Plastic, oil, natural gas, paper, solar panels, analytics, semiconductors, blimps, mobile phones, wind turbines, smart grid. These were some of the words tossed around by the six teams presenting at last night’s Cleantech Open Northeast Regional Finals. Three companies were selected to go on and compete in the Cleantech Open Global Forum in California next month. Interestingly, a few of the semifinalists are also part of the local startup program MassChallenge, which like the Cleantech Open, models itself as a startup accelerator and mentoring program with a business plan competition tucked into it.

Can you guess which of the words above apply to the three winning teams below? Take a look and see if you were right.

—PK Clean (a MassChallenge 2011 finalist) is “converting mountains of trash into barrels of oil.” The company has developed and tested a process that converts plastic waste into oil, using a proprietary catalyst. PK’s CEO Priyanka Bakaya, an MIT Sloan MBA, says the 45 million tons of plastic occupying landfills per year can be turned into about 9 billion gallons of oil (representing 25 percent of annual U.S. auto consumption). The company has already tested the tech at a pilot facility in India and is targeting the metal recycling industry as its first customers. After taking apart old cars, metal recyclers are left with plastic remnants that they have to pay to get landfilled. PK will take that away for free to turn into oil. There’s other competition in the field, namely from Portland, OR-based Agilyx (which recently raised $22 million in venture funding), but Bakaya says PK’s catalyst and cheaper process give it an edge.

—Qado Energy, a smart grid analytics startup, was the big IT play in the bunch. While maybe not as sexy as turning plastic to oil or printing invisible solar panels on paper (seriously), it’s aiming to solve a big problem for utilities and energy developers: accurately predicting the distribution and effect of new cleantech sources plugging into the grid. As co-founder Lorraine Wheeler explained, when wind or solar developers want to add their technology to the energy distribution grid, utilities have to perform studies analyzing the impact of the new tech on the grid, and produce a list of needed upgrades that the developer must pay for. Qado’s technology is designed to make this planning process more accurate and efficient, with software that pulls in utilities’ data from different sources and converts it to a standard format. From there, the potential effect on the grid can be modeled and analyzed in displays for utilities, regulators, and energy developers.

—Last up was fabless semiconductor developer Arctic Sand. The company is making smaller, more efficient power converter chips designed to cut down on the electricity needed to run traditional data centers. The company, whose team comes from MIT and Harvard, aims to design the chips for other applications like powering mobile phones and hopes to get its tech to the market through licensing deals with existing computing players, says CEO Nadia Shalaby. Arctic Sand was also a participant in MassChallenge earlier this year.

There were some familiar faces among the other three semifinalists. OsComp Systems—developers of a more efficient natural gas compressor—took home a check from MassChallenge last year and presented at our XSITE Xpo this year. Altaeros Energies also talked about its blimp-hoisted wind turbines at our Xpo. The last Cleantech Open Northeast semifinalist, Ubiquitous Energy, is working on the aforementioned printable solar photovoltaic cells for paper and fabric. The cells are designed to power mobile phones for owners in areas that aren’t even plugged into the power grid, and even further down the line, could enable dynamic displays on surfaces like cereal boxes (think digital display expiration dates). We’ll still have to keep an eye out for those teams.

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Mountain View, CA-based Google announced today on its Green Blog that it has made a $55 million investment in New York, NY-based Terra-Gen Power, which is building a wind turbine farm in Southern California’s Tehachapi Mountains that will eventually supply 1,550 megawatts of electricity. The Google investment, alongside money from Citibank, will support Phase IV of the so-called Alta Wind Energy Center. Google said it’s employing a novel “leveraged lease” financial agreement under which the two companiese “are purchasing the Alta IV project and will lease it back to Terra-Gen, who will manage and operate the wind projects under long-term agreements.”

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Liquid Metal Battery, an MIT spinout that is building a battery made of liquid-state cathode, anode, and electrolyte components, has nabbed a seed investment from Bill Gates and an undisclosed oil driller, CNET reports. The aim is to cut the cost of energy storage and enable batteries to store hours of wind and solar power, according to the report. The company is expected to announce its full Series A funding next month.

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Continuing its run of massive alternative-energy investments, Mountain View, CA-based Google (NASDAQ: GOOG) said in a blog post today that it has invested roughly $100 million in the Shepherds Flat wind farm project under construction south of the Columbia River near Arlington, OR. Developer Caithness Energy, which is headquartered in New York, hopes the facility will produce 845 megawatts of electricity once it’s completed in 2012. Southern California Edison has already contracted to buy the electricity. Google recently invested $168 million in BrightSource Energy’s Ivanpah solar concentrator project in California’s Mojave Desert, bringing its total clean energy investments to more than $350 million. The company said the Shepherds Flat project “is exciting to us not only because of its size and scale, but also because it uses advanced technology…This will be the first commercial wind farm in the U.S. to deploy, at scale, turbines that use permanent magnet generators—tech-speak for evolutionary turbine technology that will improve efficiency, reliability and grid connection capabilities.”

