Pennsylvania Can Clean Up in Clean Tech

Kevin Brown, my co-founder of Cleantech Alliance Mid-Atlantic, says, "Pennsylvania can clean up in clean tech," in the Philadelphia Inquirer this weekend:

 Philadelphia identifies with underdogs: Rocky, the Eagles, and now energy.

When business people or policymakers think of Philly, they naturally jump to the Big Five: pharmaceuticals, higher education, legal, finance, and technology. Clean tech, or renewable energy, rarely makes the list. But that's about to change. We have the potential to be a full-fledged front-runner in one of the hottest growth industries.

Read the full story here.

Philadelphia: Birthplace of Energy Independence?

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Philadelphia Navy Yard, Robert N. Dennis collection

Can Philadelphia become the birthplace of another kind of American independence: energy independence?

Two developments this week add to the Greater Philadelphia region's bid to become a regional powerhouse, if you will, of energy efficiency, clean technology research and commercialization, and entrepreneurship.

The location of these new developments is the old Philadelphia Navy Yard, the "city within the city" that is rapidly becoming an economic center with the headquarters of URBN, TastyKake, and the Aker Philadelphia Shipyard.

On Tuesday, Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP-SEPA), announced the launch of its Energy Commercialization Institute (ECI), which it describes as "the region's first partnership for accelerating alternative and clean energy technology development and commercialization, through translational research and sponsored research funding."

The ECI is a partnership between Drexel University, the University of Pennsylvania, and BFTP-SEPA, which created the ECI with $1.2 million from the Commonwealth of Pennsylvania. A host of other area universities will also participate.

"The Energy Commercialization Institute is a catalyst for regional energy-based economic growth," said RoseAnn B. Rosenthal, President & CEO of Ben Franklin.

The Institute will implement "common intellectual property protocols among the participating institutions and by provide capital at the earliest stage of technology commercialization," according to Rosenthal.

The other development tackles another energy and economic opportunity: efficiency.  A research consortium led by Penn State University announced yesterday that it won a competitive grant from the Department of Energy worth $129 million to develop an "energy innovation hub" at the Navy Yard.

The hub will fund research into energy efficiency for buildings and train workers in both retrofitting and new construction.

"Our goal is to create the building equivalents of super low emissions vehicles (SULEVs) in buildings – call them SULEBs!" said Dr. Henry Foley, Penn State's vice president for research and dean of the graduate school, who is leading the effort.

"With this kind of support we can realize the vision of Philadelphia becoming America’s greenest city and we can put Pennsylvanians in the lead of this technological revolution," Foley said in an email.

The Navy Yard, with a land footprint of 1,200 acres, has some unique qualities suitable for such a research facility, including its own unregulated power grid, allowing for testing technologies in a way that won't impact the larger, city-wide power grid.

The campus also has over seven miles of waterfront, more than 100 companies with a workforce of 8,000, 5.5 million square feet of buildings, and more than $500 million of private investment, according to an article in the Philadelphia Inquirer.
 
Critics question the assertion that the energy hub will create 100,000 jobs and note that other top-down efforts have failed to deliver results.

But Foley dismisses such criticism, saying in an email that "this effort will be driven by science and engineering for innovation. This HUB is highly focused in one incredibly important area. The outcome will be technology-based economic development."

As for comparing this to other top-down efforts, Foley said, "it sounds to me like a comparison of apples to bowling balls – they’re both spherical."

The combination of this hub, the energy commercialization institute, and existing business incubator-style efforts at the Navy Yard, which houses such promising companies as OxiCool that is developing a cutting-edge air conditioning technology, makes the case for a growing support infrastructure for the region.

What's needed next is more opportunities for ground-up entrepreneurial efforts, attracting some later stage companies that will provide jobs, and an investment ecosystem to support the best emerging technologies in the region.

Philadelphia still has a long way to go, but it is slowly building momentum to ramp up to full power. If these efforts succeed, Philadelphia may become the birthplace of another American revolution, that of energy independence.


