The Advanced Power & Energy Cluster (APC) recently completed its first year of operation for the U.S. Small Business Administration (SBA). The APC is engaged in connecting the innovation of small businesses to technology needs for the nation’s defense, and for commercial applications. The initiative has helped to create more than 250 jobs and achieve $10.3 million in Department of Defense (DoD) and private business contract awards in the past year, while acting as a catalyst for technology-based economic development. The APC currently has 95 member companies and organizations in 21 states.
Operated by the Twin Cities-based Defense Alliance and funded by the SBA, the APC is one of 10 Regional Innovation Clusters (RICs), three of which are intended to promote “advanced defense technologies.” The Defense Alliance selected the power and energy sector for its Cluster because of this region’s strong manufacturing, R&D and entrepreneurial focus on related technologies.
DoD has finally realized that energy solutions can provide savings and mission effectiveness at the same time. As a result there are a lot of new policy mandates that set out ambitious goals for DoD energy savings. The Defense Alliance believes that the best way to obtain those is to have small businesses just jump in the game and start contributing, rather than waiting for the DoD to come to them – or waiting for requirements to be perfectly defined. The APC operates together with its “Partners,” who bring highly focused and effective business mentoring to the membership. The Partners include Paradigm Positioning, the Dakota Defense Alliance, TechLink and MilTech. The APC also leverages key existing collaborative relationships held by the Defense Alliance, including with economic development organizations, government entities, academic institutions and large defense contractors.
The industry focus area of power and energy also means that the APC is working with Members to find opportunities outside of the DoD as well. DoD, DoE or other government agency funding often leads to commercial applications – and vice versa. According to the APC’s Business Director, Patria Lawton, “Our Members range from small businesses that have worked with the DoD for years, to those who are really energized by the way in which our Partners can help explain this challenging market to them.”
The ultimate goal remains bringing value and innovation to the nation’s power and energy needs, particularly for defense applications, and to help foster regional economic growth through job creation. Learn more about the APC at www.powerfordefense.com.
When I began the ISE program in the fall of 2007 I was an inexperienced engineer with one year of experience. I was thinking about getting an advanced degree while working and thought an MBA was my only option. I ran into a friend of a friend who told me about the ISE program. After research and an information session I knew the ISE program was perfect fit.
I loved the classes and networking. Through the curriculum I found that I had a real interest in Project Management, and the Capstone project gave me an opportunity to research it. The more I learned the more I realized that Project Management was exactly what I wanted to do! I made it my new goal to become a Project Manager by 2013. This past fall, an opportunity to apply for a Project Management position at Xcel Energy became available. At the time of the interview, I was one of many applicants, but I felt I had something to offer with my technical expertise and academic background. I was able to intelligently and confidently discuss Project Management technique and strategy. As you can imagine, I was overjoyed when I received the job offer and accepted the role as Transmission Project Manager. I am 1 of 9 project managers in the NSP region of Xcel Energy and absolutely love my job.
I have to thank the ISE staff and my classmates for the opportunity to learn and perpetual encouragement. I believe the ISE program exposed me to my new passion and created an avenue for me to develop.
You would think that working weekends would be a bummer, but last Saturday I had such a great time – at work! A few of us on staff here at TLI alternate working Saturdays to cover class days for our Management of Technology Program. Last Saturday it was my turn. Shortly after class started I had a group come in for an MOT information session with Professor Polla and myself. After our presentation there was a great discussion with a 2010 alum (Michael Bell, from Thomson Reuters) who came in to share his perspective on the program.
As the info session group left, another group of prospective students arrived to sit in on a class session. Professor Beau Farmer, CTO of TSI Inc, was teaching Technology Foresight and Forecasting. After a 15 minute lecture, the prospective students were distributed into the different study groups and participated in a lively workshop and some of them assisted their group’s presentation to the class. After class, the visitors joined the MOT students for lunch, and informal Q & A.
Most of the prospective students have already started filling out their applications, and I am so grateful to Beau Farmer, Mike Bell and the excellent class of 2013 for welcoming and assimilating them into the groups and showing them how dynamic and exciting the MOT experience can be! Working Saturdays really isn’t so bad after all.
Amy Danzeisen is the Admissions Coordinator for the Technological Leadership Institute’s Management of Technology program.
Minnesota 2050 is an initiative to create awareness in private citizens, in politicians, and in public agencies about the vast infrastructure network that supports the health, safety and economic well-being of every Minnesotan. The initiative includes the importance of not only building infrastructure but of sufficiently maintaining it so that it will continue to support Minnesotans for the foreseeable future.
The initiative was started in December 2009 following a meeting coordinated by the Minnesota Chapters of APWA and ASCE. The meeting included representatives from the University of Minnesota, the engineering community, transportation lobbying organizations, the legislature and a local elected official. The educators, engineers and lobbyists generally described infrastructure issues, including the importance adequate infrastructure funding. The elected officials stressed the importance of delivering the infrastructure message directly to the public.