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Foreign competition is rising, and U.S. consumers haven’t departed from their penny-pinching mentality of The Great Recession, and behind this double whammy the cleantech industry is feeling the squeeze. That’s one of the big impressions I came away with after polling a crop of cleantech experts from Xconomy’s network of advisors and op-ed contributors for their predictions for 2011. But take heart; there’s plenty of room for optimism, especially in the fields of energy efficiency and monitoring, where the U.S. may be leading the way to a greener future that’s much more achievable—at least in the short term—than through any form of alternative energy.

One sub-theme was pretty overwhelming among the responses I received: the actual materials manufacturing side of cleantech (i.e. the production of components for generating solar and wind energy, efficient batteries, and LED chips) is struggling, but energy-focused software and services are rising to the occasion. A number of Xconomists and contributors have pointed out that the U.S. cleantech manufacturing base is weakening due to competition from countries like China, which offer cheaper production and strong government incentives (or mandates) for adopting the new technology.

“It’s a rapidly commoditizing good,” Ray Demeo, VP of worldwide sales at Marlborough, MA-based Coolcentric, says of solar equipment. “The price that China can produce the product at is lower than U.S. manufacturers.”

Additionally, consumers and investors are nervous about spending upfront on things like efficient appliances, electric vehicles, or solar power, to get cleaner sources of energy into their homes (or cars), and would rather find ways to save. Makes enough sense. That’s actually the silver lining for the cleantech space, though, several experts say.

“The fundamental business proposition is we will go in and evaluate some aspect of your energy utilization and we will cut your cost—-I won’t be surprised to see those kinds of business models continue to thrive,” says Tom Ranken, president and CEO of the Washington Clean Technology Alliance. “Ten to 15 years from now, people might be slapping themselves upside the head saying, ‘how did I miss that?’”

Here’s a roundup of some specific predictions we gathered from our network of cities:

—Stephen Mayfield, director of the San Diego Center for Algae Biotechnology and a professor in UC San Diego’s Department of Molecular Biology, said we can expect to see a slew of biofuels advances this year:

• The first synthetic algal genome.
• The first significant scale-up of

… Next Page »

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It’s tough out there for angel investors and venture capitalists—not to mention entrepreneurs scrambling for money so they can build the next big thing. Nothing surprising there, but it’s especially true in cleantech and energy, where the exit market has not yet matured, and the process of building early-stage companies is as thorny as ever.

Enter the Massachusetts Clean Energy Center (MassCEC), a Boston-based state agency that supports and promotes local clean energy companies. Led by executive director Patrick Cloney, MassCEC is trying to develop the cleantech ecosystem in the Bay state by focusing on renewable energy generation and workforce development, and by making investments in early-stage projects and startups. The agency has helped finance dozens of companies big and small, including A123Systems (NASDAQ: AONE), 1366 Technologies, FloDesign, Solartrec, and Next Step Living. It has investments in areas like solar, wind, biofuels, hydro, and energy storage—and an increasing focus on energy efficiency, smart buildings, and smart grid technologies.

Earlier this fall, I spoke with MassCEC’s managing director of investments, Arif Padaria, about the state’s energy landscape and his agency’s role. MassCEC receives $25 million a year from the state’s renewable energy tax, and about $8 million of that is controlled by Padaria, to be used for investments in early-stage technology companies.

Padaria, 42, is a software entrepreneur and computer scientist by training, and a tech investor by recent career. In the early 1990s, he dropped out of a PhD program at Princeton to help start a couple of software companies, both of which were acquired. He then went the business school route, got his MBA at Columbia, and went to work on Wall Street as a tech investment banker with Broadview; later he got into venture investing at TVM Capital and Pilot House Ventures (with a stint in strategic investing at Microsoft in between). Padaria started at MassCEC in January 2010.

A big part of his charge is to help selected Massachusetts cleantech startups traverse the so-called “valley of death” and obtain their first financing round, which is usually in the $1-3 million range. MassCEC participates in these rounds and gains an equity stake in the companies.

“How do we impact that?” Padaria says. “I’m essentially a state angel group. I come with a whole network of investors, especially in software. I’m going out there, beating the bushes, trying to find the right deals. My goal is return on success, not just return on investment. We take a thought leadership role in ecosystem development. We go into a field where nobody else [i.e., an institutional investor] is willing to touch it, so to speak.”

Padaria elaborated on some of these themes in our chat below. Here are some edited highlights:

Xconomy: Where does the MassCEC investment fund fit into the ecosystem of cleantech angels, venture capitalists, and federal government financing (such as grants from the Advanced Research Projects Agency-Energy)?