(Disclosure: The author is co-founder of the Cleantech Alliance Mid-Atlantic, which provided a letter of support for the Energy Innovation Hub application and is a partner in that effort, along with other efforts supported by BFTP-SEPA.)

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Green Skeptic Friday LinkFest - 07/16/10

Here are some links to articles of interest to The Green Skeptic this week:

Nick Hodge Deconstructs the Smart Grid and some investment opportunities in Seeking Alpha: Smart Grid

Fred Wilson (despite being on vacation in Europe) wrote a compelling piece on the "seed fund phenomenon," which has implications for cleantech investing: AVC

One of my favorite San Diego companies, Envision Solar, announced it is teaming up with Pennsylvania-based battery storage company Axion on "solar tree" parking lots that track the sun from NYT Green.

GE announced its $200 million smart grid challenge and unveiled an electric vehicle charger: $GE

Shari Shapiro over at Green Building Law Blog offered her perspective on the Smart Metering controversy brewing in states around the US in "Smarting Over Smart Meters The Sequel--Maryland Rejects Smart Meters." And I added my two cents in "Smart Meters, Smart Grid and Dumb Folks."

New ARPA-E awards were announced for grid-scale storage, power electronics & building efficiency: ARPA-E

Smart grid networking startup Trilliant snags a massive $106M investment: Trilliant

And BP announced it is buying Verenium’s biofuels business for $98M, proving there is such thing as an exit in cleantech investing: Boston Business Journal

Probably the most thought-provoking piece I read this week was Po Bronson and Ashley Merryman's take on "The Creativity Crisis" in Newsweek.

Have a great weekend everyone.

Pennsylvania: Keystone in America's Energy Future?

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Long known as the "Keystone State," Pennsylvania is fast becoming key to America's energy future.

With some of the world's largest and best natural gas reserves found in the northwestern part of the state, significant coal reserves already providing electricity for much of the northeastern US, and the country's largest grid operator (PJM) located in King of Prussia, Pennsylvania is already an energy powerhouse.

Increasingly, Pennsylvania is attracting and growing companies in the emerging cleantech arena, including two of the world's largest wind companies (Gamesa and Iberdrola), smart grid and demand response (such as Viridity Energy), and emerging technologies from biofuels to batteries and storage.

Why this convergence? According to Pennsylvania Secretary of the Department of Environmental Protection John Hanger, several key policy decisions made over the past several years, along with efforts and incentives to attract companies from as far away as Spain and Greece, combined with the existing energy infrastructure to make the Commonwealth very attractive.

"Over 50 percent of the inquiries the state is getting from companies looking to relocate here are from the cleantech sector," Secretary Hanger told a group of business leaders at the Greater Philadelphia Chamber of Commerce's "The Future of Energy" briefing yesterday.

His remarks were echoed by Alice Solomon of Select Greater Philadelphia, who noted that of the 124 companies she's talking to about the region, 20 percent are alternative energy companies. Solomon, speaking at last week's Clean Energy Conference hosted by PennFuture in Camp Hill, said that strategic market location and a rich infrastructure are attracting these companies.

Part of that rich infrastructure statewide is the vast natural gas reserves that lay a mile-deep under much of Pennsylvania and adjacent states, known as the Marcellus Shale formation.

"Natural Gas is the bridge to the clean energy future," Secretary Hanger noted at last week's conference. "And Pennsylvania will soon produce 10 percent of the nation's natural gas. Marcellus is a game changer."

Wither coal? As my pal Gregor MacDonald pointed out in his Gregor.us post yesterday, "global coal consumption was flat in 2009, as consumption of oil and natural gas fell. Coal remains the big story, and will become an even bigger story as we head to 2015."

Secretary Hanger, when asked at yesterday's Chamber briefing about coal's future in the "clean energy" mix said two things. First, that Pennsylvania has policies in development focused on carbon capture and storage (CCS), and second, that the "coal industry must decide whether to fight a carbon constrained future or to get behind CCS and embrace that future."

