The clean energy revolution
A revolution is quietly sweeping the world. Communities, countries, and the global economy are embracing the clean tech revolution. What’s driving this revolution, and what are regions doing to capitalize on what some are calling the ‘next evolution of energy’?
What’s driving the clean energy revolution?
Now, more than ever, the focus on energy has taken center stage. Climate change, energy scarcity, and energy independence are forcing communities to aggressively seek new sources of energy and innovative technologies for using that energy. While the global economic downturn has dampened demand for energy, this will be a short-lived trend.
Whether you call them knowledge-based jobs, clean energy jobs, ‘green’ jobs, or any combination of the above, communities are investing heavily in clean energy and technologies as a driver of economic growth.
According to a recent report, Rising Tigers, Sleeping Giant, Asian countries are forecast to outspend the US on clean energy technology and infrastructure by a factor of 3:1 by 2013. China alone will be investing more than $600 billion in clean tech, compared to $172 billion by the US.
South Carolina and clean energy
With scarcely any naturally occurring energy resources, South Carolina has traditionally been a net importer of energy. Outside of nuclear energy, the state has no coal, natural gas, or other traditional energy resources to rely on. What is putting South Carolina on the map is its focus on developing new clean energy resources, and innovation of technologies to better utilize energy.
While South Carolina has had a strong history of fundamental and applied research in clean energy, there had been a dearth of companies involved in the energy revolution. That pattern is changing, through a focus on innovation and commercialization. A recent study from The Pew Charitable Trusts cites South Carolina as having more than 800 firms involved in clean energy.
A short drive around this state of just over 4.5 million people reveals this pattern unfolding. Major investments in wind energy at places like General Electric in the Upstate region, and the recent Department of Energy (DOE) announcement of a $98 million investment in next-generation wind turbine research at the Clemson Restoration Institute in North Charleston, demonstrate that you don’t have to be able to produce wind energy to benefit from its growth.
Aiken – once the center for US nuclear weapons – is transforming its economy with nuclear energy research, hydrogen, and biomass activity. In addition, South Carolina has become a focal point for the nuclear energy industry, with more than $40 billion worth of planned investment within a 100 mile (160 km) radius of the state capital, Columbia.
A fuel cell future
Ten years ago, no one in the clean tech industry would have pointed to Columbia as a center of innovation. But now the region is on the map in fuel cell technology, with significant research investments, commercialization activities, and leading fuel cell companies turning to ‘The New Southern Hotspot’ for clean energy.
How did this happen, what were the drivers, and what does it take to build a fuel cell economy of the future?
To answer these questions, a coalition of economic development organizations, higher education institutions, and private sector partners set out on a 12-month strategic planning process – entitled the South Carolina Next Energy Initiative – to identify how the state could build an economic development strategy based on clean tech and fuel cells. The results of the 20-year plan focused on building an innovation pipeline consisting of discovery, development, and deployment resources to accelerate commercialization of fuel cell technology.
From this plan, two organizations were created: the South Carolina Hydrogen & Fuel Cell Alliance, and the University of South Carolina-City of Columbia Fuel Cell Collaborative. Particularly in Columbia, the region has a long history of energy-related research at the University of South Carolina, with the nation’s only National Science Foundation (NSF) sponsored Industry/University Cooperative Research Center for Fuel Cells, and a strong history in nanotechnology and materials.
The Fuel Cell Collaborative: the building blocks for clean tech innovation
The foundation for the Fuel Cell Collaborative was laid through a strategic partnership among four organizations: EngenuitySC, a regional knowledge-based economic development initiative; SCRA, a powerhouse applied research and commercialization entity; the City of Columbia; and the University of South Carolina, a growing thought leader in fuel cells.
At the heart of the collaborative’s strategy is leveraging the unique assets that each brings to the table, to create a world-class pipeline for discovery, development, and deployment. The vision was that by building a strong ‘town and gown’ relationship and bringing together key commercialization assets, the region would be able to build a pipeline linking research, commercialization, incubation, and existing industry together to drive economic growth.
This vision was aggressive, to say the least, as Columbia and the state of South Carolina did not have a single fuel cell related venture as late as 2003. But, by creating the right ‘soil conditions’ for clean tech growth, the region hoped to both create new businesses and engage external industry looking for a competitive place to do business.
The elements for a fuel cell economy: discovery, development, deployment
So, what does it take to build a robust innovation pipeline focused on fuel cells? Initiatives created in places like British Columbia, California, Ohio, and Connecticut come to mind. But, while the answer may seem simple, few regions have attempted this, and even fewer have done it successfully.
‘A robust, knowledge-based economy consists of three key elements,’ says Neil McLean, Executive Director for EngenuitySC. ‘Discovery, development, and deployment.’
Discovery: the role of research & innovation
To address the fundamental challenges facing the fuel cell industry, regions must concentrate on creating robust basic and applied research activities focused on breakthrough innovations that address clean energy technologies. Not only do these discoveries deal with basic and applied research needs, but they provide the fuel that drives the engine of economic innovation.
