Technology

California’s cleantech revolution

 By Andrew Burger

Across California a new phase in the evolution of electrical and electronic engineering is taking place. A precedent-setting institutional framework of state policies and programs is catalyzing a cleantech expansion. Andrew Burger explains how cleantech companies are fueling fundamental changes in the way electricity is produced and distributed, the way it is priced and the way it is stored. The fusion of cleantech and the digital information and communications technology (ICT) that originated in Silicon Valley is pushing aside consumption-driven, ¨Industrial Age¨ socioeconomic models, institutions and organizations and creating new 21st-century versions that place much higher value on social and environmental resilience and sustainability

Amidst the corporate headquarters of Apple, Facebook, Google and Yahoo – and across California – a new phase in the evolution of electrical and electronic engineering is taking place. A precedent-setting institutional framework of state policies and programs is catalyzing California’s cleantech expansion. By reducing greenhouse gas emissions and weaning the state off fossil fuels, California is now recognized as a global renewable energy and cleantech leader.

Opening up of California Independent Systems Operator (CAISO) markets under Rule 24, distributed energy resource markets driven by Rule 21, and strong incentives to deploy electric vehicles (EV) and Electric Vehicle Supply Equipment (EVSE) are among the integrated framework of policies that have been enacted in California, AutoGrid Systems’ CEO Dr. Amit Narayan highlighted.

These policies, he continued, ¨have helped encourage the City of Palo Alto Utilities, Southern California Edison and other California utilities to engage in aggressive and innovative initiatives to make their grid and generation infrastructure cleaner and more efficient, and energy-tech companies based in California are closer to these ‘first-mover’ customers for their technologies.¨

Based in Silicon Valley’s Redwood Shores, AutoGrid specializes in the development of analytics for the smart home to smart grid. Utilities, businesses and their customers use AutoGrid’s technology to better understand and make use of a growing range of connected devices and equipment – smart meters, building management systems, voltage regulators, thermostats and others. The technology is enabling power utilities and end-users to establish parameters and respond to changing conditions on power circuits and grids, electricity generation sources and energy storage assets.

California cleantech development accelerates

AutoGrid is one of a growing number of innovative young companies adding energy to the expansion and diversification of California’s cleantech sector. Cleantech companies such as AutoGrid are fueling fundamental changes in the way electricity is produced and distributed, the way it is priced and the way it is stored.

The fusion of cleantech and the digital information and communications technology (ICT) that originated in Silicon Valley is pushing aside consumption-driven, ¨Industrial Age¨ socioeconomic models, institutions and organizations and creating new 21st-century versions that place much higher value on social and environmental resilience and sustainability.

Cleantech Open’s Accelerator program has been finding, funding and fostering entrepreneurs with viable solutions to some of today’s most pressing energy, environmental and economic challenges since it was founded by leaders in Silicon Valley and Boston in 2005. From its Oakland headquarters, Cleantech Open draws on the field work of more than 2,000 volunteers dispersed across eight regional U.S. offices.

Just over 1,000 budding cleantech companies have graduated from the Accelerator program, as of Cleantech Open’s last survey, which took place during the tail-end of 2013, according to Cleantech Open’s Rex Northen. Collectively, they have raised $1.1 billion in third-party financing from outside investors.

Young cleantech companies from eight other countries are now in the process of graduating from Cleantech Open Accelerator programs around the world. ¨Still the majority of funding is raised in the U.S., with the numbers heavily skewed in the direction of Silicon Valley,¨ Northen pointed out.

¨To the extent cleantech is newly built on a whole series of existing technology and industries, Silicon Valley is more a hub of innovation for technology more generally, as well as venture capital,¨ he continued. ¨It’s a phenomenal environment to set up an early-stage company.¨

Just as this culture has fostered the development of companies seeking to develop technologies that disrupt the way we live our lives and do business, so has it fostered the development of energy-tech companies seeking to disrupt the way we generate and use energy

California’s solar-powered cleantech wave

As Northen noted, some of the largest, most successful Silicon Valley companies — Google, Apple and Intel, for example — have been investing heavily in renewable energy and cleantech for years.

Groundbreaking, comprehensive and ongoing energy policy reform is providing the impetus powering California’s cleantech wave and making it a magnet for clean energy, Sunrun spokesperson Lauren Randall said.

Sunrun, along with Silicon Valley peers including SolarCity and SunPower, has been pioneering new ways of financing residential and commercial solar power systems that have made solar affordable to a much greater range of American consumers.

¨Comprehensive rate reform is underway in California,¨ Sunrun continued. ¨The [California Utilities] Commission recently approved rate reform that would implement a $10 minimum bill with zero fixed charges.”

