By Greg Goodwin
Less than three miles southeast of Fletcher in bordering Somerville, MA sits Greentown Labs—the largest cleantech incubator in the United States—where more than 50 cleantech startup companies, mostly in the hardware segment, hone their ideas, prototypes, and business models as they seek customers and funding.
I’ve been here for the past several weeks working on a specific project involving corporate/startup partnership in modernizing the electric grid through improved hardware and software management. Before going in to the details of my work, it’s worth describing the Greentown building, an impressive example of how a physical space nurtures a diverse group of dedicated tinkerers who feed off the environment in improving their businesses.
The 33,000-square-foot building was formerly part of the Ames Safety Envelope Company and is split between shared lab/prototyping space, an open-air co-working space, and a large event space in a way maximized to facilitate collaboration and knowledge spillover. With a pool table and large kitchen complete with brews on tap—both the cold-caffeinated and hops-laden variety—it’s almost impossible not to pass through without rubbing elbows with someone working on something related to your latest challenge. On any given day, there may be investors, corporate sponsors, state or local officials, or manufacturing/technical advisors present to tour the facility and engage with the leaders of these budding companies or each other, making Greentown’s role as a convener and a hub of discussion palpable among innovation ecosystem players and casual onlookers alike.
In October 2017 Greentown Labs is expanding its facilities to a 58,000-square-foot building just across the street that will feature an even bigger event space for larger public gatherings and a wet lab to attract startups that work with chemicals and hazardous materials.
An Incubator’s Role as Accelerator
The main project I’ve been working on here is helping to conceptualize and pitch a startup accelerator program focused on e-mobility and grid management hardware/software to a utility currently making strategic moves in this area. As an extremely broad issue, one of the key ways incubators like Greentown add value is to narrow the top of a broad funnel of promising startups to a targeted few through their extensive networks—experts in subject matter, legal/IP, academics, finance, public officials, and so forth—to accelerate and de-risk startups. This can present a valuable partnership for a corporate entity’s strategy when it supports open innovation initiatives within the organization.
This is essentially Greentown’s “Launch,” program—a six-month umbrella offering that accelerates and de-risks startups through a series of workshops and events. It’s a program that has been run so far in the solar and sensor industries. Success looks different depending on startup and corporate individual goals, but investment, joint development agreements, and purchase orders are examples of outcomes that a startup might find with a sponsoring entity, and might get them to the next level of growth in their business.
For my purposes, these startups are working broadly in areas like materials science, seen in the development of higher energy density batteries, quicker and more efficient electric vehicle charging stations and components, and also algorithmic endeavors, like distributed energy resource management software to effectively manage demand and load as new grid resources come online and energy distribution shifts from the old, unidirectional model from plant to customer via the grid, to a multidirectional one where customers with stored or excess energy in the form of batteries or behind-the-meter solar panels can sell it back to the grid or to a neighbor down the street.
Industry Trends and the Push from Public Policy
There have been plenty of industry trends and policy developments in energy, particularly in electric grid modernization and electric vehicles, the latter of which has shown tremendous growth in the past year and lofty projections for the coming few. This is due in no small part due to the multi-state Zero Emission Vehicle (ZEV) initiative, which requires automakers to sell a certain number of plug-in hybrids (PHEV), battery electric hybrids (BEV) and hydrogen fuel cells vehicles as a percentage of sales.
Within the utility sector there is also public policy-sparked activity. State legislatures—particularly in Massachusetts and New York in the East and California in the West—are piloting various projects like large-scale solar farms, microgrids, and greater storage integration to meet strategic goals like improving the reliability/resiliency of the grid, better meet customer expectations and experience as demographics shift, and meet renewable energy standards.
At the end of last month, here in Massachusetts the Department of Energy Resources (DOER) released an announcement highly anticipated in the energy storage and utility industries—the state is targeting 200 MWh of energy storage deployed by 2020, part of a mandate given to the DOER through a broad and bi-partisan bill signed into law by the Baker Administration in August of last year. In doing so, it becomes just the third state in the nation to adopt an energy storage target through state policy (joining California and Oregon) and the first on the East Coast.
Massachusetts was criticized by a few industry players within energy storage and trade publications for setting the bar too low, well short of the 600 MW recommended in the “State of Charge” report, an exploratory study on the economics and logistics of energy storage that was also part of the aforementioned law. However, it’s notable that the State of Charge’s recommendation was on at timeline to 2025 where the established target is by 2020, with the economics of energy storage projected to become far more favorable due to R&D developments and market signals provided by the target.
While the state has a number of battery and storage pilots in place right now to prove their viability and cost effectiveness, none are currently operating at commercial scale and the 2020 deadline will require a ramp-up of about 100 times the current installed capacity. It will be interesting to see what role Greentown and other incubators within the innovation ecosystem play in meeting it.