From this background, MN2050 was organized into five infrastructure groups and is currently creating content and seeking contributions from a confederation of infrastructure related organizations and companies. The content includes slide presentations, a web site and a video.
The five initial MN2050 infrastructure groups are: 1) roads/bridges; 2) water/wastewater/storm sewer (Liquid Assets); 3) airports; 4) ports/waterways; and 5) rail. Each group is creating a message how that infrastructure impacts the daily lives of Minnesotans including their safety, health and economy; what major initiatives or investments need to be addressed within each group; what is the investment trend line; and what can Minnesotans expect if adequate infrastructure investments are not made.
The current MN2050 progress is that numerous presentations have been given to public groups, the first web page has been created (‘blueprintminnesota.com’) and a one-hour Liquid Assets video has been created and shown on Twin City Public Television (TPT).
In the coming months additional presentations will be given, a MN2050 website will be opened and a MN2050 video will be created with TPT.
Author’s Note: Recently, I wrote an article for the IEEE Spectrum on the U.S. Electrical Grid. The original post can be found in the IEEE Energy Policy Department. I also spoke on this subject to NPR and TMCnet.
The U.S. electrical grid has been plagued by ever more and ever worse blackouts over the past 15 years. In an average year, outages total 92 minutes per year in the Midwest and 214 minutes in the Northeast. Japan, by contrast, averages only 4 minutes of interrupted service each year. The outage data excludes interruptions caused by extraordinary events such as fires or extreme weather.
I analyzed two sets of data, one from the U.S. Department of Energy’s Energy Information Administration (EIA) and the other from the North American Electric Reliability Corp. (NERC). Generally, the EIA database contains more events, and the NERC database gives more information about the events. In both sets, each five-year period was worse than the preceding one: According to data assembled by the U.S. Energy Information Administration (EIA) for most of the past decade, there were 156 outages of 100 megawatts or more during 2000-2004; such outages increased to 264 during 2005-2009. The number of U.S. power outages affecting 50,000 or more consumers increased from 149 during 2000-2004 to 349 during 2005-2009, according to EIA.
Adjusting for a two percent per year increase in load to 2000 levels, these outages reflect a trend. First, there were 147 outages of 100 megawatts or more during 2000-2004; such outages increased to 230 during 2005-2009. Second, assuming the same two percent annual demand growth, the number of U.S. power outages affecting 50,000 or more consumers increased from 140 during 2000-2004 to 303 during 2005-2009.
What happened? Starting in 1995, the amortization and depreciation rate has exceeded utility construction expenditures. In other words, for the past 15 years, utilities have harvested more than they have planted. The result is an increasingly stressed grid. Indeed, grid operators should be praised for keeping the lights on, while managing a system with diminished shock absorbers.
R&D spending for the electric power sector dropped 74 percent, from a high in 1993 of US $741 million to $193 million in 2000. R&D represented a meager 0.3 percent of revenue in the six-year period from 1995 to 2000, before declining even further to 0.17 percent from 2001 to 2006. Even the hotel industry put more into R&D.
Our first strategy for greater reliability should be to expand and strengthen the transmission backbone (at a total cost of about $82 billion), augmented with highly efficient local microgrids that combine heat, power, and storage systems. In the long run, we need a smart grid with self-healing capabilities (total cost, $165 to $170 billion).
Investing in the grid would pay for itself, to a great extent. You’d save stupendous outage costs-about $49 billion per year (and get 12 to 18 percent annual reductions in emissions). Improvement in efficiency would cut energy usage, saving an additional $20.4 billion annually.
There is little doubt in the demand for clean tech and clean energy in today’s marketplace. However, a host of barriers stand in the way of clean tech’s path to mainstream integration.
As far as clean tech clusters are concerned, the Upper Midwest is best known for wind production. One of the main challenges of mainstream wind energy production is the fact that wind is so widely dispersed amongst the five states that are producing wind energy in the Upper Midwest (Minnesota, North Dakota, South Dakota, Iowa and Wisconsin). In order to generate the wind power necessary for significant energy, the wind must be generated from a concentrated region. When it is spread across several states, it makes the central processing and production of the wind much more difficult.
To address these concerns and to improve transmission capabilities to consumers, the CAP-X 2020 project aims to strategically place transmission lines for increased transmission. However, this Minnesota-based initiative is not on a large enough scale to transmit wind energy to the eastern United States.
Another challenge facing the clean tech sector is the tension amongst the key industry players. The lack of communication and unwillingness to collaborate has stalled many wind projects. Some players have overloaded the system with an abundance of wind projects, and other players want to rationalize the system to eliminate these overloads. Some partners are doing nothing while others want to do more, but are limited by their roles. Overall, these players are struggling to collaborate, and in a new industry like clean tech, collaboration is essential to help players succeed.
