Investing in Clean Energy Innovation
April / May 2008
Volume 6 Number 2
According to New Energy Finance, the global investment in clean energy grew 41 percent in 2007, reaching $117.2 billion. New Energy CEO Michael Liebrich says we need to keep this momentum going during the next five years, which will be a crucial period for the clean energy sector and its investors. He says this will involve continued progress in lowering the cost of renewable energy and developing a "healthy pipeline of next generation technology." Coincidentally, this is what we do at the National Renewable Energy Laboratory.
Growth rates like this can cause investors to wonder if an investment bubble is on the way in clean energy, but there are fundamental factors that suggest this trend may continue for many years—€”and even decades—€”to come. Decreasing proven reserves of fossil fuels, rapidly increasing global demand for those fuels, energy and economic security, and global climate change combine to make the quest for inexhaustible clean energy the key global challenge for this century.
At NREL, we believe that our commercialization activities must be up to this challenge, and we're developing a number of new thrusts that build on private sector experiences and expertise.
Through the Department of Energy's Technology Commercialization Development Fund, NREL has received $4 million this fiscal year to facilitate collaborative R&D projects between researchers and companies to develop commercial products based on NREL innovations. Commercial partners share 50 percent or more of the project development costs, which will typically range from $150,000 to $1 million. Projects are selected based on their fit with the DOE program, the value of NREL's intellectual property position and the potential for near-term commercial impacts. Both NREL researchers and outside industry can submit project proposals to the NREL technology transfer office.
The program gives NREL some wonderful tools to address the commercialization "valley of death" between technologies in the laboratories and products in the private sector. We expect the program to increase the market impact of NREL's technologies. In addition, the program has shown the ability to support faster, more nimble partnering to make it happen. For our first project, we moved from first contact with a startup company through executing a license option and initiating work on a cooperative project to commercializing the product in only 17 days. Moving at the speed of business is difficult at a national laboratory, but absolutely critical to us in meeting the opportunities and challenges presented in the market.
Innovative funding like this program is important, but equally important is the talent to properly identify opportunities, evaluate them and pursue them. We're addressing this through two innovative programs to quickly leverage the business creation skills of the private sector. The first is the DOE Entrepreneur-in-Residence Program, which is being piloted at NREL, Sandia National Laboratories and Oak Ridge National Laboratory. The program involves placing a venture capital-sponsored entrepreneur at the laboratory to identify opportunities for spinoff companies based on NREL-developed technologies. The entrepreneur will then help develop a business plan and license the technology using a "venture friendly" license agreement. In February, DOE announced the selection of the venture capital firm Kleiner, Perkins, Caufield & Byers, which will provide NREL with an entrepreneur. While NREL has great networks within the venture capital community, the entrepreneur will bring different experience and skills directly into the laboratory.
The second talent-related program is the Commercialization Fellowship, which offers seasoned business professionals an opportunity to contribute temporarily to working alongside our permanent technology transfer staff as they evaluate new innovations and develop leads for commercializing the most promising ones. The Fellowship positions will not only increase our commercial deal flow, but will have a lasting contribution to our talent pool by providing mentoring to staff and inventors that would normally not be available at a national laboratory. The caliber of the professionals attracted to the Fellowship program is made possible by their belief in NREL's mission, as the salary ranges of these individuals is far outside the range of national laboratories.
Outreach to the investment community and entrepreneurial organizations remains an emphasis with our annual Industry Growth Forum. The Forum provides an opportunity for clean energy entrepreneurs to sharpen their business plans with detailed feedback from investors and energy experts. The process has a proven track record of results. For example, presenting companies from our past 15th through 19th forums have altogether raised more than $1.2 billion in private sector funding. More than 430 participants—€”including startup companies, venture capitalists, investment bankers, energy executives and government executives—€”attended the 20th Forum last year. With the continued growth of the clean energy industry, we expect an even larger attendance at the 21st Forum October 28-30 in Denver.
The booming market for clean energy technologies also has greatly increased our opportunities to license intellectual property to established companies, ranging from early stage to Fortune 500 firms. Currently, we have around 300 patented NREL technologies available to license. They include technologies in the R&D areas of advanced vehicles and fuels, basic sciences, biomass, buildings, geothermal, solar and wind.
For more information about our commercialization opportunities, visit NREL's Technology Transfer Web site at www.nrel.gov/technologytransfer/.
This work has been authored by an employee of the Midwest Research Institute under Contract No. DE-AC36-99GO10337 with the U.S. Department of Energy. The United States Government retains and the publisher, by accepting the article for publication, acknowledges that the United States Government retains a non-exclusive, paid-up, irrevocable, worldwide license to publish or reproduce the published form of this work, or allow others to do so, for United States Government purposes.
Tom Williams is the director of NREL's technology transfer office. He has been involved with energy research since 1978.
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Solar Energy: Best Bet for VCs?
Solar energy has become the leading clean energy candidate for venture capital and private equity investments, attracting around $3 billion of new equity in 2007. Some of these investment opportunities have arisen from the innovative ideas of researchers at NREL. And researcher Mark Wanlass has such an idea.
Wanlass has developed a twist on the design of multilayered photovoltaic (PV) solar cells, creating a new type of device capable of outperforming all others in efficiency. By using several layers of semiconductor, multijunction solar cells are capable of record-breaking efficiency in converting sunlight to electricity and maintaining a high efficiency under great concentrations of solar energy.
Conventional multijunction cells are grown from the bottom up, starting with germanium and transitioning to higher-band-gap III-V materials for the top layers, leaving the cell bound to the thick, heavy germanium substrate it grew out of. Wanlass has suggested the cell be grown upside down, so the germanium substrate can be removed, reducing thickness, weight and cost.
Wanlass' design also incorporates lattice-mismatched materials, which he developed extensively while researching thermophotovoltaic (electricity directly from heat) technology for nearly 15 years. Typically, the atoms in a multijunction cell are evenly spaced, which generally results in superior electrical performance. But with mismatched materials, the atoms are unevenly spaced, giving designers more materials to choose from to create even higher efficiency solar cells. The overall result is a better multijunction solar cell with higher performance.
"This inverted multijunction solar cell is really the crown jewel of my career," Wanlass said. "It is very rewarding to have a hand in something that is having an actual impact on the commercial side of solar."
This new class of lightweight, high-efficiency solar cells has opened the door for future generations of products and uses. In addition to conventional terrestrial power applications, these cells have other markets for powering advanced satellite systems, and military and homeland security applications.
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