Arif Padaria: Where we really fit is on the angel side. VCs are pleased that someone is coming in to take the risk to move a company to a level that may work or not work. If it does work, it could … Next Page »

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If we look at the history of any emerging industry, such as the Internet or biotech, it’s plain to see that there is always as much hype as promise. What we’re all calling “clean tech” is no different. But the promise of clean tech is compelling.

We have viable energy production through solar, wind and biomass. Smart-grid technology can more efficiently allocate existing energy output. And building design advances have made remarkable progress in boosting energy efficiency and decreasing pollution. Clean technology innovators are on the move. That’s why so many smart people believe clean tech has trillion-dollar potential.

As CEO of the Washington Clean Technology Alliance, I believe we can cut through the clean tech hype and find some remarkable business potential, especially for Washington state.

Two reasons: First, the U.S. has the basic economic and technological resources in place; second, Washington state has impressive comparative advantages to leverage. But sustained, concerted action between the private sector and government is vital. The risks are real, but so are the economic and environmental dividends, and they’re within reach.

Clean tech is finally achieving economies of scale, which have been so critical in establishing all major industries. Technology and best practices become standardized, expertise develops and costs go down. And clean tech is experiencing some growth spurts. For example, Washington is now the fourth-ranked state in wind capacity. Nationally, wind-energy capacity has quadrupled since 2005.

Along with economies of scale, American federal and private capital spending is impressive. According to Clean Edge, an industry research firm, about $100 billion of the $787 billion stimulus package will go to clean tech investment, according to Clean Edge, an industry research firm. And the United States has the lion’s share of global clean tech venture capital. According to the Cleantech Venture Network, North America got $10 billion of the $17 billion total in global clean tech venture capital in 2009—$5 billion went to Europe and $2 billion went to the rest of the world.

Technology improves as economies of scale are achieved and serious public and private capital is invested. So it’s no surprise that clean tech is more useful and cost-effective than ever before. Solar, smart grid output and green-building practices are examples of clean tech that are becoming cheaper, more recognized and desirable among consumers, utilities and … Next Page »

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Some 61 percent of California voters this week showed they still believe in the economic promise of clean energy. Californians rejected Proposition 23 that would have rolled back policies to limit greenhouse gas emissions and develop clean energy.

Their vote of confidence reminds us that even though comprehensive federal climate legislation may be off the table today in Washington D.C., the business and economic development opportunities of a low carbon future remain.

Several hundred leaders from business and finance, government, utilities, research and education, clean energy advocates and nonprofits are gathering to talk about emerging ideas in the energy sector next week at Convention Place in Seattle for the Washington State Future Energy Conference and our second annual State Energy Summit.

Gov. Chris Gregoire and British Columbia Minister of State for Climate Action John Yap are among the scheduled presenters over three days.

The transition to a low carbon economy is a worldwide opportunity. Global markets are moving from dependence on carbon-based fuels to a mix of renewable sources—solar, wind, geothermal, nuclear, biomass and tidal energy. Transportation and energy transmission infrastructure is evolving and becoming more intelligent. Homes and buildings are being designed and built to be more efficient and sustainable. Mass market electric vehicles are coming to the U.S.

We saw it on the Governor’s recent trade mission to China, where wind and solar energy are taking hold. According to a 2009 Pew research study, China invested $34.6 billion in clean energy—twice as much as the U.S. They’ve dedicated over $200 billion in government stimulus to renewable energy and related investments.

The Governor is in Germany today to help celebrate the opening of the BMW-SGL plant, where carbon fiber produced in Moses Lake will go into BMW’s revolutionary Megacity electric car. Throughout the world, new technology and development are pouring into clean energy and sustainable growth.

Our state is better positioned … Next Page »

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Ann Arbor, MI-based Accio Energy, a developer of technology for converting wind to energy without using turbines, announced yesterday that it has added Jennifer Baird as its chief executive officer. Baird most recently served as president and CEO of venture-backed Accuri Cytometers of Ann Arbor, a maker of affordable instruments for examining microscopic particles in the life sciences space. The Accio announcement notes that Baird will help drive the company’s next stage of growth and development.

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Last week’s business and technology news ranged from the sublime to the ridiculous—sometimes both in one story (Flipboard’s new iPad app is pretty amazing, even if it didn’t work for half of the people who downloaded it).

—After visiting Palo Alto, CA-based Nanosys, I wrote a feature explaining how the nine-year-old nanotech firm is finally getting some products to market under turnaround CEO Jason Hartlove, a true Silicon Valley “MacGyver.”

