WINTER 2008 | Vol. 2 | No. 1

NextEnergy entered 2008 with great determination to help Michigan become a national leader in Alternative Energy Technology (AET) development and manufacturing. In order for this to occur, policy has to progress, and it is progressing. Old line manufacturing companies have to diversify into new types of products, and they are diversifying. And NextEnergy is pleased to announce our commitment to the Michigan Economic Development Corporation’s “Centers of Excellence” initiative to advance the alternative and renewable energy industry in Michigan. The Centers of Excellence project, like the Renewable Portfolio Standards (RPS) currently working its way through the Michigan lawmaking process, is a vital tactic that is essential to the emergence of Michigan as a national and international leader in the AET sector.

Michigan’s Alternative Energy Centers of Excellence seek to populate the entire state with a full complement of industries dedicated to supporting Wind Energy Production, Solar Energy Production, Bio and Synfuels Production, Advanced Battery and Energy Storage, and Carbon Capture and Sequestration. The Centers of Excellence model comes from Sweden, which has had great success with the concept, and it works like this. Much like a shopping mall, an “anchor” company, already advanced in a given industry (such as alternative fuels, solar, or wind energy production) becomes the hub company that dictates the geographical location of the Center of Excellence. Then incentives are offered to other companies in the same sector (in this case, solar) to relocate or expand into the Center of Excellence geographical hub. The smaller companies continue to nurture the core competencies of the region, rapid cross pollination and commercialization occurs, and the region’s economy grows. Aided by our variegated geography and technological resources Michigan is poised to make profound progress in these five areas.

Each proposed Center of Excellence involves partnerships between anchor companies, the MEDC, Michigan’s public and private university system, NextEnergy, and others as appropriate.

The result will be a statewide portfolio of advanced alternative and renewable energy companies capable of developing and manufacturing products for significant areas of the global energy future. And this is only the beginning. There is every reason to believe that Michigan, with experience gained in the Centers of Excellence pilot program, can expand the concept and develop additional Centers of Excellence in what are now very embryonic technologies, such as Wave Energy Production and Smart Vehicle Technology (vehicles that read the road, find parking, and avoid collisions, for example.)

Michigan’s Centers of Excellence in Alternative Energy Technology will be a disciplined initiative that forces our state into the economic growth it needs. With the know how that we have and the progressive policies that we will adopt, Michigan will be in position to lead the nation and the world, as we have done in the past, in creating and marketing the most necessary technologies in the world; namely alternative and renewable energy technology. NextEnergy looks forward to playing an essential role in developing the Centers of Excellence that will power our state’s economic future.

Jim Croce
CEO NextEnergy

While the U.S. has far to go in establishing nationwide Renewable Portfolio Standards (RPS) or Renewable Energy Standards (RES), the state of Michigan is getting closer and closer to enacting this vitally important law. State Renewable Portfolio Standards demand that a state derive a set percentage of its electricity from renewable resources by a set date. Michigan Governor Jennifer Granholm in her January 29, 2008 State of the State address called for Michigan to produce 10% of the state’s electricity from renewable resources by 2015, and 25% of Michigan’s electricity from renewables by 2025. NextEnergy supports this goal. A key benefit of enacting RPS is luring national and international renewable energy manufacturers (such as wind turbine OEMs) to expand their manufacturing base in a state that has the built-in market for renewable energy that RPS guarantees. 24 states plus the District of Columbia currently have solid RPS laws on their books; Michigan does not. This progressive law has been adopted by progressive states dedicated to building themselves a strong economic future. Michigan cannot afford to be left behind on this issue. Global alternative energy manufacturers are shopping for U.S. states in which to locate major manufacturing facilities and a RPS is a “cost of entry” to attract this investment. NextEnergy supports the Michigan RPS put forth by Governor Granholm and seeks to see this law passed quickly.

