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Hydraulic fractures form naturally in rock layers, caused by the presence of high-pressure fluids that cause the rocks to fracture. The oil and gas industry has taken this natural occurrence one step further by creating their own hydraulic fractures in order to get to petroleum, natural gas, or coal seam gas buried deep under ground.
It is this procedure, along with the injection of fracking chemicals (a mixture of chemicals that helps break down rock faster than water) that has led to the concerns over what fracking is doing to the natural environment.
Two types of wells are drilled: horizontal and vertical. Vertical wells are most common, and have been drilled for many years, while horizontal wells are much more recent. They are drilled parallel to the rock layer targeted for extraction. The overall technique allows oil and gas companies to reach depths of 5,000 to 20,000 feet. At that depth, the fracking of rock is vital to enable natural gas and oil to flow from the rock to the well borehole.
The Marcellus Shale, stretching along the Appalachian basin and across several eastern states, is perhaps the epicenter of fracking in the United States. The number of marcellus wells in Pennsylvania alone has gone from 196 wells in 2008, to 1592 projected wells for 2011. The rush to cash in on the energy source has been mired in criticism due to several reports and numerous accounts of drilling activities contaminating drinking water.
Visit EnergyNOW! to hear EPA administrator Lisa Jackson and read other articles and reports on hydraulic fracturing.
In line with the concern, the EPA recently announced a fracking study plan set to take place over the next several years. "The agency announced last year that it will study the natural gas extraction technique, which involves injecting a mixture of water, sand and chemicals into the ground to break up underground rock formations and release trapped gas. The aim of the study is to determine whether the process, also called "fracking," affects drinking water supplies." (EPA Releases Fracking Plan, EnergyNOW.com) Three of the 7 locations that will be tested are in Pennsylvania. A preliminary report is expected next year, with the full report available by 2014.
Its clear this will be a contentious issue as long as environmental concerns abound, and as long as the energy payoff is so high. Energy companies will be lining up to drill for oil and gas. The next couple years will determine whether the activity can be completed safely and successfully, or if the technique is too dangerous to our drinking water.
In 2011, venture capital (VC) funding for wind energy continued to increase past previous years, totaling $369 million in 14 deals, compared to $277 million in 11 deals in 2010, and $198 million in 20 deals in 2009. Wind power start-up ReNew Wind Power’s $202 million raise was the top VC funding deal. Boulder Wind Power and Wind Energy Direct were second and third highest, with $35 million and $29 million raised respectively.
Project-specific funding also was higher than previous years, reaching nearly $11 billion - $1.6 billion more than in 2010. Offshore wind projects represented $3.4 billion in five deals. Onshore wind raised $7.5 billion in 46 deals. The top project in 2011 was the 400 megawatt (MW) Global Tech I offshore wind project in Germany, which raised $1.5 billion. Other top project deals were WindMW’s Meerwind 288MW wind farm, which raised $1.2 billion, and the 272MW Canadian wind farm being developed by Boralex, Gaz Metro and Valener’s Selgneurie de Beaupre, which raised $713 million.
The United States saw the most VC funding deals in terms of companies ($294.7 million in nine deals) and projects ($2.9 billion in 19 deals). Germany was a close second in investment with $2.8 billion in large-scale project funding, followed by Canada with $1.1 billion. The most active project investor was the European Investment Bank, which was involved in eight transactions. The International Finance Corporation had seven transactions, and four other investors had four transactions each.
Debt funding was dominated by China, which accounted for $6.8 billion of the $11 billion announced in 2011. Denmark and Spain announced $1.9 billion and $1.7 billion in debt respectively. The United States was fifth overall with $201 million. The single largest deal was the $5 billion credit facility issued to Guandong Ming Yang Wind Power Industry Group Co. by the China Development bank.
M&A activity amounted to $1.7 billion in 17 deals, the largest being the $724 million acquisition of wind gear maker Hansen Transmissions, a subsidiary of Suzlon, by ZF Friedrichshafen. The $596 million acquisition of Brazilian wind power operator Jantus by CPFL Energia was the second largest deal of 2011. Wind component companies accounted for $1 billion and wind downstream companies for $700 million in 2011 M&A activity.
There was also significant wind project M&A activity with $4 billion transacted in 61 deals. Top deals were the acquisition of 50 percent of DONG Energy’s Anholt offshore wind farm by a consortium of Pension Danmark and PKA for $1.1 billion, and the acquisition of 11 wind farms from Auxiliar de Construccion y Servicios by Bridgepoint for $850 million.
