Tufts Energy Conference brought together some of the best local and international minds in clean energy
What does it take to be an entrepreneur in the clean energy sector? You need to have the political savvy of a campaign manager, the ability to speak the abstruse language of physical sciences and the hard-hitting negotiating skills of a diplomat.
In short, the ideal management team for a clean energy startup would include Karl Rove, Albert Einstein and Henry Kissinger.
But make no doubt about it—even if you’ve assembled a Nobel Prize-winning team, you’re fighting an uphill battle to compete in an environment where most investments are going overseas.
This troubling facts kept conversation buzzing and heads spinning at the Tufts Energy Conference last Friday and Saturday. On Friday, keynote speaker Howard Berke of Konarka made the bold argument that oil, at 100 dollars per barrel, is good for America. He made his case in a Sesame Street-style lesson about the letter of the day, “E” — outlining the benefits of high oil costs in terms Energy, Efficiency, Economics, Environment, Empire, and Existence. The basic point was that high oil costs will lead to improved efficiency, benefit the environment, drive innovation and contribute to national security by reducing our political dependence on foreign oil.
I’d like to add to Berke’s list that “E” is also for Entrepreneurship and Employment. Most economists agree that small and mid-sized companies are key drivers of the economy and employment. President Obama has consistently touted the clean energy sector as a driver of jobs, highlighting the issue in numerous speeches and his most recent State of the Union address. Moreover, he has allocated $80B to clean energy in the American Recovery and Reinvestment Act.
Last year, the United States invested $18.6B in clean energy. China invested almost twice that: $34.6B. According to the Pew Charitable Trust, the United States has fallen behind sixteen other countries in clean energy investments, including Canada and Mexico, who now invest more dollars in clean energy as a share of their national economy than we do. Still, clean energy is a tremendous growth area. Global investments grew 230 percent between 2005 and 2009 and the sector now attracts $162 billion in annual global investments.
Add to this that jobs in the traditional oil market stabilized long ago, and, even though we’re likely to be dependent on fossil fuels for a long time to come, energy experts believe that innovation in the field is crucial. Many analysts, including Saturday’s Tufts Energy Conference keynote speaker Michael Quah, believe that meeting the energy demands of the future will require intelligent grid designs with energy delivered from multiple systems.
In a panel titled “Green Technology and Entrepreneurship,” Nick D’Arbeloff of the New England Clean Energy Council, Radha Jalan of ElectroChem, Steve Kropper of Windpole Ventures and Matthew Wolfe of Madera Energy shared their experiences of rolling out these visions and making scalable clean energy projects an on-the-ground reality.
Other panels at the conference included: Evolving Fossil Fuels, Urban Energy and Green Design, Re-newables to Scale, Urban Energy and Green Design, Navigating the Private-Public Interface, and Energy in Emerging Markets. The conference hosted industry experts, academics, consultants, regulators, private equity, and policy makers from such diverse organizations as Exxon Mobile, MIT, Enel, GridSolar, Sandia National Labs and Joseph Stanislaw author of Commanding Heights: The Battle for the World Economy.
This lineup provided a clue as to why it takes some serious verve to run a startup in the clean energy sector. Entrepreneurs in the clean tech sector are rolling out products into an existing energy market that already includes the $698.2Bcrude oil industry, the $101.1B fuel retailing industry, the $874.2B oil and gas market and the $33.3B renewable energy sector.
To put this into perspective, the Web 2.0 market is expected to become a $4.6B market by the end of 2013.
Can entrepreneurs compete in an industry filled with giants?
As Sue Tierney of Analysis Group pointed out in her Saturday keynote, titled “The Challenge and Promise of Adopting Advanced Energy Technologies,” bringing the clean energy technologies onto the market has special challenges due to the complex geopolitical struggles that affect the energy sector and the intensity of the regulatory environment.
On the national level, a combined total of sixteen regulatory bodies, cabinet positions, and White House advisory offices have a hand in setting energy policy, usually with little dialogue between offices.
And of course, people who have followed the developments of Cape Wind turbine project understand that local politics has a tremendous impact on clean energy projects. As D’Arbeloff, Jalan, Kropper, and Wolfe discussed their challenges as entrepreneurs in this sector, they all agreed that negotiating local politics is one of the difficult hurdles that entrepreneurs in this sector face. Kropper and Wolfe noted that much of their time is spent in obtaining permits and negotiating with local zoning boards and Wolfe shared a story about a time when he had the opportunity to meet with the State Energy Commissioner and instead chose to take a call from the local zoning manager where he was scaling up a project.
Jalan, who took over ElectroChem after her husband’s death with no technical and business expertise — and later went on to win the Massachusetts High Tech Energy Star Award as well as being named Asian Business Woman of the Year — spoke about the difficulty of obtaining funding for her projects. She confided that to survive in an area that is still emerging, it is important to have a clear sense of your own motivation, whether you are driven by problem solving, opportunity or altruism. During difficult moments, her sense of altruism and desire to contribute to a cleaner future keeps her going.
D’Arbeloff, who runs a the Clean Energy Fellows Program that assists entrepreneurs with backgrounds from a diverse range of sectors make the transition into the clean energy sector, explained that while most entrepreneurs face a “valley of death” during the friends and family round, entrepreneurs in the clean energy sector face a “cradle of death” in the early stage of product development and a “valley of death” after the proof of concept phase when they need to develop a major project or plant to scale up and distribute their project.
Another challenge facing clean startups is finding talent. Kropper, a veteran of the Clean Energy Fellows Program, studied English in college. As a serial entrepreneur who has gone through multiple technological learning curves, he finds that working with physical scientists and engineers presents new challenges. This is a field dotted with polymer chemists and laser physicists as well as mechanical and electrical engineers.
Entrepreneurs, take heed: Although America lags behind others in making clean energy investments, we are still shelling out more VC money than any other country in the space. And, as we all know, many of the VCs investing in clean energy are right here, in the Boston area.
But remember: You better have a cold understanding of science and be prepared for flaming hot political controversy!
Did you attend the Tufts Energy Conference? What are your thoughts on the challenges facing local clean tech startupers? Let us know in the comments.
Editor’s Note: Luisa Groher has a professional background in the non-profit sector and a master’s degree from Dartmouth College’s Globalization Program. She enjoys writing about entrepreneurship because she gets a real rush from hanging out with geeks who are on the verge of developing bizarre, far-reaching and life-altering inventions, and she’s particularly fascinated by the clean tech sector because the complicated political nature of the field draws out her natural tendency to have paradoxical views on just about everything.
Tags: Tufts, Tufts Energy Conference
