It used to be that energy was the domain of the big guys: state companies or large multinational corporations. Think huge build outs of infrastructure and plants, massive amounts of capital, and long, long lead times before anyone saw a profit.
The future of clean energy is here and an explosion of innovation has resulted in a slew of startups that are developing products and services aimed at squeezing every last drop of efficiency from our energy resources.
Solar power and wind power are among the top 10 industries for investors, rating high on revenue growth and capital intensity, according to IBIS World U.S. So it was no surprise that many of the startups competing in the energy category at the Challenge Cup pitch competitions were small companies with big ambitions.
To recap: A team from Washington D.C. incubator, 1776, traveled to 16 cities around the world to find the best startups in the most regulated industries, including education, health care, smart cities and energy. Sixty-four winning startups from those 16 competitions will converge on Washington D.C. the week of May 12-17 to participate in the Challenge Festival and compete to win the Challenge Cup championship title and $650,000 in prizes. (Still confused or want more details? Check out this video)
It’s going to be pretty insane. And FreeEnterprise.com is along for the ride.
The 16 Challenge Cup competitors in the energy category will electrify the stage on May 13 with products and services that could radically alter how we create, and consume, power. From a robot that cleans solar panels to kinetic energy storage, here are five Challenge Cup competitors developing some promising innovations in energy.
1. With 240 million cars on the roads right now and 23 million more projected every year, China has quite the pollution problem. That’s where Beijing Challenge Cup winner J&F Technology comes in. J&F Technology cofounder Jason Wang and his team have developed a plug-in device called EcoDrive, which hooks into a car’s diagnostic system and delivers real-time feedback to mobile phones. “In China we have two issues. We have old cars that consume a lot of oil and petrol. The other problem is that when fuel does not burn efficiently, the exhaust from the car has a lot of pollution. This machine will tell you about your pollution and give you an indication of how to improve it. It will help with fuel consumption, engine power and improve efficiency,” Wang tells 1776.
2. Maybe you prefer not to drive at all, in which case Chicago Challenge Cup winner myPower might be a product for you. MyPower is a running companion that clips to your hip and captures and stores your kinetic energy as you run. Forty-five minutes of running with myPower can give your iPhone an extra seven to eight hours of battery life, and running with myPower for a year can offset the carbon footprint of both itself and the device you charge with it. 1776 caught up with the cofounders—Tejas Shastry, Michael Geier, and Alexander J. Smith—who recently won $75,000 at Chicago’s Clean Energy Challenge. MyPower is planning to release a beta version of their unit this summer, with a goal of a broader release in 2015.
3. General Electric just announced plans to invest $24 million in India’s largest solar-powered plant, but getting solar energy to everyday citizens remains a major challenge. Sujith S. Thannikkatt, cofounder of Longman Suntech Energy is working to change that by leasing rooftop solar panels to Indian citizens in order to provide them with clean, renewable energy at no extra cost to the users. The New Delhi Challenge Cup winner tells 1776: “There are several reasons why people aren’t taking up solar. One is that there is a huge capital cost. Secondly, it’s fairly new technology so people are a bit skeptical. Finally, there are tax incentives, which…are not properly planned by the government. We found that many of our prospective clients were not able to understand the financial benefits of solar power. They subsidize other forms of power in tax credits so they can write off the tax.”
4. Longman Suntech might find the technology from fellow competitor Solarbrush useful. The Sao Paulo Challenge Cup winner manufactures robots designed to clean and maintain solar panels, boosting their effectiveness, lowering costs for maintenance, and saving precious water in arid regions. “Cleaning is very important, especially in arid regions, as generators lose up to 35% in efficiency in a single month after a sand storm,” inventor Ridha Azaiz tells 1776. “The robot has a very lean and efficient drive that attaches to the inclined panels, which distinguishes the Solarbrush robot from others. Some say it is the ‘Roomba’ for solar panels.”
5. Keith Cole, CEO of Houston-based startup Titralyte, describes his Water Lens oilfield kit as “a product that turns roughnecks into chemists.” The Water Lens provides detailed analysis of water and other fluids used during the fracking process at oil and gas drilling sites. By placing a water sample into a tray filled with Water Lens’ specialized chemical formula, and then placing the tray in a machine equipped with software, anyone on the site can analyze the contents of the water, saving oil and gas companies millions of testing dollars. The Challenge Cup Austin winner tells 1776: “Our product is specifically designed to test complex, challenging fluids, such as those found in oil and gas—and mining. We can find the proverbial needle in a haystack.”
It’s expected that America’s energy boom will spur $330 billion in oil- and gas-related construction in the next four years. Welders, pipefitters, electricians, and other skilled workers will be needed to build all of it. These job opportunities were the topic of a House Natural Resources Committee hearing and brought some blue collar celebrity to Washington.
“It’s time to make the case for the jobs that actually exist and take that to the country,” said Dirty Jobs host Mike Rowe. He told House members that we shouldn’t downplay the image of the blue collar jobs that will be created by America’s energy abundance:
“Mechanics are still thought of as grease monkeys. In truth, they’re more like rocket scientists today,” said Mike Rowe, host of the “Dirty Jobs” television show. “The skilled trades, once held in high esteem, are now seen as some kind of vocational consolation prize.”
Being from Bismarck, North Dakota, Robert Flurer, vice president of Skeels Electric Company knows all about his state’s energy boom. Speaking for the National Electrical Contractors Association, he told the Committee:
These new energy technologies, which include hydraulic fracturing, horizontal drilling, and enhanced oil recovery are creating record demand for construction jobs in the oil and gas industry.
