Colorado Cleantech Industry Association Blog
Published: 2013-05-23 10:13:18.781
MLP Parity Act Would Include Clean Energy Companies
Renewable Energy Standard Increase - SB 13-252 - Needs Your Help
We need your help to push back on the attempts to get Governor Hickenlooper to veto SB 252. Outside groups have waged a campaign of misinformation about this bill. An anti-climate change think tank called the Heartland Institute, the Americans for Prosperity, and others have bought radio, television, print and internet ads against the bill.
|Chris Shapard, CCIA|
Not mentioned in the ads is the historic rise of fossil fuel costs that always get passed onto the consumer, the recent increase in electricity costs from wholesale electricity cooperative associations due to fossil fuel costs that exceed 2% and Colorado’s success thus far with our current Renewable Energy Standard (30% by 2020 for Investor Owned Utilities and 10% for rural cooperatives). Also, not being heard in the noise are the off ramp provisions that if a utility can’t meet its requirement under the 2% rate cap increase (an increase from the current 1%) then their requirement percentage decreases.
The 2010 Colorado Cleantech Action Plan, sponsored by CCIA, state, federal and economic development partners found that a leading driver for cleantech growth was our strong public policy accomplishments – specifically our Renewable Energy Standard. No bill is perfect and SB 252 is no exception but it is a reasonable and important bill for the continued success of cleantech in Colorado.
CCIA actively lobbied and testified in support of this bill to increase the Renewable Energy Standard (RES) from 10% to 20% by 2020 for cooperative electric utilities providing wholesale electricity and large cooperative electric associations with at least 100,000 meters. Consumer costs are capped at a maximum 2% annual increase (up from the current 1%) for compliance with the standard. Compliance off ramps were put in place to decrease the standard for cooperatives who can't meet the goals under the consumer cost cap.
SB 13-252 also:
- Requires 1% of cooperatives' retail sales to come from distributed generation (DG) and .75% for a cooperative with less than 10,000 meters;
- Expands the definition of eligible energy resources to include coal mine and landfill methane if the PUC qualifies the projects to be greenhouse gas neutral;
- Removes the additional RES credit for new generation built in Colorado after Jan. 1, 2015.
Please contact Governor Hickenlooper via phone, email or letter to express your support for SB 13-252.
CCIA Dispatches from DC
Last week I fled the snowstorms of Colorado for the spring cherry blossoms in Washington DC to lobby Congress on energy tax reform as part of the Advanced Energy Economy’s (AEE)
first regional chapter fly-in.
Companies and clean energy organizations from all over the country converged in DC to talk to House Ways and Means and Senate Finance Committee Members of Congress and senior staff.
We had companies and associations from North Carolina, Arkansas, Boston, Michigan, California, Maryland, Minnesota and more.
Ed Williams, the CEO of Novinda
, was the industry advocate rounding out CCIA’s team.
Despite the historic gridlock in Congress there is a real bipartisan push to reform the tax code. One message nobody disagreed with is that our current tax policy is broken and because we don’t have a national energy policy, energy tax policy is the driving force for cleantech.
The overall theme of our message was promoting a smarter tax policy - one that is technology neutral, outcomes based and sunsets when a particular goal is met. Unfortunately, the various tax policies benefitting cleantech are composed of one, two and five year sunsets and reauthorizations that combine to create artificial cliffs prohibiting planning and investment. We need to look no further than the recent brinksmanship and damage done by the recent one-year extension of the wind PTC. Instead of a one-year extension of the wind PTC, Congress needs to set a goal - like 5% of our baseload electrical energy from wind or X amount of gigawatts deployed, then the tax benefit sunsets.
Another example I used was in the transportation sector. Congress should set a goal to reduce foreign imported oil for transportation and any domestic technology (electric vehicles, natural gas vehicles, advanced engine efficiencies, biofuels, more transit etc.) that helps to accomplish the goal gets a tax incentive. When the goal is achieved then the tax break goes away. This is especially important in the current context of many traditional energy industries getting tax breaks baked into our tax code with no sunset provisions. The current tax system picks winners and losers and distorts markets thereby decreasing and sometimes flat-out discouraging investment in new innovative technologies.
Democratic and Republican members were impressed that a group came to DC not asking for a handout and volunteering for a sunset to a potential tax provision benefitting their industry. This message especially resonated with Senate Majority Leader Harry Reid’s staff and Energy Committee Ranking Member Senator Lisa Murkowski’s staff.
While this was more of a 30,000-foot discussion on energy tax policy, if tax reform bogs down again in the DC swamp then cleantech needs to be prepared to fight for specific provisions in another temporary tax extenders package. This is of course if we can walk and chew gum at the same time. I’m confident CCIA, AEE and its members can do just that.
Energy Conversations from Utah's Energize 2013
As a conversation starter at the Energy Commercialization Center's Energize 2013 conference, I had the pleasure of visiting Snowbird, Utah (my first time in the Utah mountains) and participating in the first effort to connect and build the Rocky Mountain regional cleantech ecosystem. The Energy Commercialization Center at the University of Utah was one of five 2010 DOE EERE-funded Innovation Ecosystem Development Initiatives that will accomplish such activities as pursuing intellectual property protection for technological innovations; nurturing and mentoring entrepreneurs; engaging the surrounding business and venture capital community; and integrating sustainable entrepreneurship and innovation across university schools and departments.
During the course of the two-day event, research organizations, companies and industry trade groups from Utah, Colorado and Idaho met to share best practices and ideas for policy, access to capital, and tech transfer among other topics. My colleagues from Colorado included Dick Franklin, Executive Director of the Rocky Mountain Cleantech Open, and Steve Berens, Executive Director of the Cleantech Fellows Institute, who spoke about Rocky Mountain resources for clean technology innovation and entrepreneurship.
My session concerned best practices in cleantech policy and how policy can successfully drive job creation. While the surrounding states are not yet as organized as Colorado, there's a lot we can do together to facilitate the cooperation to grow our clean technology industries. One of the best parts of the program was meeting new partners like RenewableTech Ventures and Navillum Nanotechnologies that I can plug into Colorado's clean tech universe. I look forward to future collaboration with Utah's Energy Commercialization Center and the ongoing energy conversation.
Cleantech Fellows Institute Opens Applications for Executives and Entrepreneurs to Bridge Their Talent and Skills into Cleantech
Cleantech Fellows Institute encourages new venture formation, job creation and growth of the cleantech industry
As “Cleantech 2.0” blossoms from the lessons learned over the past decade, smart entrepreneurs and corporate executives are looking to leverage the lessons of the past and launch themselves to success in cleantech. The Cleantech Fellows Institute
addresses a simple but compelling problem: more seasoned executives are needed everyday to bridge cleantech opportunities to a hungry global market. The objective of the Institute is to help experienced entrepreneurs and executives accelerate their transition into the cleantech sector, stimulating new venture formation, job creation and growth of the cleantech industry.
The Cleantech Fellows Institute is the premiere executive talent bridge and is accepting applications
now through July 12, 2013. The program will run from mid-August to mid-December and combines seminars, guest speakers, lab visits, company tours and a capstone project. The rolling admissions process will provide prompt feedback to applicants from the entrepreneurial and corporate community.
“Executives with proven business building experience, a creative drive, and leadship abilities are encouraged to apply," commented Steven Berens, Cleantech Fellows Institute, executive director. “Each candidate must have a strong desire to transition into the cleantech industry through accelerated immersison, networking and technology exposure. Targeted executives include those who have built successful ventures in sectors such as aerospace, biotechnology, information, energy and enterprise technology.”
“I would recommend the Cleantech Fellows Institute to anyone interested in the industry and who wants to make a difference,” said John Tuttle, 2012 Cleantech Fellow. “The Institute team delivered an incredible program that tied together a deep curriculum, an impressive network of cleantech experts and a highly-valuable capstone project. The intensity of the program, combined with the dedicated network of experts, truly created an atmosphere of community. When I finished the program, I really felt that I had built a network that would help me grow my business.”
“We are fortunate to engage with world-class C-level talent and thanks to our resources and partners we are are able to offer unprecedented access to our unique network to qualified professionals from around the globe,” said Berens. “In all cases, our Fellows graduate with the ability to succeed in cleantech, find backing and grow businesses that fulfill their passion for business creation and clean technology development.”
Anchored by the National Renewable Energy Laboratory
(NREL) and the state’s premier research institutions, Colorado is a leader in energy generation, biofuels, energy efficiency, advanced transportation, smart grid, water and natural gas research and development. These areas of expertise will be featured in the Institute’s 2013 curriculum in conjunction with a focus on energy policy, market traction, international opportunities and business formation. Fellows will receive more than 150 hours of training including more than 25 company and laboratory tours from more than 140 speakers and input from 10 research institutions.
The key to the program’s success will be the executives’ exposure to near-commercial-ready technologies from regional sources. Working with the universities and energy laboratories, as well as a team of cleantech industry insiders, the executives will develop a deep understanding of the technologies being developed at each institution. Each executive will select a technology that sparks their interest and plan a capstone project to present in December 2013.
