Thursday marked the conclusion of the 2009 Sustainable Opportunities Summit presented by CORE, the Deming Center for Entrepreneurship at CU Boulder, and the City of Denver. A theme running through many of the day’s presentations was a belief that sustainability does not have to come at the expense of economic development. In fact, a robust investment in sustainability may be a key driver to fuel the economy. Governor Ritter opened the morning touting his hope that Colorado and the rest of the country could “forge a different energy future.” Ritter noted it essential “to marry energy policy to climate policy,” considering both cleaner fuels and other ways to reduce carbon emissions. Through these efforts Ritter believes substantial job creation can and will occur. Ritter cautioned the audience not to forget equity in sustainability efforts, especially when considering programs that could raise the cost of energy to consumers. Among the plans to address these equity issues is the weatherization program for low income houses, which will receive $160M in federal funding over the next two years.
Denver Mayor John Hickenlooper followed Ritter, bringing perspective from a local level. Hicklenlooper noted a duel focus on “creating a vision that is sustainable” while at the same time continuing “to be pro-business.” To Hicklenlooper what will truly drive adoption of sustainable efforts are “true and powerful business incentives.” Hickenlooper highlighted efforts made by the established GreenPrint Denver program in improving the city’s sustainability profile and the new Greener Denver Climate Prosperity program. The latter was the primary focus of a later panel discussion moderated by Andre Pettigrew (and summarized below).
Richard Sandoor, Chairman of the Chicago Climate Exchange (CCX), offered perspectives on controlling carbon emissions at a time when federal regulation on carbon emissions is expected sooner rather than later. The CCX serves as a voluntary but legally binding system where companies can trade contracts for tons of CO2 emissions and has seen substantial growth, both in volume and international expansion since its first trade in 2003. Sandoor offered his beliefs on the three broad goals any mandated system designed to limit emissions should strive for – goals he feels are best met through a cap and trade system rather than a more command and control approach.
- Align financial incentives with social incentives – “The real important thing is the price signal” as this encourages the desired behavior
- Solve global warming in a way that does more to “reward those that are doing good” rather than punishing. Through cap and trade, some companies could even see efficiency and sustainability practices as a profit center
- Achieve the desired reductions at the lowest cost possible which means allowing a system of trading so those who develop very cost effective reduction methods undertake more of the reductions rather than simply mandating reductions of each company.
John Balbach, managing partner of the Cleantech Group, brought perspectives on the clean tech investment environment to the lunchtime address. Balbach noted that estimates for the total cumulative investments in clean tech needed to keep atmospheric CO2 levels below the dangerous 450 ppm threshold range from $2 trillion to $9 trillion. Current annual investments will take cumulative investment to the low end of this range. Balbach noted the “astounding [growth] in the last six to seven years” – a trend that will definitely experience a blip in 2009 but will likely continue. In the short term, government funding may help pick up some of the private investment slack, although as a new entrant into the clean tech arena government currently lags the private sector on the learning curve. In the longer-term, Balbach highlighted the need to “address China and India” as the growing middle classes in these countries will substantially change the source of the world’s emissions.
A summary of some of the day’s panels and the finals of the Cleantech Venture Challenge follow.
Sustainable Energy: The Rocky Mountain West’s New Eco-Friendly Economy – A National Example
- Moderator: Andre Pettigrew, Office of Ecnomic Development, Denver
- Dr. Marc Weiss, Global and Urban Development
- Doug Henton, Collaborative Economics
- David Hermann, CH2M Hill
The Rocky Mountain panel offered a similar belief system as those presented by the Governor and Mayor focusing on the Climate Prosperity Strategy Program being piloted in eight locations including Denver. According to Weiss, the belief behind the program is that “improving the environment is the best economic strategy.” The program applies to cities (and larger areas in some cases) what many successful businesses have discovered – that increasing sustainability efforts also improves the bottom line. Pettigrew highlighted the three focuses of the program that Denver will undertake: Greener savings centered on how to save money via efficiency, Greener opportunities which create new markets for greener products and services, and Greener talent which focuses on creating a capable and available workforce. Henton, a key member in efforts at the tech and green revolutions in Silicon Valley, offered perspectives on the support and glue needed to garner maximum benefit from green initiatives. Henton highlighted the need to both create a supply side locally sourcing as much of the green economy as possible so that “every aspect of the value chain has a home in the region.” The demand side must also be considered through creating educated consumers who seek ways to include sustainability in their lives. Hermann concluded the presentations offering some specific examples of government efforts at sustainability in which his company is involved. Domestically, these projects include the Solar America Cities projects which attempts to identify barriers to solar installation in cities (e.g. permitting, financing) and the San Francisco solar map (sf.solarmap.org) where anyone can enter a San Francisco address and see the solar PV potential. Internationally, CH2M is involved in the planning of Masdar City in the UAE which aims to be carbon neutral and zero waste.