He pushed for a “comprehensive energy strategy that promotes development of all available energy resources.”
Contrast these views with President Obama's scoffing of the job-creating potential of the energy sector. In a 2013 New York Times interview, he ignored the State Department estimate that over 42,000 jobs would be created by the delayed Keystone XL pipeline. He laughed and said those jobs would only be a "blip relative to need."
Sean McGarvey, president of North America’s Building Trades Union, AFL-CIO, won't scoff at those jobs. He told the committee that the pipeline's delay is keeping construction workers from earning a living:
Our members are, unfortunately, still experiencing high unemployment. The March 2014 unemployment rate of 11.3% equates to over 900,000 workers being out of work. Let me be clear, when the economy sneezes, the U.S. construction industry gets a cold.
However, it is not always economic factors that prevent projects from moving forward. For example, the Keystone XL pipeline has been held up by the government approval process since before the recession even began. Personally, it is unbelievable to me why this project is allowed to linger while our nation’s economy struggles to get back on track.
North America's Building Trades Unions believe that government must become an advocate for businesses, an advocate for American workers and an advocate for jobs, and stop being an adversary or a roadblock time and time again.
The energy boom offers opportunities for job creation and economic growth. However, that requires Washington to have energy policies in place (read Energy Works for US) that don't hold back American enterprise.
Anyone who has watched Dallas (either version) knows that Texas dominates United States oil production. But because of hydraulic fracturing, the Lone Star State’s ranking globally is also increasing, the Houston Chronicle reports:
By the end of this year, Texas' oil production could exceed the output of every OPEC country but Saudi Arabia.
The state's production, driven mainly by the Eagle Ford Shale in South Texas and the Permian Basin in West Texas, will reach about 3.4 million barrels per day, propelling Texas past Iraq and Iran, said Greg Leveille, manager for technology program-unconventional reservoirs at ConocoPhillips.
Among non-OPEC countries, only Russia, the United States as a whole, China and Canada would exceed Texas' oil production, making the state the world's sixth-largest producer.
In just five short years, crude oil production in Texas has more than doubled, from 1.1 million barrels of crude oil per day in 2008 to more than 2.5 million barrels per day last year, according to government data.
Here’s a chart I made based on Energy Information Administration data showing the dramatic increase in Texas oil production:Texas Onshore Oil Production
UPDATE: Bloomberg energy reporter Bradley Olson tweeted this graph on Texas' increased oil production since 2005:
— Bradley Olson (@bradnews) April 28, 2014
Much of Texas’ oil gains come from the Eagle Ford Shale. So much activity is happening there that you can see it from space.Night view of Texas' Eagle Ford Shale.
Speaking at the Eagle Ford Consortium Annual Conference in San Antonio, ConocoPhillips' Greg Leveille said, “What you’re seeing unfold in the Eagle Ford is probably the greatest energy success story of the 21st Century.” “I turned 55 this year, and I suspect I’ll in the ground long before the last drop of oil is produced in the Eagle Ford,” he added.
Now is a good time to rethink the decades-old ban on oil exports.
The Wall Street Journal reports that the construction industry could be winners from America’s energy boom:
While spending on construction of residential and non-residential buildings still hasn’t returned to 2008 levels, the oil and gas industry grew throughout the crisis and is picking up the pace even more as the economy recovers. [Consulting firm] FMI expects spending on buildings and other structures to grow at 7-8% in the coming years, but for oil and gas construction, the growth rate is predicted to more than double that.
The report expects "more than $330 billion will be spent on oil- and gas-related construction during the next four years, nearly double the amount that has been spent in the past four years."
The report centers on construction companies having enough skilled workers, like welders, to meet rising construction demand. However, my concern involves permitting uncertainty. We’ve seen how the Obama administration has delayed approving the Keystone XL pipeline for over five years. Does this “embarrassing” fiasco scare off companies from taking on future energy infrastructure projects that involve getting permits from the federal government? If so, then the energy boom won’t be as beneficial to a construction industry that’s still recovering from the Great Recession.
Here’s a link to FMI’s report.
UPDATE: Speaking of the Keystone XL pipeline, the Washington Examiner tweeted this fitting political cartoon:
— Washington Examiner (@dcexaminer) April 28, 2014
The Washington Post editorial board excoriated the Obama administration for holding up the Keystone XL pipeline [emphasis mine]:
If foot-dragging were a competitive sport, President Obama and his administration would be world champions for their performance in delaying the approval of the Keystone XL pipeline.
Last Friday afternoon, the time when officials make announcements they hope no one will notice, the State Department declared that it is putting off a decision on Keystone XL indefinitely — or at least, it seems, well past November’s midterm elections. This time, the excuse is litigation in Nebraska over the proposed route, because that might lead to a change in the project that various federal agencies will want to consider. The State Department might even decide to substantially restart the environmental review process. This is yet another laughable reason to delay a project that the federal government has been scrutinizing for more than five years.
As for the pipeline’s routing, planners and regulators have already considered all sorts of options through Nebraska, and they already shifted the route once. Neither route posed environmental concerns of a sort that would justify concluding that Keystone XL is outside the national interest. It is bizarre to imagine that a new route from an even more careful process in Nebraska would significantly increase environmental concerns.
The administration’s latest decision is not responsible; it is embarrassing. The United States continues to insult its Canadian allies by holding up what should have been a routine permitting decision amid a funhouse-mirror environmental debate that got way out of hand. The president should end this national psychodrama now, bow to reason, approve the pipeline and go do something more productive for the climate.
That will leave a mark.
UPDATE: This political cartoon illustrates how these delays have become a farce.