About Cleantech Fellows Institute
The Cleantech Fellows Institute is a targeted program to immerse experienced entrepreneurs and executives in multiple sectors of the cleantech industry. The program promotes the intersection of experienced executives and serial entrepreneurs with new ventures and technologies that ultimately create jobs and grow the cleantech sector. For more information, visit http://www.cleantechfellows.com
Colorado Cleantech Industry Association’s Cleantech Fellows Institute
by: Eric Drummond
Many of us in the industry have seen the headlines in the print media and have watched the “experts” on the cable news shows discussing the early demise of cleantech—newspaper articles and TV documentaries recently claiming that cleantech is dead, that the cleantech bubble has burst. But if we look beyond the provocative headlines, we’ll see that the industry is not dead or dying; it’s growing, and in some sectors maturing, but doing so without effective and rational policy support and during a time of financial difficulty. And because it’s hard, investors, entrepreneurs, regulators and other industry players are still figuring out the most efficient manner in which to bring new technologies to market.
The facts, on the other hand, appear to reflect a far different story:
Recognized as one of the most innovation-intensive states, Colorado derives this honor from the strength of the research, investor and entrepreneurship communities built around the University of Colorado, Colorado State University, Colorado School of Mines and the National Renewable Energy Lab (NREL). Another data point, in the past five years, more than 450 provisional, nonprovisional and international clean technology patents have been filed by researchers at these schools.
- U.S. venture capital investment in cleantech companies reached $4.9 billion in 2011, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource. This is flat in terms of deals compared to 2012 but represents a 29 percent increase from the $3.8 billion raised in 2009.
- Nationally, renewable electricity generation doubled from 2006 to 2011, and prices for wind, solar and other clean energy technologies decreased.
- Employment in cleantech industry sectors expanded by almost 12 percent from 2007 to 2010.
- Locally, the Denver, Colo., nine-county region ranked sixth out of the 50 largest metro areas in the United States in cleantech employment concentration in 2011, with around 1,500 cleantech companies operating in the nine-county region in 2011.
- Colorado had investments of $363.3 million throughout 2011, a 28 percent increase from 2010, making it the state with the third highest level of investments.
Others have pointed out that Colorado has enormous local resources, and with NREL in our midst we have an incredibly strong link to the national cleantech ecosystem. NREL is the leader in research in solar, wind, biomass and other clean technologies. Indeed, known in the research and development community as “the Oscars of Innovation,” NREL has won 50 R&D 100 Awards in the last 30 years.
In addition to NREL, Colorado is also home to a number of other federal labs, including the National Institute of Standards and Technology (NIST) and the National Oceanic and Atmospheric Administration (NOAA), and the state is also home to the National Center for Atmospheric Research (NCAR). This feature set of national labs and research centers, as well as universities, and investor and innovator communities, all reflect on the rich diversity of the Colorado cleantech ecosystem.
A Cleantech Solution
What many of us have come to understand is that most venture capital firms are quick to acknowledge that they invest in teams and people, not just products and technologies. With that in mind, an enterprising and energetic group of people banded together to create a platform, the Cleantech Fellows Institute, to accelerate the development of cleantech in the region and across the nation.
Modeled after a successful program created by the New England Clean Energy Council, the Cleantech Fellows Institute is partially funded by support from the Advanced Energy Economy Institute (AEEI), NREL and the Colorado Cleantech Industry Association (CCIA). AEE’s mission is to influence public policy and to provide a unified industry voice in support of a strong U.S. advanced energy industry, as the economic engine of the global transition to a smarter energy future.
The Cleantech Fellows Institute is an exclusive program designed to facilitate the creation of start-up clean technology companies. The institute educates a highly select set of proven executives from across the country and from a wide variety of industry sectors that are interested in making the transition to cleantech.
The national profile of the Cleantech Fellows Institute allows the organizers to leverage partnerships across the state of Colorado and the United States, to gain access to industry leaders and visionaries that are willing to share their expertise and insight into growing a cleantech business. This model of leveraging the expertise of subject matter experts from across the nation has proven to be very effective.
The institute’s tuition-based, 17-week intensive program provides an in-depth understanding of the industry’s issues, technologies, research, support ecosystem and regulations. The institute offers more than 130 speakers and 30 site visits to support its nearly 150 curriculum hours. In addition to extensive investor and industry access, the Cleantech Fellows Institute will culminate in capstone projects designed to lead to a venture-backed start-up.
The 2012 Cleantech Fellows Institute curriculum includes, but is not limited to, the following sectors:
The sessions listed below are a sampling of the Clean Energy Generation curriculum:
- Clean Energy Generation—solar, wind, hydro, biochemicals, natural gas, biofuels
- Storage Technologies—grid storage, ultracapacitors, fuel cells, batteries
- Advanced Transportation Technologies—electric and hybrid technologies, advanced engines, materials, biofuels
- Energy Efficiency and Building Technologies—lighting and HVAC, building automation, energy management systems, demand response, green buildings
- Foundational Elements—tech transfer, commercialization, national infrastructure, cleantech financing, regulatory, public policy
When the Colorado Cleantech Industry Association (CCIA) was formed four years ago, it was with the knowledge that Colorado had enormous clean technology development potential and an opportunity to harness those technologies to create jobs, tax base and state revenues. It was understood that a statewide organization supporting cleantech could be instrumental in the continued growth of this important industry sector. None of this has changed in the intervening years.
- Session 1—Clean Energy Technology 101
- Session 2—Creating a Path to Subsidy Independence
- Session 3—Renewables Integration
- Session 4—Balance of System and Component Plays
- Session 5—Advanced Materials for Clean Energy Generation
- Session 6—Clean Energy Generation Forecasting
- Session 7—The Financial Bottom Line
- Session 8—Project Development
What has changed, however, is that when CCIA lead the development of the State’s “Cleantech Action Plan” in 2010, the action plan found the industry needed additional seasoned executive talent who understood the complexities—and opportunities—related to funding and growing a start-up enterprise. This realization was the impetus behind the creation of the Cleantech Fellows Institute. And because the nature of building the cleantech industry is national in scope, AEE and NREL, both with national presence, are the founding partners.
The Cleantech Fellows Institute will accelerate what we have come to understand is a fairly pervasive phenomenon, the desire of experienced innovators from other industries to move into and support cleantech. Many executives who have successfully built and exited technology companies have indicated that they want to do the same thing for cleantech. Rather than leaving their understanding of the industry to chance, and having to rely on anecdotal information without access to the network that makes these sorts of endeavors successful, the Cleantech Fellows Institute will surround these executives with resources, support and knowledge related to clean technological development, “go-to-market” strategies, an investment mindset and an ability to understand and possibly exploit regulatory hurdles. With the necessary tools and network in hand, these executives will be more prepared and more successful in their efforts to build funded cleantech companies.
The original article appeared in ICOSA Magazine's January 2013 issue.
Eric H. Drummond is a partner at the international law firm of Patton Boggs and has more than 20 years of experience in the energy industry. Mr. Drummond represents both public entities and private businesses, including having represented the Department of Energy both in the development of the largest, cutting-edge, high concentrating solar photovoltaic generation facility in the world (a $90.6 million financing pursuant to the U.S. Department of Treasury’s Section 1705 Conditional Loan Guarantee Program) and the first of its kind two-stage catalytic conversion of municipal solid waste to fuel ethanol production plant. Along with legal, regulatory and public policy assistance, he works with larger global financial institutions and other financial entities, as well as with entrepreneurs and innovators. Drummond is the Founding Clean Energy Generation Department Head for the Cleantech Fellows Institute.
Robert Welch: Thoughts on the Cleantech Fellows Institute
Robert Welch is one of the Cleantech Fellows Institute’s invaluable Department Heads, co-leading the Technology Transfer curriculum. We asked Robert to share his thoughts about the program.
You have extensive experience in energy efficiency, would you say you have had any “ah-ha” moments in your career?
The low price of energy in the US allowed quite a few wasteful practices to become commonplace. When I noticed every building on a single campus was operating with their heating and cooling systems running simultaneously, I started to realize how widespread the opportunities had become. When I discovered almost every data center is operating 20 degrees colder than required by the computer equipment suppliers, I began to understand huge opportunities were present in virtually every industry.
How did you get into cleantech?
My career started with providing control systems for coal fired utility power plants. That led me to control systems for renewable energy systems including solar, biomass, and hydro.
You have been the Co-Department Head of the Technology Transfer curriculum. What do you see as the biggest challenge in technology transfer?
Most of the Universities and Labs do a great job with new innovations and extending current technologies into new applications. However, they often are not very skilled at selling and promoting these new ideas to the outside world. Conversely, entrepreneurs quickly recognize market opportunities, but it’s tough for them to search through hundreds of universities and labs to see if anyone has developed a potential solution. The Cleantech Fellows Institute provides a great conduit to connect these segregated groups allowing them to discover powerful synergies, which can launch new companies and solve big problems in the market.
With your experiences and observing the Fellows’ progress with their capstone projects, any tips for cleantech entrepreneurs?
Be sure to consider global markets when looking for new opportunities. Oftentimes, new products may not have the best ROI in the US due to our low cost of energy. However, the same concept may be very successful for billions of people where the cost of power is 2 to 10 times higher than the US.
With over 160 speakers, 30 tours, and a robust portfolio of technology, what would you say is the single greatest benefit offered by the Institute to the Fellows?
The biggest value I see is in the network of world-class experts, which have become closely linked to the Fellows. The information these experts present in formal class sessions is high quality, current, and often ‘battle tested.’ However, when the Fellows need to acquire additional knowledge on a specific topic, this network can easily direct them to right expert and even provide the crucial advisor to guide their new company to success.
