A Guest Blog by David Baker, Managing Director, Smart Grid Cluster
“Friends of the Forge” is a guest blog series that aims to both address issues and promote great ideas around the Chicago education system by channeling the expertise of thought leaders within the community.
Ten years ago, a public policy discussion about how to best modernize the United States’ electrical grid took root in Illinois. And it was an important one.
This public policy discussion led to development of what eventually became the Energy Infrastructure Modernization Act (EIMA), which starting in 2011 enabled the state’s primary electric power utilities, Commonwealth Edison and Ameren, to invest $3.2 billion in creating a new, more reliable electric grid.
Updating an entire country’s electrical grid is no easy task. Add in the Internet of Things, quick-charge electric autonomous vehicles, and other burgeoning industries with a high demand for efficient sources of electricity, and you can imagine how quickly the conversation can get bogged down in minutia and technicalities.
Instead, Illinois’ universities and business leaders saw an opportunity for growth and grabbed it by the horns.
New cleantech organizations, existing economic development organizations, public and private universities, and the state banded together to form networks that would maximize the economic impact of this investment for the public good. As the Managing Director of Smart Grid Cluster, I am a member of a small team that is organizing the expanded initiative.
Forming the Illinois Smart Grid Cluster
At the same time that the EIMA was being negotiated, the U.S. Department of Energy was beginning to invest in experiments by universities, utilities, and cities to develop “Smart Grids” – or systems that integrate electric power transmission, distribution, and use. These investments, naturally, began to spark new innovations in electric power management – including integration of power from renewable sources onto the grid.
A number of organizations and institutions in Chicago saw the surge of economic activity as an opportunity to promote new ideas and new startups to support this emerging energy economy:
- The Clean Energy Trust (CET) was founded in 2010 by a group of prominent business leaders to identify these early stage startups coming out of universities, national laboratories and garages, and provide them with cash prizes to launch their businesses.
- A coalition led by Illinois Science and Technology Coalition (ISTC)and the Citizen’s Utility Board negotiated amendments to the proposed legislation that required the utilities to invest in citizen education regarding the smart grid, and to form an early stage venture fund for smart grid-related startups.
- Illinois Institute of Technology, (Illinois Tech) a private-nonprofit university on Chicago’s South Side, leveraged federal, state, university and industry funding to create the nation’s first smart micro-grid on a university campus, as a mechanism for research and testing of grid modernization technologies.
The early success of these efforts led Illinois Tech to apply for and win one of 10 competitive contracts from the U.S. Small Business Administration to establish the Illinois Smart Grid Regional Innovation Cluster (SGC), which soon became known as Smart Grid Cluster.
How Smart Grid Cluster Works
Since 2010, the coalition of organizations and universities that support energy companies under the Smart Grid Cluster (SGC) has evolved to address every stage of startup development.
As a part of this, the Executive in Residence (EIR) program and online basic building block tools help with the initial ideation stage of new businesses. In addition, the Illinois Tech student intern program funded by SGC arms the these startups with paid interns for assistance.
Each of these tools help to groom local energy startups for investment opportunities. This includes business plan competitions like the SGC-supported Corporate Startup Challenge and Energy Foundry’s venture investments.
As an example of using many of the tools provided by SGC, two Illinois Tech faculty members launched Influit Energy in 2015 based on technology they helped develop at Argonne National Laboratory. The technology uses nano-particles as the basis for “refuelable batteries” used in the rapid recharging of electric vehicles such as fork lift trucks. The Influit team used SGC-funded interns for market research and business development, helping them to apply successfully for a $225,000 U.S. Department of Energy Small Business Innovation Research Grant.
To date, Energy Foundry has made 13 investments in 12 startup companies. Collectively, the 76 active Smart Grid Cluster companies have raised $72.6M in follow-on funding. I am excited that in the six years since the advent of CET and Smart Grid cluster, we now have a solid platform in the midwest to promote a sustainable energy economy.
— Smart Grid Cluster (@SmartGridClustr) June 17, 2015
Who Else Benefits?
Another one of the SGC participating companies, SiNode Systems, provides an example of how the cluster and its partners have supported development of a new path-breaking technology. SiNode’s battery material technology spun out of Northwestern University as a student-run company. This technology promises to increase the performance while reducing recharge time for lithium-ion batteries in phones, wearables, and even electric vehicles. An early finalist in CET’s Clean Energy Challenge, the startup went on to win a total of $900,000 in student-focused business plan competitions.
Armed with this support, SiNode received an SBIR Phase I award, established its laboratories at Illinois Tech’s University Technology Park, and was counseled by one of SGC’s partners as it achieved an SBIR Phase II award. This funding enabled the startup to develop its product platform, attract strategic partners, and receive an early stage venture investment from Energy Foundry and others.
Meanwhile, SiNode added staff, including SGC-funded interns to assist with development and testing of their products. In 2016, the US Advanced Battery Consortium of the nation’s leading automakers awarded SiNode a $4 million development agreement.
Through the emerging smart grid, the initiatives of our electric utilities and companies have made it possible for residential, commercial, and industrial customers to manage their own electricity use.
The next challenge is figuring out how to properly integrate these new technologies with the emerging worlds of Smart Cities, the Internet of Things, and a growing need to conserve and reuse water and other resources. Smart Grid Cluster membership of companies like Comcast – who demonstrate a significant commitment these new technologies – will undoubtedly aid in the success of these efforts. The complexities of integrating autonomous and electric vehicles into urban settings, of course, will add further challenges.
We hope that by applying the lessons learned from establishing the Smart Grid Cluster and working with other organizations to provide testing and demonstration programs for these emerging technologies, we can accelerate their adoption – improving people’s lives, creating new jobs, and conserving the planet’s resources along the way.