‘It’s All About Energy, Stupid!’

The choice for microbiologist Jack Newman came down to making strawberry fragrance or changing the world. Sitting around a conference table last year at Amyris Biotechnologies in Emeryville, Calif., Newman and his colleagues were trying to figure out what to do following the success of their project to produce inexpensive anti-malarial drugs. (The project was a collaboration between the Institute for OneWorld Health, Amyris Biotechnologies and U.C. Berkeley, and was funded by the Bill and Melinda Gates Foundation.) The genetically engineered microbes responsible for their breakthrough showed tremendous promise in other areas. "We talked about flavors or fragrances or vitamins that would make a couple of million bucks," says Newman. "Then we said, 'Wait a second. A lot of people came [to the company] to change the world, so why not tackle a really big problem?"

The scientists, who met as postdoctoral fellows at U.C. Berkeley, decided to apply the knowledge they used to create their low-cost drug to develop a line of "no-compromise" biofuels. Competitive in price and performance with conventional fossil fuels, Newman says the Amyris products will cut greenhouse-gas emissions by 85 to 95 percent, making them far cleaner than ethanol. And unlike ethanol, the biofuels can be transported in existing pipelines, and can be engineered to work in gasoline, diesel or jet engines.

Amyris recently hired former BP executive John Melo, a native of Brazil, the world's largest sugar-cane producer, as CEO, and the company is reportedly talking with Virgin's Richard Branson about a future distribution network. Amyris will start test production next year and plans to mass-produce its first biodiesel by 2011. They got their start by doing good, but don't be surprised if the scientists from Amyris end up doing extremely well in the energy market of the future.

A123 Systems; energy storage

Impressed by the 50 or so miles per gallon of the average Toyota Prius? Pop a suitcase-size battery pack from A123 Systems into the trunk and watch your newly converted plug-in hybrid shoot to 174mpg. "You fill your tank three times a year," says CEO David Vieau. The Watertown, Mass., Company has won raves in technology and investment circles by figuring out how to overcome one of the biggest hurdles in the development of the electric car: huge, unreliable, expensive—and flammable—batteries. While current lithium-ion batteries work well enough for laptops and cell phones, scientists at A123 have replaced chemical components with extremely thin layers of nanophosphate, a conductive material that makes the new batteries smaller and quicker to charge than their predecessors.

Starting next year, A123 will sell its battery to hybrid owners who want to convert their cars to plug-ins—models that you recharge in the garage overnight. The estimated price tag of $10,000 for the conversion will be too steep for most individuals, so company executives expect their main customers will be government or corporate hybrid fleets. The next step will be factory-installed battery packs in a new generation of hybrid and electric vehicles, like the Saturn Vue and the Chevy Volt, scheduled to hit the U.S. market in 2009. The company has raised $132 million in capital from leading venture firms such as Sequoia Capital, as well as from GE, Proctor and Gamble, and Qualcomm, companies eager to apply the new batteries in their products.