Debra Wilcox: Thoughts on the Cleantech Fellows Institute
Debra Wilcox is our Advanced Transportation Department Head for the Fellows Institute. We asked Debra to share her thoughts about the program.
You were one of the integral members of the Cleantech Fellows Institute’s team of Department Heads during the inaugural session in 2012. Looking back on the experience, what were a couple of program highlights for you?
At the time I was asked to be a member of the CFI team, I had an idea of what I thought the program would be. My vision was far exceeded by both the participants and the content of the program. The value of the program showed itself in the level of participation from the fellows, the staff and the many guests speakers attracted to the program. The program was about learning, not teaching and each session presented learning opportunities for fellows and presenters alike.
Your background in law, aviation, aerospace and energy is quite impressive. What most excites you about the intersection of cleantech and aviation?
I am a strong proponent of bringing industry sectors together. Through those intersections participants learn from each other and those intereactions spark more innovation. I believe that the Cleantech Fellows Institute has created an innovative culture, not unlike that described by the Edison Achievement Award in describing the work of David Kelley, CEO of IDEO, that is the “development of an innovative culture that has broad impact.” This innovative culture will continue to be the success of the program.
Cleantech is still a relatively new industry sector. Aside from the aviation and aerospace industries, what other mature industry sectors could cleantech learn from?
Energy storage and transmission, energy extraction industries, water – availability and quality – and transportation will embrace cleantech solutions. These industries will integrate cleantech as part of improving their basic technologies.
If you had to take out your crystal ball and look ahead for cleantech in 2013, where do you think the industry is going?
I don’t think we need a crystal ball. I think the sector has, in spite of negative press, been showing growth at least in Colorado and that will not change during 2013. There is a maturing process that naturally weeds out some technologies and companies. Others are surviving and growing. There was also an initial push for large projects – utility scale solar and wind projects. For better or worse those projects became the definition of cleantech, but it is much more. We will see more technologies and companies focused on simple, but impactful cleantech solutions.
Eric Drummond: Thoughts on the Fellows Institute
Eric Drummond was the 2012 Clean Energy Generation Department Head for the Fellows Institute. We asked Eric to share his thoughts about the program.
You have an incredibly varied background in the law, politics and energy. How do you tie these areas of expertise together to help support and grow Colorado’s expanding cleantech and renewable energy industries?
I’m very big on collaboration and getting the best people around the table to devise and execute on projects. This collaborative model was something I was exposed to very early in my career when several of us assisted with the formation of one of the largest electric utility holding companies in the U.S. This effort lasted around three years, involved four states plus the nation’s capitol and required our group being directly involved with a number of state and federal agencies, and state federal legislatures. I relied on these types of experiences when I was Chairman of the Economic Development Commission and, ultimately, Mayor of my city. Collaborative and creative processes led to a record amount of private investment in our city and allowed us to regain control of our economic future.
I am enjoying supporting our Colorado-based cleantech businesses and assisting with attracting capital and other like-minded businesses to our state. In addition, I believe that it is both rational and lucrative to assist Colorado businesses in developing work in foreign markets where U.S. expertise is in the global forefront of providing energy in energy intensive and emerging economies, while doing so without adding to, or possibly decreasing carbon load in these markets. I generally believe that in the most robust markets in the world there is conscious participation at the highest levels between law, politics and business and I hope to continue to facilitate those kinds of interactions to benefit our nation’s economy and our global climate.
When you signed on as the Cleantech Fellows Institute’s Department Head for Energy Generation, you took on a huge task in a wildly varied sector of the energy industry. Given the sometimes challenging fits and starts in the area of clean energy generation, how did you develop the curriculum?
In terms of developing the Clean Energy Generation curriculum, I gave a great deal of thought to two things: 1) after over 20 years of practicing in energy and telecom and working on large, often cutting-edge deals, what would I most want the Fellows to know and, 2) would it be useful to employ the kinds of approaches that I use in representing my clients with the Fellows; that is, would it be effective to approach the development of the Clean Energy Generation curriculum as if the Fellows were my clients and with the view that I would want the Fellows to understand how to best take advantage of the business opportunities that often occur at the intersection of law, policy and business. Over the years my law practice has developed such that I spend most of my time advising C-suite level clients here and abroad on strategy, global markets and how best to interface with large utilities and possible strategics and, with that in mind, I set about developing curriculum hopefully to elucidate what is developing in solar, wind, biofuels, biomass, etc. In addition, while it did not always work, I was not reticent about seeking speakers for the program no matter where they worked or officed in the country.
Have you seen anything during the Cleantech Fellows Institute that really caused you to have an “ah-ha” moment?
I suspect I had two “ah-ha” moments. The first was in the weekly grind of calling and emailing prospective faculty and refining the curriculum when I thought, “this CFI initiative looks very much like a business start-up and I would go into business with my fellow CFI compatriots.” For over a decade, I had my own boutique energy and telecom firm – we were rated as being in the Top 15% of all U.S. law firms in our practice areas – and working with my other CFI founding colleagues very much brought back the experience of setting up and ultimately creating a thriving and competitive law firm in two cutting edge aspects of law and policy.
The second “moment” was more of a confirmation of something I’ve shared with my clients and colleagues: it makes no difference how much talent, how much money or whether one has the best idea, if you cannot execute on the plan. Execution, and an ability to pivot, are essential to start-up endeavors and a skill that is often lacking with people attempting to start new businesses and other initiatives. All of the CFI staff executed the plan, both seamlessly and thoughtfully and, I believe, those actions led to a successful and enjoyable 17-week program.
Now that we are finally out of the election cycle, much will be at stake for the renewable energy and cleantech markets in 2013. What do you see as pivotal opportunities and challenges coming our way next year?
We will have a robust debate, both publicly and privately, with Congress and stakeholders, regarding the level and duration of current cleantech subsidies. In addition, I expect we will see novel means to finance cleantech projects that will be based on REITs, or financial products based on securitizing renewable energy assets, to develop additional pools of funding for cleantech project finance.
I suspect that FERC Order 755 will continue to drive the advancement of energy grid energy storage and frequency regulation in open markets. In addition, there will be substantial demand for renewable energy and cleantech services and products internationally especially in China, India, the EU and the Middle East.
Focus on the Fellows: Tom McKinnon
Tom McKinnon, Professor Emeritus at the Colorado School of Mines and Director of InventWorks
In our second installment of Focus on the Fellows, we highlight Tom McKinnon, managing director of InventWorks Inc. and Professor Emeritus at Colorado School of Mines. Tom has followed a fascinating career path that has included work at NREL (when it was the Solar Energy Research Institute); TDA Research, a small contract research company; University of Colorado; Colorado School of Mines, researching combustion biofuels, “green” fire suppression, and new materials for lithium batteries; Fullerene Sciences Inc., a nanomaterials company; Novare Biofuels; and Boulder ElectroRide, which made high-performance electric motorcycles. Tom even has experience on the legislative side from when he cofounded a bill for the Colorado ballot to place a small carbon tax on natural gas.
So how did Tom find his way to the field of cleantech? Energy had been on Tom’s mind for quite some time, and the field of alternative energy was of particular interest to him but he wasn’t sure where to start. Fate seemed to intervene when he went to a job interview in Boston during his senior year at Cornell University and shared a cab with a man who would eventually become his boss at SERI. After a few years at SERI, he went east to get his PhD in Chemical Engineering at MIT, researching combustion, and then continued to follow a path in research and energy.
So, entrepreneur or academic? “I would have to say both,” he says, “In our seminars, the stuff that lights me up the most is the stuff that has an academic nature to it. I like to see things applied. I am a widget-oriented person. I make stuff.”
In addition to his academic interest in the cleantech and energy industry, Tom is also driven by the importance he places on reducing our carbon footprint. “For me, the most important challenge that humankind faces is climate change. Within cleantech is where I tend to focus my efforts, and in the past where I have entirely focused my efforts.” His passion for applying technology and addressing climate change is a powerful combination and a great motivator.
Like many others, Tom would like to see the playing field in which the cleantech industry competes changed for the better. He takes issue with people criticizing cleantech for being on the public dole while the incumbent energy industry has enjoyed a plethora of subsidies, direct and indirect, and the subsidies that cleantech does receive are a fraction of the size and are much less permanent. For example, Tom points to the wind production tax credit (PTC) that may be allowed to sunset in the end of this December. “If I could change anything, it would be to make a truly level playing field in energy and then let the best portfolio of technologies win.”
The other change that Tom would like to see is in the policies that encourage, or discourage, the growth of the cleantech market. “We have the technology, we’ve had the technology for over a decade, and we have the money, we just don’t have the political will to do it.”
For his latest challenge, the Fellows Institute Capstone Project, Tom has set his sights on a technology that would increase accessibility to water for remote villages like those in Morocco. The origin of this project comes from a dinner Tom had with a friend who works for an NGO in Morocco. This friend described how women from many Moroccan villages spend a large portion of their day walking to and from a distant water source. In some areas, villages can leverage a process called fog harvesting to obtain water but where it is more arid, that method is no longer an option. Following an Institute HVAC webinar, Tom realized he might have found a solution using one of NREL’s desiccant-enhanced evaporative air conditioner (DEVAP) technologies. A follow-up tour of NREL’s HVAC lab increased his confidence.
