Michigan Energy Report - May, 2008

Wednesday, June 4, 2008

Michigan Launches Cohesive Assault On Energy Challenges

Politicians, universities, businesses join forces

James A. Croce, CEO NextEnergy

The Michigan Energy Report is a few days late this time around as we wanted to include the latest Michigan energy highlights from last week's Mackinac Policy Conference, held on Mackinac Island every year, and featuring the state's most influential policy, academic, and business leaders.

As you can well imagine with gasoline prices topping $4 per gallon at the pump, energy and energy costs were on everybody's mind, and a coterie of speakers and presentations addressed the issue on many fronts.

In chronological order, the first salvo in the assault on today's energy challenges came from the Michigan business sector; in the form of a presentation entitled "Alternative Economy From Alternative Energy" and featuring presentations from me, from Robert Buckler, CEO of DTE, and from David Kepler, Executive Vice President and Chief Sustainability Officer for The Dow Chemical Co.

The focus of our joint presentation was on using the remarkable opportunities presented by the burgeoning alternative and renewable energy industry to reinvent Michigan's entrepreneurial culture. Virtually all possibilities for entrepreneurial growth were mentioned; little was left out. Everything from LEDs to energy efficiency to biofuels to carbon trading. Noticeably absent from the conversation was any mention of nuclear power. I believe that that's because bringing up nuclear power creates an instant lightning rod and probably deserves a stand-alone breakfast at the Mackinac Policy Conference. (Maybe next year?)

Immediately following our presentations, the political team took the ball in the form of Senator Debbie Stabenow holding a press conference on "Alternative Energy; Making Michigan a Leader in the Green Economy." Senator Stabenow reported on the passage of the Food Conservation and Energy Bill (aka the Farm Act) at the Federal level which makes alternative energy development a priority nationwide, and also on her piece of legislation, the Green Collar Jobs Initiative. The Initiative is included in the U.S. Senate Budget blueprint and is designed to provide more than $2 billion in investment in alternative energy and the industries and services which support it; including training workers (including Michigan workers) to thrive in the emerging CleanTech world, with an emphasis on energy efficiency, conservation, advanced battery development and manufacturing, and biofuel production.

Next up, the academic stakeholders. Following Senator Stabenow's press conference, another press conference was held, this time by Michigan's University Research Corridor (URC) which consists of an economic-growth driven partnership that includes Wayne State University, Michigan State University, and the University of Michigan. Together, the three presidents of these state universities announced seed fund grants to provide startup support for two "revolutionary but feasible" energy projects: the first to develop far more efficient low-cost thermoelectric materials with industrial applications. The second will develop revolutionary nano-biocarriers to rapidly and efficiently produce cheaper, more plentiful ethanol from switchgrass or corn stover (the leaves and stalks that make up about half of a corn crop). Production facilities would require a much smaller footprint than current ethanol plants.

Last but far from least, in her keynote address on the final day of the Conference, Michigan Governor Jennifer Granholm took to the stage and announced, as one of her three "asks" of the standing room only crowd of legislators and business leaders, that Michigan lawmakers must pass a comprehensive energy reform package including incentives to encourage energy efficiency and renewable energy (e.g. Renewable Portfolio Standards). Although such a package has been approved by the Michigan House of Representatives there is still some fine-tuning to be done in the Michigan Senate, and it must be done quickly. A meaningful RPS should encourage competition for the installation and operation of renewable energy power plants. And every day that Michigan doesn't have RPS is one more day that Michigan loses precious opportunities. The Governor used maps clearly showing massive alternative energy investment FLYING into RPS states while Michigan receives the left-overs.

I've said it before and I'll keep saying it; you MUST contact your legislator and push for passage of meaningful RPS legislation.

Mackinac: Renewables, nuclear must replace oil
Renewable energy was top of mind last week at the Detroit Regional Chamber Mackinac Policy Conference. In an era of skyrocketing petroleum prices, America needs to look more seriously than ever at conservation, renewable energy sources, expanding domestic oil drilling and nuclear power, panelists told a packed room in the Grand Pavilion of the Grand Hotel. "This is a tsunami," Jim Croce, CEO of NextEnergy, the state of Michigan's energy industry accelerator, said. "The world economy is being transformed by a lack of fossil fuels and rising demand." Out on the Grand Hotel's expansive porch after the presentations, U.S. Sen Debbie Stabenow announced that the 2008 Food Energy and Conservation Act, better known as the Farm Bill, also contains serious incentives for renewable energy. Included is $2 billion to develop "green collar" jobs, $250 million for advanced battery research (vs. $22 million last year), incentives for purchasing hybrid vehicles, $70 million for incentives to grow cellulosic energy crops along with a fuel tax credit for cellulosic ethanol, $320 million in loan guarantees for biofuel plants, $118 million for biomass energy research and more.