Companies – new and existing – require access to this research pipeline, to further their commercialization activities. The University of South Carolina (USC), as a leading institution in future fuels research, is investing heavily in creating an industry-leading research environment.
In 2004, USC was awarded the nation’s only Industry/University Cooperative Research Center for Fuel Cells, sponsored by the National Science Foundation, and the race was on to develop a globally recognized center of excellence. This center is a place where industry members conduct cooperative research with USC scientists on an open platform.
‘The university and its partners in Columbia and throughout the Midlands region have created an exciting environment where research, development, and demonstration of future fuels can take place,’ remarks Dr Harris Pastides, President of the University of South Carolina. ‘The industry/university cooperative research center at USC is the only one of its kind in the US, and our Future Fuels™ initiative encompasses not only hydrogen research but also solar, wind, and nuclear research.’
Both the State of South Carolina and the University of South Carolina have invested heavily in attracting top research talent to the state through the SC Centers of Economic Excellence (CoEE) Program and the Innovista™ Research Campus, the region’s boldest investment to date. The USC Solid Oxide Fuel Cell Center – led by Dr Ken Reifsnider, a leading SOFC scientist – is aiming to build one of the largest teams of SOFC scientists in the world. His team has just been awarded USC’s single largest federal research grant ever, a $12.5 million DOE award for advanced energy research, and has partnered with more than 20 entities to further the discovery pipeline for clean energy.
Another prominent researcher, Dr Brian Benicewicz, was attracted to the region by its growing reputation. Benicewicz is one of the nation’s leading researchers in polymer nanocomposites. But what makes researchers like Benicewicz unique is how they blend research and commercialization. He understands these ties, and has been able to connect discoveries his team is making to commercial applications in the industry. Recently, the group received more than $300 000 in research funding from BASF Fuel Cell Inc, for the development of next-generation high-temperature PEM fuel cell membranes.
With an investment of over $150 million, the University of South Carolina is taking on a vision to build an innovative destination for research and commercialization. Innovista™ is a downtown innovation and research campus that represents the physical manifestation of the university’s long-time research philosophy of nurturing innovation, creativity, discovery, and opportunity. Signature research areas include hydrogen fuel cells and other clean energies, health sciences, nanotechnology, environmental sciences, and informatics. This unique proposition hopes to create a synergistic relationship between the public and private sectors that will fuel both research innovation and company formation in the Midlands region.
Development: a pipeline for commercialization
Knowledge creation is fundamental, but it is not enough. Taking knowledge and applying it to real-world needs is where the fuel cell industry has struggled historically by some accounts. This element involves creating an environment where commercialization is both encouraged and nurtured, and represents a critical component for next-generation economic development strategies.
You must have a dynamic entrepreneurial environment, and you must connect that environment to the discoveries and innovations flowing through your research institutions. Business incubation, access to much needed capital, and an environment that embraces ‘failure without failing’ is critical.
In early 2006, the Fuel Cell Collaborative launched a series of development projects aimed at building a critical mass of activities to foster innovation, company formation, and commercialization of fuel cell technology.
To rapidly stimulate industry partnerships and to build a fuel cell cluster in the Columbia region, the collaborative launched the Greater Columbia Fuel Cell Challenge and the Columbia Fuel Cell District, which were aimed at supporting highly visible demonstration and market seeding projects across all areas of the innovation pipeline within a concentrated area of the city. During the past five years more than 20 projects totaling over $3 million have been supported, ranging from fuel cell forklift demonstration projects, test deployments of portable backup power units, and ‘lab to market’ prototype fuel cells, to seed funding for relocation and new company formation in Columbia.
In addition, based on legislative direction from the South Carolina General Assembly, SCRA created three ‘Innovation Centers’ across the state, and chartered a new affiliate organization, SC Launch, to support their operation. The goal of this program is to identify, nurture, and help grow high-impact, knowledge-based companies. SC Launch provides qualified businesses and entrepreneurs, pre-company initiatives, and other knowledge economy initiatives with a mix of seed funding, access to venture capital, business mentoring, resources, and matching grants to support commercialization. The program received national recognition in 2008 by the State Science & Technology Institute (SSTI) for building entrepreneurial capacity.
‘SCRA has enjoyed its lead facilitation role in working with business, academic, government, and economic development partners in Columbia and across South Carolina to advance alternative and sustainable energy commercialization,’ says Bill Mahoney, CEO of SCRA. ‘In less than four years, we have helped create dozens of demonstration projects and startups which are commercializing new energy technologies in SC.’
At the same time, the Columbia region began to focus on investing in the infrastructure to support commercialization, in particular via incubation. The city boasts one of the top-ranked technology incubators in the country, in the USC-Columbia Technology Incubator. Since 1998 the incubator has nurtured 51 companies, created 645 jobs, and has facilitated more than $29 million in follow-on investment capital. Five out of 50-plus companies currently in the incubator are looking to break into the hydrogen and fuel cell industry sector.