The basic idea that Tom has in mind takes a very concentrated salt solution, 30%-40% salt, and then exposes it to air so the water in the air will go into the salt solution. Using solar thermal, you can then effectively boil the water out of the salt, concentrating the salt back to its original form and producing very pure water. Of course there is still plenty of tweaking of the process left to do, but this is where the relationship between the Cleantech Fellows Institute and NREL comes into play. As part of NREL’s partnership in the Fellows Institute, they have offered in-kind support that includes the ability for the Fellows to work with the NREL scientists. Tom greatly appreciates the help he has received from NREL. “The in-kind support will be extremely important so that I can access help from these experts. The other great resource is simply the credibility attached to the NREL name. When I make a pitch to a foundation to build one of these systems in the field, I can acknowledge that it is from NREL – and that carries a lot of weight.”
To say the least, the CFI capstone project is a challenge, especially in only 17 weeks. But Tom is geared up to tackle the opportunity and in terms of what he values most out of the program, he places the Capstone Project at number one. “People always perform best when there’s a little bit of pressure. And we’ve got Capstone Department Head Steve Berens breathing down our necks!”
Focus on the Fellows: Tony Formby
Tony Formby, cofounder of Squirrel POS Systems and angel investor
For the third edition of our Focus on the Fellows we are highlighting Tony Formby, a Vancouver, B.C. native who has lived throughout North America and played an instrumental role in the development of touch screen user interface technology before becoming an angel investor, focusing the majority of his attention on cleantech.
Tony started his professional life in Ottawa, working as an aid to the Minister of Justice and Attorney General. After five years, he realized he had become jaded in his views and wanted different career opportunities. So in his late twenties he moved back to Vancouver, teamed up with a partner, and entered into the restaurant business, owning two restaurants and running a third on behalf of the owners. During the recession of 1980, the restaurant industry was hit hard and only one of Tony’s restaurants survived the tumult. Around this time Tony and his partner decided to move into the computerization of restaurant point of sales (POS) systems. In 1985 they commercialized Squirrel Systems, the first PC-based, touch-screen user interface. Today, Squirrel POS systems is used by heavyweights such as Apple, Holiday Inn, and Applebee’s.
After significant success with Squirrel Systems, Tony and his partner decided to sell the company and as Tony says, “I saw the opportunity to integrate flat panel display touch screens and customized mother boards with various controllers built into them to create a low profile computer system that could be used in a multitude of process control scenarios, for instance on factory floors or at hotel front desks.” Truly an entrepreneur, Tony worked from home, had no employees, and created contracts with companies that needed products designed for them and then contracted out to a team of engineers and a manufacturer that shipped the product directly to the end user.
After another successful business venture, Tony was able to retire in 2002 and focus his efforts toward investing, with an emphasis on cleantech. Tony attributes his interest in cleantech as a “…result of growing up in probably one of the most beautiful cities in the world and seeing how we in North America tend to waste energy as compared to Europe, where energy is much more expensive.” Some of Tony’s investments include:
Tony has a positive but realistic outlook on the future of cleantech. He believes that over the next 10 years, wind and solar will improve and become price competitive, and that solar especially will have a great impact. He compares the improvements in solar to the improvements in the computer industry in the 1980’s. Personal computers didn’t exist until 1980, and before that, a company that needed computing would have to rent computing time from a company such as IBM or NCR. “As the revolution of the personal computer forced the industry to change, the solar industry will continue to evolve, and as more people are able to purchase and install photovoltaics themselves, it will continue to change the dynamic of the grid.”
- CalCars, a group that was pushing car makers to create plug-in hybrids and did the first conversion of a Prius to a plug-in hybrid;
- RavenBrick, a Denver developer of thermochromatic window film;
- Rahr & Sons Brewing Company; and
- SunCentral, a company innovating natural light distribution within buildings.
Tony also sees huge potential in storage. “Once that little mystery is solved, it will bring into play all sorts of things like electric cars, dramatic changes to the grid, and a whole different relationship between utilities and rate payers. Battery storage is probably the most important thing.”
Tony would also like to see a level playing field in which cleantech companies might compete. “If companies using energy had to pay the true cost of that energy, I think businesses, and individuals, would change the way they use energy. Solar, wind and other alternatives would become much more attractive.” But as a seasoned businessman, he is realistic and acknowledges that things won’t change over night. “People will eventually change their views but it will take time.”
Luckily for Tony, the difficulty of the industry is his favorite aspect. He says, “You know that these technologies work. But you also know that they need to work a little bit better. And you know that you have to be really clever about how you go about commercializing them. So it’s a real challenge, and when you get one to work, it’s really gratifying and rewarding because A, it works and you can make some money off it but B, you’ve also made a change.”
For his capstone project, Tony wanted to deal with a more expensive fuel than electricity so he decided to focus on drop-in jet and diesel biofuels and try to compete with barrels of oil that cost $80 to $90. The idea is to take an intermediate feedstock that can be refined by an existing oil refinery. This process takes advantage of the very efficient infrastructure created by the oil industry. Compressed natural gas and hydrogen fuels will have a harder time because the infrastructure needs to be constructed for them. After some initial analysis, Tony realized that while oil seed would work well, there just isn’t enough acreage available to make a significant dent in the percentage of diesel and jet fuel used in the marketplace. So, while Tony is still on the biofuel path, he’s now focusing on a different fuel – algae.
“My project involves a novel design for an industrial scale Photo Bio Reactor (PBR) for algae cultivation. Instead of using large open ponds to grow algae this design uses large thin (60ft X 60ft X 2 inch) clear bags, which are layered one on top of the other with spacing between the layers to drive sunlight between the layers. The structure to support this approach would be similar to a building superstructure made of high strength I beams. This approach is land and water efficient and it also provides a closed and controlled growing environment. This approach can be deployed where land is not abundant but where nutrients are – municipal wastewater plants, food processors, dairies, power generators, and breweries. The algae can be used for waste water remediation, renewable fuels, nutraceuticals, animal feed, and biomass power generation.”
When asked what he values most about the Cleantech Fellows Institute, he says the exposure he’s experienced. There have been times in his career when he has thought, “I really wish I had known this before I went down this business venture.” And that is what the Fellows Institute is giving him, a broad, thorough perspective into this industry called cleantech.
Sam Jaffe: Thoughts on the Cleantech Fellows Institute
Sam Jaffe is one of the Cleantech Fellows Institute’s invaluable Department Heads, leading the Storage Technologies curriculum. We asked Sam to share his thoughts about the program.
Your background is in journalism with publications such as Bloomberg and Business Week. What brought you into the cleantech arena?
I went into journalism because it’s a great way to witness history. However, in the end, your role as a journalist is as an observer, not as a prime mover of change. I went into cleantech because I felt that making energy clean and cheap is the fundamental challenge of my generation and I wanted to be part of it–as an actor, not as an observer.
You’ve worked with some of the premier energy and cleantech research firms. Has your research and work with these firms led you to have any industry “ah-ha” moments that you can share?
As a science journalist, I was always interviewing fascinating people who made significant discoveries. But when I asked them when their breakthrough would be turned into a product, the answer was always the same: “In five years.” I wanted to find out what was so magical about five years. The “ah-ha” moments have usually been when I’ve had a chance to peek inside the screen and find out that “five years” is usually short-hand for “this will never work, but we’re going to milk it for as much capital and prestige as we can for as long as we can”. When a concept described in a scientific paper really, really works and solves a significant business problem, it usually finds its way to market much earlier than five years. The majority of cleantech concepts out there, however, simply don’t work as promised. There might be published data and a team of people with great C.V.’s, but the data is usually wrong.
Where do you see the greatest challenges and opportunities facing the cleantech and renewable energy industries in 2013?
The single biggest problem that cleantech faces is the “Silicon-Valley-ization” of venture capital that flowed into the sector. It led to a lot of high-fliers that in turn led to a lot of spectacular flameouts. The sector needs a venture capital outlook that measures time in decades, not quarters. I know that that is asking the impossible, but I’m convinced that such investors will see favorable returns over the long term if they can afford that kind of timespan.
As the Institute’s Department Head for Energy Storage, what do you think are a few of the most important take-aways for anyone looking to enter the storage industry?
Number one: NEVER, EVER, EVER cut corners on safety. It’s been the downfall of several promising energy storage startups. One fire – and the future of the company is gone.
Number Two: Anything that is obvious will be done by existing market players that have billions of dollars in cash and thousands of researchers. There is simply no possible way that a small startup can compete with the Samsungs and Panasonics of the world. An energy storage startup’s only hope is to leverage the one barrier to entry that excludes the big guys: small market niches. There aren’t a lot of them, but the good news is that they haven’t all been determined yet–that’s where a smart and hard-working entrepreneur can make a difference.
An Interview with Steve Berens, Cleantech Fellows Department Head
Steve Berens is one of the Cleantech Fellows Institute’s invaluable Department Heads, leading the Capstone Project team. We asked Steve to share his thoughts about the program.
You know the startup and entrepreneur environment very well. How do you feel about the cleantech startup market given today’s economic pressures?
I'm excited by the amount and variety of unique, market-worthy opportunities currently being considered as part of the cleantech fellows program. I believe the contributing institutions, up-and-down Colorado's front range, have exciting and innovative technologies that can make economic and social impact. Today's economic realities require that each of the Fellows’ technologies be evaluated on their own merits. The Fellows are approaching these opportunities by looking intently at the feasibility of projects that survive without government or grant funding and deliver strong ROI to their customers.