For a copy of Mercom’s Wind Funding and M&A 2011 Report and other clean energy reports, visit: http://mercomcapital.com/cleanenergyreports.php.
The unveiling was a highlight at the Council of Environmental Quality's three-day conference centered around GreenGov; focused efforts to make the federal government more green and energy-efficient.
Hundreds of new, open data, maps, and apps are now made available to the public at the website spanning several decades. The message is clear that the Federal Government will continue to make energy information open to the public to try to inspire a new energy portfolio. However, another message, somewhat more hidden, can be derived from the GreenGov unveiling.
All of the data and information were released from federal government statistics and recordings. However, the federal government is only a part of an energy whole that consists of private utilities and energy companies. The government hopes this initiative will inspire more to share in transparent energy information and data.
OpenEI.org shares the same vision for energy data, maps, and apps. We are working hard to incorporate similar information, and create unique visualizations from U.S. data, as well as data from international sources and crowd-sourcing.
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Venture Capital (VC) funding in the solar sector was off to a slow start in Q1 2012. VC funding for the quarter came to $329 million in 34 deals, the lowest dollar amount recorded since Q4 2010; however, VC investors were still very active in the sector with a record 34 deals funded, the highest ever recorded in the solar industry.
“While VC’s interest in the solar sector remains strong, their appetite for risk appears to be lower as the average VC funding round amount in Q1 was $10 million, compared to $18 million in 2011,” said Raj Prabhu, Managing Partner at Mercom Capital Group
“To add to the current over capacity problems, policy changes and lower tariff announcements in some of the largest solar markets, such as Germany and Italy, will all contribute to an uncertain 2012,” Prabhu continued. “We can expect a more cautious approach to investing in the solar sector this year.”
There was strong M&A activity in the solar sector totaling $5 billion in 14 transactions, however only three of these transactions disclosed details. The spike in M&A amounts was mainly due to the $4.7 billion acquisition of Solutia, a performance and specialty chemicals company with products in PV encapsulants, performance films for PV and CSP products and heat transfer fluids for CSP plants, by Eastman Chemicals Company. Another significant M&A transaction was the $275 million acquisition of Oerlikon Solar, a producer of equipment and turnkey manufacturing lines for thin film amorphous silicon and tandem junction technology, by Tokyo Electron.
The first quarter of 2012 also saw 11 new cleantech and solar-focused investment funds announced committing $5.7 billion. A significant positive event for the solar sector in Q1 was the Initial Public Offering (IPO) of the microinverter company Enphase Energy, which raised $62 million as part of its offering.
The top five funding deals made up about 60 percent of the total funding in this quarter, led by $81 million by SolarCity, a pioneer in the solar lease model. Three of the five top companies to receive funding also included MiaSolé, Nanosolar and AQT Solar, all CIGS companies, raising $94 million in total. Maintaining last year’s trend, with half a billion dollars raised in 2011, CIGS companies continued to receive the most amount of VC funding as a technology group.
There were 56 different VC investors that participated in the 34 deals. Venture capital firms that recorded multiple rounds included Black Coral Capital and Firelake Capital Management. The United States continued to be the dominant country for VC investments, accounting for about 80 percent of all VC funding in the first quarter.
For a complete list of Q1 2012 transactions in the solar sector, visit: http://mercomcapital.com/cleanenergyreports.php
Correction: In the April 9 press release, other significant M&A transactions included the Andrem Power’s $274 million acquisition of 3W Power (a holding company of AEG Power Solutions). However, the deal was said to have halted due to the German Federal Financial Supervisory Authority (BaFin) prohibiting the publication of the offer document filed by Andrem Power.
“Venture capital (VC) funding in smart grid was anemic at best in 2011. Even though the number of VC funding transactions were about the same as last year, the average deal size dropped in half,” said Raj Prabhu, managing partner at Mercom Capital Group. “Interestingly, the number of VC investors increased to 92 from 87 in 2010, pointing to continued investor interest but lower risk appetite. Strong M&A activity was driven by power giants like Siemens, Schneider Electric, ABB and GE.”
VC funding in 2011 brought in $377 million in 50 deals (24 disclosed) compared to $769 million in 51 deals in 2010 (27 disclosed). The average VC funding round dropped by 50 percent in 2011 to $7.5 million compared to almost $15 million in 2010. Early rounds of funding (Seed, Series A & B) accounted for 22 of the 50 deals.