One of those companies, NextGenEn, was born through a collaboration between a local energy entrepreneur and one of the endowed chairs in fuel cells at the University of South Carolina. ‘Columbia’s collaborative environment and access to resources made this an easy choice for launching our clean energy company,’ says Chad Sands, President and CEO of NextGenEn Inc. ‘World-class research, a concentration of industry activity, and access to business resources are what drove our decision to begin here.’
And just recently, SCRA broke ground on an innovation center geared towards high-tech and light manufacturing startups. With an investment of $5.6 million in 2009, the center boasts over 74 000 square feet (6900 m2) – room for 10–15 high-tech, light manufacturing startups – and close proximity to Innovista™, one of the boldest regional development projects to date.
In addition, the Midlands Technical College in Columbia is building an enterprise campus to support advanced manufacturing, and has created a fuel cell technician training program to build the workforce of the future in Columbia.
Deployment: bridging the gap
Being a world-class center for innovation drives activity. Equally as important, though, is creating an environment that embraces the commercial applications for clean technology. While it is not a precursor to economic success in clean tech, regions such as Columbia that have embraced sustainability and clean energy are able to create a supportive environment for new products (and companies) to be deployed.
In the past five years, the Fuel Cell Collaborative has partnered with private sector partners to build out the infrastructure to support clean technology. The state’s first hydrogen fueling station was completed in early 2009, and the region is currently hosting the world’s first hydrogen hybrid bus, manufactured by Proterra through a Federal Transit Administration grant.
SCRA, through its affiliate ATI, has collaborated with the US Departments of Energy and Defense on one of the largest stationary fuel cell military projects in the country, by deploying 10 backup power units at the Fort Jackson Army Base in Columbia. The City of Columbia, through a resolution, has committed funds to support the deployment of fuel cell technologies within the fuel cell district, and has recently completed a project with Dantherm Power to provide two backup fuel cell systems to supply emergency power to critical telecommunications systems in the region.
In addition, through a partnership with Trulite, the City of Columbia has deployed and tested a dozen KH4 portable power units, to provide critical real-world utilization and data for the company’s beta test. A collaboration of public and private entities committed to partnering with Trulite to test the products in a range of settings and locations.
In another effort to help seed an early market adopter for fuel cells, the Fuel Cell Collaborative partnered with LiftOne and Hydrogenics to deploy two fuel cell powered forklifts that have operated in six real-world environments in the region. Collaboration with willing end-users was the key to success, with several major manufacturing and distribution partners testing the products. This widely successful project gained national recognition, and led to an award of $1.3 million in follow-on funding from DOE to expand the program to a national audience.
‘We’re finding in our preliminary tests that we can actually extend the life of a fuel cell over a conventional battery,’ comments Bill Ryan, VP/General Manager of LiftOne. ‘And the bigger benefit there is, because it fuels like a conventional car would, you can go and refuel the fuel cell at any point in time.’
Delivering results in the knowledge economy
The combination of South Carolina’s investments in discovery, development, and deployment have led to significant growth of the fuel cell industry in the region. In its first five years, the Fuel Cell Collaborative has partnered with more than 40 different public and private entities on research and commercialization projects.
An estimated $50 million in economic impact has been generated from these activities, with 10 new clean tech and fuel cell companies being created, spun out of the university, or recruited to the region. The Collaborative has deployed more than 20 projects in the local market that have helped companies test, demonstrate, and bring to market fuel cell technologies. The region is now one of the top destinations for US federal investments in fuel cell deployment.
This business-focused approach to economic development culminated in early 2009, when Columbia hosted the National Hydrogen Association’s annual conference and expo. Through a collaboration with more than 10 local entities, the region attracted the conference to Columbia, and hosted over 2900 attendees from around the world.
In 2009, South Carolina was recognized as one of the top five destinations for hydrogen and fuel cell technology by the National Hydrogen Association, and the Fuel Cell Collaborative has been recognized for innovation in alternative energy economic development by the Southern Growth Policies Board.
The region’s focus on creating a compelling business environment for fuel cell companies is gaining momentum, with the recent announcement by Trulite to relocate its North American headquarters, R&D, and manufacturing to the region.
What’s next
The global battle for clean energy leadership is upon us, and the US faces significant challenges if it is to compete in the ‘new energy era’. While much has been done, much more investment in the discovery, development, and deployment of clean energy technologies is needed. In addition, regions that want to prosper in the coming years will need sound economic development strategies geared towards aggressively creating, nurturing, and embracing clean technology to win this race.
More information
Greg Hilton, Project Manager – USC-Columbia Fuel Cell Collaborative, Sagacious Partners LLC, PO Box 50768, Columbia, SC 29250-0768, USA. Tel: +1 866 966 0299.
Radu Vitoc, Technology Development Manager, SC Launch, 1330 Lady Street, Suite 505, Columbia, SC 29201, USA. Tel: +1 803 343 5302.