Sustaining Our Natural Resources: Water, Our Common Liquid Bond
- Moderator: Virginia Winter, Equinox Consultantancy
- Speakers: Julie Frieder, Senior Social Research Analyst, Calvert Group
- Michael J. Glade, Director, Water Resources & Real Estate, Molson Coors
- Elisa Speranza, President, CH2M HILL OMI
Moderator Virginia Winter opened the session by positing, “I don’t think there’s any more precious resource than water.” This sentiment, seemingly shared by all the panelists, was put in sharp relief by the first speaker, Elisa Speranza of CH2M Hill OMI but presenting on behalf of Water for People. According to Speranza, over 884 million people worldwide lack access to safe drinking water, leading to 6,000 preventable deaths every day from waterborne disease. Water for People, with programs in ten countries, attempts to change this equation by strictly adhering to a set of core principles. The non-profit believes that facilitating a permanent impact relies on providing a sustainable infrastructure, applying the appropriate technology, and empowering the people of a local community. Too often, according to Speranza, well meaning organizations arrive in a water-deprived region and fail to deliver on their promises, either due to lack of capital or because they misunderstood the technological constraints before arriving. Water for People boasts a 97% success rate – defined as viable projects still in use ten years after installation – because the organization recognizes that involving the community is the greatest predictor of success in sustainability. Julie Frieder, of the Calvert Group, followed Speranza and discussed the metrics her investment fund uses in evaluating responsible corporations. The Calvert Group believes that Environmental, Social and Governance (ESG) aspects of a firm are matters of material significance, and these measures serve as a good proxy for the quality of management. Frieder, recently arrived from the World Water Forum in Istanbul, put forth that advocacy is needed from investors, pushing companies to investigate and disclose their water footprint and ensure that equitable and affordable access to water is available to all. Michael Glade of Molson Coors rounded out the panel and discussed the unique aspects of water availability in Colorado. According to Glade, the water scarcity experienced within the state is to be expected due to matters of geography, given that the populous Front Range only receives about 20% of the water available within Colorado. Water consumers – agriculture interests, industry, and the public – can best come to agreement on usage by establishing a regular dialogue, as communication is the greatest asset in managing the scarce resource.
Sustainable Energy: Innovative Clean Energy Technologies
- Moderator: Richard Eidlin, SolSource Inc
- Richard Bolin, Acting Technology Transfer Director at NREL
- John Herrick, Brownstein Hyatt Farber & Schreck
- Rick Margolin, Innovo Energy Solutions Group
Of no surprise given the economic time, many of Eidlin’s and the audience’s questions to the panel focused on the opportunities for clean tech innovations to achieve funding to move the ideas to market. Many clean tech ventures find themselves in a capital intensive business requiring investment in the 10s and 100s of millions to achieve a commercial product. Herrick sees generally bleak prospects for the near-term, but noted opportunities “in public private partnerships” where a company takes advantage of public grants as well as the changes in the loan guarantee program offered by the stimulus bill. Margolin, who works to bring technologies together with inventors, noted that he has seen recent interest from some PE investors in deals they had originally walked away from because of the possibility for new government funds or incentives. Herrick did note a more positive outlook for the long-term prospects of clean tech investment as he feels that the recent spikes in energy prices have generated a longer attention span for alternatives even as fuel prices have receded. Beyond financing, Bolin noted the importance of new companies focusing on “applications and how to grow the business” as opposed to overemphasizing the technology – a common trap for scientists. Margolin encouraged companies to “start outreach early and develop allies within the community” who can provide both advice and connections. For short-term opportunity panelists were in agreement that some efficiency technologies – which incidentally are usually less capital intensive – represented low-hanging fruit including moving toward a smarter grid and enhanced building controls.
