Seek to Rediscover and Redefine Energy in this New Century

What is energy? In high school physics we learned energy is the “ability to do work”. We also learned through the law of conservation that energy can not be created or destroyed; it can only be changed from one form to another. How do we value our future ability to do work? As some forms of energy are constrained - particularly oil, natural gas and coal - will our ability to do work, grow the economy, or continue a standard quality of life be constrained as well?

Energy has evolved to a necessity in our daily lives. It powers our portable electronics, it cools our indoor offices in the steamy summer months, and it gets us to work everyday…fashionably late. Our relationship with energy is love-hate. We love all the great quality of life elements that energy provides us, but hate that pest of a utility bill at the end of the month. We’ve come a long way since Edison commercialized electricity; however we still have a lot to learn about “energy”. In this new century we are increasingly being forced to reevaluate our long-term relationship with our great friend and foe, energy.

The availability of coal, natural gas and oil is fixed. At least, this is our general understanding as far as we know, even if some scientists like Thomas Gold who wrote the book “The Deep Hot Biosphere: The Myth of Fossil Fuels” and was referenced in a February 17, 2003 Fortune Magazine story on how he hypothesizes that oil is not made from fossils and that the earth may contain more oil than we estimate, albeit at greater depths and pressures than we have technology to extract it. Regardless of how much oil is in the earth, the constant we know in the equation is that burning it degrades our climate and our ecosystems. So, in a world that is increasing its use of oil, gas and coal to convert them to heat, electric or kinetic energy what are we to do when the pump runs dry and the canary has sung its last song?

I’m not sure when conservation ever became a dirty word. Somehow we’ve come to accept that driving vehicles that get 12 miles per gallon and heating/cooling homes 3500+ square foot in size for families that have less people than our parents or grandparents did is fashionable. We have the technology and know-how to conserve energy and natural resources, but why? Energy is still relatively cheap. And why conserve something that is seemingly infinite.

Well, the bounds of our old illusions are being tested by new market, technology and political realities. The conversion of oil, gas and coal to other useful forms of energy can be inefficient. It also creates greenhouse gas emissions that pollute and impact our air quality and cause global climate change. Governments, corporations and the public are now seeing global risks unfold, all related in some way to climate change. The loss of ecosystems, diversion of clean water, and desertification of what was once plush green lands, and increased intensity and frequency of significant natural disasters and pandemics each have been influenced by global climate change. We know that the energy we use and how we use it is part of our future risk. This new century will require us to rediscover and redefine our notion of energy. And, perhaps more value will be placed on conservation than it has been in last 100 years.

The energy transformation has started. Leading companies are now seeking to mitigate climate risks by transforming how we value, consume and conserve energy. Consider the following firms:

GE Global Research is working to develop commercially viable thin-film solar cells that can be integrated with a variety of materials including metal, glass or plastic. Thin-film solar cells have been proven in laboratory scale testing environments however, their reliability and efficiency in commercial applications has been varied. The commercial potential for thin-film solar cells is large however, and new R&D will help uncover new options for using this technology. GE is purchasing thin-film from DayStar Technologies, Inc. among other suppliers.

Sterling Planet markets and sells renewable energy. They recently sold PepsiCo. three years of renewable energy certificates (RECs) comprising more than 1 billion kilowatt-hours of renewable electricity per year. The PepsiCo purchase of Sterling Planet’s RECs was the largest corporate purchase in U.S. history. See the PepsiCo Press Release.

MeterSmart, L.P., formerly Hunt Power, provides comprehensive advanced energy information and advanced metering services to utilities and their end-use customers. Using advanced meters, state-of-the art data management tools and real-time energy pricing, MeterSmart, L.P. is able to help its customers save energy and money simultaneously through smart use of market information and metered energy use data.

Harbec Plastics, Inc. specializes in precision injection molding, rapid prototyping and low to high volume production of injection molded parts. The firm does so with a large commitment to environmental sustainability. Harbec has been integrating new clean energy technologies at its manufacturing facility for close to a decade (see Northern Development, LLC for more information). The company currently uses on-site wind generation and 25 microturbines (combined heat and power) in an integrated energy system at its manufacturing operation. It is seeking to also incorporate biodiesel fuel, geothermal energy, biodigester technology and more wind generation to its current capacity. As the firm grows and as new business and industrial tenants locate near the Harbec facility, the firm will seek to integrate its systems with others, potentially creating a sustainable energy and industrial park where all tenants value from lower-cost, reliable and clean energy.

Each of the firms identified above have begun to create new business models around how they value and use energy. They are doing so by creating new energy products and services that commercially address energy conservation, efficiency, clean production and a future defined by energy price volatility and environmental risk. The firms range from public to private, and diversified multinationals to small regional suppliers. In each case they have found success in rethinking what energy means to them and to their bottom line. In addition, these firms have pioneered new paths for others, taking on market and competitive risk. And, in each case that risk is paying off as these early adopters are quick learners and already charting new opportunities to rediscover and redefine energy for their customers, their shareholders and investors and themselves in this new century.

Go seek to rediscover and redefine what energy means to you and your firm in this new century. You may just find yourself in a market leadership position.

Mark C. Coleman
Senior Associate, AHC Group, Inc.
Mark@ahcgroup.com