Just a few years ago, the notion of driving a car powered by vegetable oil was considered preposterous, if not dangerous. Biodiesel was the fuel choice of the fringe, personified by celebrity endorser Willie Nelson. (He has his own brand, BioWillie.) But biodiesel, an alternative to petroleum-based diesel fuel, has caught on surprisingly fast. Estimated production in the United States jumped to 75 million gallons last year from just .5 million in 1999, according to the National Biodiesel Board.
Biodiesel is just one of the many ways that renewable and clean energy have entered the mainstream. Concerns about dwindling supplies of coal and oil have sparked interest in alternative sources, such as solar and wind power, that aren’t depleted through use. And forecasts of climate change—with many scientists predicting the Earth’s temperature will rise about four degrees this century—have led several states, including New York and California, to take the lead on regulating emissions.
With this growing acceptance—even embrace—of renewable energy, the School’s alumni are entering the industry, often by joining start-ups or launching their own firms. “Anyone who has the ability to create renewable energy to replace fossil fuels should do so,” says Nicholas Oppenheim ’73, chief executive of Beinn Mhor Power, which plans to open a 160-megawatt wind farm in the Hebrides. “A wind farm is like a power plant that doesn’t need fuel. How much would you pay for a car that never needed gas? It’s time to change the way people think about renewable energy.”
In 2001, Jeremy Dockter ’99 founded the Kinetic Group, a New York–based firm that capitalizes and develops renewable energy projects. Starting up the firm allowed Dockter to reconnect with his home state of North Dakota. “North Dakota is on a renewable energy tear right now, with ethanol and biodiesel and wind power,” Dockter says. “There’s huge potential in that state, and that’s been a motivator for me.”
His firm is now working on a project called Dakota Skies Biodiesel. When construction is completed, this biodiesel plant will be one of the largest in North America. Biodiesel is often derived from soybean or waste vegetable oils, but Dakota Skies is basing its product on canola oil, which it will produce on site. “It will be all renewable energy from homegrown crops,” Dockter says. “And we’ll do all the integrated manufacturing within our own facilities.” In addition, the project will produce almost no waste.
Biodiesel can be used like any standard petroleum diesel fuel but is nontoxic and biodegradable. Dakota Skies’s primary target customers, Dockter says, are large fuel distributors. “In the United States and Europe, it’s becoming increasingly common for distributors to include a fair amount of biofuels, including biodiesel, in their standard product mix.” Biodiesel is typically blended with petroleum diesel, because the mix can be used in most vehicles without having to modify the engine. Many vehicle manufacturers have approved using a blend with up to 10 percent biodiesel and are testing to see if the percentage can be raised. (Pure biodiesel is occasionally used in cars and agricultural equipment, but very cold weather can cause the fuel to congeal.) The fuel can also be used to replace home heating oil.
Dockter’s firm is also working on other renewable energy projects, from ethanol to waste-to-energy projects. One effort involves converting abandoned or underutilized chemical-processing facilities around the United States into biodiesel production plants. “It’s a way of redeveloping brownfields to produce green fuel,” Dockter says.
The Kinetic Group also functions as a boutique investment-banking firm that specializes in renewable energy projects. “We saw there was a need for a small and fairly flexible development firm to serve this space, because often these projects are small by the standards of the energy industry,” Dockter says. “So we’ve been able to carve out a niche that serves that segment of the market—projects that require between $20 million and $200 million of capital. That isn’t large enough for the major energy players, but there happen to be a lot of investors out there who are interested in projects of that scale. We believed that this sector was set to mushroom, and so far, we’ve been proven right.”
Thomas Conroy ’87 considers energy one of the greatest challenges facing the United States. “It’s an issue because of the security of supply and because there are tremendous environmental concerns around the world,” he says. “There is no question that renewable energy needs to be introduced more rapidly.”
Conroy, who also has a degree in engineering, worked for 18 years in the high-tech sector before deciding it was “becoming a commodity-based business.” He started researching different types of renewable energy and found that utility-scale wind power was the most cost competitive. He found a business partner who had devoted three years to designing an innovative, commercially viable wind turbine tower, and in 2005 Conroy became president of Wind Tower Systems, based in Heber City, Utah.
Conroy’s background in high tech helped ease his transition. “A major goal in the high-tech sector is to design an innovative product. But you only make money if you successfully commercialize it,” he says. “In many ways, the business knowledge of how to be successful in the marketplace that I gained at the School and have used ever since is what I’m bringing to the party.”