Cleantech Venture Challenge
The Cleantech Venture Challenge is the premier international student competition showcasing emerging opportunities in the cleantech sector. Hosted by the Deming Center for Entrepreneurship at the Leeds School of Business, University of Colorado at Boulder, student teams from around the world are invited to submit business plans that demonstrate both venture-grade, for-profit business models as well as innovative solutions in the cleantech sector.
Cleantech Venture Challenge Judges:
- Tom Blum, GC Anderson Partners
- Paula Rhodes, Third Eye Consulting
- Abe Yokell, Rockport Capital Partners
4th Place: NALION Technologies, University of Waterloo, Ontario, Canada. NALION Technologies, represented by Balinder Ahluwalia, Karen Doering, and Fraser Harris, seeks to commercialize a breakthrough in lithium-ion battery composition. By substituting its patented ingredient, manufacturers can produce batteries with a life span of up to ten years (extended from three), cut costs by 10-30%, and offer safety through stability that units currently lack. Substitution, however, requires a slightly larger battery packaging, so NALION is targeting the hybrid and electric vehicle market where size is less of a concern than in computers. The team seeks $1.5 million to build the pilot plant in which to produce the material, after which they plan to step back and exist as an IP licensing company.
3rd Place: Tetra One Source, University of Louisville. Tetra One Source, represented by Daniel Johnson and Abby Lovan, plans to address the heavy metal toxicity found in the soil of over one million contaminated sites in the United States. Currently, evacuation and disposal is the predominant method used to cleanse contaminated land in the $123 billion remediation market, at a cost of $300-500 a cubic meter. Tetra One Source believes its solution – mixing the soil with a patented blend of raw materials – is more cost effective at $50 a cubic meter, and has demonstrated an 80-90% reduction in soil toxicity in initial field tests. The underlying technology was developed in a joint venture between NASA and Texas A&M University. The company is seeking $850k to complete its field testing, ramp up sales and marketing, and build inventory.
2nd Place: Husk Insulation, University of Michigan. Husk Insulation, represented by Ian Dailex, Erica Graham, Shally Madan, Siddharth Sinha, and Elizabeth Uhlhorn, seeks to replace polyurethane insulation in refrigeration units with a patented Vacuum Insulation Panel (VIPs) that occupies a fraction of the space while boasting a 6-10x improvement in energy efficiency. While VIPS are currently available, the secret sauce of Husk Insulation is a production process that reduces the cost by 80% – in line with polyurethane – while maintaining all the benefit. Husk has targeted the refrigeration markets for initial penetration (first commercial, then residential), as customers within these industries are seen to value the extra space afforded by the slim material. The company is seeking $1.2 million to be used for operating and capital expenses, licensing, and raw materials.
1st Place: Ecoviv, Oxford University, United Kingdom. Ecoviv, presented by Gagan Kanwar, provides a software product that optimizes the efficiency of server farms with the goal of reducing power consumption by 15%. There are currently 30 million servers in operation, with eight million units shipped in 2008, yet the average utilization of a given machine is only 10%. Ecoviv’s software optimizes the resources of networked servers and creates a set of rules from which given machines can be turned on and off, maintaining reliability while cutting the power bill. For a server farm of 2200 units, the software would yield an annual savings of $250k/year, or a five year net present value of $1.6 million. The company is currently partnered with Dell and Sun, and plans to launch a pilot with Dell in May of this year. Ecoviv seeks $1.5 million to devote to engineering, sales and marketing.
In winning the contest, Ecoviv took home the G. Chris Anderson $25,000 award, an invitation from the National Renewable Energy Laboratory to present at the annual Industry Growth Forum, and the opportunity to circulate its business plan among the Investor’s Circle.