—Palo Alto-based startup Flipboard came out of stealth mode, launching a “social magazine” app for the Apple iPad and revealing that it has raised $10.5 million in financing from Kleiner Perkins Caufield & Byers, Index Ventures, Twitter chairman Jack Dorsey, and the actor Ashton Kutcher, among other investors. In my Friday column, I took a close look at Flipboard’s app, which, despite the startup’s inability to keep up with signup requests, shows great promise as a way for iPad owners to manage their social media streams.

—I attended the Geo-Loco conference in San Francisco on July 21 and reported back about the event’s main themes, including why check-ins are becoming passe and how startups can gain users for their location-based services.

—I took a look back at Apple’s solution to the iPhone 4 antenna crisis (giving all iPhone 4 owners a free case) and asked whether ‘Antennagate’ was a side effect of the company’s notorious culture of secrecy. My verdict: probably not.

—Google Energy, a unit of the search giant charged with finding ways to make its operations more energy-efficient, said that it had struck its first deal, an agreement with NextEra Energy Resources to buy 114 megawatts of power from wind farms in Iowa. Google won’t use the power directly, but will sell it on the spot market, thus taking resources off the market and (in theory at least) encouraging new investment in renewable energy generation.

—Skyhook Wireless, in Boston, unveiled an online map designed to help San Francisco Marathon fans track tweets, Foursquare checkins, and other geotagged mobile activity among the crowds along the race route.

—Venture firm Draper Fisher Jurvetson in Menlo Park, CA, announced that it had finished raising its 13th fund, which totaled $350 million. That was about $300 million short of the original goal.

—Kleiner Perkins Caufield & Byers and Sequoia Capital contributed to a $30 million Series C financing round for Palto Alto, CA-based social networking tools maker Jive Software, as our assistant editor in Seattle, Thea Chard, reported.

—Pixazza in Mountain View, CA, raised $12 million to fund further development and marketing of its “visual commerce” software, which turns Web images into pop-up catalog pages.

—San Mateo-based mobile medical software maker Epocrates, which called off a planned $86 million IPO in 2008, said it has re-filed the necessary paperwork to give it another shot.

—San Jose-based Solexant, a developer of ultrathin photovoltaic panels, said it had selected Gresham, OR, as the location for its first commercial-scale manufacturing facility.

—Optical communications company Oclaro of San Jose announced that it had acquired Mintera, an Acton, MA-based maker of high-speed optical transmission systems, for $12 million up front and as much as $32 million in total, if Mintera hits sales goals over the next 18 months.

—Validity, the San Jose, CA-based maker of fingerprint scanners for laptops and other devices, raised $12.6 million from Panorama Capital, Crosslink Capital, Qualcomm Ventures, TeleSoft Partners, and VentureTech Alliance.

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If you’ve crossed the U.S. Midwest by car recently, as I have, you may have noticed a new kind of crop sprouting up amidst the corn and soybeans: wind turbines, thousands of them. Now, some of the electricity those turbines produce will be going to Google Energy, a new entity set up by the Mountain View, CA, search giant last year to participate in wholesale energy markets.

Urs Hoelzle, Google’s senior vice president of operations, announced on the company’s blog today that Google Energy has signed a 20-year agreement to buy 114 megawatts of power from NextEra Energy Resources, which operates 9,000 wind turbines across 17 states. Google is buying power from a specific group of 100 GE-manufactured NextEra turbines in Story County and Hardin County in central Iowa. (Story County’s largest city is Ames, home of Iowa State University.)

Google (NASDAQ: GOOG) has been striving since 2007 to become carbon-neutral by making its facilities more energy-efficient (it said last year that it had already cut its energy use in half). The company is also turning to renewable energy sources such as the solar panels at its Mountain View headquarters and hydropower from the Columbia River in Oregon, and has been buying carbon offsets. Hoelzle said that the electricity Google Energy is purchasing from NextEra is “enough to supply several data centers.”

However, the wind turbines in Iowa won’t directly power Google facilities, which are too far away to efficiently transmit all the energy. Instead, Google has structured the deal in a way that it hopes will benefit the broader renewable-energy movement. Google will resell the electricity produced by the turbines on the spot market, while at the same time retiring the renewable energy credits, or RECs, associated with the project.

RECs are independently traded entities often bought by organizations seeking carbon offsets. They guarantee that the energy from a given project is produced in a way that does not add carbon dioxide to the atmosphere. They were, at one time, envisioned as a key source of financing for renewable energy projects, but the recession has dampened demand for the certificates.

Buying the actual power from the Iowa wind farms, rather than just the “naked” RECs, has a bigger benefit, Google said, in that it will provide NextEra with a guaranteed customer, allowing it to build more wind farms. “The inability of renewable energy developers to obtain financing has been a significant inhibitor to the expansion of renewable energy,” Hoelzle said on the Google blog. “We’ve been excited about this deal because taking 114 megawatts of wind power off the market for so long means producers have the incentive and means to build more renewable energy capacity for other customers.”

