Well we had another hot July day in Boulder. Out meeting was cool with the help of Coolerado demo truck (cooling down attendees in the parking lot) and the law building A/C!

Announcements

• Gavin Nachbar(gavin@nachbar.com) is a nationally published freelance writer seeking greentech stories.

I am looking for investors and entrepreneurs who either are involved with a business in the earlier stages (nofunding, angel round, etc.) or any company, or invention idea, that has not received much press. I have particular interest in exposing those interesting, but under covered, ideas.

• Kris mentioned in the meeting that we will start to put together a stimulus support section on our website. This will assist new green tech businesses in determining if they qualify and how to take advantage of stimulus money.
• Also Kris made a call out to meetup attendees (specifically grant writers or people with experience submitting stimulus grants) to submit information and stories to contribute to our site

The “Coolerado” demonstration truck.

Speakers

Holme Roberts & Owen (HRO), Melody Harris
Stimulus Package – What’s in it for Green Tech Companies

The American Reinvestment and Recovery Act (ARRA) was signed into law in February 17th, 2009 at Natural History Museum in Denver. There is a  significant amount of money available (nominally 787 billion). As Melody noted, the complexity of accessing this money creates significant hurdles and understanding the legislation is a harrowing endeavor. See the opencongress.org version for the full text. HRO is a specialist in advising companies trying to obtain stimulus money but was gracious enough to give some free information with the disclaimer that her presentation did not constitute legal advice. The presentation provided only a high level view of available dollars and relevant items to attendees who are interested in pursuing stimulus money and grants. Melody pointed out that they provide full services in this area to the general public by appointment at their offices in Denver.

Big ticket money allocation in the ARRA act are in the following categories

• Counter-cyclical funds
• Flexible Funds
• Health IT
• Transportation Infrastructure
• Alternative Energy R&D
• Energy Efficiency and Renewable Energy

This first area, counter-cyclical funds is targeted towards states (Colorado is receiving a good share) to help balance budgets based on tax shortfalls. This money is directed at specific areas such as a higher education. Flexible funds as well are being used to help provide waivers on interest for Small Business Administration

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(SBA) loans over 100K. Health IT includes advanced medical record and productivity technologies that health providers are being encouraged to adopt. Transportation includes upgrades to highway infrastructure.  The remaining two areas are green technology and the focus for the remainder of the presentation.

The energy provisions in the act have direct federal dollars as well as funding for state level disbursement (e..g weatherize). State level money is available typically from the governor’s energy office (GEO).  Federal dollars for energy are available as loan guarantees (around $6B) and as Tax Incentives in the follow areas

• Investment Tax Credit (ITC) – (e.g building a wind farm)
• Production Tax Credit (PTC) – (e.g. operating a wind farm)
• Manufacturing tax Credit – (manufacturing renewable energy equipment)
• Grants in Lieu

The Solar Energy Industries Association (SEIA) is an advocacy for green tech, and members can receive email alerts to group calls on topics such as grants in lieu. Recently they were meeting on tax credits and on the subject of converting ITC and PTC credits to up front cash or grants in lieu. These grants are mainly intended for purchasing of renewable energy equipment (e.g. PV panels) for utility scale projects.

Targeted technologies are also allocated significant monies as follows:

• Smart Grid – $4.5B
• Advanced Batteries/Storage – $2B
• Advanced Fossil Energy (CO2 capture) – $3.4B
• R&D Renewable Energy Projects – $2.5B

Given the focused funding to these areas, there seems to very little opportunity for funding outside of these areas. The federal grant website www.grants.gov provides a tool to research funding opportunities in targeted technologies/others. This site crosses a number of federal agencies that have stimulus money such as Department of defense, labor, interior, agriculture, etc. and provides alerts called funding opportunity announcements (FOA).  This is not the only source for funding and Melody recommended their services to help navigate all the possible sources and provide the most efficient use of resources for startup green tech companies.