As the industry players try to sort out their differences, they will also have to worry about a growing threat to the industry. Stories have been circulating in the media about the negative effects of these high-voltage transmission lines. Citizens are growing concerned that these projects will do more harm than good. The Citizens Energy Task Force claims that power lines interfere with bird migration, hurt tourism and damage the ecosystem. While these power lines also include coal, the main criticism is on these new CAP-X 2020 lines that are being constructed.
Finally, one of the other major barriers for clean tech is inadequate regional governance. Regional governments all have different beliefs about clean tech payoffs and strategies. These differing opinions have caused many local governments to freeze projects or not do anything at all. Clean tech infrastructure upgrades are very reliant on the help of regional governances. However, with so few of these governances agreeing, clean tech could face its greatest challenge of all.
No matter how many technical barriers the industry overcomes, it must clear the government buy-in hurdle. If these regional governments cannot agree, then they must consider allowing the industry to move forward without interfering and delaying mainstream integration.
Alfred A. Marcus is the Honeywell/Edson W. Spencer Chair in Strategic Management at the Technological Leadership Institute and Professor of Strategic Management and Organization at the Carlson School of Management at the University of Minnesota.
As clean tech clusters begin to form across the country, organizations like the BioBusiness Alliance are making conscious attempts to catalyze the creation of these clusters. By establishing funding systems in these industries, these clean tech clusters will grow very rapidly. Once an industry cluster is established, the companies operating in those clusters will greatly benefit from enhanced innovation, skilled workforces and competitive success.
One of the biggest barriers in encouraging clean tech startups to create these clusters is funding. With the proper funding, knowledgeable and capable startups will receive the catalyst they need to generate significant momentum. As startups move from R&D to full-scale operations, they require several levels of funding.
In the clean tech sector, the Government has set aside large amounts of capital for companies to research the various technologies that are being created. As the research moves into the development stage, venture capitalists and private equity firms begin funding the startups. At this point, startups have enough capital to begin to scale-up their manufacturing processes and are able to receive additional funding from public equity markets. Finally, as they begin to roll out their products, these clean tech startups will be able to self-fund their operations and continue growing as the clean tech industry expands.
At every stage in the process for these startups, the diversity of the stakeholders increases. Every venture capital firm has different strategic ideas than each private equity firm, and each private equity firm has different ideas than every public equity stakeholder. There are several strategic issues that can arise from these differences:
Sustainability and availability of feedstocks
Standards for logistics and infrastructure
Scale and speed of production
Development capital
Transition costs versus value
Regulatory and legislative harmony
A driving force in the development of the clean tech industry is government policy. Most recently, the Renewable Energy Standard and Carbon Reduction Goals of 2007 led to specific policies for each state. In the Midwest, Wisconsin will require that 12.9% of all energy production be of renewable energy sources by 2015 and 25% by 2025. Also, by 2015, North and South Dakota and Michigan all pledge to allocate 10% to renewables .
As these mandates require more and more clean energy, the demand for such products will only increase. It is from these policies that clean tech startups will benefit the most. Look for clean tech startups to be a driving force in the renewable energies market.
Alfred A. Marcus is the Honeywell/Edson W. Spencer Chair in Strategic Management at the Technological Leadership Institute and Professor of Strategic Management and Organization at the Carlson School of Management at the University of Minnesota.
Every area of the nation is known for industrial specialties. These areas are easily recognized and new companies in those industries tend to gravitate to those geographies. Silicon Valley is known for information technology, Pennsylvania and New Jersey are home to pharmaceuticals and Boston is well known for biotechnology.
One of the newest clusters is clean tech. Minnesota is quickly becoming the center of a clean tech cluster. Southern Minnesota is one of the leading wind energy producers in the nation and a host of Fortune 500 companies that are headquarted in Minnesota are implementing clean tech initiatives.
In 1890, Alfred Marshall noted that, “Geographical concentrations of specialized industrial activities, once established, reinforce themselves by attracting complementary activities at various stages in the supply chain. In addition,” he adds, “they create a pool of specialized labor which aid the spillover of know-how between firms.”
Over a century later, the same geographical concentrations exist. Michael Porter of the Harvard Business Review stated that “Today’s economic map of the world is dominated by…clusters: critical masses – in one place – of unusual competitive success in particular fields.”
By concentrating these specialties, entire industries can increase productivity, drive innovation and stimulate new business creation.
As clean tech becomes more relevant in today’s economy, look for these clean tech clusters to emerge in other parts of the country. When they do emerge, clean tech innovation and optimization will propel the industry faster than if there were no clusters at all.