On November 28, 2007, NextEnergy hosted its second annual Hydrogen Codes and Standards Conference featuring presentations and speakers from across the country. Over 70 attendees learned about the latest construction methods and safety standards for the next generation of hydrogen fueling stations. The wide range of attendees covered fields as diverse as U.S. Department of Energy policy makers to automakers to Fire Department Chiefs. After opening remarks from NextEnergy COO Dave McLean, the keynote address was delivered by Jim Ohi of the National Renewable Energy Lab ( NREL) from Golden, Colorado. Major points touched on in Dr. Ohi’s speech were an update on the DOE Hydrogen Program, which updated the DOE’s efforts to create infrastructure for permitting hydrogen fueling stations around the country and lessons learned from a hydrogen permitting workshop held in Sacramento, California for key fueling station developers and code officials. Two Codes and Standards panels followed, and a Local Code and Safety Panel addressed broader safety questions from the audience. The conference was a success, with many enthusiastic attendees already planning programs and presentations for next year in the fast growing field of hydrogen refuel processes and technologies.

On January 29, 2008 NextEnergy hosted a workshop called “AET Manufacturing 101 – Funding Your Alternative Energy Technology Venture” at Automation Alley Headquarters in Troy, Michigan. This was the second workshop in NextEnergy’s alternative energy business growth series. The workshop was focused on the process of fund-raising geared towards alternative energy entrepreneurs at the pre-seed and startup stages of their business ventures. The day-long event attracted over 80 attendees involved in the alternative energy industry in Michigan. Speakers and panelists from the Cleantech Network, the Michigan Pre-Seed Fund, Nth Power, Charter One Bank, NextEnergy, Shepherd Advisors, Ardesta, Augment Capital, and Ann Arbor Spark provided investment case studies, investor meeting hints and tips, and fund-raising advice to participants.

The workshop culminated with three promising Michigan-based alternative energy companies – Wind Catcher, Power Panel, and Hybra-Drive Systems – practicing their investor pitches in front of participants and then receiving on-the-spot feedback from investor panelists. One participant commented that the most valuable part of the workshop was “hearing the investor feedback to the pitches; (the investors) were a lot more detailed and thorough than I expected.” In addition to teaching participants about attracting, preparing for, and meeting with potential investors, Funding Your AET Venture provided useful networking opportunities for alternative energy entrepreneurs and investors.

The January 29th event was the second in a series of alternative energy business growth workshops. The third and final workshop, Developing Strategic Business and Customer Partners for AET Ventures, will address partnerships in the alternative energy industry, and is currently scheduled to be held on April 16, 2008 in Ann Arbor. Look for registration information on the NextEnergy website at www.nextenergy.org/events. The business growth workshops are organized by NextEnergy in collaboration with Shepherd Advisors, and sponsored by Butzel Long and Charter One Bank.

Nextek, one of NextEnergy’s laboratory partners, has come up with what Nextek founder Paul Savage calls “the first major advance in the electrical distribution system in the U.S. and around the world in 100 years.” A big claim, but persuasive enough to convince former President Bill Clinton to invite Paul to explain Nextek’s technology at the 2007 Clinton Global Initiative to a focused assembly of world business and policy leaders. Nextek’s revolutionary technology allows onsite energy generation, such as solar cells or wind turbines, to provide electricity in what Savage call its “natural state,” i.e. DC power, to operate electric loads within a building without ever having to draw power from the grid, which provides AC power. In the Nextek model, a facility can run on either self-generated DC, or AC from the grid, or both. Enormous efficiencies can be culled from this system. From a solar rooftop array, for example, the Nextek system channels electricity to where it’s needed by the building at any given time, much like a hybrid electric vehicle channels power to where it’s needed most. But instead of a drivetrain, the Nextek system channels electricity to lighting, computers, etc. To service an entire building requires a Nextek Power Gateway about the size of a refrigerator. In the case of smaller appliances, the Nextek Power Gateway can be small enough to tuck inside a desktop computer, refrigerator, or dishwasher. In current non-Nextek systems, DC power from onsite generation such as solar panels is piped into an inverter, which turns it into AC power; that power is then pushed into the utility energy grid, and all those electrons become undifferentiated from the power that is purchased from the utility. “The difference with Nextek is that we envision taking that DC power directly from the solar panels and pulling it straight into the building for use, rather than pushing it out through an inverter to provide AC to the grid and then drawing it in again to convert into DC for our electrical use,” says Savage. “Nextek eliminates a costly and inefficient step that has become unnecessary with the current advances in onsite generation.” Nextek is currently expanding their operations within the NextEnergy Center.

