The Xconomy Guide to the Northwest’s Cleantech Clusters

3/9/09Follow @gthuang

Last week, we published a series of three stories documenting the companies and organizations in the Pacific Northwest that are focused on alternative energy and cleantech. We organized the lists by geography, breaking out separate lists for companies in Washington, Oregon, and British Columbia. Now we can take a step back, analyze the trends in each region, and—although the lists aren’t comprehensive—compare them to one another in terms of their strengths and weaknesses.

But first, some big-picture trends from the whole Northwest. We catalogued 160 organizations in total—27 of them working on alternative fuels (17 percent), 18 on solar power (11 percent), 16 on wind power (10 percent), and 19 on other alternative energy sources like geothermal, nuclear, and hydro (12 percent). Thirteen companies specialize in transportation technologies like hybrid vehicles and engines (8 percent), while nine are focused on fuel cells (6 percent). We counted 15 organizations focused on smart-grid technologies and electricity management (9 percent). And in total, 20 of the companies (13 percent) have a strong software component to their products, while seven are focused on energy storage or new materials (4 percent).

“We haven’t quite seen anything like what’s happening in the energy space,” says Rick LeFaivre, managing director at OVP Venture Partners in Kirkland, WA, which has invested in several alternative energy companies on the West Coast. “There’s a huge drive for cleantech. We’ve hit an inflection point.”

Washington
is the clear leader in software and alternative fuels, with about one-fifth of its 83 organizations focused on each of these areas. Its leaders in energy software include Optimum Energy, Powerit, and Verdiem, while a new generation of biofuels technology is emerging, led by the likes of Arzeda, Bionavitas, and Boeing. The state is also strong in smart grid and electricity management, with 11 companies in this emerging arena, including Itron and Areva T&D. For its cluster size and level of activity, however, Washington does not have many venture firms or angel networks with a focus on cleantech (we counted just three—Arch Venture Partners, OVP Venture Partners, and Northwest Energy Angels).

Oregon is strong in solar, wind, and biofuels, with about one-fifth of its 36 cleantech organizations focused on each of these. SolarWorld and SpectraWatt are leaders in solar, while Shepherd’s Flat Wind Farm and InEnTec could dominate in wind and biofuels, respectively. Software and energy storage are under-represented, however. Oregon’s energy-focused venture firms are Nth Power, OVP, and Pivotal Investments Fund.

British Columbia has depth in a number of areas, and is particularly strong in wind, hydro, fuel cells, and energy management. Some of its leaders include Sea Breeze Power, Plutonic Power, Angstrom Power, and Light-Based Technologies. But expertise in software and solar seems to be lacking. Its cleantech venture firms are Chrysalix Energy, Pangaea Ventures, and Yaletown Venture Partners.

So what does it all mean? We’re still working on different ways to slice it, but see below for the complete breakdown of companies by geography and technology focus area. (Venture firms and utility companies with an alternative energy focus are tallied up here, but nonprofits and consulting firms are not.)

Looking at the variety of approaches represented here, I’m reminded of something Nathan Myhrvold of Bellevue, WA-based Intellectual Ventures (which has a nuclear reactor project) told me. On energy innovation, he said, “My recommendation to the world is, fund 100 really cool new carbon-free energy sources, and fund some that have some diversity—not 100 people trying to do photovoltaics…If you really want to stimulate new energy ideas, you need to find a way to get ideas stimulated at a grass-roots level from lots of folks.”

These cleantech clusters would seem to be a good start.

Washington (83 organizations)
Transportation—7
Wind—4
Solar—9
Other energy (nuclear, water, geothermal, biomass)—6
Software—16
Management/Smart grid—11
Storage/Materials—3
Alternative fuels/Biofuels—17
Fuel cells—3
VC and angel organizations—3

Oregon (36 organizations)
Transportation—3
Wind—6
Solar—7
Other energy (nuclear, geothermal, thermoelectric)—5
Software—3
Management/Smart grid—3
Storage/Materials—1
Alternative fuels/Biofuels—6
Fuel cells—1
VC firms—3

British Columbia (41 organizations)
Transportation—3
Wind—6
Solar—2
Other energy (geothermal, hydro, water)—8
Software—1
Management/smart grid—3
Storage/materials—3
Alternative fuels/biofuels—4
Fuel cells—5
VC firms—3

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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