NextEra, which has its headquarters in Juno Beach, FL, says its growth has been built on such contracts. “We are thrilled to welcome Google Energy to our growing list of customers and appreciate their support of emission-free, renewable energy,” said Mike O’Sullivan, NextEra’s senior vice president of development, in a press release today. “With the support of customers like Google Energy, we’ve built our wind fleet from fewer than 500 megawatts a decade ago to more than 7,600 megawatts—the largest fleet in North America today.”

But the deal isn’t entirely an act of charity. It also gives Google a way to hedge against future hikes in energy prices. If Google can sell the Iowa wind power on the spot market for more than it’s paying NextEra, it will make a profit on the contract, offsetting higher energy costs elsewhere.

“While we are happy to be purchasing renewable energy as part of our environmental commitment, this is also a structure that makes long term financial sense for Google,” the company said in a statement. “Through the long term purchase of renewable energy at a predetermined price, we’re partially protecting ourselves against future increases in power prices. This is a case where buying green makes business sense.”

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Recently I had the opportunity to participate in a series of meetings in Washington, DC, together with an impressive array of business leaders and investors. The group that held the meetings is called the Progressive Business Leaders Network, and it focuses on a select set of issues that are critical to driving U.S. competitiveness. PBLN’s efforts toward energy independence and education are of particular interest to me.

I have spent most of the past 10 years bringing U.S. tech companies and their products into Asian markets. I have had the opportunity to do business in all of the major economies there, including Japan, China, Korea, and India, and have experienced firsthand what many now identify as the new center of the world economy. The people I have had the good fortune to meet in Asia are bright, creative, and full of enthusiasm for the promising future ahead. They are also driven.

Last year, my family and I returned to the U.S. from Singapore. Having lived amid the incredible pace of infrastructure expansion across Asia, including China’s efforts on energy, it seemed natural that acceleration in the U.S. would soon follow. The legislators discussing progress toward American energy independence at the DC conference, however, were passionate about the need for this energy overhaul, but not so optimistic about the outcome.

Congressman Ed Markey recounted a scene from his own recent trip to China, where he saw rows of newly manufactured wind turbine blades lined up outside of a factory. He likened the blades to the threat posed by the Soviet missiles that the U.S. faced in Cuba so many years ago.

This imagery is useful for its attention-grabbing dramatization. And, since most of us respond more readily to visuals, it may well be an effective analogy.

But, unlike Soviet missiles in Cuba, China’s efforts are inwardly focused and did not originate as an offensive threat. To the extent that we in the U.S. are not equally focused inward, this nearly closed window of opportunity to take advantage of the next great manufacturing trend is a threat of our own making.

Why does China now dominate the world’s wind turbine and solar manufacturing?

Because…

it has an economy that is growing at breakneck speed and has an insatiable need for more energy…

its leaders realize that these industries provide high-skill manufacturing jobs urgently needed to support a rapidly expanding middle class…

energy independence is important for a nation that has a relatively insular history…

the country’s ubiquitous coal-fired power plants produce so much pollution that every citizen in the major cities of China feels the burning effects in their throats and eyes whenever they step outdoors.

China sees the near-term benefits that clean energy technology provides for its citizens and is proceeding rapidly to implement an organized plan to take advantage of this opportunity. Unlike the situation in many circles within the U.S., in China clean energy is not an academic discussion.

The byproduct of this cleantech manufacturing boom, and a nice bonus for China, is that the country gains economies of scale, improving both the quality of its products and its knowledge base. This ensures that China will be a formidable global competitor in this space going forward.

The industries associated with clean energy—including energy components and systems manufacturing, and not just installation—are those that we have every means to develop in the U.S, and for most of the same motivations as China.

Ed Markey mentioned how consistently sharp and focused the Chinese leaders whom he met with were on the specifics of their country’s energy plan. In contrast, the lack of unity and driving concern around a common plan in the U.S. means that these high value chain industries are powerful new opportunities that we are apparently willing to forego.

We do not need a showdown on the high seas to counter this threat. The conflict is all on our home turf.

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This month a group of 50 clean energy CEOs, investors and executives from New England traveled to Washington D.C. to deliver a common message to our leaders in the nation’s capitol: comprehensive energy and climate legislation is critical for building the clean energy economy here in New England and across the United States. The Kerry-Lieberman ‘American Power Act’ has the potential to kick-start our shared vision for the nation’s future. It draws upon many elements of the House’s Waxman-Markey legislation and Senate’s Cantwell-Collins proposal to deliver the market signals that will accelerate private sector investment, speed the transition to a clean, sustainable energy future, and create millions of quality jobs in the U.S. And, as we watch the situation unfold in the Gulf of Mexico and are reminded of our dependency on oil, it couldn’t have come at a more critical juncture.