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URC analysis for Mackinac: Michigan can become alt-energy player
The University Research Corridor announced investments in two new energy initiatives and released an independent analysis showing Michigan is ready to "become a leader in alternative energy." Lansing's Anderson Economic Group found the URC received more than $79.5 million in alternative energy research grants in 2007, with 77 percent coming from federal grants and 11 percent from business, which currently invests $16.7 billion in Michigan R&D each year, more than any state except California. The preliminary report was made public to advance ongoing conversations at the Detroit Regional Chamber's Mackinac Policy Conference.

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EcoMotors gets tax credit for new Troy tech center
EcoMotors International, a developer of next generation diesel engines, plans to launch a new, $7 million technical center in Troy. The project is expected to create 156 jobs at the company and an additional 183 spin-off jobs, according to an economic analysis conducted by the MEDC. Based on the MEDC's recommendation, the Michigan Economic Growth Authority approved a state tax credit valued at $5.1 million over 10 years to win the project over a competing site in California. The city of Troy is considering an abatement of up to 12 years to support the expansion. The company currently employs seven associates in Troy.

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DTE Energy, UM create cleantech entrepreneurship contest
To help move clean energy technologies from the laboratory to commercial production, DTE Energy has joined with the University of Michigan to conduct an annual entrepreneurship competition that will challenge teams from Michigan colleges and universities to develop the best plan for bringing new clean-energy technologies to market. The prize pool for the 2009 competition will be $100,000, which will be divided among the winning teams. For subsequent years, it is expected that the prize pool will be $200,000. As application forms, deadlines and other details are finalized, that information will be posted on the DTE Clean Energy Prize Web site. To reach that site, visit www.dteenergy.com and search for Clean Energy Prize.

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Plug-in hybrid pilot biggest grant among $6.5 million from MPSC
The Michigan Public Service Commission this month issued an order approving nearly $6.5 million in Michigan energy efficiency grants for all customer classes to 14 organizations. Back on March 21, the MPSC issued a request for proposals for Michigan energy efficiency grants for all customer classes with three distinct focuses: plug-in hybrid electric vehicle pilot programs; compact fluorescent lamp programs; and green community programs. The biggest grant: $5 million for a plug-in hybrid vehicle study to be conducted by the University of Michigan, DTE Energy and General Motors Corp.

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Hybra-Drive gets demo for hydraulic hybrid trucks
A startup in tiny Deerfield has beaten out trucking industry giants to win the right to test hydraulic hybrid delivery trucks with a California-based organization. Deerfield-based Hybra-Drive Systems LLC has been selected to negotiate with the Parcel Delivery Working Group of the Hybrid Truck Users Forum in Pasadena, Calif. for validation and testing of hybrid hydraulic power on parcel delivery vehicles. The forum is part of Weststart-CALSTART, a nonprofit consortium founded in California in 1992 to develop greener transportation methods. In winning the award, Hybra-Drive beat out industry giants like Eaton Corp. More at www.calstart.org, www.htuf.org and www.hybra-drive.com.

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Strong solar demand pushes ECD to profit
Rochester Hills-based Energy Conversion Devices Inc. reported that surging demand for its solar energy products has at last pushed the company to profitability. ECD reported $7 million in net income in the fiscal third quarter ended March 31, or 17 cents a share, up from a loss of $6.9 million or 17 cents a share in the year-ago period. Revenue for the quarter was $70 million, up 155 percent from $27.4 million in the same quarter a year earlier, and up 24 percent from second quarter revenue of $56.4 million.

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GM in deal with second cellulosic ethanol company
General Motors Corp. is taking an undisclosed equity share in Mascoma Corp., a Boston-based developer of cellulosic ethanol. It's the second such deal this year for GM, which invested in Warrenville, Ill.-based Coskata Inc. in January. Coskata is working on a thermochemical process to make ethanol from non-grain sources. Mascoma is developing a single-step cellulose-to-ethanol method called consolidated bioprocessing. The process combines non-grain biomass with low-cost conversion techniques to make ethanol faster and cheaper than is possible with other biochemical methods that require more additives and enzymes, according to the company.

