Where the money is: 3 giants launch venture to fund energy tech startups

GE, Conoco­Phillips and NRG Energy have partnered to create a venture to invest $300 million in early-stage energy technology firms.

The partnership, Energy Technology Ventures, will help fund 30 companies over the next four years, focusing on investments in North America, Europe and Israel.

Target technologies will include renewable power generation — an area where GE is already busy - as well as smart grid technology, energy efficiency, oil, natural gas, coal and nuclear energy, emission controls, water and biofuels. 

"Ten years ago energy was getting just a fraction of that venture capital, one-tenth of one percent," said Kevin Skillern, the head of venture capital investing at GE Energy Financial Services. "The statement these three companies joining together makes is that there is a lot of opportunity for such investments today. And it's not just a one- or two- year trend, it's a generational thing."

Skillern said oil's return to around $90-a-barrel and ongoing talk of regulators wanting to reduce industry emissions is creating demand for new energy technology.

"And it's not just clean-tech we're talking about," Skillern said, "but advancements in conventional energy technologies too." 

The deals will give the three partners minority equity stakes while allowing the 30 firms a chance for commercial scale collaboration. The partners didn't disclose how much each is contributing to the $300 million pot.

Already 3 commitments

GE Energy Financial Service's investment team will be at the core of Energy Technology Ventures, but Conoco­Phillips and NRG will have input into how the $300 million is invested. 

The fund already has made commitments to three companies in which GE previously has invested:

Alta Devices of Santa Clara, Calif., which is aimed at improving the production economics of advanced materials for high-efficiency solar energy.

Ciris Energy of Centennial, Colo., which is developing technology to biochemically convert coal to methane.

CoolPlanetBioFuels of Camarillo, Calif., which is developing technology that converts biomass into high-grade fuel and carbon that can be sequestered.

NRG Energy and ConocoPhillips are new to the venture investing business, but GE, through its GE Energy Financial Services and GE Capital Equity units, has been one of the most active investors in early stage energy technology. 

Princeton, N.J.-based NRG operates nearly 450 megawatts of wind power and 20 megawatts of solar power, and also is rolling out a network of electric vehicle charging stations in Houston and Dallas. GE is a technology partner on the electric vehicle system.

Houston-based ConocoPhillips is not as well-known for its energy technology investments as other super majors, such as Exxon Mobil Corp., which has made a major biofuels push, or Chevron, which has run a technology venture investment fund for more than a decade.

Personal connections

But Richard Germain, manager of alternative energy at ConocoPhilips, said the company does have a number of projects in the works, including wind energy storage in North Texas, advanced biofuels and biomass, and producing electrodes for advanced lithium-ion batteries. 

"Energy innovation is at the core of the company," Germain said.

The combination of the companies may also be based, at least in part, on personal relationships.

NRG Chairman and CEO David Crane and ConocoPhillips Chairman and CEO Jim Mulva have gotten to know each other through the United States Climate Action Partnership, a group of businesses and environmental organizations that called for strong national legislation on reducing emissions.