Most Americans agree that it would be ideal to retire coal as an energy source. But in a country that burns 1.1 billion tons of coal a year and relies on it for more than half of its electricity, the ideal is clearly a long way off. "Incremental change is better than no change at all," says Chris Poirier, president of CoalTek. Founded by an astrophysicist and oil and gas veteran, the Atlanta-based company uses low-frequency, high-power electromagnetic energy to zap the moisture out of low-grade coal, resulting in a sort of designer coal that is more fuel efficient and cleaner burning. This relatively simple process can increase BTU content by up to 33 percent while reducing sulfur dioxide and other impurities by up to 70 percent.

CoalTek kept a low profile until it had a facility up and running. It has that now in Calvert City, Kentucky, where it plans to process two million tons of coal per year. The company also has the distinction of being one of 10 clean energy start-ups chosen for California's $30 million Clean Energy Fund investment portfolio. Right now, the only competition in the coal-processing field is Evergreen Energy (NYSE:EEE), a publicly traded company that produces a similar product using a different process. With a potential market so large, however, competition is not really a concern. "There could be a hundred of us and we would just be scratching the surface," says Poirier.

One of the most troubling realities of the power industry is that it has to produce more than we need. There's no way to store electrons for later, so energy providers produce enough power for peak hours virtually 24 hours a day. Gridpoint of Washington, D.C., may have a solution. The company's CEO, 28-year-old Peter Corsell (whose resumé includes a stint with the CIA), calls his product a "thinking" power storage device. It's a refrigerator-size box that does three things. It provides homes and businesses with backup power, for use in an outage or when prices are high. It regulates that power, allowing customers to pick and choose when their house pulls in energy. And it eliminates the complex installations required by wind and solar--when the masses are ready for renewables, they'll have a plug-and-play appliance to link up with. Corsell also likes to call his product "the TiVo of electricity."

Gridpoint's early investors include Esther Dyson and former U.S. Senator Bill Bradley; more recently Goldman Sachs kicked in some $18 million. The big emissions payoff, however, will come when Gridpoint shifts its focus from selling to contractors and busts into the utility market. The plan: Power companies will lease the $10,000 Gridpoint boxes to customers the way Comcast leases its cable box, creating a smart grid of hundreds of thousands of nodes that can draw enough waste out of the system to preclude building more and more smokestacks.

Silicon Valley is placing some big bets on renewable energy, and Cilion, an ethanol start-up in Goshen, California, may well be the biggest one yet. Founded last June, the company has raised some $200 million from some of the industry's most powerful players, including venture capitalist Vinod Khosla, co-founder of Sun Microsystems, and Richard Branson's Virgin Fuels.

Khosla's goal is to make ethanol so prevalent that gasoline becomes an alternative fuel. By January 2008, Cilion plans to have three plants in California that will make ethanol from corn and other feedstocks, and they'll do so in a far more efficient manner than current plants. After the fuel is made, the distiller grain that's left over will be used to feed cows on California ranches. The company is led by CEO Kevin Kruse, former president of Western Milling, a California grain company, which co-founded Cilion in partnership with Khosla Ventures.

Cars in the state already are fueled by gasoline blended with 5.7 percent ethanol, creating demand for 900 million gallons of the fuel per year. Currently, less than 5 percent of that ethanol is produced in California, but Governor Arnold Schwarzenegger recently mandated that the state produce 20 percent of its own biofuels by 2010. When Cilion's plants are up and running, the company, which now has just 10 employees, could meet the governor's goal all by itself.

Every year, North American wastewater treatment plants generate some 50 million tons of treated sewage. Municipal governments like to refer to it as "biosolids," but this sludge is primarily human waste matter that generally is used as fertilizer or sent to the landfill. Either way, it threatens to seep into the groundwater and contaminate local water supplies. "We just don't know where a lot of this stuff goes," says Kevin Bolin.

Bolin's company, Atlanta-based EnerTech Environmental, is looking to answer that question by creating an environmentally friendly way to dispose of biosolids--and generate energy in the process. The company's first commercial facility, set to open in 2008 in Rialto, California, will take some 675 tons of biosolids per day from three cities and two counties, apply heat and pressure, and convert the sewage into something called E-fuel, which EnerTech will sell as a clean replacement for coal in industrial settings like power plants and cement kilns, sharing sales revenue with its clients. The potential savings are huge: The city of Riverside projects that its 20-year contract with EnerTech will save $20 million from disposal costs alone.

At GreenFuel Technologies, it's all about the algae. The company uses the slimy stuff to create biofuels, while at the same time reducing carbon dioxide emissions. The technology captures the carbon dioxide-rich gas emitted from power plants and pumps it through algae-rich water. Aided by photosynthesis, the algae feeds on the carbon dioxide and other pollutants, cutting power plant emissions. And while it does this, the algae doubles its mass every few hours. The technology to turn it into biofuel has existed for some time.

