Colorado PUC issues emergency net metering rules- Reposted from the Interstate Renewable Energy Council

These regulations have the power to determine the life or death of a company like ours. Colorado's renewable energy regulations have an interesting history. In 2004 when voters here passed Amendment 37 we were the first voters to pass renewable portfolio standards (RPS). The Colorado Public Utility Commission is responsible for defining and updating the rules governing RPS and all activities of Utilities.


This recent ruling (the emergency rules were formalized in a recent filing) is especially relevant to us as it discusses "third party operators," like us. We finance the units we install, selling heat and power to our customers but requiring no up front capital from them, making us a third party operator. The solar industry has thrived in Colorado because Xcel offers them the rebates and rates described below. We are beginning to push for the same rules to apply to us as well. Our units can provide equally clean energy to apply to Xcel's RPS, but we also have the added benefit of operating 24x7, day or night, rain or shine!


Colorado PUC issues emergency net metering rules: "COLORADO – On August 26, the Colorado Public Utilities Commission issued emergency rules for the state’s Renewable Energy Standard, to implement changes required by SB 51, signed into law in April 2009. The changes became effective September 1. SB 51 required several changes to the state’s net metering rules for investor-owned utilities as they apply to solar electric systems. As previously mentioned in this publication, these changes include shifting the maximum system size for solar electric systems from 2 MW to 120% of the annual consumption of the site; redefining a site to include all contiguous property owned by the consumer; and allowing system owners to make a one-time election in writing to have their annual net excess generation carried forward as a credit from month to month indefinitely, rather than being paid annually at the average hourly incremental cost for that year. While SB 51 dealt explicitly with solar electric, the emergency rules pertain to all eligible energy resources. The Colorado PUC continues to develop final rules under Docket 08R-424E.
On a related note, in August, Xcel Energy Inc. asked the Colorado PUC for permission to change its popular “Solar Rewards” rebate program to allow third-party developers to participate. Senate Bill 51 allows third-party companies to own and install solar panels on residential roofs, while homeowners pay a monthly lease for the panels and use the renewable power in their homes.
Xcel on Monday proposed changing its Solar Rewards rebate program to allow these third-party companies to access the rebate money. In the past, only the property owner could receive any rebate money. All solar power systems get a $2 per watt rebate, per state law. The systems are also eligible for an additional payment for the Renewable Energy Credit (REC), associated with renewable power generation.
For systems owned by third parties, and sized 1 to 100 kilowatts, REC payments are 11 cents per kWh. For those sized 10 to 100 kilowatts, the REC payment is 11.5 cents per kWh. For systems capable of producing between 100 and 500 kilowatts, the $2 rebate is capped at $200,000, and the REC payment is 12.5 cents.
Xcel also recently announced that with the recent completion of infrastructure build-out and software deployment, Boulder, CO has become the world's first fully operational smart grid-enabled city."

Combined Heat and Power

Many existing forms of electricity generation produce huge amounts of waste heat, but these massive centralized plants have no way to make use of this resource. Regardless of how efficient these plants become, or how "clean," centralized generation will always waste energy. As we rethink and update how we create and use energy in the United States, distributed energy is going to be a huge part of the solution.

The biomass gasification systems that we use at Colorado Forest and Energy are perfectly suited for distributed generation, they make extremely efficient use of waste residues by converting them to both power and heat. We attach directly to customer's site, where the heat produced in gasification and generation is easily routed to the customer's facility. When operating in this "combined heat and power (CHP) mode" these units have over 80% efficiency, converting over 80% of the energy stored in the feedstock into useable energy.

I came accross another very interesting combined heat and power company recently, Ceres Power. Their fuel cells are sized for a single home, much smaller than a BioMax,  but are based on the same principle of providing heat and power. They use the natural gas piped into the home to do this. Some day perhaps we will see a fuel cell running on the syngas from a BioMax!