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DTE converting 800 trucks to biodiesel
DTE Energy said it will reduce the environmental footprint of its 800 diesel-fueled trucks and service vehicles by converting the fleet to cleaner-burning biodiesel fuel. Biodiesel is an alternative fuel produced from domestic renewable resources such as vegetable oil and animal fat. Compared to conventional diesel fuel, the use of biodiesel significantly reduces emissions of carbon dioxide, carbon monoxide and other air pollutants. Converting DTE Energy's 800 diesel-fueled vehicles to biodiesel is the environmental equivalent of taking about 120 of those vehicles out of service.

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Flint-Sweden partnership to explore creation of fuel from city waste
State officials announced that the city of Flint and a Swedish alternative energy firm, Swedish Biogas International, will produce alternative energy from waste removed from the city's wastewater treatment plant. The plant will produce biogas -- an alternative energy that can fuel vehicles and generate heat and electricity. There were no immediate details on the plant's size, employment or financing. The Flint Journal reported it would cost up to $10 million initially and state and federal grants could help support it as a pilot project.

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LED lighting pilots under way in Escanaba, Ann Arbor
A pilot project to install a Troy company's LED-based replacements for fluorescent bulbs is under way at a state office building in Escanaba. Over the next four years, Ilumisys Inc. will replace 200 fluorescent tubes in the building with three successive generations of LED lamps. Ilumisys is a subsidiary of Altair Engineering Inc. Ilumisys LED lights are also now at work in a conference room on the fourth floor of Ann Arbor City Hall.

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Detroit company offering E85 conversion kits
A Detroit company, Metropolitan Alternative Energy Inc., is offering kits to convert conventional gasoline vehicles to compatibility with E85, a fuel blend that is 85 percent ethanol and 15 percent gasoline. The kits are offered on a Web site, www.flexfuelmyride.com. A variety of converters are sold -- for everything from motorcycles to four-, six- and eight-cylinder cars and trucks to boats to RVs -- at prices ranging from $269 to $799.

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Azure Dynamics loss grows, but hybrid truck firm gets orders
Oak Park-based Azure Dynamics Corp. (TSX: AZD) this month reported a loss of $7.9 million or 4 cents a share in the quarter ended March 31, compared to a loss of $6.5 million or 3 cents a share in the first quarter of 2007. The development-stage developer of hybrid and electric powertrains for commercial vehicles reported revenue for the quarter of $400,000, up from $200,000 in the first quarter of 2007. The company reported several operating milestones for the quarter, however, including major orders.

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Ann Arbor tries out wind, solar powered street light
The city of Ann Arbor is beginning to harness the wind and the sun to run its street lights. This particular light is on a pole at the entrance to Buhr Park on Packard Road. This light pole has a small wind generator at the top and two solar electric panels on the sides that provide electricity to charge batteries. These batteries operate a streetlight on the pole to illuminate the entrance drive to Buhr Park and Cobblestone Farm. This hybrid wind-solar light represents a partnership between the City of Ann Arbor and the University of Michigan's Sustainable Design Research Laboratory within the Taubman College of Architecture and Urban Planning. The light was donated to the SDRL for testing by Everlast Induction Lighting of Jackson.

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Consumers Energy goes green in training center addition
Consumers Energy is planning to add renewable energy features to its $5 million Marshall Training Center expansion, now under construction. Included in its plans are two small-scale wind turbines, a fixed-panel solar array, batteries to store the energy and inverters to convert direct current to alternating current. A small energy-efficient training building will house the batteries and inverters and serve as a platform for the solar array.

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Safety Track adds hydrogen auto power device
A Belleville company that until now has been known for vehicle tracking technology has added a new product that uses oxygen and hydrogen to boost vehicle MPG. Safety Track of Michigan says it's now selling the Go Green Hydro 4000. The unit uses the electrical power source of the engine's alternator itself to crack distilled water into its constituent gases, oxygen and hydrogen, through electrolysis. Those gases are then introduced into the engine, improving fuel economy. For more information, see the technology at www.safetytrack.net/Products/GoGreen.asp.

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