The coal industry is not alone in resisting change. The natural gas industry continues to fight Pennsylvania Governor Ed Rendell's push for a severance tax on natural gas extracted from the state's reserves. Rendell's cause may have received a boost earlier this week when a gas well explosion and fire shut down drilling in Clearfield County.

"We needed a severance tax even before the accident," Rendell told reporters from the Philadelphia Inquirer.

Secretary Hanger's remarks at the Chamber were more pointed, "Every other state has a severance tax on their resources extracted. It's crazy that Pennsylvania doesn't have a severance tax in place for this incredible reserve."

Clearly, as we've argued on this blog before, there is no silver bullet to meet our energy needs and security. So, too, is there no one place that will meet those needs. Pennsylvania, however, with its combination of resources, infrastructure, supportive policies seems poised to become a "keystone" in the future of energy in the United States.

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Energy Expert Sees a Perfect Storm of Opportunity in US Mid-Atlantic Region

Tom Tuffey, an energy expert with 35 years in the environmental field, spoke to a rapt crowd of 225 clean energy enthusiasts at the REBN, Mid-Atlantic's second event last night.

Tuffey, who runs the energy and environment practice at PennFuture, talked about a perfect storm of opportunity, incentives, and capital coming into the region's burgeoning clean tech sector.

The crowd, gathered in the upstairs room of Maia Restaurant in Villanova, PA, consisted of entrepreneurs, investors, and service providers who hope to benefit from the scenario Tuffey described.

"You need to be vigilant," Tuffey cautioned. "Lest your boat spring a leak or get swamped by the sea of competitors in this storm."

As an example of what Tuffey sees in terms of opportunity is the region's nascent solar development.

"We're behind on solar," Tuffey said. "But I believe solar installations in the state will grow from the current 600-700 to 13,000-14,000 in the next few years."

State legislation passed last year, designed to reduce electricity demand in Pennsylvania will also contribute to alternative energy development in the state.

"It's just coming fast and furious from every side," Tuffey said. "The opportunity is tremendous and you need to figure out your piece of it, concentrate on that, and be diligent."

Those who do, Tuffey suggested, will thrive.

Many in the crowd hope to be among those who thrive. And their excitement was palpable as Tuffey reported a litany of numbers that grew to upwards of a billion dollars in alternative-energy and efficiency investments he expects to pour into the state over the next few years.

This is a perfect storm that stands to raise all boats, according to Tuffey, from the entrepreneurs in the room to the guys with hammers and caulking guns Tuffey met with earlier in the day.

"It's a terrific opportunity for the region and a great thing to see," Tuffey concluded.

The Renewable Energy Business Network (REBN), Mid-Atlantic Chapter, was launched in February to help build networking opportunities and build momentum for the clean tech sector throughout the region. (For more info, visit http://rebn.org/mid-atlantic)

[Disclosure: The author is the co-Chair/founder of the REBN, Mid-Atlantic Chapter and serves on its board.]

Is It Time to Green Financial Services?

"I'm hoping the financial services sector catches on to the green trend," Frank Baldassarre, president and CEO of e3bank, told the crowd at today's forum sponsored by the Pennsylvania Green Growth Partnership in Hershey.

Green building has caught on in a major way over the past decade. Now, 14 percent of US municipalities over 50,000 in population have programs promoting green development, according to Shari Shapiro, a lawyer with Obermayer, Rebmann Maxwell & Hippel in Philadelphia.

But the financing of those projects hasn't caught up with the building community.

"Until two years ago, I didn't know what LEED certification was," Baldassarre, a former senior vice president with Fox Chase Bank, who is launching one of the first green banks in the country. "It just wasn't something bankers were thinking about."

Baldassarre and others, such as Florida's First Green Bank, Shore Bank of Chicago, and New Resource Bank in San Francisco, are trying to change that.

"Bankers lack the knowledge to go green," says Baldasarre, who referred to "building as the bones and financial services as the circulatory system" of our economic body.

