The General Electric, NRG, Conoco Phillips Venture Capital Hookup (GE; NRG; COP)

From the Wall Street Journal:

General Electric Co. is teaming up with major oil company ConocoPhilips and power plant operator NRG Energy Inc. to invest in early-stage energy technology companies.

The companies will announce a joint venture, Energy Technology Ventures, to deploy $300 million over the next four years, they said. The partners declined to say how much each of them is contributing.
This marks ConocoPhilips' and NRG Energy's first formal forays into venture-capital investing, while GE, which is already a major investor in this field, will use the joint venture as its main vehicle for backing these types of companies. The involvement of such large corporations comes at a time when many energy technology companies have been struggling to find capital to grow their businesses much beyond the start-up stage.

"Strategic [investors] are necessary for clean-tech," said David Yeh, an independent venture investor, speaking at the MIT Enterprise Forum in New York on Tuesday.

Richard E. Germain, manager of alternative energy at ConocoPhilips, said the company has been working with companies developing energy storage equipment, advanced biofuels and biomass, while ConocoPhilips itself is producing electrodes for advanced lithium-ion batteries. "We think a lot of the most successful technologies may still be coming out of the labs," said Mr. Germain.

However, the company hasn't gone as far as some of its competitors. Chevron Corp., for example, has managed strategic venture funds since the late 1990s. The monetary commitment is also relatively small compared with what the company spends on oil and gas exploration and production. "It's a fairly moderate and modest investment," said Mr. Germain.

GE is already one of the most active corporate venture investors in energy, having invested about $200 million since January 2006 in energy technology deals. The company will now conduct all due diligence for such deals through the joint venture.

"In our view, the value of our three companies working together is much greater than working independently," said Kevin Skillern, who heads up GE's group that invests in emerging technologies. Both NRG and ConocoPhilips, for example, are willing to invest additional capital in portfolio companies for demonstration projects. NRG has project development and operations expertise that's beyond the realm of GE's. ConocoPhilips, meanwhile, may also help with projects such as biofuel refineries.

The joint venture will take minority equity positions in about 30 companies, primarily in North America, Europe and Israel. Three of GE's existing investments are the first companies to receive capital: Alta Devices, which is developing solar technology, Ciris Energy, which aims to convert coal into natural gas, and CoolPlanetBioFuels—a biofuels company. The joint-venture partners declined to disclose how much they invested in these companies....MORE