The Colorado Cleantech Opportunity- Reposted from Cleantechblog.com

I am reposting a great article from Joel Serface about the Colorado Cleantech climate from earlier this year. I think he hits the nail right on the head. We at CF&E have seen the power of NREL and the strength of the state leadership, as Community Power Corporation developed their technology with support from NREL, DOE, USDA, and DOD. However, we are also experiencing the lack of local investment vehicles that Joel refers to. We are finding that while we can generate interest, our deal does not fall in the strike zone of any of the investors we have come across and we are becoming increasingly creative about getting it off the ground. A challenging and opportunity filled environment, what could be better!

The Colorado Cleantech Opportunity: "By Joel Serface – July 2, 2009

In June, I took a great camping trip to a truly unique feature that many outside the state of Colorado know little about. It was the Great Sand Dunes National Park – the tallest sand dunes in North America with the backdrop of the Sangre de Cristo Mountains. I arrived at the perfect time of the year when the temperature was warm enough to simulate a beach environment (small waves included), but before the snowmelt ceased over the course of the summer. It was a fantastic experience, but few other than Coloradans knew about this well-kept secret nestled in the interior of a beautiful state.

I found this a good analogy for the Colorado cleantech opportunity. While I have been in Colorado for only a year, I feel that I arrived at that perfect time when all the conditions were right for a unique experience that could only happen here and that few outside of the state know about. Could it be the perfect time for everything to converge in Colorado allowing it to become the leading cleantech state?

When I arrived to Austin in 2006, I conducted an inventory of local cleantech companies. I found around 20 of what I considered viable cleantech start-ups in Austin and over the time I was there helped grow this to around 40 through starting, recruiting, or coaching companies into the community. When I arrived to Colorado, I found a very surprising thing. In the Front Range – the area stretching from Colorado Springs to Fort Collins – alone, I was able to inventory almost 200 cleantech companies (not including the many services companies that comprise almost 1,778 reported by the Pew Center / Cleantech Group in Colorado). After meeting with many of these companies and delving deeper, I found that there was an incredibly fertile environment for these companies in Colorado with only a few key limitations.

Let’s start with the strengths of Colorado that created this environment…

• Research – Colorado boasts among the highest renewable energy research budget per capita in the United States. This primarily comes to the National Renewable Energy Laboratory (NREL), but also to several cooperative national labs including the National Institute of Standards and Technology (NIST), National Oceanic and Atmospheric Administration (NOAA), National Center for Atmospheric Research (NCAR), and several defense laboratories. In addition, three major research universities in the state collaborate with NREL including the University of Colorado, Colorado State University, and Colorado School of Mines. Each of these institutions works closely with one another through the Colorado Collaboratory and the Alliance for Sustainable Energy, NREL’s management company.

• Energy and technology industry expertise – The Colorado Front Range boasts something that no other major population center does… A location where the technology industry and traditional energy industry coexist. This translates into one of the few centers where both talent for cleantech company development and project development can both be executed.

• Ease of recruitment / low cost of doing business – Colorado is a state that carries significantly lower costs than other tech states such as California and Colorado. Colorado also boasts among the of the most highly-educated workforces. Because of the low cost of living, highly-educated workforce, and an environmentally-friendly culture that values outdoors and quality of life, it is not difficult to recruit people from all over the United States to move here.

• State leadership – Colorado has had strong leadership at the state and national level for a number of years around renewable energy. By setting a 20% Renewable Portfolio Standard and a statewide solar rebate, the state has signaled that it is open for clean energy business. Bill Ritter, the Governor of Colorado, is one of the most progressive governors on renewable energy issues that I have met and has an excellent supporting executive team in its Governor's Energy Office and Office of Economic Development. Because of their leadership and other factors above, Colorado has attracted major new renewable energy companies including Vestas, Siemens, ConocoPhillips, Abengoa Solar, and others to the state. They have also been successful in this despite the lack of other tools (see below) that other states have in place.

