Utility-backed investment group forms to commercialize energy technology

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Quick take: I've been on the advisory board of a national laboratory for over a decade and I often consult to energy startups. So I've seen up close and personal the dreaded "valley of death" -- the gap between proving a technology in the lab and proving it at commercial scale.

 

Now an investment group has formed not just to funnel money to startups, but also to help them with key commercialization challenges. By securing partnerships with some big-name utilities, the group has created a network that can provide all-important pilots, demonstrations and test beds. Smart. Very smart. – Jesse Berst

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Power and utility companies – including Duke Energy, GE and National Grid – are teaming with investment firm Broadscale Group to invest in and help commercialize new energy technologies and services offered by growth-stage companies. (Read the press release on page 2.)

 

Broadscale founder Andrew Shapiro, the founder and former CEO of strategy firm GreenOrder, describes his new venture as a "new model of investment firm" that will address the market challenges that have made it difficult for many groundbreaking energy companies and products to achieve mainstream success.

 

Broadscale has formed a strategic relationship with Pegasus Capital Advisors L.P., a leading private equity fund manager, to invest in deals that Broadscale identifies. Pegasus manages approximately $2.7 billion in assets, including a portfolio of energy and sustainable business investments.

 

But Shapiro notes it's not all about the money.

 

“Capital is necessary, but not sufficient," he said. "New models of collaboration are needed to scale up breakthrough solutions. Broadscale will connect the right market participants, align their financial interests, and partner with them to turn innovation into impact.”

 

What's in it for the utilities?

 

From Duke Chairman and CEO James Rogers: "Technology is key to Duke Energy’s mission of delivering affordable, reliable, and cleaner electricity.We believe this network approach can help us to cost-effectively identify and benefit from promising new energy solutions."

 

From National Grid USA CEO Tom King: "We are eager to work with Broadscale and the other partners to find new opportunities to bring next generation solutions to our markets and most importantly to our customers."

 

More on energy innovation…

5 don't-miss grid innovations from a U.S. national laboratory

Video: ARPA-E and its role in our smart energy future

6 new smart grid (and related) technologies: Brilliant or bizarre?

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Jesse Berst is the founder and chief analyst of Smart Grid News.com, the industry's oldest and largest smart grid site. A frequent keynoter at industry events in the U.S. and abroad, he also serves on advisory committees for Pacific Northwest National Laboratory and the Institute for Electric Efficiency. He often provides strategic consulting to large corporations and venture-backed startups. He is a member of the advisory boards of GridGlo and Calico Energy Services.

September 24, 2012 09:00 AM Eastern Daylight Time

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Leading Companies Partner with Broadscale Group to Scale Up Energy Innovations

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GreenOrder Founder Andrew Shapiro and Veteran Investors Create New Network Model to Invest In and Commercialize Breakthrough Solutions

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NEW YORK--()--Broadscale Group, a new model of investment firm working with leading energy corporations to scale up the industry’s most promising innovations, announced its formation today.

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“Capital is necessary, but not sufficient. New models of collaboration are needed to scale up breakthrough solutions. Broadscale will connect the right market participants, align their financial interests, and partner with them to turn innovation into impact.”

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Broadscale has created a network of large power and utility companies – including Duke Energy, General Electric, National Grid, and other members to be named shortly – to invest in and help commercialize new technologies and services offered by growth-stage companies.

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Broadscale also has formed a strategic relationship with Pegasus Capital Advisors L.P., a leading private equity fund manager, to invest in deals that Broadscale identifies. Pegasus manages approximately $2.7 billion in assets, including a portfolio of energy and sustainable business investments.

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Andrew L. Shapiro, Broadscale’s founder, says his firm will address the market challenges that have made it difficult for many groundbreaking energy companies and products to achieve mainstream success. Significant capital requirements, complex regulations, and long adoption periods often prevent these companies from making it through the so-called “valley of death” and reaching commercial scale.

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Broadscale will offer the most promising growth-stage companies streamlined access to strategic sources of capital, distribution, and demand. Large corporations, in turn, will gain access to well-screened investment opportunities and innovations that will allow them to improve efficiency, lower operating costs, and be more competitive.

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“The key to unlocking progress in this area is combining the drive, creativity, and technical advances of the best entrepreneurial companies with the market knowledge and reach of our industry-leading network members,” Shapiro said. “Capital is necessary, but not sufficient. New models of collaboration are needed to scale up breakthrough solutions. Broadscale will connect the right market participants, align their financial interests, and partner with them to turn innovation into impact.”

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“Technology is key to Duke Energy’s mission of delivering affordable, reliable, and cleaner electricity,” said James E. Rogers, Chairman and CEO of Duke Energy. “We believe this network approach can help us to cost-effectively identify and benefit from promising new energy solutions.”

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“National Grid is proud of a long history of bringing efficient and innovative solutions to our customers and communities. We are eager to work with Broadscale and the other partners to find new opportunities to bring next generation solutions to our markets and most importantly to our customers,” said Tom King, CEO of National Grid USA.

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“Pegasus is delighted to collaborate with Andrew Shapiro and Broadscale to invest in companies that can address our global resource challenges,” said Craig Cogut, Founder and Managing Partner of Pegasus Capital Advisors.

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“Edison Electric Institute (EEI) shares Broadscale’s goal of fostering new collaborations in our industry that will accelerate the deployment of viable technologies,” said Thomas Kuhn, President of EEI, the association of shareholder-owned electric companies.

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"Achieving sustainable energy for all will require more private-sector leadership and creative collaborations such as Broadscale Group," said Chad Holliday, Co-Chair, UN Sustainable Energy for All, and former Chairman & CEO, DuPont.

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Shapiro is the founder and former CEO of GreenOrder, a strategy firm that has worked with more than 100 large enterprises on energy and environmental innovation since 2000. He has worked with GE’s leadership since 2004 on its ecomagination initiative and with a number of the nation’s largest utilities and industrial companies, real estate firms, and other energy-intensive businesses. Shapiro also founded GO Ventures, which has incubated and invested in cleantech start-ups, and co-founded the U.S. Partnership for Renewable Energy Finance, a coalition of leading investors.

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Ben Rogers, a veteran of the power and utility sector, is partnering with Shapiro to initiate and lead Broadscale’s network in this area. Rogers has been an investor in start-ups in energy storage and efficiency, was an investment banker at Goldman Sachs, and held operating roles at Cinergy (now Duke Energy) and Enron.

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Broadscale is also partnering on specific transactions with Daniel Gross, formerly a founding partner at Hudson Clean Energy Partners and principal investor at Goldman Sachs and GE Capital, and with Rosina Giuliante, a former investment professional at The Carlyle Group, GE Capital, and Goldman Sachs.

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Broadscale is committed to accelerating innovation across the energy and resource industries in order to improve productivity and make cleaner solutions more cost effective. After developing its power and utility network, Broadscale plans to build networks in related industries such as real estate and transportation.

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About Broadscale Group LLC

Broadscale Group is a new model of investment firm dedicated to scaling up breakthrough solutions for a changing world. We work with leading corporations to invest in and commercialize the most promising market-ready innovations.

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