insights (2007-47)


Innovation Valley Energy

The Knoxville area is beginning to live up to the Innovation Valley moniker that its economic development boosters have laid claim to.

One sphere of innovation that stands out in this regard is the harnessing of renewable energy sources. The quest to replace fossil fuels with renewables that power motor vehicles and generate electricity stands right at the top of the nationâ’s agenda from both a national security and environmental standpoint. And research emanating from Oak Ridge National Laboratory and the University of Tennessee might just put this area in the forefront of producing biofuels and solar power.

The initiative thatâ’s gotten most of the attention up to now is UTâ’s plan, in partnership with a Cambridge, Mass.-based company, to start making ethanol from switchgrass and perhaps other cellulosic plants. With over $60 million in state funding, a pilot plant in Vonore is slated to become operational in 2009 with a goal of producing five million gallons of ethanol, which UT has trademarked as Grassoline. While expanding on that output depends on further research to increase yields and drive down costs, UTâ’s Executive Vice President David Millhorn has predicted that within a decade Tennessee will be producing a billion gallons a year at a price competitive with other fuels.

Less noticed, at least publicly, has been work at ORNL on technologies for solar-power generation. But that work has caught the attention of Innovation Valley Partners, a venture-capital firm that was formed two years ago with a $35 million infusion by roughly a dozen deep-pocketed local investors. IVP operates in tandem with Battelle Ventures, a much larger, New Jersey-based venture-capital firm spawned by the same Battelle that manages ORNL in conjunction with UT.

IVP recently announced a $1 million â“seedâ” investment in a new company formed to pursue commercialization of solar energy technology licensed from ORNL. IVPâ’s general partner, Glenn Kline, will double as CEO of the new company, Ampulse, for the nonce. Indeed, he will be a one-man band, drawing upon the ORNL researchers involved in â“further work with transitioning the technology toward ramping up for pilot-scale production and moving on from there.â” A management team will be brought on board at one of these later stages, Kline says.

Ampulse is targeting the market for what is known as thin film photovoltaic technology, which he projects will grow to $7 billion a year in 2015. Presently, silicon crystals account for 90 percent of photovoltaic IPV power generation, but they are very bulky compared to thin film PV materials that can be deposited on what are called substrates. Moreover, silicon is much more expensive than substrate materials such as stainless steel, aluminum and glass. And the trick is to get thin film efficiencies up and the cost of solar powered PV electricity down to the point where itâ’s competitive with fossil-fueled power plants in more and more locales.

Kline also stresses the flexibility of thin film substrate materials as another competitive advantage because they lend themselves to being incorporated into roof shingles and window covers. Pure silicon, by contrast, is brittle and prone to break when so applied.

Beyond that, Kline is cryptic when it comes to describing the technologies or materials that Ampulse will employ among an array of possibilities. Nor will he give any information on how long it may take to get a product on the market or how much it will cost to do so.

â“This is a highly competitive market in which a dozen or more U.S. companies have invested hundreds of millions of dollars, and weâ’re not going to give away early indication of what we believe our advantage is,â” he explains.

One can infer, however, that itâ’s going to take a lot more than IVPâ’s initial $1 million investment to get Ampulse to the point of commercial viability. Thatâ’s where having the backing of a deep-pocketed, technologically savvy venture-capital combine (IVP and BV typically invest together) may be part of the competitive advantage.

Itâ’s taken more than a year since Kline moved to Knoxville to head up IVP for the firm to make its first investment in a company based here. Steeping himself in whatâ’s emerging at ORNL and evaluating its commercial potential is a big part of his job, and Kline foresees potential for many other fruitful investments in Innovation Valley ventures in the future.

In his previous post as managing partner of a venture-capital firm in North Carolinaâ’s Research Triangle, Kline is credited with having made investments in some 30 start-up companies, including several in which he played an entrepreneurial role. Hopefully, over time he can replicate that success in the Knoxville area. â" Joe Sullivan


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