Another option for funding is the Department of Energy Loan Guarantee program. They provide loan guarantees for specific components of renewable energy systems that can be one or two levels down from the finished product. The new program focuses on hardware.  It no longer requires innovative technology but still requires a participating lender.  Previously, the program was slow; case in point: Solar panel manufacturer Solyndra received a guarantee after 2 1/2 years. The new Energy Secretary has promised to speed up the process. See the DOE Loan Guarantee website for more information.

State level programs are administered primarily by the GEO in Colorado and are a great place to start looking for funding. The primary area for funding is the Weatherization Assistance Program (WAP) program. Colorado will receive 80 million over the next three year to fund WAP. In order to get monies, you need to an approved/preferred vendor. I’ve located the full text on WAP - the opencongress.org site (sec 407). Colorado will also allocate 45 million over the next three years for Energy Efficiency and Carbon Reduction (EECBG). The bulk of the funds will be dispersed to local municipalities and governments and the remaining 9 million will be processed by the Colorado Govenors Energy Office (GEO). A key part of getting this money is building relationships with local governments and cities such as Denver (which is receiving around 7 mill. of the 45 mill. ).  It’s also helpful to bring a unique technology to the table that will allow you to stand out from the other potential recipients for funding. Some of the high demand areas for efficiency are the following:

• transportation/fleet conversions
• building efficiencies
• recycling
• lighting retrofits (LEDs, etc.)
• Renewable Energy projects – solar, wind, biomass

The state of Colorado has submitted its State Energy Plan (SEP) to the Department of Energy (DOE) on 5/12 of 2009 and is awaiting approval. This plan should receive 50 million over three years. Other related programs such as the Renewable Energy Development is going to mainly channeled through the existing rebate program for purchasers of solar panels. Existing NEED grants will also be funded with 19 Million. Carl from Hybrids Plus was in the audience and had received grant for R&D but it is considered to be small in relation to the other potential grants available. The State Energy Program has a good potential for direct money and services such as workforce training and education. See the Colorado Energy website for more details on its intended usage of recovery money.

Kris and Melody offered some advice on creating opportunities by targeting/educating end users and local municipalities on potential use of the grant money assigned to them. From the audience we did hear some good stories on current grants in progress. One story was regarding a grant for 20 Million that is still pending. For a grant of this size, the effort required consultants, company labor and cost 30K to prepare. Another experience pertained to electric car grants. They applied for three grants with potential values of 1.2M, 4.5M and 8.2M. Their advice was three fold, use experienced grant writers preferably PhD’s, use a good accountant and partner with others who contribute and share in the delivery. Their effort involved partnering with colleges to help share the workload which included 3-4 weeks of gathering and 3-4 weeks of consolidating/writing/editing.

Another great story was about chasing down city money and working to help divert it from public projects (example of using LED intersection lights) into more beneficial private projects (e.g  green building project). Using partnerships and existing relationships in cities/municipalities was key to doing this. The cities and funding available can be found on the DOE Energy Efficiency and Renewable Energy state information pages. Another opportunity area in connection with cities is they have numerous funds related to energy audits. The cities lack skilled resources to perform these, so they need for education and training - this is a good opportunity to seek out.

Towelhead aka Nothing Is Private buy A grant reviewer in the audience also provided feedback on how to fill in grant forms. She recommends to read all the grant material carefully and fill in all the optional sections. The expectation is that company/grantees need to have partners, letters from customers, Memorandum of Understandings (MOU) from customers. On the federal level, Kris noted there is a lot of federal money available but this would require General Service Administration (GSA) certification to validate you are a real/valid company with accounts receivable/etc. Given this process takes 6-9 months, any company not having this today would probably miss out on ARRA grant money. Another comment from the audience was made in the regard that Department of Defense has sizable grant money available and that they do not require General Service Administration (GSA) certification.

I’ve include another item from the NPR’s Cook County Weatherization story revealing that stimulus money requires workers be paid the prevailing wage. In Cook County, Chicago the prevailing wage for weatherization is $35-52/hr limiting the effectiveness of stimulus money for those projects.