Alfred A. Marcus is the Honeywell/Edson W. Spencer Chair in Strategic Management at the Technological Leadership Institute and Professor of Strategic Management and Organization at the Carlson School of Management at the University of Minnesota.
The North American electric power infrastructure is a highly complex dynamical system. The reliable operation of the power generation and delivery system requires the multi-level interactions and integration of numerous specialized component technologies and systems. While advancing the capabilities and performance of individual system components is important to enable progress, it is essential to remain focused on solving larger systemic challenges in order to successfully achieve a fully operable Smart Grid.
Before fully implementing the Smart Grid nationwide, during 1998-2008 I proposed that Smart Grid development start with “microgrids” that begin at loads, or at a building level, and extend to larger power delivery systems. More specifically, in 2008-2010 I proposed using the University of Minnesota as a “Smart Grid Sandbox” where companies could contribute their Smart Grid technologies and expertise as an experimentation and assessment “Smart Grid Sandbox” to determine what works well (reliably, securely, efficiently, and makes good business sense) in the end-to-end Smart Grid overlaid system.
As part of the Smart Grid Sandbox, there would be four primary phases (from “micro” to “macro” assessment and deployment, all centered around enabling services):
Smart Room
Smart Grid School/Building
Smart Grid U™
Smart Grid City
The transformation of the University of Minnesota’s Twin Cities’ and Morris campuses along with the UMore Park into SmartGridU™s would consist of several elements:
DEVELOP system models, algorithms and tools for successfully integrating the components (generation, storage and loads) within a microgrid in these locations
CONDUCT “wind tunnel” data-driven simulation testing of smart grid designs, alternative architectures and technology assessments, utilizing the University as a living laboratory
BUILD A ROADMAP to achieve a “Net Zero Smart Grid” (Net Zero Energy) at the large-scale community level (i.e. – a self-contained, intelligent electricity and energy infrastructure able to match renewable energy supply to the electricity demand)
To achieve the objective of Net Zero Energy (NZE), campus facility managers need new technical approaches for energy planning and operations that will:
Provide the capability to optimally reconfigure energy systems to accommodate new construction, building renovations, and to make best use of affordable deployments and equipment upgrades
Optimize the real?time operation of all demand side equipment, and make best use of on?site power generation and energy storage options, which include a phased-in plan for electrification of transportation
Once the Smart Grid, from “micro” to “macro” concepts and implementations in the Sandbox become fully assessed, “stress-tested” and operable, the local and national stakeholders, public and private, can better assess pathways forward and to manage risks in implementing the Smart Grid across the nation as a more secure and efficient power grid.
As a national Smart Grid is constructed, it is important that developers include renewable energy and localization considerations to ensure that the Smart Grid operates as close to 100% efficiency as possible.
When it comes to renewable energy sources, wind and solar have become the primary foci. Over the past couple of years, renewables have been at the center of the energy debate. While renewables strive to eliminate the need for non-renewable resources, wind and solar energy are traditionally characterized by their intermittency of operation and their inability to dispatch.
Since the reliable operation of the power supply and delivery system requires a balance between instantaneous supply and demand, it will be critical for further developments to be made in how wind and solar power are stored. Once wind and solar energy can be reliably stored, those renewables will be able to offset the operational costs of the Smart Grid.
Similarly, as manufacturers and consumers become more energy conscious, plug-in hybrids and electric cars will become more and more popular. While the effects that these plug-in electric cars will have on the Smart Grid are undetermined at this point, it will be important for Smart Grid developers to take these load requirements into consideration as they construct the Smart Grid.
On a more local level, energy companies and electric power utilities have already begun upgrading their infrastructures to better monitor and manage energy usage. These 2-way communications allow the energy companies to regulate loads during peak usage to better optimize their delivery systems. This will not only allow energy providers unique insights into how commercial and residential customers consume electricity, but also allow those energy providers the ability to control power so as to minimize the risk of power outages.
90+% of the electricity generated in developed nations is consumed in residential, commercial, and industrial premises. Energy efficiency and peak load reduction are required to reduce overall electricity consumption, to minimize use of expensive peaking plants, and to fully exploit renewable sources. Automation and control systems in homes, buildings, and industrial plants are needed to minimize consumption and cost.
As development of the Smart Grid moves forward and the technology that utilizes renewable energy sources becomes more reliable, Smart Grid developers must integrate renewable energy sources with the infrastructure changes that local energy providers are already implementing.
The Advanced Power & Energy Cluster (APC) recently completed its first year of operation for the U.S. Small Business Administration (SBA). The APC is engaged in connecting the innovation of small businesses to technology needs for the nation’s defense, and for commercial applications. The initiative has helped to create more than 250 jobs and achieve $10.3 million in Department of Defense (DoD) and private business contract awards in the past year, while acting as a catalyst for technology-based economic development. The APC currently has 95 member companies and organizations in 21 states.