¨The decision substantially increases the size of solar’s addressable market in CA and gives confidence that regulators will continue to protect existing solar customers against utility proposals to impose solar fees to eliminate competition. Strong leadership from the legislature and commissioners is key, said Sunrun.

The October 2013 enactment of the US power industry’s first utility and distributed energy storage mandate is an other prime example of the groundbreaking cleantech policies California’s legislature has ushered in.

"Saving with solar power isn't just smart. It's brilliant..."

Energy storage and other groundbreaking California cleantech policies

AB2514, California’s utility energy storage mandate, requires investor-owned power utilities to acquire a minimum of 1.3 gigawatts (GW) of power storage capacity by year-end 2020, according to John Carrington, CEO of Millbrae, California-based Stem.

Fortune 500 companies, such as Marriott International and Safeway, are using Stem’s predictive software and advanced energy storage hardware to reduce energy costs, particularly the high demand charges for electricity during peak hours of usage.

Located nearby, Stem’s proximity to other progressive, influential companies, such as Adobe, has helped it to more quickly refine its cleantech and build its customer base. ¨Stem’s proprietary predictive algorithms and automated intelligence empower our customers to take control of their electricity bills without making changes to their daily operations,¨ Carrington elaborated.

¨The data we collect also helps customers easily identify energy usage patterns to help them make better-informed operations decisions and see even more savings over time.¨

¨Just as this culture has fostered the development of companies seeking to develop technologies that disrupt the way we live our lives and do business, so has it fostered the development of energy-tech companies seeking to disrupt the way we generate and use energy,¨ said Carrington.

Silicon Valley municipalities’ cleantech drive

Silicon Valley and California’s municipalities are playing key roles in the state’s cleantech expansion. A keystone city and gateway to Silicon Valley, San Jose is home to a growing number and variety of cleantech companies.

The sustainability goals set out in the San Jose Green Vision 2014 report relate to energy consumption, water usage and job growth, according to Reena Brilliot, business development officer for the San Jose Office of Economic Development. ¨Goal one is cleantech jobs,¨ she added.

Cumulative 2014 VC investment in San Jose totaled $8.6 billion, with the cleantech sector employing 12,008, workers, according to the report. A member of San Jose’s cluster of cleantech companies, Vitriflexis developing flexible film applications for solar panels.

Aiming to expand the city’s cleantech companies and local use of cleantech products and services, San Jose partnered and helped found non-profit Prospects Silicon Valley. The program serves as a catalyst for emerging cleantech companies by providing demonstration and testing equipment and facilities.

Between 10 and 15 young tech companies are currently participating in Prospects Silicon Valley. Their work revolves mostly around cleantech and ¨green¨energy trends, such as energy storage and ¨green¨ transportation. Included are companies developing waste-to-energy and energy storage systems and others working on energy optimization for refrigeration systems.

The whole Internet of Things (IoT) sector, certainly much of it, is focused on capturing data and convenience, but it also optimizes efficiencies. That growth is really cleantech, because it has sustainability benefits, said Brilliot.

¨I would say there was a gap that city leadership recognized and filled regarding the need for testing facilities, lab space and opening up of new prospects that has helped foster cleantech sector growth,¨ she explained.

Furthermore, Brilliot pointed out that San Jose is seeing some cleantech companies respond to issuance of the state Title 24 building code, which revolves around increasing energy efficiency. The building code’s standards ratchet up every ten years, the last time in January, 2014.

¨That created demand for more energy-efficient lighting and other cleantech solutions,¨ she noted, adding that San Jose is home to some of Philips Lumileds and LED manufacturer Xicato.

Governor Jerry Brown in January proposed raising the state's renewable power target all the way up to 50 percent by 2030. It's currently 33 percent by 2020, and renewable energy generation capacity is being installed at a pace that puts California well ahead of schedule to achieve it

The future of cleantech in California

Governor Jerry Brown and supporters want to do more, much more. Now being considered in the state legislature, Gov. Brown in January proposed raising the state’s renewable power target all the way up to 50 percent by 2030. It’s currently 33 percent by 2020, and renewable energy generation capacity is being installed at a pace that puts California well ahead of schedule to achieve it.

The new renewables target is not only achievable, it would result in as much as $51 billion in annual savings for the state’s residents, according to an analysis by Strategen Consulting that “quantifies the economic and societal impacts” of the governor’s proposed goals.

According to Strategen’s analysis, contained in a report entitled, Impact Analysis: Governor Brown’s 2030 Energy Goals, there is “convincing evidence that the governor’s plan is economically sound, environmentally beneficial and achievable.

about the author
Andrew Burger
Andrew Burger has been reporting on energy, technology, political economy, climate and the environment for a variety of online media properties for over five years.