Invener S.A., Nicolas Kuhlenthal and Judd Rogers
Investment in Chilean Clean Energy

Invener, a Chilean based energy development company,  presented a refreshing view from outside the U.S. on green tech development abroad. They stopped by our meeting after visiting NREL regarding collaboration/partnerships regarding renewable energy. The purpose of their visit was to network, look for suppliers (especially for wind) and financial partners.  Invener was started in 2007 and have completed work on two thermal-electric diesel developments (around 140 MW capacity) in northern Chile. They are currently working on three mini-hydro developments that will generate 3MW of power.

Judd started to lay the foundation of why Americans should invest in Chile and how Invener fits into that picture. Invener brings to the table a team that would support plan execution, established relationships with government & industry and a pipeline of projects with good market return (up to 18%). Chile is positioned as a strong market opportunity to do business. It has Free Trade Agreements with most large countries and is an investor-grade country (typically rated by Moody investor services). Chile is experiencing a perfect storm for renewable energy potential with great natural resources and capital markets for financing, almost no fossil fuels and has a captive market as they now experience energy shortages.

Chile has large natural geography being the longest country in the world at over 4000 miles. Two isolated main transmission networks make up for 98% of power delivery. The north grid supplies power to heavy industry(90% industry/10% city) and the greater Santiago grid (ISC) supplies power to the central part of the country and to 92% of the population. The north grid had changed recently.  It was previously running on natural gas, but it had to convert over to diesel when Argentina cutoff a pipeline supplying the area. The fallout of this is that the mining industry and others in the north are paying around $450 per MWh power rates, while the Santiago grid cost is around $120 per MWh and employing hydro-based power.  With hydro however, recent droughts are impacting Chile’s power grid with blackouts.  Demand is growing on both grids and approaching per capital levels of the U.S., culminating in an energy crises and a great opportunity.

The potential for renewables are broad in Chile. The north is a dry dessert and amenable for PV solar, concentrated solar, geothermal, wind and biofuel based renewable energy. It’s rating for solar energy is higher then the Mohave desert at 8Kw/square meter.   The Chilean government is aggressively investing in new renewable plants with RFP issues for 1MW PV plant and a 10MW CSP plant. There is also 300MW of wind projects in the pipeline to be developed. A number of projects are being developed specifically for industry with mining concerns looking to have their own power generation typically using PV, CSP solar. An interesting note is that Chile was one of the first to privatize it’s energy market. They are looking at spot prices (energy bought beyond current contracted amounts) declining from a high of $120MWh to around $70MWh in the near future. These rates are still attractive allowing for potential 18% return on assets.

The core value proposition is the cost to enter the market is lower in Chile and the cost of development is cheaper. Chile has also strengthened it’s foreign investment laws and believes in the rule of law. They already have a number of foreign companies that own mining operations – companies from Spain, U.S. and Canada. There are a number of issues to navigate.  Water is an important resource in the Northern part of the country. In the desert, there is a need to work with the government on water rights since water resources are operationally important to mining companies located in the region. For more information please email Felipe at felipe.oettinger@invener.com

Green House Data, Shawn Mills
100% Wind powered GREEN Data Center

Green House Data has returned to our green tech meetup with great news: they are now fully 100% wind powered. There facility broke ground in 2008 and with recent additions of co-generation facilities (on-site) their facility pulls from two wind sources: the Cheyenne 35MW wind energy plant and/or their local wind operations. They also have plans to add 3 more local 100KW wind generators to their location. The core value proposition is that harnessing green energy and energy efficient equipment/design can compete and beat their data center competitors on price while maintaining a low carbon footprint.

With 2.5M in a sales pipeline and 2.2 million in grant money from Wyoming, their green data center concept is moving along well. Echostar is a strategic partner with Green House and is co-located in the same business park, allowing Green House Data to leverage  an enormous amount of broadband for their clients. Growth in demand for data centers is huge and opportunity demand currently outstrips supply by 3:1. This raises the spectre that data centers will pollute more then airlines by 2020.  So, the need to use carbon neutral power is evident. Wyoming provides unique benefits:

• Lower energy prices
• local wind generation
• 240 days of Wyoming cold air for cooling
• Next generation energy efficiency racks
• scalable/modular technology

While leveraging these benefits, they save 30% in operational costs and pass this on as a 10% discount to their customers. Green House is very active in promoting this model with articles in information week, zdnet and speaking engagements at conferences such as data center world. This is an active area of research for a number of large companies such as Microsoft and IBM who are acknowledging startling statics such as an EPA analysis suggesting data centers will use 1.5% of energy generated in the U.S.