What drew you to the Cleantech Fellows Institute?
I was initially drawn to the Cleantech Fellows Institute by the passion and capability of the founding team. Their commitment and dedication to bringing a strong program to Colorado was evident. I am continuously impressed by their ability to bring a wide variety of clean technologies and real opportunities to Fellows who want to join or expand the cleantech industry in Colorado. It is exciting to see the progress in the unique opportunities that are being pursued. It has been an honor to be a part of the team.
What do you think the single greatest benefit of the Institute might be for the Fellows?
I believe the single greatest benefit of the Institute might be in its name itself; the fellowship that is being formed between the Fellows and the contributors to the program is truly evident. The fact that these individuals are able to expand their networks and build the foundation for more successful business ventures going forward will serve each participant and the program well.
You are heavily involved in CU Cleantech. How do you think programs such as the Fellows Institute and CU Cleantech benefit Colorado’s cleantech industry as a whole?
I believe that any opportunity to shine a light on Colorado’s cleantech ecosystem is the most important thing that we can do to assure the sustainability of our industry. Together, Colorado Cleantech Industry Association, the Cleantech Fellows Institute and organizations such as CU Cleantech are accomplishing that goal.
Any tips you’d like to share for cleantech entrepreneurs?
I would encourage cleantech entrepreneurs to find the support and the ecosystem that has been developed from programs like the Cleantech Fellows Institute. It will greatly improve their opportunity for success in a complex market like cleantech.
About Steve Berens Mr. Berens is a skilled industry executive that brings more than 20 years of experience in strategy, marketing, sales and engineering to all his endeavors. As Co-Founder, Chief Marketing Officer, and Board Director of Power Tagging, Mr. Berens led the company from its initial concept to a become a full fledged smart energy solutions company. Prior to Power Tagging, he served as President & CEO of Privacy Networks. Mr. Berens was nominated to serve on the Deming Center for Entrepreneurship Advisory Board as well as the executive board of CU Cleantech. During his career, Mr. Berens has held key management positions in high technology start-ups and Fortune 500 companies including PowerTagging, IBM, Benchmark Storage Innovations and Privacy Networks. Mr. Berens holds a Bachelor of Science degree in Mechanical Engineering from the University of Arizona and an MBA from the University of Southern California.
Focus on the Fellows: Henry Mouton
With over half of the Cleantech Fellows Institute curriculum completed, we wanted to take this opportunity to highlight the Fellows and the progress they have made to date. This first installment of our Focus on the Fellows looks at Henry Mouton, a successful Fort Collins businessman with 26 years of experience in the restaurant industry and a deep passion for sustainability.
On track for an engineering career in the oil industry, Henry took a class his senior year called “Ethics of Engineering.” This class illuminated the challenges between the oil companies and the environment and came to be the catalyst in his shift of focus away from traditional energy development and towards environmental stewardship. The second career-altering event came soon after he graduated, with an invitation from his older twin brothers to move to Colorado to ski for a season and help out at their newly founded Rio Grande Mexican Restaurant. Whether it was the great snow or the Rio’s impressive success, Henry stayed longer than a year, 26 to be precise, becoming the Chief Operating Officer and Director of Sustainability while the Rio grew to 8 locations, employing 575 Coloradans at its peak. Having recently retired from the Rio, Henry notes only one regret - that he would have devoted even more of his efforts towards corporate sustainability earlier in his career.
The experienced restaurant businessman is now returning to technology, specifically to cleantech. In this industry, he believes that determination is the key attribute for an individual to succeed and his environmental emphasis is Henry’s main motivator. “For me, reducing my carbon footprint is critical, so I think that’s the biggest driver for me. I think that can be my biggest contribution.” Since being in the Cleantech Fellows Institute program, he views energy efficiency and building technologies as the most promising area in cleantech, short-term, because many of our buildings are at the age where retrofits are needed, regardless of whether clean technologies are integrated or not. He cites notable examples such as the Empire State Building retrofit, and locally, the Byron Rogers Federal Building retrofit, which the Fellows Institute toured in late October. In these cases, developers were able to take advantage of new financing strategies and better ROI’s to make energy efficiency plays attractive and economical. Energy efficiency can also be increased by behavioral modifications, which companies such as Green Button and Tendril emphasize.
Henry believes the nation is moving in the right direction in terms of accepting cleantech, but wishes the industry wasn’t labeled as a high-risk venture for investors. He says, “The way I see it is, if it’s a great idea and if you have the right people at the table, then you’re going to end up with a successful company. So whether it’s cleantech or not, the basic tenets apply.”
Henry’s capstone project for the Fellows Institute is a low energy, low water usage system for growing local, organic leafy microgreens, using LED’s as the main technology. LED’s require little energy, they emit low amounts of heat, which helps with low water usage, and they only use blue and red frequencies, the two frequencies that plants need. While short growth cycles for the targeted microgreens adhere to the low energy, low water goal, Henry hopes to eventually expand into larger greens as well. Henry has also gained building-technology inspiration from a tour of a near-zero energy greenhouse built by Boulder company, Synergistic Building Technologies. By using concentrators to bring in and distribute heat and sunlight, the company created an extremely efficient building envelope while using minimal glazing. Even when Colorado’s temperatures dip to below freezing, the greenhouse still measures 55°F.
Henry is well aware that the restaurant industry is one of the highest commercial energy users, in terms of energy density per square foot. He has long-term goals in pursuing energy efficiency in the restaurant industry, and his current venture seems like a great starting place.
The Fort Collins native’s excitement for what he is pursuing and enjoyment of the industry is contagious. “It is one of the things that I like about being in this space; I get to work with like-minded people and almost everybody that I run into is very passionate about what they’re doing.” Henry is pleased that his involvement in the cleantech space has become an inspiration for others. “Since I’ve been in this program, I’ve had at least 5 acquaintances, who have been executives in other businesses for a long time, hear what I’m doing and they say, ‘Yeah, I want to do that too; I want to figure out how I can play a bigger part in making a brighter future.’” He also graciously gives credit to the Cleantech Fellows Institute saying, “We’ve been exposed to such great people, an amazing array of technologies and an incredible wealth information. The quality of the presenters and the quality of the volunteers is just so critical to our success through the program.”
We’re glad to have him with us.
Ampt Creates Solar Energy Leadership Alliance to Improve Solar Energy Economics
At the recent Solar Power International Trade Show last September, Ampt Solar, a Fort Collins-base company, had several significant partnership announcements. Most significant was the launch of an industry alliance to drive down cost of solar: http://www.ampt.com/pressreleases/HDPV_Alliance-20120910.pdf
Ampt has patented technology that enables an inverter to deliver up to twice the power at a higher efficiency than the same inverter operating in a normal mode. Doubling the rated power is equivalent to cutting the cost in cents per watt in half. Ampt’s technology also enables systems to be designed with more PV modules in a series string to save up to fifty percent on DC BOS costs. These savings collectively represent Billions of $s each year that can be eliminated from the cost of PV solar.
"We recognized that our technology is disruptive, but also that it enabled innovation in many areas of the PV system from inverters to PV modules to system design and operation. The opportunity for disruptive cost reduction was bigger than just Ampt, and so we looked for partnerships with other innovators in the industry," said Ampt CEO Levent Gun. "HDPV, or High Definition PV, creates the highest ROI, derived from increased performance and lower cost of PV systems. Better project economics makes financing available to more projects, and removes the most limiting bottleneck for the rapid growth of solar market. This accelerates market growth. That is the opportunity of HDPV, and, we hope, part of our legacy for the future."
Within the HDPV Alliance, manufacturers of inverters, junction boxes and solar modules as well as monitoring companies will have access to Ampt's technology. As Ampt becomes an integral part of the system architecture, solar developers drive down costs system wide.
A website and more information about the program is pending. For details about current partners and the alliance, visit http://www.ampt.com/
2012 Colorado Cleantech Awards Celebrates Advancements in Colorado’s Cleantech Community
Keynote Speaker Josh Green
This Monday, we honored those endeavors of Colorado's cleantech community during our Colorado Cleantech Leadership Awards Celebration. Throughout the evening, we honored 14 recipients for their efforts in advancing Colorado’s cleantech ecosystem, increasing jobs and driving innovation in the cleantech sector.
Innovation was a theme for the night, as Josh Green, General Partner of Mohr Davidow Ventures, presented his compelling keynote on the importance of clean technology today and forward.
“Innovation will always prevail,” said Green during his keynote. Green “Although cleantech has struggled in the past and will surely see bumps along the road as we move forward, the take away point from this year’s event is that Cleantech has a strong and viable future. If we place value in those whose leadership and technology is continuing to impact cleantech in new and exciting ways, then surely we cannot fail.”
Please join us in congratulating all of CCIA’s Leadership in Advancing Cleantech Award winner:
National Cleantech Leadership:
Center for the New Energy Economy
Founded in February of 2011, the Center for the New Energy Economy is a privately-funded initiative to support the growth of a cleantech economy across the United States. The Center, a part of Colorado State University, is led by former Colorado Governor Bill Ritter and is assisted by some of the nation’s most important thought leaders in clean energy research, development and commercialization.