The Detroit law firm Butzel Long recently completed the restructuring of Ann Arbor’s Relume Technologies in order to accommodate additional financing. Butzel Long will also continue to assist Relume in contracting reviews. Relume, recently awarded Ann Arbor’s energy-saving LED streetlight project, provides LED street lighting and other LED applications. Butzel Long has extensive experience with leading edge companies and familiarity with the financing opportunities and pitfalls encountered by new technologies. Relume expects to erect 1,080 LED street lights in Ann Arbor and has already begun installation. Butzel Long will manage an additional round of financing on behalf of Relume in the first half of 2008. In Michigan, Butzel Long has offices in Detroit, Ann Arbor, Lansing, Bloomfield Hills, and Holland. Their Web site is www.butzel.com.

Ryan Smith: Ryan joined the NextEnergy team as Coordinator of Program Delivery, and manages and executes NextEnergy’s federal and state funded programs in the alternative energy technology industry. These programs include the Advanced Mobile MicroGrid Power System program and a DoD-funded venture to develop a mobile unit that will incorporate variable electronic inputs into clean AC output for military applications; Hydrogen Codes and Standards, a DOE-funded venture in partnership with Ford Motor Company, General Motors, and Chrysler Corporation to develop tools and resources for the nation’s hydrogen infrastructure. Ryan also provides support in overseeing installations of new technologies onto NextEnergy Center’s outdoor MicroGrid Power Pavilion and Alternative Fuels Platform. Ryan received a Bachelor of Science degree in Mechanical Engineering at Lawrence Technological University in Southfield, MI in May 2007.

Wayne Snyder: Wayne joins NextEnergy as Manager of Computing and Electronic Systems. He has an extensive background in the management of information technology, website, telecommunications, audio/visual, and lighting systems. Wayne earned his Bachelor of Science in Computer Science (2002) and Master of Science in Information Systems Engineering (2005) from Oakland University in Rochester, Michigan. With over 5 years of professional experience in the information technology industry, Wayne’s IT expertise is exceptionally suited to NextEnergy’s progressive internet communications and data network.

Zach Platsis: Zach comes to NextEnergy as Facilities Engineer with over 15 years experience in University Research Labs, and over 10 years experience in materials research, hardware, instrumentation, control, and lab management. Zach is particularly interested in distribution and transmission issues; specifically, pathways to decentralize "small generator" production via AET and local storage mechanisms. At NextEnergy, Zach manages the installation and testing of on-site programs, and manages the building and NextEnergy campus.

DTE Energy, NextEnergy, Rolls-Royce Fuel Cell Systems, Electrical Distribution Design (EDD) partner to test new technologies for delivering electricity

In a project funded by the U.S. Department of Energy and located at NextEnergy this team will study, develop, test and demonstrate the practicality of integrating innovative power delivery technology into the power distribution system (or “grid”). The team, led by DTE Energy and Rolls-Royce, believes that moving energy generation closer to the point of consumption is the wave of the future and that localized distributed generation is the way to get there, providing greater flexibility and cost effectiveness for consumers. Localized distribution also fosters power-grid independence for better homeland security – a vital tactic in securing our nation’s power supply -- and provides a better balance of supply and demand by sighting generation at the place of use.

The NextEnergy Power Pavilion provides a real world, real-time testing platform to check the technology for compatibility issues, stability, voltage management, and dispatch signals under various conditions. “NextEnergy is delighted to partner with DTE Energy and Rolls Royce to advance distributed power technologies for utility use”, said Jim Croce, CEO of NextEnergy. “Our power pavilion is an ideal platform for use by industry to test and validate advanced electrical and thermal energy systems in a real world environment.” The three-year project demonstrates the value of distributed energy resource technologies to provide consistent, reliable, secure and cost-effective power distribution.

