Big Oil Follows Silicon Valley Into Backing Green Energy Firms

(Bloomberg) -- Major oil companies are joining Silicon Valley in backing energy-technology start-ups, a signal that that those with the deepest pockets in the industry are casting around for a new strategy.

From Royal Dutch Shell Plc to Total SA and Exxon Mobil Corp., the biggest investor-owned oil companies are dribbling money into ventures probing the edge of energy technologies. The investments go beyond wind and solar power into projects that improve electricity grids and brew new fuels from renewable resources.

While the money involved is small -- a fraction of the $7.5 billion that venture capital and private equity injected into the clean energy industry last year -- the funds support work that may evolve into major income streams in the decades ahead as governments work to limit fossil-fuel pollution and global warming.

“In the energy industry, small companies have quite a lot of disruptive power,” Geert van de Wouw, managing director of Shell Technology Ventures, said in an interview. “We always have to look over our shoulder to make sure that we stay ahead of the game.”

Following is a list of the projects the biggest oil companies are supporting:

Shell Technology Ventures  

The unit of Royal Dutch Shell Plc splits its spending between oil and gas technology and clean energy equally. The green share may increase to about 60 percent in the years ahead, according to van de Wouw, declining to detail his annual budget. The fund’s total size is “hundreds of millions of dollars,” he said. It has put money into:

Kite Power Systems, a maker of a kite that flies on wind currents to generate renewable electricity. Glasspoint Solar Inc, a company that has developed a way to make steam for enhanced oil recovery with solar energy. Sense, a start-up that creates devices that monitor home power consumption.

Total Energy Ventures International SAS

The unit of the French oil major Total SA has invested $160 million to date with almost three quarters flowing into North America, according to the fund’s CEO Francois Badoual. It only takes minority stakes. It has invested in:

AutoGrid, a California-based company that designs smart-grid software United Wind, a company that leases wind turbines to retail customers and small businesses. Off Grid Electric, a Tanzania-based installer of rooftop solar panels that works in low energy-access areas in Sub-Saharan Africa.

“We try to detect and invest in innovation,” Badoual said. “The shift can accelerate at a pace which is difficult to really foresee, but you have to be ready and to adapt.”

BP Ventures Inc.

BP Plc’s VC fund has invested $325 million to date. It tends to skew more towards chemicals or fuels, rather than renewable electricity. It has funneled money into:

Tricoya Technologies, a maker of a technology that changes the chemical structure of wood chips to make a building material that’s more durable and energy efficient. Fulcrum, a producer of bio-jet fuel made from municipal waste, which raised $30 million from BP. Solidia, a company that is working on reducing the carbon footprint of concrete.

“BP Venture’s goal is to be both an investor and an end-user of the technologies in which we invest,” said Jonathan Tudor, managing director of the fund. “That requires a longer-term commitment because we look beyond a quick financial return. We take an active role in the evolution of these companies and want to see their new technologies commercialized and deployed into BP’s existing businesses.”

Exxon Mobil Corp.

Exxon has a different approach to frontier technology. It prefers to conduct research internally and with partners rather than buy minority stakes in start-ups. It’s studying biofuels, carbon capture and storage, energy-efficiency processes and energy-saving materials, according to spokesman William Holbrook, and is working with:


View Full Article


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.