New England and its business leaders have the ability to effect change. The clean energy sector already includes more than 2,000 Massachusetts companies and 26,000 jobs. It is the fastest growing industry in the region. Clean energy may be the largest opportunity we have ever had to grow new companies, create new jobs and build thriving regional and national economies. However, the clean energy industry in New England is different from its predecessors—textiles, computer hardware and software, Internet business – in scale, timeframes and the amount of investment required.

By now, many of us have heard the numbers. Energy is a $6 trillion global industry that will grow by tens of trillions of dollars during the next 30 years. But clean energy involves capital-intensive manufacturing or projects that produce commodities such as fuel, electricity or clean materials. This combination requires an alignment of policy and public-sector investment with private capital and entrepreneurial activity. The market dictates that company growth and jobs will disproportionally be placed in regions with clear, long-term policies, pricing signals, and a willingness to adopt early.

New England already has some of ingredients to drive private investment. Regional policies such as RGGI (the Regional Greenhouse Gas Initiative), state Renewable Portfolio Standards, advanced building codes, utility energy efficiency programs, and other initiatives have contributed to the growth of the sector. Massachusetts clean energy companies have brought in $1.1 billion in venture capital and private investment deals from 2007-2009, trailing only California, according to Bloomberg New Energy Finance data and a recent Clean Edge report.

Despite our progress, a recent Pew Charitable Trusts study concluded that in 2009, China invested twice as much as the U.S. in clean energy—$34.6 billion versus $18.6 billion. In addition, in relative terms, the UK invested three times more than … Next Page »

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In a joint press conference today with Governor Deval Patrick at the Massachusetts State House, U.S. Secretary of the Interior Ken Salazar said his department has approved a scaled-down version of the long-delayed Cape Wind project at Horseshoe Shoal in Nantucket Sound. Salazar said that the revised project approved by the department will consist of 130 wind turbines rather than 170, that the turbines will be moved farther away from Nantucket Island than originally proposed, and that additional seabed surveys will be conducted before construction to ensure that any as-yet-undiscovered submerged archaeological resources are protected. Some of the changes were made specifically to reduce the visual impact of the wind farm from the Kennedy family compound in Hyannisport; deceased Massachusetts Senator Edward Kennedy was a longtime opponent of the project. The wind farm, first proposed in 2001 by private developer Cape Wind Associates, is expected to supply enough power for Nantucket Island, Martha’s Vineyard, and much of Cape Cod and create several hundred construction jobs. “This will be the first of many projects up and down the Atlantic coast,” Salazar said at the press conference.

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The big news of the week (and year) is Picnik’s acquisition by Google. But read on for some other notable deals from the Northwest as well.

—Seattle-based Picnik, the popular photo-editing software startup, was bought by Google in a deal of undisclosed size. The folks at Picnik seem pretty happy, and it sounds like a good cultural fit, as well as a good sign for the local Web startup community and M&A market, according to Picnik CEO Jonathan Sposato.

—Erin reported on some under-the-radar financing deals from the Seattle area and beyond, from January. Some notable investments you might not have heard about: UW startup Impel NeuroPharma raising $300,000, Seattle-based ValueAppeal raising $400,000, and Portand, OR-based NVoicePay raising $90,000 for e-payment software.

—Seattle-based 3Tier raised $3 million in new equity financing, as Luke reported. The investors weren’t disclosed, but back in December 2008, the company raised $10 million in a deal led by Good Energies. 3Tier recently completed its global map of wind and solar energy hotspots, in an effort to use high-performance computers and satellite data to provide crucial information to energy companies looking for the best sites to build renewable power plants.

—Seattle-based PhotoRocket, the stealthy photo-sharing startup from founder Scott Lipsky, opened a new round of financing that it expects will close on March 31. Investors and a target amount were not disclosed. Lipsky, the co-founder of aQuantive and GalleryPlayer (and former Amazon.com exec), said he has hired Michael Cockrill, formerly of Atlas Accelerator, Mixxer, and Qpass, and Gary Roshak, formerly with Marchex and Yahoo, for senior roles in PhotoRocket.

—Seattle-based Alliance of Angels said it invested a record $9.1 million in 29 companies in 2009. The investments by the angel investor organization were made in software, cleantech, retail and consumer products, and other sectors including Internet, mobile, and medical devices. Alliance of Angels has been investing in tech and high-growth companies since 1997.

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3Tier Group, the Seattle-based company that has developed a map of the world’s best places for wind and solar power plants, has raised $3 million in new equity financing, according to a regulatory filing. The company raised $10 million in December 2008, and recently completed its detailed map of solar power hotspots. The company, which has 60 employees, doesn’t disclose its financial results, although CEO Ken Westrick said earlier this week in an interview that the company is “close” to turning profitable as the economy is beginning to improve for alternative energy.