• Thought leadership – In addition to research and state leadership, Colorado has a legacy of thought leadership in a number of areas such as green building, energy efficiency, smart grid, and energy analysis. Most already know the great work of Amory and Hunter Lovins and the Rocky Mountain Institute, but several other leading analyst firms exist. eSource, IDC Energy Insights, and Architectural Energy Corporation are all located in Boulder. NREL also maintains one of the largest renewable energy and energy efficiency analysts corps in the world in its Energy Analysis group.

• City / community leadership – Boulder and several other communities have taken on leadership in vital areas such as its Smart Grid City efforts with Xcel Energy and in building efficiency standards and protection of open space. It is community and city leadership that are going to provide test beds for the integration of larger technologies at the city level. Denver, Fort Collins, Colorado Springs, and many smaller communities (including mountain communities that are seemingly off grid) each have their respective efforts around energy and environmental leadership.

It’s not all rosy in Colorado. One of the major complaints at the state level are that they have limited economic development funds to help attract or re-locate companies. In my conversations with leaders in the state, I have expressed that their leadership is much more important in creating markets for clean technologies than in providing cash incentives. Leadership, markets, and environment all combine to attract companies to the state; having a little bit more economic development funding could be helpful in rounding out that portfolio, but not a requirement in moving major companies to the state.

A further weakness in building early stage companies in the state is its lack of “domestic” venture capital. Given the ideaflow, creativity, and talent here, it is disappointing that there are no cleantech-focused investing professionals on the ground here to help build early-stage companies providing the coaching and governance necessary to move them to their next stage of development. Several local generalist firms have tipped their feet in the water, but have not made this a large portion of their portfolios. A leading energy technology fund in the state makes very few investments in the state and even fewer in early-stage clean technology companies. There is a robust angel community of former entrepreneurs in Colorado, and a few of them are ramping up their cleantech investments. But still, most of the cleantech venture capital in the state today still comes from coastal VCs.

Like Great Sand Dunes National Park, Colorado is a relatively unknown commodity in cleantech. Many investors on both coasts suspect it has tremendous potential and will occasionally make it to the state to look at opportunities. Unfortunately, unless the investor is on the ground or has native ties here, many of these opportunities will be overlooked.

After a year here, I can attest that this will become one of the best places to build clean technology companies in the United States as all the above conditions converge and successful role model companies emerge.



Joel Serface served as NREL’s first Entrepreneur in Residence with Kleiner Perkins Caufield & Byers. As an investor and entrepreneur, Joel has planted cleantech seeds in Massachusetts, California, Texas, and now Colorado. Since 2000, Joel has started or invested into more than 20 cleantech companies with 5 liquidity events so far and has catalyzed the formation of numerous supporting cleantech institutions and regional and national policy initiatives.

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Colorado Forest and Energy

I am now working (and have been since June) at Colorado Forest and Energy (CF&E), a renewable energy start-up in my hometown of Denver, Colorado. Our website (colofe.com) can give an idea of who we are and what we do. Our founding team is a group of people that I know from the Obama campaign, we worked together in South Jefferson County Colorado. We are working with another local company, Community Power Corporation, to commercialize the BioMax technology they have developed (the website has good info on the technology).

The energy context in America is changing rapidly, and I think a few key concepts (that reinforce each other) will emerge as the most transformative.

• Distributed Generation (small units connected directly to a facility like a school)
• Community Based Solutions (engage people in the production of the energy they use)
• Smart Grids (this includes demand management and the integration of distributed generation with good telemetry)
• Thrift (we use all of the waste heat generated by our units, central plants waste huge amounts of heat and even central solar and wind waste energy in transmission and distribution)

It is not a mistake that these are the core principles that drive what we do at CF&E. We are pushing hard to get our venture off the ground, and when we do we will be the only company that deploys small (100kw) biomass gasification units and owns those units, selling the power generated to utilities or directly to customers. That is why we make the claim that we are "the world's first community-based bioenergy power company."