Isaac Berzin founded the company while doing postdoctoral work in chemical engineering at the Massachusetts Institute of Technology, and GreenFuel, which is based in Cambridge, maintains close ties to the university. In fact, GreenFuel's first working bioreactor was on the roof of an MIT power plant. The company also has projects at power plants in upstate New York and in Arizona. "It's like using corn to make ethanol," says GreenFuel's president, Cary Bullock. "Except you don't have to wait to harvest your crop based on seasons; you can harvest it every day."

GreenFuel is in talks with a number of commercial power plants in the United States and hopes to begin construction on its first large-scale facility by 2008. But power plants are just the beginning; the technology can be deployed at any facility with a large carbon dioxide output--manufacturing plants, wastewater treatment facilities, and more.

After launching dozens of companies, including NetZero, Citysearch, and, Bill Gross, founder of the technology incubator Idealab, is turning his attention to solar energy. And as usual, he's approaching the problem differently than most of his peers.

Most solar systems use large, flat panels to capture the sun's energy, often using mirrors to concentrate that power. Energy Innovations, which is based in Pasadena, California, and backed by the VC firm Mohr Davidow, is focused on getting more juice out of less surface area. Its crucial design difference: more cheap mirrors, fewer pricey photovoltaic cells. The company's Sunflower 250 system uses a circle of 25 mirrors, each guided by a microprocessor directing two motors, to track the course of the sun as it moves through the day. The light is bounced directly at a thin, wedge-shaped solar panel suspended above the mirrors. The system remains under development, but when completed, it's expected to cost just two-thirds the price of a standard solar-energy system of the same size.

Imagine submerging 200 windmill turbines in New York's East River. The turbines would generate enough electricity to run 8,000 households through the power of the natural currents and tides. That's the grand plan for New York-based Verdant Power, and the company recently began installing two turbines as a test.

Verdant is using New York as a proving ground, but its bold longer-term goal is to fuel the rapidly expanding economies of countries like China, India, and Brazil. "The technologies have been there, but what's been missing is making them commercially viable," says Trey Taylor, a former marketing executive who co-founded Verdant in 2000. Verdant recently raised funds from Tudor Investment Corp. And the prospect of a new source of clean, renewable energy between Queens and Manhattan has inspired the State of New York to chip in some 30 percent of the cost of the project, along with engineering talent. The 30-employee company is also planning a project in the St. Lawrence River in Ontario, Canada.

It's easy to get behind the idea of solar power, but solar panels themselves have been far from lovable. They're large, rigid, and expensive, and have to be mounted on rooftops or other exposed surfaces. But Nanosolar is making solar technology that anyone can love. Using nanotechnology, the company has created a kind of photovoltaic ink that can convert sunlight into electricity. The ink is coated onto sheets of foil with a printing-press-like device, a manufacturing process that costs a tenth of that of conventional solar cells. The company calls its cells PowerSheets.

Founded in 2002 by Martin Roscheisen, a 37-year-old serial entrepreneur who sold his last company, eGroups, to Yahoo for $450 million, Nanosolar has raised about $100 million from some powerful investors, including Larry Page and Sergey Brin, the founders of Google, and Jeff Skoll, founding president of eBay, as well as top-tier venture capital firms like Benchmark Capital and Mohr Davidow. The company is using that cash to build one of the largest solar cell factories in the world near its headquarters in Palo Alto, California. When completed, the factory will produce a million solar panels a year.

What if you could take a lump of coal and transform it, via a nonpolluting process, into clean-burning pipeline-grade natural gas? That's what GreatPoint Energy is attempting at its test facility in Des Plaines, Illinois, and it has attracted a lot of believers, including some leading VC firms, among them Draper Fisher Jurvetson.

Converting coal into gas is not novel. But until now, the process has led to the creation of another dirty fuel called Syngas. GreatPoint's technology, on the other hand, converts coal directly into natural gas, and Andrew Perlman, the firm's CEO, believes the company will be able to produce the gas at roughly half the current market price. The impact could be huge, because coal isn't going away anytime soon. "If you want to do something in the next hundred years to deal with global warming and air emissions and mercury pollution and acid rain, you have to clean up coal," Perlman says. "You can't just wish it away."

Randell Mills is thinking big by thinking small. Really small. The founder and CEO of BlackLight Power, in Cranbury, New Jersey, is rethinking the hydrogen atom--and if he's right, he just might solve all of the world's energy problems.

This is heady, obscure stuff, and more than a little controversial. According to conventional physics, whenever an electron moves closer to a nucleus, energy is released. But the single electron in a hydrogen atom, physicists have long agreed, cannot get any closer to its nucleus. Mills argues that this is not the case. When you heat hydrogen into a plasma, and add a catalyst like potassium or argon gas, he says, you create a chemical reaction that forces the electron sphere to shrink, giving off up to 1,000 times more energy than conventional combustion. That means you could create a highly efficient energy source from mere water.

Most physicists are highly skeptical. But some chemists and engineers are intrigued. And so are some major financial players-- including Neil Moskowitz, CFO of Credit Suisse, and Michael Jordan, chairman of Electronic Data Systems--who have invested nearly $50 million in BlackLight. The payoff could be a ways off. Mills has been working on this for 15 years and estimates that it will be at least another two years before anything hits the market. It's about as big a long shot as there is. But if Mills is right, the upside is limitless.