The US Government Funds Cutting Edge Research

Though it has been a while since my last post this is not due to a lack of enthusiasm and interest in the opportunity that is climate change. Far from it. I have had a fantastic holiday and then witnessed first hand some of the creativity and ingenuity that humanity will have to show to solve and ultimately benefit from the problems we have created for ourselves. My job took me, in mid July, to the Farnborough International Airshow; not a centre of environmental innovation?

Perhaps.

But it is a centre of human ingenuity. As I watched the F22 hovering in mid air, performing maneuvers even its most recent cousins couldn't dream of I marveled at the genius of humanity. We certainly produce some spectacular things when we turn our mind to war and I know (or at least hope) this same type of genius is turning its attention to technology that will benefit and ultimately save humanity. These are the people working on disruptive technologies in companies we have probably never heard of.

This type of research has always (and probably always will be) a long way behind the funding provided to military research but as the world wakes up to the issue of climate change more funding will be spent in smarter ways. I was particularly impressed to read that the US government is funding ARPA-E, a programs very similar to DARPA's research into speculative military technology. The idea is to fund low 'probability' high 'benefit' research into technology.

I will look more closely at this program in the next few days but think there could be some truly revolutionary outcomes from this approach. It is certainly one of the most exciting funding developments in the energy field for a long time.

A Shared Opportunity: Wind Energy and Aerospace

I recently had a number of interesting discussions with government trade and investment organisations where the interaction between composite technology in the aerospace sector and the requirements of the renewable energy sector were raised. It seems there are emerging opportunities in the renewable sector for companies that have developed capabilities in the design and construction of composite materials for the aerospace sector.

The next generation of wind turbines is looking like it will be even larger than the last, especially those being installed offshore. This means that the current system for building this turbines (similar to that for boats and cars) will need to be improved. The current processes can leave small imperfections in the blades which can lead to early failure with some reports suggesting up to 80% of blade failure can be attributed to poor production standards. Given the work that has gone into composite production both for the F-35 (Joint Strike Fighter) and the Boeing 787 Dreamliner it is unsurprising that opportunities for cross pollination exist. What is surprising is that very few aerospace companies realise this opportunity exists, I also wouldn't mind betting that the Wind Power sector does not know the Aerospace sector has been working on these design/production issues for years.

Perhaps this is a situation where support from government, industry associations and research institutions could save the Wind Power sector from 'reinventing the wheel' and could increase business for some Aerospace companies.

Would be interesting to know how many other opportunities like this exist in other sectors.

Is this the breakthrough in distributed power?

Photo: Bloom Boxes at ebay (from www.bloomenergy.com, 11/3/10)

Another fuel cell is launched and another round of enthusiastic investors and reporters are proclaiming the world as we know it is about to change. Bloom Energy has announced the release of its 'decade in the making' fuel cell the Bloom Box. It is easy to dismiss this as another hype filled company that will fail to deliver on its promise; but sooner or later someone really will revolutionise the way we generate energy.

Is this it? It is hard to say, but there are a few things that make Bloom Energy extremely interesting. Firstly, Gen. Colin Powell (Ret) is one of two independent board members. Secondly there seems to have been interest from a number of leading companies including Google, Walmart, Bank of America, Coke, FedEx and ebay with FedEx predicting a payback period of 5 years (the others do not provide a prediction though Bloom Energy predicts 3-6 years).

The third, and perhaps most interesting, is that the Bloom Box is a solid oxide fuel cell rather than the more expensive and more common (in commercial applications) Proton Exchange fuel cell. Solid Oxide fuel cells can operate using a variety of different fuels, do not need to use an expensive Platinum catalyst and are extremely efficient even by fuel cell standards but traditionally operate at a high temperature (600C +). As you can imagine these high temperatures add to the costs associated with design and production. Bloom claim to have solved this problem though there is not much detail on how.

In a marketing and sales sense Bloom Box is simple to understand: a group of fuel cells the size of a loaf of bread will power a house, the design is modular, the more you put together the more power you get out, a complete module can power 100 homes or 1 office block. This is an easy idea for the consumer and business customer to get their head around; a concept that is both easy to understand and scalable will be easier to sell in the board room. Those businesses that do install this systems will also make a clear statement to visitors, a shiny set of these boxes out the front sends a message.

So will Bloom Energy succeed? Well I think it has a better shot than most that have tried so far: it has good independent leadership at board level, is being used by leading companies who are willing to participate in case studies, it is cheaper to produce than traditional fuel cells, it is modular and easy to understand and it looks good.

Bloom has a pretty good shot at being extremely successful and changing the way energy generation is viewed; perhaps even get us used to the idea of localised energy generation. Whether Bloom Energy succeeds with the Bloom Box may be irrelevant though, especially if it opens the market for other 'distributed power generation' entrepreneurs.

An Opportunity

There are amazing opportunities out there right now. Things are happening, economies are changing, barriers to entry are being broken down in established industries. Yes, there has been a failure of government and government policies in changing the 'rules of the game' to ensure sustainability as well as opportunity are the foundation of capitalism. But things are changing anyway!

Look at the the automotive industry of the late 20th century; high barriers to entry and very limited opportunities for new car companies. In fact an entrepreneur would need to have a lot of money to loose just to start building cars let alone actually sell any of them. While consumers demanded the same basic car that Henry Ford built (with higher efficiency and more fancy bits) there was limited opportunity. Suddenly this has changed, enough consumers are demanding ultra high efficient vehicles to make companies like Tesla Motors, Think and Better Place an interesting proposition for entrepreneurs. Whether they make money is another matter, the very fact that VC sorts and entrepreneurs are even considering the automotive industry is worth entering risk tells us that the game has changed.

Why the game has changed and the people and companies that are trying to take advantage of the new opportunities this presents is what this blog is all about.