NICK D'ARBELOFF AND HEMANT TANEJA

Catalyzing the clean-energy economy

By Nick d'Arbeloff and Hemant Taneja | December 22, 2008

A KEY ISSUE facing the nation, and one that must be addressed by Steven Chu, President-elect Obama's pick for secretary of energy, is how best to transform the nation's energy infrastructure, catalyze the clean-energy economy, and reach Obama's stated goal of creating 2.5 million green jobs.

Should the government fund a centralized Manhattan Project to address alternative energy, or should we instead fund "100,000 garages" in which individual entrepreneurs across America can invent new technologies, as Steve Jobs and Bill Gates did 30 years ago?

While there are aspects of energy transformation that demand central involvement by the federal government, the country's tremendous record of innovation is based on the power of individuals in the private sector to identify problems, envision solutions, and pursue their dreams as entrepreneurs - often starting in their garages. This is precisely what fueled the explosion of computers and information technology, and it can drive the development of a new generation of clean-energy technology as well.

In order to make this happfen, Chu should direct a far greater percentage of the department's budget and resources outward - sparking more clean-energy research in our universities and research centers, accelerating new venture creation, and helping to scale proven technologies.

A powerful template for action can be found in New England's recent surge as a clean-energy cluster. Massachusetts and the region have seen the number of clean-energy companies grow exponentially since 2006; this can and should be repeated elsewhere.

Here are a small number of programs that could help create powerful clean-energy clusters around the country:

Clean-energy seed grant program. Using Massachusetts's Green Jobs Act as a model, the department should aid other states in developing a clean-energy seed grant program - offering grants to researchers and teams whose technology suggests commercial viability. The goal should be to engage the private sector (investors, entrepreneurs, university technologists) and provide a team of business-oriented coaches who can guide each grant recipient toward private funding and commercialization.

National lab technology transfer. To increase the flow of technology out of our national labs and into the marketplace, the department should reestablish a network of regional offices within all sizable clean-energy innovation centers that do not have a lab in proximity, such as Boston, Austin, and Portland. Each office would be tasked with connecting entrepreneurs, investors, and companies with researchers and emerging technologies at national labs, and be measured on the number of technology transfer deals completed.

Clean-energy boot camp. The department should offer funding for a series of regional clean-energy boot camps that put entrepreneurial executives through an intensive, energy-focused, executive education program - and speed the transition of critical talent into the clean-energy sector. The goal: offer executives a working knowledge of energy technologies, a basic understanding of energy markets and macro trends, and a network of contacts in the clean-energy field. The program could be based on a similar program developed by the New England Clean Energy Council in 2008.

Clean-energy pilot plant development. The department should expand its loan guarantee program for helping clean-energy companies fund pilot plants. Such guarantees should be made through commercial banks (which would take on some risk for non-repayment) and should cover no more than 75 percent of the required capital - private investors would provide the rest. In this fashion, the risk profile of any loan would be lessened by the due diligence of both private investors and the banking institution.

Chu will be busy. There is a dizzying array of decisions to be made with regard to energy efficiency, renewables, and helping Congress formulate the market signals required to more quickly steer our society away from traditional fossil-based energy.

But most important, the new secretary must drive the department at the speed of business, utilizing public/private partnerships to catalyze private-sector action. This is critical if we are to reach the goal of energy independence and a thriving clean-energy economy.

Nick d'Arbeloff is executive director of the New England Clean Energy Council. Hemant Taneja is a managing director at General Catalyst Partners, and the council's co-chairman.

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