Perhaps the time is coming for the blood running through that circulatory system to turn from red to green.

My 3 Take-Aways:

1. The knowledge gap is a niche worth exploring;
2. There is another emerging niche associated with the real need for a diversity of green financial products and services; and
3. The tipping point is upon us.

-----

Addendum: Something Howard Lindzon (it's Howard's birthday tomorrow, so I'm giving him a shout-out) pointed me to today seems to support the idea of mining this niche. It comes from Roger Ehrenberg of InformationArbitrage.com:

"Investment Banking 2.0 will be the re-emergence of the boutique, the focused, nimble, high-touch firm that was the bedrock of capital formation in the early years of the stock market boom.

"Because these mega-firms being created at the urging of the Treasury are not sustainable. They'll live just long enough for investment banking losses to be absorbed by the commercial bank's larger capital base, after which the best talent will flee for greener pastures."

Greener pastures, indeed.

(Composed on BlackBerry; updated with links 9:29 PM)

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Clean Tech: Pennsylvania Gets $650M+ Alternative and Renewable Energy Fund

Let's here it for the home state!

When Kathleen McGinty, Secretary of the Pennsylvania Department of Environmental Protection, told to me a few weeks ago that Pennsylvania was "actually now leading the country in manufacturing renewable energy technology, housing the world's leading companies in renewables," I remained skeptical, if hopeful.

Secretary McGinty backed up her statement by listing the companies: Gamesa, Iberdrola, Conergy, AE Polysilicon, Solar Power Industries, Axion, and Bionol, among others, have all become PA companies and major investors in the Commonwealth in the last 3 years.

"We are first in the country now in growth in manufacturing and first in job creation in venture-backed enterprises," Katie said. But, she added, there was a still a long way to go.

Key, she thought, was Governor Ed Rendell's Energy Independence Strategy (EIS) to spur further growth and development in the Commonwealth.

Now, Pennsylvania is making a $665.9 million investment to spur the development of alternative and renewable energy technologies and help customers and small businesses take steps to reduce their electricity consumption and save money.

Together the Alternative Energy Investment Fund and the Alternative Fuels Investment Fund will target $237.5 million specifically toward helping consumers conserve electricity and manage higher energy prices, and $428.4 million to spur the development of alternative energy resources and create good-paying, skilled jobs for Pennsylvania’s hard-working men and women.

Included among the new $650 million fund is $500 million that provides:

* $165 million for loans and grants to spur the development of alternative and renewable energy projects (except solar) among businesses and local governments;
* $100 million to provide loans, grants and rebates that cover up to 35 percent of the costs residential consumers and small businesses incur for installing for solar energy technology;
* $80 million in grants and loans for economic development projects in the solar sector;
* $40 million to the Ben Franklin Technology Development Authority to support early stage activities, such as incubator support services, translational and early stage research in startup businesses that develop and implement energy efficiency technologies;
* $25 million for wind energy and geothermal projects;
* $25 million for green buildings. Homeowners and small businesses will benefit from grants and loans to build energy efficient structures or renovate an existing building to improve its energy efficiency;
* $40 million ($10 million annually for four years) to support LIHEAP so the commonwealth can help low-income customers manage higher energy prices, severe weather conditions, or disasters; and
* $25 million for pollution control technology to help energy generators meet state and federal standards.

Under the alternative fuels law, every gallon of gasoline and diesel fuel sold in Pennsylvania must contain a percentage of biofuels, ramping up to 20 percent biodiesel and 10 percent ethanol once in-state production reaches certain levels.

"This new investment fund will strategically target new resources to leverage as much as $3.5 billion in private investment and create at least 13,000 new, good-paying jobs in an industry that is sure to be to the 21st century what information technology and biosciences were to the later 20th century," the Governor said in a press statement.

Makes me proud to say I live in Pennsylvania, the State of Independence and perhaps the new green economy.

Congratulations, Governor Rendell and Secretary McGinty -- and all Pennsylvanians.

Watch Governor Rendell's announcement of the Fund here