Governor’s Award For Excellence in Cleantech Leadership:
Robert Fenwick-Smith founded Aravaipa, an efficiency-tech investment fund in Colorado, in early 2008. With 20 years of global experience acquiring, founding, building, merging and selling companies, Robert is frequently invited to serve on cleantech investing panels and juries.
Cleantech Corporate Champion:
Wells Fargo offers customized commercial banking products and services to businesses that manufacture, market or develop clean technology products and services. It is with their generous support that programs such as the Cleantech Open, CU Cleantech, NREL Industry Growth Forum, and Cleantech Fellows Institute that cleantech ventures in Colorado can sustain funding.
Investor of the Year:
9th Street Investments
9th Street is a non-traditional venture capital group born out of CoorsTek, Inc, headquartered in Golden. 9th Street primarily focuses on businesses in the advanced materials sector and has invested in Boulder Ionics, ALeco Container and more.
High Impact Cleantech Company of the Year:
Based in Boulder, Colo., Albeo designs and manufactures highly efficient LED lighting solutions focusing on the commercial and industrial sectors. Albeo’s primary goal is to enable businesses to simultaneously lower their total operating costs and help the environment.
Breakout Cleantech Company of the Year:
Boulder Wind Power
Boulder Wind Power creates utility-scale permanent magnet generator technology that will dramatically reduce the production cost of wind energy. The company works with wind turbine manufacturers to deliver simpler, more efficient and cost-effective ways to maintain systems than existing wind turbine technologies.
Emerging Cleantech Company of the Year:
SkyFuel, Inc. is a solar thermal power technology and service provider founded in 2007. SkyFuel solar collectors harness solar radiation to produce steam for electricity generation and industrial applications. The company is a leading supplier of utility-scale concentrating solar power (CSP) systems.
Colorado Cleantech Entrepreneur of the Year:
Hans Mueller, EcoVapor Recovery Systems
Mueller is the founder of EcoVapor Recovery Systems, a state-of-the-art recovery technology for oil and gas wells. He has established an industry-leading economic return technology that also addresses increased environmental regulations.
Colorado Cleantech Executive of the Year:
Mark Verheyen, TerraLUX
Mark Verheyen joined the TerraLUX team in 2011 with extensive experience in the illumination market and a proven track record penetrating and expanding new growth markets across Asia/China, South America, North America, and Europe. Mark has more than 20 years of sales and senior management experience.
Political Advocate of the Year:
State Representative Brian DelGrosso
Brian DelGrosso is a member of the Colorado General Assembly representing the Loveland area. Brian is a successful small business owner and a pragmatic legislator with a reputation for common sense solutions to grow Colorado’s economy. Additionally, this year he was the sponsor of a bill signed into law to cut red tape to make it easier to expand alternative fuel vehicle infrastructure.
Excellence in Commercialization:
Colorado State University - Dr. Eugene Chen
University of Colorado - Dr. Ryan Gill
National Renewable Energy Laboratory - Dr. Charles Teplin
Colorado School of Mines - Dr. P. Craig Taylor
Did you attend the dinner? What did you learn from the speakers and award winners?
CCIA selects the 2012 Finalists for the Colorado Cleantech Industry Awards Celebration
The Colorado Cleantech Industry Association today released the names of the finalists for this year’s 2012 inaugural Colorado Cleantech Industry Awards Celebration. The finalists were selected based on their leadership in advancing cleantech job creation, corporate growth, individual effort and technical innovation.
Winners will be announced Monday, Oct. 22 at the Sheraton Downtown Denver hotel, at the official event.
The 2012 Colorado Cleantech Leadership Awards Finalists are:
NATIONAL CLEANTECH LEADERSHIP AWARD 2012
Center for the New Energy Economy (Fort Collins) - http://cnee.colostate.edu/index.html
Colorado Renewable Energy Collaboratory (Golden) - http://www.coloradocollaboratory.org/
Ecotech Institute (Aurora) - http://www.ecotechinstitute.com/
GOVERNOR’S AWARD FOR EXCELLENCE IN CLEANTECH LEADERSHIP 2012
Robert Fenwick-Smith, Aravaipa Ventures - http://www.aravaipaventures.com/
Doug Schatz, Ampt - http://www.ampt.com/
CLEANTECH CORPORATE CHAMPION 2012
Wells Fargo - http://www.wellsfargo.com/
CLEANTECH INVESTOR OF THE YEAR
9th Street Investments (Golden) - http://9thstreetinvestments.com/
Access Venture Partners (Westminster) - http://www.accessventurepartners.com/content/
Braemar Energy Ventures - http://www.braemarenergy.com/
New Enterprise Associates - http://www.nea.com/
HIGH IMPACT CLEANTECH COMPANY 2012
Albeo Technologies (Boulder) - http://www.albeotech.com/
Sundrop Fuels (Longmont) - http://www.sundropfuels.com/
BREAKOUT CLEANTECH COMPANY 2012
Boulder Wind Power (Boulder) - http://www.boulderwindpower.com/
Zeachem (Lakewood) - http://www.zeachem.com/
EMERGING CLEANTECH COMPANY 2012
Silver Bullet Water Treatment (Denver) - http://silverbulletcorp.com/
SkyFuel Inc. (Arvada) - http://www.skyfuel.com/
COLORADO CLEANTECH ENTREPRENEUR OF THE YEAR
Sandy Butterfield, Boulder Wind Power (Boulder)- http://www.boulderwindpower.com/
Hans Mueller, EcoVapor Recovery Systems (Centennial)- http://www.cleanlaunch.com/
CLEANTECH EXECUTIVE OF THE YEAR
Joel Butler, Solix BioSystems (Fort Collins) - http://www.solixbiofuels.com/
Mark Verheyen, TerraLUX - http://www.terralux.com/
LEGISLATOR OF THE YEAR
State Representative Brian Delgrosso - http://www.briandelgrosso.com/
Only One Week to Register for the 2012 Presidential Surrogate Debate
Being that Colorado is a swing state with a robust renewable and traditional energy sector, the spotlight has been placed on Colorado during this important election. Colorado’s strong role in energy research and its national spot as a top 10 state for wind, solar, coal, oil and gas resources and deployment make it an excellent forerunner for national energy issues.
Former Secretary of Energy Federico Peña and former Governor Bill Owens will officially represent President Obama and Governor Romney campaigns during the highly anticipated 2012 Presidential Energy Surrogate Debate. They go head-to-head discussing the state of energy in this important election. Eli Stokels of FOX 31 will moderate the debate.
The event is next Tuesday. Join the Colorado Cleantech Industry Association, along with the Denver Metro Chamber of Commerce, the Colorado Petroleum Association, the Colorado Oil & Gas Association (COGA) and the Environmental Entrepreneurs (E2), as we embark on the hotly debated topic of the future of our nation’s energy sector.
Join us Oct. 9 at the University of Denver (Auraria Campus) Tivoli Turnhalle from 8 a.m. to 9:30 a.m. This event is $35 for sponsor members and $45 for non-members. Take charge in the outlook of our nation’s energy sector and register now.
Nominations for Cleantech Industry Awards Due Friday
There are only a three days left to nominate your choice for this year's cleantech leadership awards! Nominate a company or entrepreneur to receive a Colorado Cleantech Industry Award. Finalists and winners will be selected by the CCIA Awards Committee to receive recognition in the following categories:
- High Impact Cleantech Company of the Year
- Breakout Cleantech Company of the Year
- Emerging Cleantech Company of the Year
- Colorado Cleantech Entreprenuer of the Year
- National Cleantech Leader
Winners will be announced at the Colorado Cleantech Awards Celebration on Oct. 22. All of the details about the application process can be found about the application process by visiting the link above. Our thanks to Deloitte for partnering with us to manage the award process.
Colorado Cleantech Awards Sponsorship Deadline Tomorrow
It’s not too late to claim your event sponsorship at this year’s third annual Colorado Cleantech Awards Celebration! As we inch closer to the end of the September, we head towards celebrating this year’s cleantech leaders and their companies for their efforts to expand Colorado’s cleantech ecosystem, increase jobs and build one of the best states in the nation for the cleantech industry.
Help us celebrate the life of Colorado Cleantech by becoming a sponsor for our 2013 Awards Ceremony. Event sponsorships provide a two-fold benefit for your company. Not only do most sponsorships include advertising in Colorado Biz’s Cleantech Special Section, but they also show your support for the cleantech industry. Your logo will be placed throughout the event website, in the handouts during the event, emails prior to the event, newsletters, print/radio media mentions, social media outreach and more. Join the ranks of those who have already committed to sponsoring the event, including Cooley, the National Renewable Energy Laboratory (NREL), KPMG, OPX Biotechnologies, Rothergerber Johnson & Lyons, LLP, Cenergy, CSU Ventures and more.
The deadline for sponsorship is tomorrow. For more information please contact us at firstname.lastname@example.org or visit the Colorado Cleantech Awards sponsorship page: coloradocleantech.com/2012-dinner.html. Don’t wait until the last minute, reach out to our representative today and see how your company can participate in this amazing cleantech celebration.
Josh Green to Keynote Cleantech Industry Awards
Josh Green will address raising capital in tight markets and the necessity of innovation at the upcoming Colorado Cleantech Industry Awards Celebration Oct. 22 at the Sheridan in downtown Denver.
Green is a venture capitalist and general partner with Silicon Valley firm Mohr Davidow Ventures. His keynote presentation is titled, “Toward an Optimistic Cleantech Future.”