With a $150,000 grant from The Chrysler Foundation, NextEnergy has completed the Alternative Fuels Platform at NextEnergy in Detroit’s Tech Town. “Chrysler’s commitment to creating new fueling options has helped move automotive applications for alternative energies to a new level,” says NextEnergy CEO, Jim Croce. “With The Chrysler Foundation’s grant, we have been able to complete a testing platform that helps check the viability of new bio and synthetic fuels as they progress from concept to use in vehicles and power generators.” The fuel testing platform allows fuels to be tested for their stability and efficiency before trying them out in vehicles or other power generators. Among the Alternative Fuel Platform early tenants are Titan Energy Worldwide’s new Sentry 5000 Mobile Utility System, currently being tested at NextEnergy on biofuels such as ethanol, butanol, and biodiesel and Clean Emission Fluids new biodiesel new bideiesel blend unit called the F.A.S.T.™ (fluids affordably stored) unit.

Art Van, the Michigan-based furniture company, has joined NextEnergy’s National Biofuels Energy Laboratory (NBEL) as the first official test fleet for the standardized biodiesel fuel being developed by NBEL. Over the past two years, Wayne State University scientists at NBEL have assisted in developing a national standard for the next generation of biodiesel vehicle fuel (B6 - B20.) The efforts of NBEL and other organizations have been rewarded by ASTM International, the global leader in formulaic standards recognition, whose technical subcommittee has approved a B6-B20 standard, a critical first step toward standardizing biodiesel fuel and thus allowing warranted use by vehicle manufacturers around the world. ASTM International is an independent organization whose American Standard Test Method is relied upon worldwide. Among current alternative fuel options, biodiesel is an easy transition for the consumer; at fueling stations B20 can be stored and pumped through the existing infrastructure of tanks and fuel pumps. The ASTM standard is a major milestone in the effort to achieve broad use of this clean renewable fuel. With an ASTM standard in place, manufacturers can initiate testing of the fuel in vehicles to determine performance, emissions, durability and reliability. When that phase is complete, manufacturers will individually determine whether to support B20 use in select or all diesel equipped vehicles.

NextEnergy has awarded the development of its Electric Power Control and Conditioning (EPCC) system to Grand Rapids-based Coffman Electrical Equipment Co. funded by a $1.4 million federal grant subcontract to develop alternative energy technologies for delivering portable electric power anywhere in the world. Designed to convert power from multiple sources, including alternative energy sources, into grid-quality electrical power, the EPCC system will be used first by the military and then develop into non-military applications that enable power supply in remote locations and disaster areas.

Coffman’s contract to develop the final design and prototype of the EPCC system for the Advanced Mobile MicroGrid Power System (AM2GPS) represents the second phase of a three-phase, $6.8 million contract awarded to NextEnergy by the U.S. Department of Defense and represents the largest single DoD program awarded by NextEnergy to date. A key component of the Mobile MicroGrid, the EPCC system can accept and convert power from batteries, generators, and European and alternative energy sources and be deployed to any environment within 48 hours.

“Michigan has a clear market opportunity in the development of new energy technologies as evidenced by this project,” said Birgit Klohs, president of The Right Place, Inc., a Grand Rapids-based economic development organization. “Providing opportunities for innovative companies like Coffman Electric to stay and grow in West Michigan is the reason we partner with NextEnergy. We look forward to supporting Coffman’s continued efforts to expand in the region.”

A big success story in attracting new business to Michigan, Titan Energy Development, Inc., NextEnergy’s first tenant, is reporting strong revenue and business growth in 2007 and 2008 as a progressive manufacturer, distributor and service provider for generators, emergency power equipment and specialized mobile utility systems in the U.S. Titan Energy Development, Inc. a wholly-owned subsidiary of Titan Energy Worldwide, Inc. (TEWI) began operations at NextEnergy Center on October 5, 2005 with two employees and has since created jobs for 31 full-time employees with more on the way. Titan’s first product is the Sentry 5000™, a mobile, all-in-one utility system designed for fast and easy deployment in emergency and disaster response situations. Each unit provides 60 kW of power, water purification, air conditioning and heating, compressed air, satellite communications and perimeter lighting. The unit is compact enough to be pulled by an SUV or pickup and is operational within minutes to attend to the most pressing onsite needs. To deliver this product, Titan Energy has established supplier partnerships with three Michigan-based companies, Tel-X Corporation (Garden City, MI), Rush Air (Saint Clair, MI) and Controls Crew Inc. (Madison Heights, MI).

