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October 3rd, 2011

Feds fund six clean energy ‘proof of concept’ centers

Published on October 3rd, 2011 | By: Eileen De Guire

The national i6 Green initiative leverages resources of five federal agencies to advance clean technology commercialization, focusing on promoting Proof of Concept Centers methodologies. Credit: Economic Development Administration, Department of Commerce

Last Friday was the last day of the Federal 2011 fiscal year, and award announcements were flying out of DC all afternoon. Several caught our attention including the announcement of the six winners of i6 Green Challenge, which is part of the Obama administration’s Startup America initiative.

The i6 Green Challenge is an initiative designed to leverage federal dollars and cost-share dollars to “drive technology commercialization and entrepreneurship in support of a green innovation economy, increased US competitiveness and new jobs.”

Translation: This is funding to prime the venture capital pump. Venture capitalists tend not to invest in early stage R&D, preferring to jump in later in the process after research demonstrates a promising, realizable commercial product.

This is the second i6 Challenge. According to the press release, this year’s competition sets up methodologies based on “proof of concept centers.” The focus of last year’s competition was high-growth entrepreneurship in the United States.

Several of the centers are modeled after MIT’s Deshpande Center, which strives to “bridge the innovation gap” between an idea and its implementation and to overcome the four obstacles it has identified: fear of risk, reduced funding, financial limitations on small businesses and disconnect between academia and marketplace.

Since its founding in 2002, the Deshpande Center has awarded $11 million to fund close to 100 projects (based on 500 proposals), which has translated into the creation of 26 companies, $350 million in new funding and over 400 employees.

It’s a success story that the i6 Green Challenge is hoping to duplicate and the funding order of magnitude is the same ($11 million vs. $14 million). One important difference is that the i6 investments are decentralized, and each center has significantly less money to leverage than Deshpande. With shallower pockets, each “bad pick” could have a bigger impact on the overall performance of the centers. Against that, though, is that each center has some nontrivial cost-sharing  “skin in the game.”

The Department of Commerce, through its Economic Development Administration, is the lead government partner on the i6 Green Challenge. Other partners include the Department of Agriculture, DOE, EPA, NSF, NIST (also part of Commerce) and the US Patent and Trademark Office.

Below is a summary of the awards and how they break down. Note that the totals tabulated (by me) in the table are probably incorrect. The likelihood of the Iowa and Washington awards being identical is low, in my opinion. EDA has updated and corrected the information on their web pages; the new numbers are below.

Project name

Award Total ($)

EDA

Applicant

DOE

EPA

New England Clean Energy Foundation

2,900,000

1,000,000

1,650,000

150,000

100,000

Igniting Innovation (I2) Cleantech Acceleration Network

1,912,901

1,000,000

613,155

299,746

Proof of Concept Center for Green Chemistry Scale-up

1,080,000

500,000

500,000

80,000

Louisiana Tech Proof of Concept Center

2,429,122

(inc. 649,500 from “other”)

1,000,000

679,622

100,000

Iowa Innovation Council I6 Green Project

2,000,000

1,000,000

1,000,000


Washington Clean Energy Partnership Project

2,869,434

1,000,000

1,569,434

300,000

Total i6 investment ($)

13,191,457

5,500,000

6,012,211

749,746

280,000


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