In a 25-year career, Green has acted as advisor to some of Silicon Valley’s legendary startups in the computer, Internet, telecommunications, biotech and medical device industries. His breadth of knowledge makes him uniquely qualified for cleantech, which spans multiple industries.
“While some within the industry may feel beaten down at the moment, there is still a need for innovation in the creation, distribution and use of energy. Innovation is going to find its way,” Green said in a recent news release from CCIA. “History shows us that it is during the challenging points in the cycle where brilliant, fundamental technology breakthroughs happen.”
With the challenges the industry has faced in the past year, Green's speech about how to gain industry strength through innovation is sure to draw attention.
Tickets and sponsorship information for the Colorado Cleantech Industry Awards Celebration 2012 are now available. Nominations are being accepted until Sept. 28 for companies and entrepreneurs making a difference in Colorado’s cleantech economy. For more information, visit CCIA's website.
So what is this crowdfunding, anyway?
New legislation by Obama and Congress relaxes solicitation by start-ups
By Jim Brendel
The trendy new term in the high tech arena is “crowdfunding.” Both the President and Congress jumped on the crowdfunding bandwagon as a way to show they are doing something about the economy by passing the JOBS Act. What exactly is crowdfunding? Here’s one introduction through the eyes of a professional accountant and auditor.
Essentially, crowdfunding is the ability for a large group of people to band together and make small investments that collectively are enough to fund a start-up company. Prior to the act, that wasn’t feasible because the limit on the number of shareholders before having to report as a public company was 500. The legislation raises that to 2,000. Naturally, this will be done over the internet, through what the legislation terms “funding portals.”
It’s a hot topic for businesses because they are always looking to raise capital. The hard part is figuring out a way to get investors together. Without some kind of exchange, only tech savvy companies that had a web-based business could raise money that way. Now several funding portal websites have risen to fill the crowdfunding void. Anyone, even if not incorporated, will be able to use crowdfunding. It is only limited by the attractiveness of your idea and ability to present it.
Kickstarter, CircleUp and Fundable
The remarkable thing about crowdfunding is how successful it’s been even though the SEC hasn’t created rules for it; they are not due until the end of 2012. The appetite for small investments in companies is proven by the report that the website Kickstarter has raised more than $200 million
for 22,000 product offerings. Two million people have supported these products, receiving nothing more than what amounts to a digital “attaboy” and maybe a sample of the product.
Investors are termed “supporters” because they don’t currently receive any ownership in or financial information about the retail product start-ups.
In April, the SEC reminded issuers that “any offers or sales of securities purporting to rely on the crowdfunding exemption would be unlawful under the federal securities laws.”
started all this three years ago.
Co-founder Yancey Stricker was quoted as saying that only five percent of the projects appealing for funding are rejected, while 56 percent of them fail to meet their fundraising goals. Film fundings are the most successful projects on the site, with 12 Kickstarter films showing in the Tribeca Film Festival this year. Company officials say they won’t switch to equity shares, even when the SEC rules are out.
Here’s a typical reward for supporters of ReAct Theater in Seattle: For $10, you get an admission to a play in the theater; for only $30, you receive invitations to cast events and backstage passes; for $250, you can have dinner with the theater’s board and for $1,000 or more get a special VIP night with a pre-show dinner, front row seats and drinks after with cast members.
, on the other hand, offers direct share ownership in consumer product start-ups in return for your financial support. According to the company’s website, “Your ownership will be proportional to the amount you invest. As the company grows, so will your equity investment. This ownership will allow you to receive distributions when the business is sold or if dividends are paid.” The site does not offer a rewards model. CircleUp is able to offer equity because they currently only accept “accredited investors,” who must have $200,000 of annual income or $1 million in net worth.
attempts a combination of both methods. The company said that it will – as required by the new law – register with the SEC and a yet-to-be decided self-regulatory body as a broker-dealer before it can sell shares of companies. CircleUp will have to do the same in order to offer shares to the public. Fundable charges companies 5 percent of every dollar raised. One of its successful products was an elevation training mask that simulates training at elevation for runners and cyclists. The product goal was to raise $10,000 and it had raised $14,000 a month before its deadline. The most popular “reward” level was $75. For that you got a mask, a beanie and a t-shirt.
To the trained eye, there are some obvious challenges to crowdfunding. The first and most obvious is the probability that it could be used for fraudulent activity. The second is that even if investors receive actual shares of the company once the SEC rules are set, these shares are private and illiquid, meaning that once you’ve bought them there’s little chance that you will be able to sell them to someone else. The crowdfunding sites are not exchanges, just angel investment collectors. The third is that there are few requirements – if any – to inform investors about what’s happening with the company. SEC chairwoman Mary Schapiro has already said that the JOBS Act would weaken investor protection.
SEC attorney John Eckstein of Fairfield & Woods in Denver notes that crowdfunded shares per the JOBS Act are to be sold in a transaction which is exempt from registration under the 1933 Act (new Section 4(a)(6)).
“We are all assuming that the shares once they have come to rest in the hands of an investor will be 'restricted' stock which cannot be resold unless they are subsequently registered under the 1934 Act or exempt (e.g. Rule 144 or "Section 4(a)(1 1/2)" type transactions,” Eckstein says. “The SEC has a lot of regulation writing to do to make the rules for this new exemption clear and facile for the use by issuers, intermediaries, investors, and service providers such as accountants and lawyers. Many things are yet to be determined.”
Eckstein says there is a political battle for the right to be the self-regulatory agency over portals.
“FINRA (Financial Industry Regulatory Authority) would certainly like the job, but there is at least one new portal trade association (Crowdfund Intermediary Regulatory Association) trying to form to do the job. My bet is on FINRA, which is also trying to get the job of regulating registered investment advisers after Dodd-Frank, but there are reasons why FINRA may not be the best public policy choice,” Eckstein says.
Crowdfunded companies that raise more than $1 million during one 12-month period or have more than 500 shareholders will have to register as public companies and begin public reporting. Until then, these new looser regulations will no doubt allow some winning companies to emerge. They will probably be in the minority however, as some real stinkers emerge a year or two after they receive funding. Of course, that’s the nature of venture investing.
About the author
James Brendel, CPA, CFE, is the national director of audit and accounting for Hein & Associates LLP, a full-service public accounting and advisory firm with offices in Denver, Houston, Dallas and Orange County. He specializes in SEC reporting and assists companies with public offerings and complex accounting issues. Brendel can be reached at email@example.com or 303.298.9600.
Why Disillusionment with Cleantech is Not Such a Bad Thing
By Christine Shapard, Executive Director, Colorado Cleantech Industry Association
These days, some major proponents of cleantech are having a hard time staying optimistic about the future of the industry. With continuing news of layoffs at major companies like Vestas and closures of some businesses, like Abound Solar, it’s easy to think that cleantech may not become an economic engine within the next decade.
But if history proves us correct, cleantech will only flourish in the next few years because of the dedication of a few. Sometimes, the biggest things happen after the parade has passed.
Have you ever heard of the Hype Cycle? Coined by Gartner, Inc, a hype cycle is a graphic representation of the maturity, adoption and social application of specific technologies. A hype cycle is a good representation of how nascent technology industries grow, from the breakthrough Trigger Point, to Irrational Exuberance, through the Trough of Disillusionment, up the Slope of Enlightenment and landing on the Plateau of Productivity. Hype cycles can be applied to almost all new technology industries including smart phones, internet sales, and search engines, to name a few.
What about cleantech? A nascent industry if there ever was one. Yes, the Gartner Hype Cycle applies to cleantech, as well. So where are we? About five years ago, some in the cleantech ecosystem were in the irrational exuberance state and witnessed high valuations along with high levels of venture dollars flowing into the industry. Today? That’s a tricky question for the cleantech industry. Because cleantech encompasses such a wide variety of technologies, we find our companies at various points in the cycle.
Of particular concern of late are the companies mired in the trough of disillusionment. A few of the early high flyers have exited the market due to economic contraction, global competition, poor planning or a myriad of other reasons. In turn, some venture capital has pulled away from early stage investing because they were burned at the beginning, which is not good for the current start-up community. The good news is, the market is correcting itself and companies should begin entering the slope of enlightenment. Gartner points to the slope as the point at which enterprises start to recognize how the technologies can benefit their businesses. More instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation products appear from technology providers.
Colorado’s cleantech community continues to innovate, regardless of the national political rhetoric and the headwinds against them at the moment. I am confident that once we move beyond being mired in this negative cycle, the industry’s well-led companies and viable technologies will see an influx of capital and sustained growth.
No Water, No Energy. No Energy, No Water
By William Sarni, Director and Practice Leader Enterprise Water Strategy
Deloitte Consulting LLP
Energy has long been considered an engine of economic growth and the world needs more of it. The U.S. Energy Information Administration (EIA) estimates that world energy demand will increase
by 53 percent between 2008 and 2035. EIA further predicts that a large portion of this demand will be met through low-carbon, renewable forms of energy, but a vast majority of it will still satisfy traditional fossil fuels.
The connection between energy and freshwater has long been established, but few companies have plans for management. With growing instances of drought and flooding and increasing incidences of water scarcity, more public and private sectors are seeing freshwater for what it is: a scarce and precious commodity that needs to be managed more effectively.