Wind Tower Systems specializes in towers for multimegawatt wind turbine generators, which convert the kinetic energy in wind to electricity. The firm is working on a tower for a 2.5 megawatt generator in California that will produce enough energy for 2,500 households. “Energy is one of the underpinnings of our prosperity, but we’re highly vulnerable,” Conroy says. “There are many parts of the world where people are still generating electricity from liquid fuels.” Many rural villages have had to face the prospect of turning off the lights because they can’t afford to buy fuel, he says. Fossil fuel–based electricity also contributes to the greenhouse effect. “There’s a big groundswell for renewable power in the United States and great opportunity in the renewable energy space around the world. There is no question that this sector is going to continue to grow.”
After earning her MBA, Andrea Lally ’01 spent five years working as an investment banker in London. She became interested in solar power through her work with semiconductor companies, several of which were developing products for use in photovoltaic panels. Unlike traditional solar thermal panels, which collect solar energy to heat water or air, photovoltaic panels generate electricity. Convinced that the demand for renewable energy would continue to grow, given the world’s needs, Lally carved out a cleantech sector within her banking group.
As she became more familiar with the intricacies of semiconductors and solar power, Lally decided to work directly in the renewable energy sector. Last April, she became the head of business development for Solarcentury, a London-based firm that develops both solar thermal panels and photovoltaic panels. One of the firm’s most notable undertakings was designing photovoltaic panels for the Eden Project, a sprawling horticultural utopia in Cornwall, England, that contains the world’s largest environmentally controlled greenhouses. Many of the project’s more than one million plants live in climate-controlled biomes that are heated by the panels.
“I always hoped to use the experience I’d gained in investment banking to join a company that was mission driven,” Lally says. “I hate to sound ‘save-the-world,’ but that really was the reason,” she adds with a laugh. At the same time, she wanted to remain in the for-profit sector. “The mission of this company is to combat global warming,” she says. “That’s our fundamental mission, but we have investors, and we’re very much a profit-seeking company.”
Lally expects the solar-power market to accelerate quickly in the United States and elsewhere over the next two decades now that the industry has achieved a critical mass and is becoming more cost-competitive with fossil fuels. “We’re seeing private equity investors and venture capitalists putting money into all parts of the solar energy value chain,” she says. “People are thinking long term about the industry and identifying opportunities to generate attractive returns. That investment wouldn’t happen without some degree of confidence that this is a feasible form of energy for the future. It’s a real market now; it’s no longer just enthusiast engineers or environmentalists.”
With about a quarter of all incoming students expressing interest in the energy industry, many are finding new ways to translate their environmental goals into business ventures. Last year, Arnold Leitner ’06 received an investment from the Eugene M. Lang Entrepreneurial Initiative Fund for his plan for SkyFuel, a firm that is planning to develop and operate solar thermal power plants.
Alumni are starting new ventures every year. In 2004, Yuki Yamamoto ’92 founded Oceanwind Technology, which has designed and developed a floating platform for offshore wind farms. In 2002, Neil S. Suslak ’86 helped found Braemar Energy Ventures, a venture capital fund that finances companies that invent new technologies for the sector, including one firm that developed a process to make ethanol from waste materials from plants and wood. And Carlos Martins ’92 launched Ecoinvest Carbon, which develops renewable energy projects that help reduce carbon dioxide emissions, in 2000. One of its projects is a plant in Brazil that turns sugarcane waste into electricity.
Still, as alumni such as Jerry Robock ’05, founder of Community BioFuels, remind us, some alternative energy sources are merely a transition. “Biofuels offer an alternative to petroleum-based fuels but only reduce greenhouse-gas emissions; they don’t eliminate them,” says Robock, whose firm, a consulting company specializing in sustainable, community-based alternative energy projects, helped create the solar-powered Hudson Valley Biodiesel Cooperative. “Cleaner isn’t necessarily clean. The most significant short-term solution is energy conservation.”
Given the forecasts for global energy needs, perhaps it isn’t surprising that alumni are taking on these challenges. “The price of oil, climate change and security issues are driving investment and innovation in renewable energy,” says Ray Horton, the Frank R. Lautenberg Professor of Ethics and Corporate Governance and director of the Social Enterprise Program. “The growing global demand for sustainable energy sources is creating enormous opportunities in this sector.”