My friends over at Earth2Tech are reporting that Toronto-based Morgan Solar, a promising concentrated solar PV startup, is heading into its round B of financing and hopes to raise between $20 and $25 million. Up until now the company has raised about $20 million, slightly less than half from private investors and the rest through government grants. Morgan Solar, in my talks with them, is serious about keeping its R&D and some manufacturing in Toronto, but it sees the first major volume happening at a new facility it plans to build in California. I don’t think Morgan will have trouble raising the money. I’ve seen the technology, know the founders well, and have talked to their early investors. There is solid commitment there and a sense that what the company is working on is truly ground-breaking. 

Montreal-based 5N Plus, meanwhile, is diversifying its business through acquisition. The company is the main supplier of cadmium telluride to First Solar and others, such as Abound Solar. But analysts were concerned 5N wasn’t diversified enough and was too dependent on its business with First Solar. So 5N decided this week to acquire Belgian-based MCP Group, which is a producer of specialty metals such as bismuth, gallium, indium and selenium. This allows 5N to tap into the market for CIGS solar cells (that is, copper indium gallium selenide cells), but also a whole range of other products: LEDs, flat-panel displays, fuel cells and other forms of energy storage.

Heading to the West Coast, biomass gasification expert Nexterra has raised $15 million in equity financing from Tandem Expansion Funds and ARC Financial. Nexterra makes small-scale biomass CHP systems based on the gasification of biomass. The systems are ideal for distributed generation in a hospital, university, industrial or municipal setting, and because it is ultra low emission it is a good fit for urban environments. The company has a solid partnership with General Electric and just snagged some government funding for a large biomass-based CHP system at the University of British Columbia, which says the 2-megawatt system when it’s up and running in 2012 will reduce its demand for natural gas by 12 per cent.

In Florida, algae-to-ethanol startup Algenol has acquired its German partner Cyano Biofuels GmbH. Okay, the company isn’t based in Canada, but Algenol’s founder Paul Woods is a Canadian who grew up in the Toronto area and kickstarted the natural gas retail market in Ontario before moving south. And some of Algenol’s core innovation comes out of the University of Toronto, so I consider the company an honourary Canadian corporate citizen. Cyano Biofuels is an expert in producing hybrid algae that can produce ethanol, and Algenol was already a minority shareholder in the company. Algenol saw the all-out acquisition as a way to accelerate the commercialization of its Direct-to-Ethanol process using genetically enhanced cyanobacteria, or blue-green algae. I’m a fan of Algenol, which is the focus of a chapter in my upcoming book Mad Like Tesla.

Finally, Sustainable Development Technology Canada issued another round of grants to 17 companies doing cleantechie stuff. I’ll go through some of these in more detail later, either as part of a Clean Break column or a quick post. But check out the list — there are some interesting projects there. As I’ve always said, SDTC funding rounds are like Christmas time for cleantech news junkies like myself.

Joule Unlimited has been on my radar for a little over a year now, but it has become the topic of much conversation — at least in Canada — after Globe and Mail columnist Neil Reynolds wrote about the innovative U.S. biotech company, which is based in Cambridge, Massachusetts. So what’s all the hype about? Reynolds pointed out that Joule, which is privately held, received a patent for a “proprietary organism” that produces liquid hydrocarbons such as diesel fuel, jet fuel and gasoline. “This breakthrough technology, the company says, will deliver renewable supplies of liquid fossil fuel almost anywhere on Earth, in essentially unlimited quantity and at an energy-cost equivalent of $30 (U.S.) a barrel of crude oil,” wrote Reynolds, citing the company’s claim of being able to produce “fossil fuels on demand.” These organisms mimic photosynthesis, requiring only carbon dioxide, sunshine and water to produce crude. It has already produced ethanol at 10,000 U.S. gallons per acre and is aiming for 25,000 gallons per acre. It believes it can produce diesel fuel at 15,000 gallons per acres — eventually, at least. It received a patent for this process last September.

Reynolds made a small error in his piece. “The Joule technology requires no ‘feedstock,’ no corn, no wood, no garbage, no algae. Aside from hungry, gene-altered microorganisms, it requires only carbon dioxide and sunshine to manufacture crude,” he wrote. In fact, Joule is using genetically altered cyanobacteria, or blue-green algae, which is not unlike the organisms used by many algae-to-biofuel ventures out there.  The difference is that Joule doesn’t have to harvest and process the cyanobacteria. Instead, the organism refines and excretes the end fuel product for relatively easy collection, skpping many costly processes that have made many algae-to-biofuel approaches uneconomical. But even there, there are a number of companies taking a similar approach, including Algenol, Synthetic Genomics (Craig Venter’s venture) and BioCee. And let’s keep in mind that CO2, itself, is a feedstock. It’s not like Joule’s cyanobacteria can pull ambient CO2 out of the air. It has to be pumped into its system, meaning some kind of upstream delivery infrastructure is required. Also, Joule likes to distinguish its SolarConverter system from a photobioreactor, but in general terms it’s still a photobioreactor.