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Seattle-based 3Tier Group set an audacious goal two years ago of remapping the world to find the best spots to generate solar and wind power, and now it’s done. Of course, that means it’s time for 3Tier to show this information is truly valuable to customers.

3Tier finished its map of the world’s wind currents in November 2008, and yesterday it announced the completion of the solar map. This was truly a project cut out for the supercomputer it has in Seattle’s Westin building. 3Tier captured data from five different stationary satellites, and took half-hour snapshots of sun patterns on Earth over the past 10 to 13 years, zeroing in on squares as narrow as 3.3 kilometers across. (You can look at a thumbnail version of the map below. Click on it for a larger version.)

By taking so many repeated glimpses over time, and over such a small surface area, 3Tier hopes to provide power companies with deeply detailed information which ought to be useful before they plunk down $100 million or $200 million to build a renewable power plant, says 3Tier CEO Ken Westrick.

“This way you can account for cloud cover, and get a much better idea of the transient behavior of the clouds,” Westrick says.

This will be an important year to test 3Tier’s business plan, which rests on selling access to this data on the ebb and flow of the sun and wind. The company, founded in 1999, raised $10 million in December 2008 to finish the remapping project. But the economy didn’t do 3Tier any favors last year, as a lot of alternative energy projects slowed down or shifted into a wait and see mode. 3Tier laid off an undisclosed number of workers last September, and revamped its business to de-emphasize consulting, allowing customers to access their datasets over the Internet and customize their own dashboards for forecasting and power assessment. The company has “gotten traction,” with this strategy since last fall, and is “close” to operating at a profit, said Westrick, without providing specific numbers. The company now has about 60 employees, he says.

I pressed Westrick on how this new solar map is really different from whatever his customers have access to now, to give me a better idea of how useful this might be to them. The main competition in the U.S. is from the National Renewable Energy Laboratory (NREL), Westrick says. The big difference is that NREL’s map looks at the U.S. in 10-kilometer wide squares, and takes snapshots every three hours. So the 3Tier map, as Westrick says, is higher resolution, which ought to account for the finicky behavior of clouds (something we Northwesterners know all about). Clouds obviously count for a lot in the solar world, because they have a direct effect on how much power a solar plant can throw off.

“We think our accuracy is a little higher, and when you’re spending $100 million to $200 million on a project, you want to look at another source of data,” Westrick says. “It’s a good idea to get a second opinion.”

A potentially bigger opportunity for 3Tier, however, is in other parts of the world that are getting aggressive about renewable energy, and don’t have access to any data from a government agency like NREL. India and Australia don’t have access to anything like the 3Tier solar map from another source, and the company has established offices with good potential to attract customers there, Westrick says. Europe is another promising market for solar power, particularly Spain, although 3Tier has found Europe to be “hard to break into.”

Now that the data is in, I wondered which results really surprised the people at 3Tier. After all, who needs a supercomputer to tell them the sun is powerful in Arizona, Australia, and Spain? It turns out that a lot of previous attempts at solar mapping relied on averaging, which made those places look promising on a map, but there’s actually more nuance when 3Tier dug deeper. In India, for example, 3Tier found a lot of month to month variability, in which so-called “sunny areas” on the map had more cloud cover at certain parts of the year. If, say, the highly populated coastal areas have peak electricity demand at a time when the clouds are overhead, and the best solar resources are inland at those moments, that’s something you’d want to know before breaking ground on a new plant, Westrick says.

“You need to ask, ‘Is the resource, the sun, there when you need it?’” Westrick says.

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On Tuesday, FloDesign Wind Turbine of Wilbraham, MA, announced that it has raised $35 million in Series B funding from a list of marquee venture capital firms and hired a new CEO to go along with the new money. Both moves are aimed at setting the company on the path to commercialization of its unusual wind-turbine design, which resembles a jet engine on a stick much more than a conventional windmill.

Yesterday, I caught up by phone with Lars Andersen, who’s spent all of two weeks in FloDesign’s CEO chair. (Andersen replaces company founder Stanley Kowalski, who has become a vice president.) If the startup was searching for a wind industry veteran, it couldn’t have found one with more experience than Andersen, who’s been in the energy generation and wind business for 20 years, and has spent the last five building up the Chinese division of Vestas, the Danish wind company that manufactures nearly 30 percent of the world’s wind turbines.

Below is a compressed version of our conversation. As you’ll see, Andersen was evasive about the details of FloDesign’s technology, but he says the approach is a “disrupting” one that could change the way the world looks at wind energy.

Xconomy: Tell me a bit about how you connected with FloDesign, and why you decided to leave Vestas to lead a much smaller company.

Lars Andersen: I think, first of all, that the time with Vestas has been a fantastic time. I’ve had many good opportunities, not least during the last five years, which I spent building the business of the company in China. It’s been a good an exciting journey.

