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The New Energy Companies

What, exactly, is an "energy company"? That used to be an easy question to answer, but no longer. Now, it seems, just about everybody wants in on the energy game.
One of the more noteworthy aspects of what has come to be called "the clean-tech revolution" is that industry sector lines are blurring. It's no longer just oil, gas, coal, and utility companies that qualify under the "energy company" moniker. As the world's energy choices diversify, so, too, has the number and nature of companies jumping in. There are now "energy companies" emerging from a variety of decidedly non-energy sectors, from electronics to chemicals to aerospace to ag.
Consider Dupont, which recently announced a $50 million expansion of a facility to manufacture materials for solar panels -- specifically, the panels' protective backsheets. This is hardly the first big energy bet for Dupont, the company who's tagline was, famously, "Better Living Through Chemistry." For example, it boasts an entire division making "more powerful, more durable, and more cost- efficient fuel cell materials and components," as the company puts it. In May, Dupont Fuel Cells introduced components that provide direct methanol fuel cells -- the kind that someday will power laptops and cell phones -- with improved overall power performance and longer run-times. Another big chem company, Dow, boasts the world's largest fuel cell project, a partnership with General Motors, in which GM aims to prove the viability of hydrogen fuel cells for large industrial power. GM is powering fuel cells with hydrogen created as a co- product at a Dow facility in Freeport, Texas. Meanwhile, 3M, the maker of Post-its and Scotchguard, similarly has a fuel cell division, developing membranes and other component parts.
I've written on several occasions about GE, which already is the largest U.S. wind turbine manufacturer, and which also is engaged in manufacturing solar, fuel cell, coal, nuclear, and other energy technologies.
Who else is in the energy business? There's aircraft maker Boeing, which recently signed a multi-million dollar contract to supply concentrator solar cell assemblies to an Australian solar company. Owens Corning, best known for its pink building insulation, recently introduced a new "single-end roving and knitted fabric," WindStrand, which could enable lower costs and higher performance for wind turbines.
The electronics companies have long been in the energy biz. Fujitsu, Hitachi, Kyocera, Sanyo, Sharp, Siemens, and Toshiba are among the many firms in that sector making solar cells, fuel cells, components for wind turbines, and control technologies that make all of these things work more efficiently. Sharp, for its part, is the world's largest maker of solar cells and modules.
There's the ag folks. Archer Daniels Midland, one of the world's largest processors of soybeans, corn, wheat, and cocoa, is also one of the world's largest manufacturers of ethanol and biodiesel, increasingly used vehicle fuels. Its biggest competitor, Cargill, last year made a major expansion of its ethanol capacity, to nearly a quarter-billion gallons a year.
It's not just the ag growers. John Deere, the tractor folks, last year made equity investments in several wind energy projects in the rural U.S. and has created a business unit to provide project development, debt financing and other services to those interested in harvesting the wind. Another heavy-equipment manufacturer, Caterpillar formed an alliance with FuelCell Energy involving the distribution and development of fuel cell power generation products for industrial and commercial use.
And then there are the IT companies -- the nice people who brought us the Internet and the personal computer, among other things. For several years, they've been investing in ways to improve the electricity infrastructure to make it more efficient and reliable. After all, the new "smart grid," in which homes, businesses, and appliances "talk" to one another to determine whether and when to power up or down, will require switches, routers, and sophisticated software -- the same things that run the equipment used to transmit and receive this blog. The fusion of info tech with energy tech has led IBM and Cisco, among others, to develop products and technologies to help deliver energy more efficiently.
Who else could become an "energy company"? Almost anyone who makes metals, plastics, advanced materials, or coatings. Software companies, who may write the code that weaves the cacophony of energy producers into a harmonious system. Big-box retailers, whose spacious, flat roofs could collectively become solar farms for the surrounding community. And, by extension, big real estate developers -- of malls, warehouses, industrial parks, and other large complexes -- creating microgrids of solar, wind, geothermal, fuel cell, and other energy sources. Some of these players already are emerging, with many more still to come.
It may not be long before we're asking, "Who's not an energy company?"
----------------- Joel Makower is Co-founder and Principal of Clean Edge, Inc.