Has Calera become Khosla's 'favorite child'?

Vinod Khosla just might have let it slip which of his cleantech investments he thinks has the best chance at success.

When asked to pick the top company in the cleantech portfolio of Khosla Ventures, the firm's founder told the audience at the Always On Going Green Conference in Sausalito, Calif., that he couldn't choose (see Kleiner Perkins hints at plug-in car launch this week).

"That's like asking 'Which one of your four kids is your favorite?'," Khosla joked, adding that when he invested in Google he had no idea how successful the company would be.

Khosla followed up the remark by singling out one portfolio company, Los Gatos, Calif.-based Calera, as the "only currently viable solution for carbon sequestration."

Calera CEO Brent Constantz said at the conference that his company's technology treats flue gas from coal-fired power plants with sea water and brine water to make an aggregate, which can be mixed in place of Portland Cement to produce concrete.

Each ton of the aggregate material represents half a ton of captured carbon dioxide. Additionally, the ton of Portland Cement that is replaced would have produced one ton of carbon dioxide emissions, Constantz said.

"Calera is really the best option for addressing carbon capture and sequestration, and the global cement industry," he said.

Constantz said the sequestration process costs about $1,000 per kilowatt, versus traditional carbon capture and storage at $2,200. Calera is also left with the aggregate to sell to makers of concrete.

Calera, which now has 125 employees, could profitably sequester 15 billion tons of carbon dioxide per year without government incentives, he said. The company secured a 200-acre facility that was closed for 10 years next to the 1.5-gigawatt Moss Landing peak-power plant in the Monterey, Calif., area.

That facility is now producing tons of cement and aggregate each day, he said. In addition, the process creates fresh water, which can be further desalinated to make potable.

The company, which  is currently working to expand in Australia, has taken five rounds of financing from Khosla Ventures.

Constantz declined to reveal the value, but in January, it was reported that Calera raised $10 million, bringing its funding to more than $17 million (see Investors keep eyes on water filtration).

"We've stayed as stealth as possible 'til now," Constantz said.

That hasn't stopped critics such as scientist Ken Caldeira, who challenged the company's claims after viewing an exhibit at the California Academy of Sciences (see You say Calera, I say Caldeira).