I connected with FloDesign through a series of interviews. I was approached, first of all, by a headhunter, and went through a series of due-diligence studies of my own, and interviews with the investors and the company and the founders and the team that is there today. And I got very excited about the technology and also the team they have there that has done all the research and the innovation.

From a high-level perspective, this is a very good opportunity in the wind industry. There has been a lot of innovation in the industry, but it has been very stepwise innovation, with gradual improvements here and there. Here is a totally different and disrupting technology that could make a breakthrough in the industry and in the way we look at wind energy today. That’s really what got me interested—being part of that development and that journey.

X: What excites you so much about the technology? For example, does it offer a realistic way around the Betz Limit [a physical cap on the efficiency of open-fan wind turbines]?

LA: Well, I hope you understand that there are a lot of things about the technology that I can’t talk about. And I’ve only spent two weeks on the job, so … Next Page »

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Wilbraham, MA-based FloDesign Wind Turbine, whose radical jet-engine-like design for a new form of wind turbine has whisked it from the world of student business plan competitions to national prominence in under three years, says it has raised a big chunk of new cash and installed a new chief executive.

In an announcement today, FloDesign said it closed a $34.5 million Series B funding round in December. The backers include California-based Kleiner, Perkins, Caufield and Byers—the firm that supplied most of FloDesign’s Series A round—as well as three new investors, Goldman Sachs, Technology Partners, and VantagePoint Venture Partners. The latest round brings FloDesign’s total funding to about $40 million, not counting an $8.3 million Department of Energy grant awarded to the company last fall.

FloDesign also said that Stanley Kowalski, the company’s founder and original CEO, has taken the position of vice president, and that the CEO role has been filled by newcomer Lars Andersen. A 20-year veteran of the power generation and renewable energy industries, Andersen was previously president of the China operations of Vestas, the Danish firm that is the world’s largest manufacturer of wind turbines.

Andersen’s job will be to manage FloDesign’s transition from “a research and development organization to a leading renewable energy manufacturing company,” the firm said in its announcement. It’s commonplace, when manfacturing startups are nearing the commercialization stage and require more capital, for investors and directors to look for a new chief executive with more business development experience. That appears to be what’s happening at FloDesign, although neither Kowalski nor Andersen, who is traveling today, were available to comment on the transition.

Andersen trained as an engineer at the the Engineering College of Aarhus in Denmark and has held positions at ABB Power Generation in Switzerland and engineering consulting firm Black and Veatch in the US. In a prepared statement, Andersen said “I am very pleased with the prominent venture investors who are backing this company. It will be an exciting journey to build a world‐class company applying leading edge technology in the wind sector.”

FloDesign remains secretive about its wind-turbine designs—it hasn’t shown off its latest turbines in public, and the company’s website is password-protected. (A staffer once told me this was largely due to fears of intellectual property theft among partners at Kleiner Perkins.) But if the company has stayed true to its early design concepts, then its turbines feature tube- or cage-like enclosures that supposedly make them more efficient at extracting energy from wind than conventional open-fan turbines. The best open-fan turbines can convert only about 59 percent of the kinetic energy in wind into electricity, a phenomenon known as the Betz Limit.

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[Editor's Note: Erik Mellgren, a noted Swedish business and technology journalist who worked with Xconomy as an Innovation Fellow in 2008, sends this article from Stockholm, just as the United Nations climate change conference is winding down in nearby Copenhagen, Denmark.]

Massachusetts startup FloDesign Wind Turbine was singled out by U.S. Energy Secretary Steven Chu as an example of a groundbreaking new energy technology company when he visited United Nations conference on climate change earlier this week.

Chu also challenged his Danish hosts and told the audience that today’s wind energy technology simply isn’t good enough, if wind power is to have any impact on CO2 emissions. Denmark may be the world leader in wind energy technology at present, but the United States will take over the leadership in the future, Chu said.

His presented his vision of the next generation of wind turbines and said that they needed to be highly efficient, ultra compact, and low in cost. He then pointed to the Wilbraham, MA, company FloDesign and its turbines, which differ radically from today’s ordinary propeller-like windmills. The company’s design looks a bit like a jet engine, with a multi-bladed turbine enclosed in a shroud.

FloDesign was one of 37 companies across the United States, and six in Massachusetts, to win R&D grants through the Energy Department’s ARPA-E competition in October; it will receive $8.3 million.

The Danish wind energy community has already reacted to Dr. Chu’s comment, according to an article in the engineering magazine Ingeniøren. The article quotes Flemming Rasmussen, researcher at the prestigious Risø Institute. He says that even though the FloDesign concept may give a higher efficiency, it will probably not be competitive against today’s traditional designs, the reason being that the new design requires far more material in its construction.

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