Green House Data takes their SLA contracts seriously and have a 100% uptime assurance where they pay a penalty for outage time. Their facilities support everything from a full enterprise hosting solution to a single server system.  Today GHD hosts 2500 customers in their 500 sq. ft. facility. In the future they expect to expand this and are working on funding the construction of a  new 1700 sq. ft. facility.

Coolerado, Tony McDonald Armageddon download
The Greenest Way To Stay Cool

Coolerado provides high efficiency cooling units for both residential and business clients based on an indirect evaporative technology. Swamp coolers are different than indirect evaporite systems in that they take warm air and use water evaporation to cool. The drawback of swamp coolers is they can put over 3000 lbs. of water into a home over a 24 hr. period. The coolerado unit does not create humidity and claims a 10x comfort improvement. Indirect evaporite technology has benefits over traditional A/C unit which can use over 10 times the amount of electricity (Arvada example referenced is a 20 ton traditional A/C unit using 30KW and the Coolerado unit using 3KW). Tony provided the three green aspects of the Coolerado product:

• money green with 10x less electricity
• environmental green (less electricity-less water as net-zero water in aggregate )
• health green by using fresh air that is filtered for dust pollens and allergens

The addressable domestic market for cooling is $18 Bil. with a 3% annual growth rate. Worldwide this market is $66 Bil. (13% growth rate). In many newly emerging countries people are rapidly adopting air conditioning and  buying the best A/C units available. Similarily water usage is a consideration when it is a limited resource giving indirect evaporite a competitive advantage. Cutting electrical usage with the Coolerado advantage is significant in hot countries where peak hour demand is rising and so is the utility rates.  A/C accounts for 50% peak hour usage in the U.S. and  in Dubai it can be as much as 70%.

An example deployment for the product is a plastic injection molding facility in Colorado that makes Pepsi bottles. The Injection factory used to use a 200 ton A/C unit to cool a 150K sq. ft. facility in aggregate (40K sq. ft. in the actual molding facility). It cost 250K a year to cool the facility and this solution did not work well with most of the plant having 85 deg peak temps and production areas hitting 130 deg. The Coolerado system helped bring down the temperature significantly while cost only 15K.  The overall solution included an  improved airflow solution. The savings in electricity allowed for a 13 month pay back.  The 10yr. cash flow savings is expected to be $2.4 Million.

The product is net water zero. Tony walked us through this explanation since the product does use water to cool. This conclusion comes from the re electricity consumption the product uses zero water since places such as California and Colorado use water to make electricity. The rate for Colorado is 1.2 gal/KWh and 4.6 gal/KWh in California, so that energy efficiency of the A/C unit makes it use less electricity and in turn uses net zero or negative water. The Coolerado unit does need to be connected to a water line.  Another advantage of the product is that it performs better in hot dry locations such as Colorado. In fact as the temperature increases to 96 deg. and higher, the traditional A/C units can’t keep up while the Coolerado continues to operate well.

The core unit is made in Denver with source components are made in California. The inventor is a Ukranian PhD who defected in the 70s. The product has been vetted by the federal government which has been recommended its usage. Customers range from the Gordon Biersch to Southwest and Federal facilities (e.g. AISO.net data center). Tony gave some impressive stats for the 6 ton demo truck/trailer that he brought to the meeting. The trailer mounted unit can be used to cool a 3000 sq ft. building on the power of 1/3 of hair dryer (50-600W). All the technology and intellectual property is patented.

Their product is available today for residential and business. The unit works well in the southwest and geographically ends in Texas/Nebraska boundaries. The home units are sold through empire gas and electric. A good question was raised on how the evaporite solution worked without adding humidity. It was described as cooling a secondary flow. supporting both evaporation and heat transfer in the same unit.

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