A number of different clean energy technologies are ripe for innovation. Here are four areas for entrepreneurs to watch.
Graham Lawlor meets a lot of tech start-ups--and he hears a ton of great ideas. He's the founder of Ultra Light Startups and puts on events in New York, Boston, and other cities where start-ups pitch their ideas to investors.
Lately, Lawlor has been organizing pitch events specifically around clean tech ideas in conjunction with Shell Oil Company and the U.S. Department of Energy. Here's his take on four trends energy entrepreneurs should watch:
1. Natural gas is so cheap everyone wants to use it.
Hydraulic fracturing, a.k.a. fracking, is a controversial business because if done improperly, considerable environmental damage can occur. At the same time, the drilling technology that injects fluids into the ground to free up difficult-to-access reserves of oil and natural gas has resulted in powerful economic ramifications. In fact, Lawlor says the sharp decline in the price of natural gas has sparked all sorts of entities--energy utilities, government institutions, and companies of all sizes--to figure out new ways of using it.
Previously the price of natural gas in the U.S. was above $10 per million BTUs and now that price is down around $2--"the equivalent of oil dropping in price from $100 a barrel to $20 a barrel over the span of two years," he says. "It's added dramatic, dramatic impacts on the energy industry and not only on consumers of natural gas but everything else."
So while renewable energy sources like wind and solar a couple of years ago were starting to become cost competitive with petroleum-based energy, now they're having a hard time competing and have much more ground to make up.
And because utilities and enterprises are looking at ways to switch to natural gas, it's a great time for clean tech start-ups to get in on the game and figure out new ways of innovating in the space. For instance, it's relatively easy to convert a coal-fired power plant to natural gas, but the question remains: What other opportunities for conversion to natural gas exist?
2. New nuclear technologies are on the horizon.
A couple of things are getting people thinking about next-generation nuclear technologies: The black eye the industry received after the Japanese Tsunami of 2011 and the resulting Fukushima Daiichi nuclear disaster, as well as the finite lifespan of conventional nuclear plants.
One example of a start-up innovating in nuclear is Transatomic Power. Lawlor says the company's technology was birthed at MIT and is a Waste-Annihilating Molten Salt Reactor (WAMSR) that's far cleaner, safer, and more efficient than conventional nuclear technologies. In a nutshell, the WAMSR is powered by nuclear waste that's kept suspended in a liquid. The process lets Transatomic get more energy out of the fuel than a conventional reactor allows.
The company says it can convert stockpiles of nuclear waste from conventional nuclear reactors into $7.1 trillion of electricity annually and once fully deployed can power the world through 2083.
3. Renewable energy needs a better storage solution.
If you can come up with a brilliant way to store renewable energy, you've got something special. The main problem with renewable energy sources is they're intermittent.
"Yet people need electricity 24/7 and so storing electricity from when the wind is blowing and the sun is shining to use at night or when the wind is not blowing has been a persistent challenge for the renewables sector," Lawlor says.
The good news is the industry is primed for innovation. One idea he's seen: pumping water up a mountain when you have the renewable energy to get it up there. Then at night, when you don't you can let it flow downhill and spin turbines to create more energy.
4. There are other sources of venture funding out there.
Lawlor says that lots of fledgling companies aren't thinking enough about how eager big companies are to garner new technologies, as opposed to being disrupted by them from the outside.
A perfect example: how Kodak fell victim to the digital revolution without pivoting fast enough.
"Giant companies in every industry look at that and they say 'We don't want that to happen to us. If there's the equivalent to digital photography in our industry we want to invest in that early and we want to be a part of that change as opposed to be disrupted by that change,'" he says.
His advice to start-ups: Look to corporations as a source of investment revenue and partnerships because they can markedly increase the scale at which you can grow.
"A start-up that's trying to sell a natural gas fuel tank on its own has a lot of trouble but if you end up partnering with a big auto company or a big manufacturing company then you can get instant global distribution, which is going to put [your] company on a totally different level," he says.
CHRISTINA DESMARAIS is an Inc.com contributor who writes about the tech startup community, covering innovative ideas, news, and trends. Have a tip? Email her at christinadesmarais (at) live (dot) com. @salubriousdish