Top VC deals in 2011 were iControl Networks, a broadband home management company ($51.6 million), SmartSynch, a Smart Grid company that uses cellular networks for utility smart grid projects ($25.7 million), Silver Spring Networks, a provider of utility networking equipment for smart grid deployment ($24 million), Gridpoint, an energy management solutions provider ($23.6 million), and JouleX, a provider of energy management systems for data centers and distributed office environments, ($17 million).
Top venture capital investors in 2011 were GE with six deals, Emerald Technology Ventures with five deals and Kleiner Perkins Caulfield & Byers with five deals. The same investors were also the top three in 2010, however, with double the amount of deals each last year. Other top investors were Foundation Capital, Intel Capital and Rockport Capital with four deals each.
There were some major M&A transactions in 2011, specifically the $2.3 billion acquisition of smart meter company Landis+Gyr by Toshiba and the $2 billion acquisition of Telvent, a real-time IT solutions and information provider, by Schneider Electric. Though acquisition details were not disclosed, the acquisition of eMeter, a meter data management system company, by Siemens was another significant transaction.
Only four acquisition transactions were disclosed out of 30 total transactions, pointing to a much higher total amount than the $4.6 billion reported in M&A activity. This follows the same pattern as 2010 when only four transactions out of 40 were disclosed.
For a copy of Mercom’s Smart Grid Funding and M&A 2011 Report and other clean energy reports, visit: http://mercomcapital.com/cleanenergyreports.php.
“Investment activity in 2011 was robust,” said Raj Prabhu, managing partner of Mercom. “Whether you point to the dramatic module price declines, Europe’s diminishing incentives, or the so-called ‘Solyndra effect’, solar continued to gain attention and dollars for technology and innovation through venture capital funding.”
Venture capital (VC) funding and M&A activity were strong in 2011, setting records for number of deals and M&A activity. Notable findings include:
* VC investment in solar totaled $1.9 billion in 111 deals in 2011—the highest number of deals ever in a single year. By comparison, there were 65 VC deals in 2010, 84 in 2009, 93 in 2008, and 71 in 2007. Thin-film technology raised the most VC funding ($595.5 million in 17 deals), beating downstream companies ($339 million in 26 deals), photovoltaics ($338 million in 20 deals), concentrated solar power ($308 million in 13 deals), and concentrated PV ($129 million in 10 deals). * The solar thermal power company BrightSource Energy raised $201 million in Series E funding, making it the largest single VC investment of 2011. Stion, a manufacturer of high-efficiency thin-film solar modules, came in second when it announced a $130 million raise led by AVACO and Korean private equity funds. The third and fourth highest VC fundraising rounds were by thin-film solar panel maker MiaSolé ($106 million, Series F), and solar cell developer Suniva ($94.4 million, Series D) respectively. * The top VC investor of 2011 was Kleiner Perkins Caufield & Byers, which completed eight transactions, followed by GE and Good Energies, with six transactions each. There were 182 VC investors in solar in 2011. * M&A activity in 2011 was more than double that of 2010 in terms of dollars, and approximately 33 percent more in deals. There were $4 billion in M&A activity in 65 deals, compared to just over $2 billion in 44 deals in 2010. The largest single M&A transaction was Total’s (the French oil & gas company ) 60 percent stake in the solar manufacturer SunPower, accounting for $1.4 billion of the $4 billion. * While Solyndra dominated headlines in the United States and globally, over $700 million worth of VC investment came after the solar manufacturer’s bankruptcy announcement on August 31, 2011. * Fourth quarter VC funding totaled $511 million, compared to $372 million in Q3, $354 million in Q2, and $658 million in Q1.
“Falling panel prices and oversupply brought about a lot of consolidation activity,” added Prabhu. “With valuations of publicly-traded solar companies at record lows, M&A was the go-to exit strategy.”
The United States led all other countries in number of deals and VC funding, with 84 deals and over $1.5 billion of investments. The United Kingdom completed the second highest number of deals with five, and India garnered the second highest amount of VC funding with $95 million.
Globally, debt financing totaled $20 billion. The top debt investor was the China Development Bank. Chinese loans, credit facilities and framework agreements came to $15.7 billion in ten transactions.
Mercom Capital Group’s report also included information on project-specific funding, U.S. Department of Energy Loan Guarantee awards, new funds, restructuring and bankruptcies.
For a copy of Mercom’s Solar Funding and M&A 2011 Report and other clean energy reports, visit: http://mercomcapital.com/cleanenergyreports.php.
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