In keeping with its mission to accelerate and advance the Alternative Energy Technology industry in Michigan, NextEnergy has supported Titan’s business growth with state-of-the art facilities and laboratories as well as the opportunity to connect with industry, community, military and legislative leaders, including former President Bill Clinton and Governor Jennifer Granholm. Titan Energy is actively engaged with Wayne State University, the US Army, TARDEC and NextEnergy in a number of cooperative research and development activities.

Developed by Titan Energy at NextEnergy, the Sentry 5000™ mobile utility unit is now ready for market. More information on Titan Energy Worldwide can be found at www.titanenergy.com.

2007 and early 2008 have been extraordinarily busy and productive for NextEnergy in establishing and nurturing Michigan’s AET Supplier Network. Here are some statistics:

There are now over 500 manufacturers in NextEnergy’s AET Supplier Network. The Supplier Network features:

• Company profiles of NextEnergy’s Wind Manufacturing Working Group including:
  • 23 manufacturers who currently provide materials, full components or machining services to the wind industry
  • 12 companies who provide design, engineering, transport or installation services
  • 8 who are trying to commercialize new wind energy systems or components to industry
  • 7 experienced wind project developers for large wind turbine farms
  • 4 companies who have licensed or are planning to license existing utility scale wind turbine technologies for manufacturing and assembly in Michigan
  • 100 companies who have capabilities to provide manufacturing services based on size and requirements of large utility scale turbines
  • Almost 1,000 companies that have competencies to design, engineer, manufacture, automate or assemble large and smaller size wind components
• NextEnergy has identified through NAICS codes all manufacturers in Michigan that have competencies to produce components for wind, solar/PV, biomass systems, and advanced batteries and other systems for hybrid and electric vehicles
• NextEnergy with help from Michigan Manufacturing Technology Center (MMTC) developed and launched a survey (Sept. 07) to enlist targeted manufacturers in a RFQ database which adds qualified companies to our supplier networks and allows us to catalogue the capabilities of each firm.
• NextEnergy with its partners MMTC and Shepherd Advisors have developed market briefings and manufacturing resource guides for wind, PV, and advanced batteries and other systems for hybrid and electric vehicles. Similar materials are currently being developed for biomass systems
• NextEnergy has arranged for over one dozen “match making” events that include private meetings between Michigan suppliers and wind energy OEM’s and other renewable energy product producers
• NextEnergy has arranged for 73 organized private meetings and hundreds of personal introductions between Michigan suppliers and AE product developers
• NextEnergy introductions have led to many new supplier/customer relationships including:
  • Over 100 quoting on new business
  • Companies who have secured orders including a few companies that have made their first entry into the alternative/renewable energy market
  • Assistance to enable the expansion of four manufacturing firms
  • Many more suppliers are now showing commitment to invest in new equipment to position them to diversify into the growing AE market NextEnergy is co-chairing the MEDC Wind Policy Support Group contributing specifically on the policies that support wind energy manufacturing

If you would like your company listed in NextEnergy’s AET Supplier Network in order to receive RFQs and invitations to future supplier events, you must go to www.nextenergy.org/rfqsurvey.asp to get on the list. Please fill out the form online. Especially critical is your e-mail address, as RFQ alerts and invitations are distributed via e-mail.

Ilumisys, a Troy, Michigan-based company focused on next-generation solid-state lighting technology, is bringing products to market that directly replace standard T-8 and t-12 fluorescent tubes. The company was formed in 2007 as a spinoff venture and wholly owned subsidiary of Altair Engineering, Inc. ilumisys’ initial products offer direct replacement LED lighting for replacement of fluorescent tubes in existing fixtures. ilumisys products take full advantage of the many LED attributes, including:

• Long life
• Temperature robustness
• Vibration tolerance
• Energy efficiency
• Color control

The U.S. Department of Energy estimates that energy consumption for lighting can be reduced by more than 20% by 2020 by the use of solid-state LED-based lighting. ilumisys is supported by NextEnergy as a clear example of the positive AET economics taking place within Michigan. To learn more about ilumisys visit www.ilumisys.com.

