January 14, 2011

Clean Tech's Growing Role

By: by Robin K. Cooper, The Business Review


Throughout his career, Eric Burnett has created a successful spinoff of General Electric Power Systems and built and sold a company that developed lending software for banks.

His latest venture, Auterra Inc. in Malta, has invented a low-cost and low-emission-generating chemical process to purify oil. This process, he believes, could lead to the first major advancement in refining in 30 years.

Burnett, 51, who has raised $10 million in venture funding for Auterra, has attracted the attention of petroleum companies from Canada to Russia that want to know if his technology can be used commercially.

Burnett is part of a growing number of local entrepreneurs and businesses tapping into the burgeoning clean tech and clean energy sector. The clean tech boom locally reflects the global trend as more companies, venture capitalists and foreign governments invest an increasing amount of money and time into research and product development. It's all being driven by businesses and consumers and their ever-growing thirst for energy.

Solar power, wind turbines, smart grid technology, better batteries, energy storage and any process that leads to energy efficiency are all hot.

In the Capital Region alone, companies large and small have invested or announced plans to invest more than $300 million in local clean tech products, research and services over the past 18 months.

General Electric is linked to a large portion of that. The company spent $45 million to locate its Renewable Energy Global Headquarters in Schenectady and it's preparing to invest another $100 million into a new battery manufacturing plant, creating 350 jobs.

The ever-growing College of Nanoscale Science and Engineering research center at the University at Albany also continues to attract corporate investments from clean tech and clean energy companies.

CG Power of Belgium will spend $20 million on smart grid research-in a partnership with the college-that promises to create 100 new jobs, including 50 for scientists and engineers.

The college also is working with a dozen early-stage clean tech companies. One of the most recent startups, BESS Technologies, was formed last year by a group of graduate students from the Nanoscale College who are using nanotechology to build better batteries. BESS Tech was the second tenant to join the school's $1.5 million iClean incubator that was formed last year.

The first tenant, Magnolia Solar of Massachusetts, uses nanotechnology to improve solar cells and could create 25 or more local jobs.

"There is a lot of momentum," said Pradeep Haldar, vice president of clean energy programs and nanoengineering professor at the nano college.

"They are here to tap into the brains of our scientists and to use our tools for testing, research and development," Haldar said.

The $6.5 billion research center has become a magnet for clean tech research in the region, said Haldar, who has led several organizations and initiatives over the past 10 to 12 years to promote the sector.

The Obama administration wants to jump-start the next big clean tech developments by pumping nearly $70 billion to businesses through grants, loans and tax credits this year.

And in recent years, venture capitalists have been leaning toward clean tech. They have invested $13.6 billion into U.S. companies over the past five years, according to the National Venture Capital Association trade group in Virginia.

"More venture capitalists are definitely looking at clean tech," said Mark Heesen, NVCA president. "Unlike, [Internet technology] and biotechnology, clean tech is one area where the entire world is wanting change."

The difficulty with clean tech and clean energy is that the payoff for investors typically takes five to 10 years to show a return, longer than many are willing to wait, Heesen said.

Clean tech industry watchers say solar and wind production are a piece of the puzzle that will reduce U.S. dependence on oil. But technology improvements related to energy storage, the electric grid, lighting, coal and cleaner oil production may pay off more quickly.

Natural Power Ltd., a Scottish wind farm design, planning and monitoring firm, began investing money in the U.S. last year when it opened Natural Power LLC in Saratoga Springs.

Jim Adams, who grew up locally in Voorheesville, was named president of Natural Power's North American operations this year. He's building a sales and technical work force in Saratoga Springs to develop a services and sales market as Natural Power develops a U.S. and Canadian customer base.

The company, which sells land-based and off-shore wind monitoring equipment to developers and utility companies, will increase its U.S. work force from four to 10 this year.

"There is a lot of opportunity for us in North America," Adams said.

The potential for new wind farms to be developed on the Atlantic Coast has generated a lot of sales leads and could lead to additional revenue from services it provides for wind farm management, engineering and monitoring.

The parent company generated roughly $30 million in revenue last year. Natural Power's U.S. sales totaled more than $1 million during its first year of operation here.

Adams spent seven years with the Albany company now known as AWS Truepower in Albany before joining Natural Power.

AWS CEO and founder Bruce Bailey said his company has grown to 85 employees, not including a 17-person joint venture in Barcelona, Spain, and a one-person office in India.

Bailey said his company, which provides wind and solar mapping as well as forecasting and modeling services to utility companies, developers and banks, has grown to $19 million in annual revenue. He expects double-digit revenue growth as the domestic and international demand for wind and solar renewable energy grows.

Burnett of Auterra said clean tech and clean energy have become buzz words because of recent government backing.

But he believes the demand and the need for clean and renewable energy sources and products will grow.

"You've got to give the federal government credit for investing more money into it," Burnett said. "The more shots on target, the more likely we are to find good solutions."

It's all driven by profit, he said.

One oil refinery in Canada estimated that if Auterra's technology and catalyst can be used on a commercial scale, it would save them up to $1 billion a year in production costs, Burnett said.

His company, which currently employs 12, is gearing up to do more testing and he should know by the end of this year just how successful the technology will be.

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