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At this years energy fair, James Croce of NextEnergy discussed his companys efforts to develop a new economy to offset Michigans massive economic losses resulting from the decline of the U.S. auto industry. NextEnergy was created in 2001 as an independent nonprofit organization to focus on the development of alternative energy, one of four areas selected to build a new state economy. The other areas are life sciences, homeland security and defense industry, and advanced automotive manufacturing and materials. Although Next Energy is focused on alternative energy, some of their activities impact the three other areas.
Considering the global energy picture, it makes sense to focus on utilizing local energy resources to rebuild a state economy. Michigans existing energy resources are limited. It has no coal, a small amount of oil and dwindling reserves of natural gas. With $20 billion leaving the state each year for energy expenditures, using state resources to develop alternative energy sources is a priority. Both agricultural and forestry crops are likely to play dominant roles in Michigans new energy economy.
High, unstable energy prices have created an opportunity for the growth of alternative energy. Despite federal subsidies favoring fossil fuels and nuclear power, renewable energy is becoming one of the fastest growing investment sectors. Some California venture capitalists believe we are on the verge of dramatic technological innovations in producing solar electricity. This will enable decentralized energy sources to challenge our centralized power distribution system similar to the way in which personal computers challenged the dominance of mainframe computers. Michigan has high hopes for its solar technology industry and recently helped fund the construction of two new 30 MW facilities to produce solar cells.
NextEnergys efforts are directed at a diversity of energy sources rather than seeking one that could dramatically change our energy system. Federal funding to secure additional supplies from nearly all energy sources overrides environmental concerns such as global warming.
NextEnergy exists to help developers of alternative energy technologies commercialize their inventions and market them. Their efforts have focused on developing and maintaining the infrastructure to support innovation and entrepreneurship, providing businesses with capital (60 percent of venture capital funds are invested in coastal states), providing technical assistance to emerging businesses, integrating university research into the marketplace (out of state start-up companies generally receive the new ideas developed in Michigans state universities), and graduating more engineers and scientists to transform Michigan from a manufacturing economy to a knowledge-based economy.
To facilitate these goals, NextEnergy concentrates on bringing together people from businesses and universities to collaborate on developing new technologies, assisting in market development, and providing start-up services for new ventures.
NextEnergy, located in a renovated building near downtown Detroit, contains laboratory facilities and capabilities for testing and validating new technologies. Their facilities are not for the exclusive use of Michigan innovators. Clients from other states are synthesizing fuels from waste materials and working on renewable energy development.
The U.S. Department of Defense, whose alternative energy efforts approach those of the Department of Energy, is an important client. A major concern is supplying the fuel and electricity needed for battlefield operations. The high cost of fuel in some operations, such as $500 per gallon diesel fuel, creates economic opportunities to implement renewable energy sources and upgrade battery performance. A top U.S. general recently requested renewable energy systems that can process waste into energy or use local crops for energy to offset the logistics of supplying energy to remote bases. Military needs often stimulate the development of new commercial products.
Michigan clients are developing fuel standards for diversified fuel stocks from Michigans agricultural and forestry resources. Other projects include developing a hydrogen infrastructure to support a hydrogen economy. This includes codes and standards for the safe use of hydrogen and quietly developing a hydrogen fueling station system.
Croce ended his presentation with the call for regional and local efforts to accelerate developing sustainable energy sources.
This column is based on a presentation by James Croce at the Ogle County Fairgrounds Aug. 12, 2006.
From the Oct. 4-10, 2006, issue