Chicago clean energy competition highlights innovation, and challenges

Clean energy startups took home $1 million in prize money and planted the seeds for further investment on Tuesday at the annual Clean Energy Trust Challenge in Chicago.

During keynote speeches and presentations by companies and student teams, a striking parallel emerged between projects aimed at developing countries – for example in Sub-Saharan Africa – and technologies meant to help modernize and reshape energy delivery in the U.S.

The event had a clear focus on decentralized, sustainable and clean energy that can be generated and stored in innovative and efficient ways, whether to provide reliable electricity to developing countries or to reduce emissions and costs in the U.S.

In both cases, new technology and startup companies are playing key roles.

Jim Rogers, former CEO of Duke Energy, essentially made this point during his keynote speech at the challenge.

“We need a real sense of urgency in making this happen” in the developing world, “in the same way we need a sense of urgency in transforming the business model here with utilities, and transforming the grid and deploying new technologies,” Rogers said.

Utilities of the future

Rogers said that, “When I first became a CEO in 1988, virtually every investor-owned utility in the United States was vertically integrated and regulated. The generation, the transmission as well as the distribution.

“When you look back over the last 27 years, what you see is significant erosion of that monopoly. From a generation standpoint, 19 states now have a competitive market – generation is no longer regulated in those states. When you look at transmission, two-thirds of states have a regional transmission organization so the utility no longer operates it. On distribution, which you would think is a natural monopoly, you have storage on the rooftop, home management systems, and you see the erosion of the monopoly.”

Rogers urged utility companies to embrace this change and be more flexible, innovative and responsive to customers, including modernizing their grids and being more welcoming to distributed generation.

“I think the right way to think about utilities, to think about the grid is as a big battery,” Rogers said. “The first thing you do is make your battery more efficient, then start to think about how do you extend beyond the grid, optimizing the use of electricity…We have a bias to protecting the reliability of the grid…we’re slow to embrace ideas.”

Katherine Hamilton of Greentech Media hosted the conversation with Rogers.

“In the ’80s, we had to be really innovative, the utility used to be the owner of innovation on the grid,” she said. “Then everything kind of flat-leveled…now we’re at a point where innovation is coming back. Do you think utilities are poised to do that?”

Rogers said he thinks utilities are up to the task, and cited their past glory.

“In the 1920s, electric utilities were the high-tech industry of the time, they were the Google, the Facebook, they were the ones leading the way.”

One energy expert and consultant in the audience pointed out that while Rogers was at Duke, the company was not always at the forefront of promoting a new energy economy. He mentioned Duke’s Edwardsport, Indiana plant plagued by political scandals and massive cost-overruns.

Rogers described company leaders as “pioneers” in pushing the gasification plant, one of a number of coal gasification plants promoted around the Midwest at a time that traditional coal plants were already being phased out.

However, “natural gas has put coal in the coffin, the Clean Power Plan has put the nails in the coffin,” Rogers said. “The bottom line is, [coal is] just too expensive, it’s just not going to be competitive. I think we’ll leave coal in the ground. Until we figure out how to take the carbon out, it’s just not going to be a player.”

Microgrids for Sub-Saharan Africa

While coal plants may be on the way out in the U.S., new technology could help people in developing countries turn to cleaner and cheaper sources of distributed generation.

NovoMoto, a company started by two University of Wisconsin-Madison students who aim to bring reliable, clean and affordable power to African countries, secured $90,000 in prize money through three different awards.

NovoMoto’s technology involves creating companies that sell reusable batteries charged by solar power, and recruiting local entrepreneurs to run the systems.

Company co-founder Aaron Olson is originally from the Democratic Republic of Congo and is hoping family connections will help launch the company there. He and co-founder Mehrdad Arimand describe their technology as a “micro-grid” that can help replace polluting, expensive generators used for power.

They say that under their system, locals could pay $9 for enough power to run three 3-watt LED lights, to charge a cell phone and to operate low-power radios or TVs for a month. Currently, people pay about $22 a month for kerosene and phone-charging via generators, Olson said.

Rogers praised NovoMoto’s presentation and their plans to rely on local leaders to spread the technology.

“Don’t underestimate the creativity of people in those countries, they’ve done so much with so little for so long,” Rogers said.

Other big winners at the Clean Energy Trust Challenge included Nexmatix, a St. Louis-based company that makes pneumatics more efficient, reducing electricity use and costs for manufacturers; and Hazel Technologies, a Chicago-area company that has developed a biodegradable capsule that extends the shelf life of fruits and vegetables, reducing food waste and the energy needed to transport food to market.

Frustrating obstacles remain

In another speech at the Clean Energy Trust Challenge, Adam Lowry, co-founder of the sustainable cleaning products company Method, described the potential of new technology to cut energy use and carbon emissions in manufacturing household products.

But even with cutting edge technology and business practices, he noted, utility policies proved a major impediment to utilizing clean energy at the Method factory opened on the far South Side of Chicago in 2014.

A 600-kilowatt refurbished wind turbine was installed and ready to go in September 2014, Lowry said, but they were not able to “turn it on” for 10 more months because of permitting and legal issues with the utility, ComEd. The costs related to that delay increased the wind turbine’s payback time from seven to 10 years, Lowry said.

“This was entirely on our land, entirely on our dime, in a city that backed us 100 percent,” Lowry said in his speech. “Of course regulations are needed to ensure safe operation of a utility-scale wind turbine, but utilities have the wrong incentives right now.

“There were a lot of engineering checks, a lot of contract negotiations, a lot of amendments to contract negotiations…I would have hoped the people we were working with would have been more excited about this…but that wasn’t the case.”

The Method factory is located in the Pullman neighborhood, the industrial swath of the city home to petcoke storage and other remnants of dirty energy and manufacturing. The plant also generates its own energy with an 80-kilowatt array of “solar trees”; and saves energy thanks to a lush green roof that insulates the building and produces a million pounds of edible leafy greens a year.

“I get really optimistic when I see the type of companies and technologies being developed,” Lowry told Midwest Energy News. “I hope we as a society, government, utilities and private equity partners, create the type of ecosystem where we change the way we distribute power. We need to think about ways to make it easy, providing talent, access to markets and capital.”

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