Alternative Energy Economy

We have jumped into the Alternative Energy Economy with both feet this year.  The country has been dabbling in this space for decades, but when oil hit $100 a barrel, gas at the pump exceeded $4 a gallon and diesel exceeded $5, the entire country became painfully aware of just how dependent we have become on foreign oil. The outcry from people across the country was for investment in alternative energy.  Fortunately, research has been quietly taking place in laboratories all over the country from universities, private businesses and national research facilities. The challenge we face now is bringing that intellectual property to commercialization.

 

The NREL (National Renewable Energy Laboratory) 21st Industry Growth Forum is being held in Denver this week.  NREL is part of the US Department of Energy.  The conference has participants from a wide variety of alternative energy companies including batteries and energy storage, ethanol development, wind turbines, photovoltaic technology and much more. The conference includes emerging companies in the alternative energy arena, established companies seeking additional funding, venture capitalists with funds to invest, and representatives from several of the universities in Colorado that have programs specific to alternative research.

 

According to Colorado Governor, and Forum keynote speaker, Bill Ritter, the state is the global hub of alternative energy research and companies.  There are over 200 companies directly engaged in alternative energy solutions based in the State.  In addition, the University of Colorado, Colorado School of Mines and Colorado State University has developed a virtual “collabratory,” partnering with NREL, to work together in sharing intellectual property development, testing and brilliant minds.

 

IT plays a key role in development, collaboration and commercialization of alternative energy. In speaking with several of the vendors on the conference floor, virtualization of business processes is fundamental in their success.  The core team consists of engineers, but the supply chain and all non-core functions are contracted out. I repeatedly ran into the statement that this business model maximized their funding and allowed them to invest in the engineers they needed to bring their solutions to market more quickly.

 

My back of the envelop analysis, based on conversations with start ups and vendors, nets the following bottom lines: 

 

1.    Collaboration technology is a key component for the alternative energy market.

2.    Software as a service is part of the business plans that VCs are investing in.

3.    Technology must be interoperable, without lock-in due to the wide variety of entities collaborating in the cloud.

4.    Communication technology is a fundamental component in getting research out of the labs and into the commercial market.

5.    Government investment in the delivery infrastructure, such as smart power grids, is required due to the scope of the total project.  Think of it as the interstate system for alternative energy – mostly government funded, but supported by state and local government as well.

6.    The long term solution to our energy economy is a portfolio of solutions, not just wind, or solar, or ethanol.

 

All of us have a role in this new energy economy.  We are responsible for how we consume utilities and fuel in our day-to-day lives. Being aware and acting responsibly in reducing our consumption of energy will contribute in reducing the country’s dependence on foreign oil, and buy time to commercialize the R&D currently embedded in labs.