Warren, Michigan-based Consolidated Energy Services, L.L.C. has launched the Diesel Magnum as a cost effective solution for diesel fleets to burn more diesel fuel in a much cleaner fashion within the vehicles’ engines. The Diesel Magnum is an aftermarket solution that installs quickly, easily, and affordably in the engine compartment of the vehicle in proximity to an on-board propane tank that is hard-mounted to the vehicle. Inside the cab is a Mini Module for easy user interface. The Diesel Magnum works by introducing propane into a turbo charged diesel engine via the fresh air intake through the Diesel Magnum’s Venturi Adapter. Acting as an accelerant, the propane injection promotes a fast, even burn of the diesel fuel. The result is more complete combustion of the injected diesel fuel resulting in better fuel efficiency, more power, and fewer emissions. “This is a tested and retested technology that guarantees fuel savings and reduced emissions,” states CES president Daniel Kurawski, “It’s hard for me be anything less than wildly enthusiastic about the results we’ve seen. Diesel fleet owners are the idea market for the Diesel Magnum, and we even guarantee results with a 30 day free trial. We install it in your trucks. We give you free propane. And if you aren’t satisfied we take it out in 30 days at no cost to you. Guess what? No one’s been unhappy with the results.” The Diesel Magnum works on any diesel engine fueled by conventional diesel fuel. NextEnergy invites you to learn more about Consolidate Energy Services at TheDieselMagnum.com.

Please go to www.nextenergy.org to:

• Join our Supplier Networks
• Use our Fleet Processing Tool.
• Access our Hydrogen Codes & Standard Database
• Consult our RPS/Economic Impact Study for Michigan
• Learn about Testing & Validation Services of our MicroGrid and Alternative Fuels Platform
• Get information on Hydraulic Hybrid Technology

Renewable Energy Executive Conference

Sponsored by:

The Association for Corporate Growth and Financial Executives International in partnership with NextEnergy.

Feature Speaker:

Michigan Governor, the Hon. Jennifer M. Granholm

Date:

Thursday, April 17, 2008

7:00 – 8:00 am: Registration and Networking

8:00 – 12:00 pm: Program

Location:

Troy Marriott Hotel – Troy, Michigan

Program Chairman:

Seb Coppola, President Corporate Analytics and Energy Industry Financial Expert

Topic:

What’s Fueling the Renewable Energy Industry In Michigan? This large scale networking and information event will instruct participants on both the technological advances and financial opportunities available in the Michigan AET sector.

Registration:

To register for this event please call Seb Coppola at (248)601-2800 or
click here.

NextEnergy Alternative Energy Technology Business Growth Workshop: Developing Strategic Business & Customer Partners for AET Venture.

Date:

April 16, 2008

Location:

Ann Arbor SPARK, 330 E. Liberty, Ann Arbor, MI 48104

• Supply chain partners
• Distribution, sales, maintenance
• Management support
• Customer pathway partners

Please check here for more information.

Ann Arbor SPARK is located at 330 E. Liberty, Lower Level in downtown Ann Arbor. It is located between Fifth and Division and the best place to park is the Ann Arbor Public Library parking lot with entrances on Fifth and Division.

The Detroit Investment Fund

The Detroit Investment Fund invests in projects that have the potential to stimulate economic development within the city of Detroit while generating a return for the Fund's investors. This $52 million private capital fund created by Detroit Renaissance provides financing for growing commercial and industrial businesses, residential real estate development projects and special projects which address strategic needs of the city of Detroit. The Detroit Investment Fund also provides capital loans, which leverage owner equity so that the contemplated transaction will merit traditional financing.

The Fund focuses on manufacturing, distribution and service companies with sales/revenues of $5 million to $75 million that have a minimum of a three-year history of successful operations and require capital for expansion. Capital Loans in this category are provided for, but are not limited to, the acquisition of land, buildings, machinery, equipment and the working capital requirements associated with expansion.

To learn more visit detinvfund.com.