Still, what Joule and its rivals are trying to do is fascinating, and the fact that there are several companies taking this approach is encouraging. Algenol, in my opinion, is ahead of Joule in many regards. The company’s genetically enhanced cyanobacteria is focused on ethanol production for now, but it also has its eyes on biobutanol, which has much higher energy density than ethanol. Algenol’s claims of per-acre ethanol production are more modest — and realistic — than those coming from Joule. Algenol says it can achieve 6,000 gallons per acre today and is aiming for 10,000 gallons per acre, while Joule is aiming for 25,000 gallons per acre (both still dramatically higher than what corn or cellulosic ethanol offer). I’m naturally skeptical Joule can achieve this, and the company admits that it has a long way to go from the lab to large-scale production.

Joule has raised more than $30 million but less than $50 million so far, and in 2010 supposedly entered pilot stage with its approach to ethanol production. It has no known industrial partnerships or strategic investors, and if it does it’s not talking about them. It has a board of advisors, but all of them are academics — there doesn’t appear to be much depth of industry experience. Algenol, by contrast, has raised more than $100 million (not through VCs) and it has struck impressive partnerships with Dow Chemical, Linde, Valero and Abengoa. (Disclosure: there is a chapter on Algenol in my new book Mad Like Tesla, which is out in September). I point out all of this not to diminish what Joule is trying to do, but to emphasize that Joule is not alone, and not necessarily ahead, in the quest to turn microbes into low-cost producers of fossil-fuel alternatives. Indeed, Algenol also makes the claim that its process is economical with oil as low as $30 per barrel.

If you want a good sense of what Algenol is working on these days, check out this very detailed Environmental Assessment performed by the U.S. Department of Energy, which is helping fund an Algenol pilot production plant being built this year beside the company’s new headquarters in Fort Myers, Florida. The good news, as Joule says on its Web site, is that “The Race Is On” to achieve energy independence by directly converting sunlight into an unlimited supply of renewable fuel.

BTW: Joule announced this month that it had appointed former White House chief of staff John Podesta to its board of directors. Podesta was most recently co-chair of Obama’s transition team. Certainly, this appointment adds a healthy dose of credibility to what Joule is working on.

I’ve got a lengthy feature in the Toronto Star this weekend about the recent wave of activity around algae as a source of renewable fuel. Now, in the past there has been no shortage of algae-to-biofuel startups — some have already failed, others have managed to raise money and continue to work away. But the new wave of startups — Algenol Biofuels, Catilin, Synthetic Genomics and others — have two things going for them. One, they’re overcoming one of the biggest economic obstacles, which is the difficulty and cost involved with harvesting algae so that they can be processed for their oils. Instead, these new startups are developing strains of algae that continuously produce and actively secrete oils and ethanol. By turning the algae cells themselves into microscopic refineries, several process steps can be eliminated along with costs. Second, these startups are also hooking up with some big partners in industry to demonstrate that their technologies can be scaled to a size that matters. Algenol has hooked up on a massive demonstration project in Texas with Dow Chemical, while Synthetic Genomics (Genomics pioneer Craig Venter’s company) recently snagged $300 million in funding from ExxonMobil, which has committed $600 million to algae fuel R&D and says it will contribute billions of dollars more if efforts over the next few years prove successful. Honeywell, by the way, is leading the charge in turning algae oils into green jet fuel, and it’s working with Boeing, Airbus and several major airlines to make it happen. Dow, Exxon, Honeywell — these are no corporate pansies. These are serious companies putting flesh in the game.

My feature, by the way, starts out focusing on Florida-based Algenol. Many don’t realize the company’s technology emerged out of research at the University of Toronto, and that founder Paul Woods is a Canadian who was born, grew up and ran a natural gas marketing business in Toronto before heading south at age 36. Algenol’s chief science officer, John Coleman, is the U of T professor who worked with Woods over the past 25 years to perfect the Algenol process.

I’ve said this in many posts before, but I’ll say it again: These are exciting times people. The engine of innovation is in high gear.