It takes vast amounts of water to extract, process and produce many forms of energy and it takes vast amounts of energy to extract, transport and treat water. The demand for one could soon cripple our need for the other. When added to competing pressures of food requirements, these concerns multiply. The availability of both energy and water impacts our ability to adequately supply food to an expanding global population.
Unless we can manage energy and water, we will not likely be in a position to feed an increasingly hungry world. The competition for energy, freshwater and food raise serious concerns about economic development, national security and public well-being.
The Path Forward: New Technologies Needed to Reduce Energy’s Water Footprint
The solutions provider market is forecast to grow as new technologies are needed to address the water gap. From an energy perspective, the solution involves reducing water consumption in traditional energy production as well as moving towards energy sources that are inherently less water-intensive. Where do we go from here? We have outlined below top actions for water stewardship, as well as energy and power:
Managing the Nexus
Water Stewardship - Top Three Actions
• Track water use against energy use -- how much water is associated with direct energy use (onsite), purchased energy and in your supply chain?
• Develop an understanding of your water footprint and water risk within the watershed.
• Engage stakeholders within the watershed to develop a collective water and energy conservation and management plan.
Energy and Power - Top Three Actions
• View energy development (oil and gas, biofuels, etc.) as power generation within the context of the local watershed, i.e., “watershed-scale thinking.”
• Consider renewables (low water footprint) for watersheds experiencing water stress or scarcity.
• Engage stakeholders within the watershed to develop a collective water and energy conservation and management plan.
Embracing new economic and business models means meeting the needs of the water-energy nexus by leveraging new technologies.
William Sarni is a Director of Deloitte Consulting LLP and is the firm’s Practice Leader for Enterprise Water Strategy. An internationally recognized thought leader on sustainability and corporate water strategies, Sarni is a frequent speaker for corporations, conferences and universities. He is the author of “Corporate Water Strategies” and the forthcoming book, “Water Tech, A Guide to Investment, Innovation and Business Opportunities.” He lives in Denver.
As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.
Normalize Renewable Energy Credits Now
Authors: Greg Pfahl, CPA, Hein & Associates, LLP and Sean Kelly, CPA, Hein & Associates, LLP
Several renewable energy incentives are on the congressional chopping block this year, and every year, it seems. There are plenty of persuasive arguments on either side regarding whether or not to keep renewable incentives. We believe a long-term energy policy is needed at the federal level to allow the domestic renewable energy industry to grow and ultimately prosper. It will remove the guesswork surrounding what incentives may be available in any given year.
First, let’s offer some perspective. The government gets involved with industry when it deems it is in the national interest of the U.S. For example, companies and investors receive tax advantages associated with domestic oil production as a way to lessen U.S. dependence on foreign oil. Earlier in our history, the government granted right-of-ways to railroads and utilities. Today, politicians use the renewable energy industry as campaign stump fodder because clean, domestic renewable energy sounds good to voters. It brings in jobs arguments as well, and Navigant Consulting, Inc. estimates that eliminating the production tax credit on wind would blow away 37,000 jobs in the U.S.
When a group submits a business plan for potential funding, it often includes projections 10 years out. How can renewable energy companies receive funding when a critical aspect of their business plans — those dealing with such issues as investment tax credits and bonus depreciation, for example — is indeterminate? The 2.2 cent per kWh tax credit program has been extended seven times during the past 10 years. Banks and investors want to know what the potential financial landscape is with the best amount of assurance, and annual extensions of incentive programs by Congress is the last place they look.
One industry expert we spoke with, Christian Laursen, is the CEO of Quanta Power Generation, which provides engineering, procurement, and construction (EPC) services to the utility scale power generation industry, and has been involved with the development of 260 megawatts of PV energy. He explained that the auction process for power purchase agreements with utilities results in lower bid prices. So a developer who is trying to win a PPA with a utility factors the tax credit into his bid. “Critics say that the PTC is just helping a bunch of developers get rich, but that’s not what happens,” Laursen continued. “It (the PTC) just factors in a lower price to the consumer.”
The problem with tax credit uncertainty is, Laursen said, that only the aggressive developers who bid based on the PTC get the power contracts. However, if the incentive is legislated away, the project stalls and the utility doesn’t fulfill its renewable energy quota. Tens of millions of development costs gets washed away, making developers less inclined to build projects.
We thought it useful to review the incentive landscape to compare and contrast. The following table presents the current slate of selected U.S. federal tax incentives:
Investment tax credit: Available for solar, wind, geothermal and non-ethanol biofuels. Qualifying properties get a 30 percent tax credit, a direct dollar-for-dollar of tax due, not just a deduction, which makes this incentive so attractive. The former 1603 grant in lieu of the tax credit program is history. Although there is a general blowback from the Solyndra loan guarantee default that has given solar power a black eye in general, there is still support for this tax credit because it is not a loan guarantee. It is set to expire in 2016 and it is too early to tell if this credit will be extended.
Production tax credit (PTC): Available for wind, biothermal, geothermal, and closed loop biomass. This is similar to the investment tax credit in that you receive credit for taxes due. While this is more beneficial to companies than a tax deduction, the credit of 2.2 cents per kilowatt hour produced, is based on production, and thus may come later in the life of a project. Other eligible credits of 1.1 cents per KH are available for hydroelectric, wave energy and ocean thermal. It is due to expire in 2012. The PTC is important enough that Danish wind turbine manufacturer Vestas said if the PTC is not extended, it will lay off a large number of employees at its Colorado operations. Our current opinion is that there is about a 50 percent likelihood that the PTC will get extended, but there is currently a strong contingent pushing for extension, despite recent difficulties in Congress.
Federal loan guarantees: Loan guarantees on debt obtained from traditional financing sources have been available for most renewable energy companies from the Department of Energy and the Department of Agriculture, when funding is available. A Colorado biomass refiner, Zeachem, recently announced that it was awarded a $232.5 million guarantee under the UDSA Biorefinery Assistance Program. Unfortunately, according to the USDA’s website, no funding is available under this program in 2012. Additionally, the Department of Energy’s 1703 and 1705 loan guarantee programs are now expired, leaving only a few relatively insignificant options available for loan guarantees at this time.
Cellulosic producer tax credit: This $1.01 credit per gallon sold is seldom used. Companies are attempting to make the technology work but the science is still catching up. It is scheduled to expire at the end of 2012. Since the technology has not been proven to be viable on a commercial scale, we do not anticipate that this credit will be extended.
Bonus depreciation: This is an accelerated tax deduction based on investment in new plant and equipment. It is a tax benefit consideration for investors in oil and gas, solar, wind, and biofuel production, as well as other industries. In 2012, investors can write off in the year of purchase 50 percent of the investment in new plant and equipment with a life of 15 years or less. By using this program, companies are using up all their deduction early, so it’s kind of like stealing from future results. The bonus depreciation expires in 2013. This program has nearly expired a number of times, but keeps getting extended. We feel that bonus depreciation will be extended again because there are concerns that if it isn’t extended, capital expenditures will drop-off dramatically and the economy could go back into recession.
Accelerated write-off of intangible drilling costs: Now we come to the oil and gas tax benefits. Most of them involve capitalization rules on U.S. assets. The tax laws related to intangible drilling costs allow the owner of an oil and gas well to write off all of the labor and supply costs incurred with drilling in the first year. This is beneficial because the costs incurred to produce an asset or a revenue stream are usually required to be capitalized and deducted over many years. The intangible drilling costs have been allowed as a tax deduction since 1913. We believe the laws surrounding intangible drilling cost will stay in place for the foreseeable future. It is important to note that geothermal companies also receive these benefits.
Small producer tax exemptions: These are commonly known as the percentage depletion allowance which allows a deduction equal to 15 percent of all gross income from oil and gas wells that produce less than 1,000 barrels of oil a day or 6 million cubic feet of gas. This tax benefit can be significant because you can continue to take the percentage depletion deduction even after you have recovered your entire investment. Similar to intangible drilling costs, this tax benefit has been around for a long time and it is likely to stay in place. In contrast, the small producer tax exemption for bio-fuels expired in 2011 and there are none of these benefits for other types of renewable energy.
Lease costs: Currently, investors can deduct 100 percent of the purchase of U.S. leases and all rights paid to landowner related to mineral rights over a period of time until their depletion. There are also some add-backs to calculating the alternative minimum tax deduction. We do not expect a change to the tax treatment of lease costs. This includes geothermal leases.
In the United States, our energy policy has traditionally centered around the tax code as opposed to other means to a similar end, such as the feed-in tariff system used in many countries, particularly in Europe. Because of the complexity of our U.S. tax code, it is very difficult for the average citizen to understand what is in place. There is no question, however, that these programs stimulate development in their respective industries. Because renewable energy is such a crucial part of our future, we believe that a consistent treatment from Washington would stabilize the funding and growth of the industry.
Sean Kelly, CPA, is a tax partner in the Orange County office of Hein & Associates LLP and provides tax planning and compliance services to closely-held businesses and public companies, and regularly assists with entity planning and selection, business planning, estate planning, succession planning, and charitable giving. Sean Kelly can be reached at firstname.lastname@example.org or 949-428-0288. Greg Pfahl, CPA, is an audit partner in the Denver office of Hein & Associates LLP, a full-service public accounting and advisory firm with additional offices in Houston, Dallas and Orange County. He also serves as a local leader for the alternative energy practice area. Greg Pfahl can be reached at email@example.com or 303.298.9600.
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