2010 and then 33 percent by 2020. Those are the big goals, and also the mandate includes milestones that utilities need to meet each year. PG&E, for one, has lined up enough power purchase contracts to meet its goal through 2016, Johnson said. The utility asked for more bids from developers last summer, but those bids will be considered for meeting the requirements from 2017 through 2020.

While other states have similar mandates, those mandates are usually more modest, or the states don’t have the large populations that will require such a massive amount of clean power, like California does. As a result, developers like First Solar, which also makes solar panels and other equipment, now expects much fewer opportunities to develop mega projects like the two projects of 550 MW each that First Solar is building in California now.

“We will see very few mega projects like what we’ve seen, and see more small and diversified projects in the southwest and across the country,” said Brian Kunz, vice president of U.S. project development at First Solar, during the conference.

First Solar’s gain

Interestingly, First Solar has been a big beneficiary of the failings by developers to deliver on the power contracts they signed with California utilities. The company scooped up a fat pipeline of projects under development by OptiSolar for $400 million in 2009, and that deal helped to propel First Solar to become the largest solar project developer in the country. First Solar subsequently bought project pipelines for several other developers.

OptiSolar came to symbolize solar project development failure. The California company was working on more than 1 GW worth of projects when it stumbled – it wanted to be both a solar panel manufacturer and project developer and couldn’t do either well. Other companies that ditched plans to stay in the project development business included Ausra. And it wasn’t so long ago when Tessera Solar was forced to sell its two mega projects because it didn’t have the money to continue. Those two projects had secured contracts to sell power to Southern California Edison and San Diego Gas & Electric, and both utilities canceled the contracts after the sale of the projects only about a year ago.

In the past, California regulators calculated that that about 30 percent of the power purchase agreements (in gigawatt hours, not number of contracts) for renewable energy, which includes not just solar but also wind and other sources, would get canceled. During a California Energy Commission workshop last September, PG&E and Southern California Edison said they actually used 60 percent success rate in their long-term planning for meeting the state mandate.

“We’ve learned a lot over the past eight years, and going forward we are getting projects that are much further along in the development cycle,” Valerie Winn, PG&E’s manager of state agency relations, said during the commission workshop. “We expect … our success rate to get higher going forward.”

Photo courtesy of First Solar

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A new greentech VC to pitch: Michael Ahearn & his $300M fund

Katie Fehrenbacher — Mon, 18 Jul 2011 19:10:08 +0000

Former First Solar CEO Michael Ahearn officially launched his $300 million greentech fund, dubbed True North Venture Partners, on Monday. Word has been out about the venture since earlier this year when the team revealed in a filing that it had closed on $192 million of the fund.

The firm says in a release Monday that it will focus mostly on early stage companies, with investments ranging from $100,000 to $25 million, and will look for startups across the energy, water, agriculture and waste industries. While Ahearn is still Chairman of First Solar, and was CEO until 2009, the thin-film solar panel giant isn’t involved in the new fund.

But it would make sense for Ahearn to use his knowledge of solar to fund innovative solar startups. Solar power attracted $1.83 billion in VC investment in 2010, not as high as 2008’s record solar year, but higher than in 2009. While much of that investment actually went into First Solar thin-film competitors, solar software and services, and technology to track and manage solar power’s integration with the grid has been picking up as well.

Ahearn was formerly partner and president of an equity investment firm called JWMA (formerly called True North Partners, LLC), which he started with John T. Walton, one of the children of Walmart founder Sam Walton, back in 1996. JWMA Partners is one of the largest holders of First Solar stock, and Walmart invested $25 million in First Solar in 2008 and is also a customer.

So potential greentech entrepreneurs, True North Venture Partners is officially open for business and ready to listen to your pitch. The firm says it will finish staffing up its operations by the end of 2011.

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First Solar’s Michael Ahearn Launches $300M Venture Fund

Jeff St. John — Wed, 19 Jan 2011 16:00:57 +0000

Michael Ahearn, chairman and former CEO of First Solar, is getting into the venture capital game with the launch of a new $300 million venture fund that has already raised $192 million, according to a Securities and Exchange Commission filing (first reported by VentureWire). What might his new fund be planning to invest in?

It’s hard to say right now. The new Tempe, Ariz.-based True North Venture Partners hasn’t revealed much about its plans, or even specified whether solar power or green technology will be its focus. A First Solar representative told VentureWire that the thin-film solar panel giant isn’t involved in the fund.

Last week’s SEC filing lists Ahearn as the manager of True North Management Partners, which is listed as general partner of True North Venture Partners, but reveals little else about the fund’s purpose.

Nor does it list the investors responsible for the $192 million raised so far. Ahearn, himself, certainly doesn’t lack for cash — in February 2010, he sold 1.3 million shares of First Solar stock for $141.8 million, several months after handing the CEO job to former Honeywell executive Robert Gillette in order to devote his time to lobbying the government on energy policy.

If Ahearn does choose to focus on solar startups, he’ll have good company. Solar power attracted $1.83 billion in VC investment last year, not as high as 2008’s record solar year but on the upswing from a lackluster 2009. While much of that investment has gone toward would-be competitors of First Solar, a good portion has been flowing to software and services for the solar sector as well. Technology to track and manage solar power’s integration with the grid is also an area with room for innovation and growth.

Interestingly, the True North name has its roots in an investment firm called True North Partners that Ahearn founded with John T. Walton, one of the children of Walmart founder Sam Walton, back in 1996. That firm was later renamed JWMA Partners, and remains the single biggest holder of First Solar stock. Walmart invested $25 million in First Solar in 2008 and has been a customer for some time, most recently in a 15-megawatt distributed solar power project including thin-film CIGS solar panel maker Miasole and installer SolarCity.

First Solar has been doing its share of acquisitions as well. It bought up solar panel tracking equipment maker RayTracker for an undisclosed sum last month, and is said to be considering buying 5N Plus, a company that produces the tellurium required for its cadmium-telluride thin-film panels.

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Image courtesy of me and the sysop.