A recent Crain’s New York Business article about a smart grid start-up incubator in Brooklyn, New York, was of great interest to me, even beyond my usual level of interest in all things related to smarter grids, since the article’s author references work at NYU Tandon School of Engineering (a.k.a. Brooklyn Polytechnic back when I studied engineering there).
The article’s author, Pat Sapinsley, is the managing director of Cleantech Initiatives at Urban Future Lab / ACRE / Powerbridge at NYU Tandon School of Engineering. She described three start-up companies which are part of NYU Tandon’s Urban Future Lab in Brooklyn. Their projects include NY REV demonstration work as well as another Cuomo administration initiative, the New York Green Bank.
Refreshingly, Sapinsley referenced the economic costs associated with peak generating capacity which sits idle “more than 90% of the time…costing rate-payers $17 billion over the past decade.” Sapinsley added that the price tag “will nearly double to $30 billion over the next 10 years if changes aren’t made.”
Synergies versus Subsidies
Putting a price tag on underutilized peaking generating capacity opens up a theme of importance, beyond the article’s interesting descriptions of the three smart grid start-up companies housed at NYU Tandon’s Urban Future Lab and its ACRE incubator in Brooklyn.
The start-ups, which Sapinsley describes as “focusing on new technologies and new business models for smarter cities, smarter transportation and a smarter grid,” are providing value through technologies and market-creation which facilitate greater utilization of energy efficiency, renewables, storage, electric vehicles, and other Distributed Energy Resources (DERs). These companies are offering market-based solutions to the problem.
The theme I have in mind concerns getting beyond the way certain “anti-subsidy” factions often tend to criticize similar green-tech start-up companies’ narratives. Such “anti-subsidy” factions would say:
- A focus on subsidies is taking away from healthy economic initiatives that should rise or fall on their own, without subsidies;
- Intermittent sources of power and other distributed energy resources are not as reliable as base-load generating facilities;
- Easy-to-dispatch “backup” gas-fired generation is often needed to ensure reliable electric supply when we add more DERs.
But what if we change the theme, and focus on synergies instead of subsidies? Specifically, consider the fact that a lot of the same technologies that facilitate integration of renewables and DERs onto the grid could also reduce peak demand so as to avoid or defer construction of more such underutilized peaking generating capacity, and could even facilitate optimal utilization of underutilized generating capacity.
If we leveraged synergies more, I believe we would unleash a lot more creativity across markets and technologies our industry needs to develop. So while I agree “unfair” subsidies should be criticized, the bias is in the eye of the beholder, and knee-jerk fighting against anything remotely resembling a subsidy can be counterproductive to development of better solutions for the long term health of our grid and our economy.
They say what you focus on gets increased, and can even exclude awareness of other things (see this Selective Attention Test video for proof of this point).
Another synergy folks tend to discount is the increase in electricity sales associated with new business creation from cleantech companies, and ways such companies attract other businesses to the cleaner communities they create.
Consider the economic growth associated with the Urban Future Lab (UFL), New York City’s hub for smart cities, clean energy, and smart grid technology. Its programs include:
- ACRE, a business incubation program for pre-seed to series A startups;
- PowerBridgeNY, a proof-of-concept center commercializing research from local universities, and;
- Clean Start, an advanced diploma from NYU for people seeking a transition into the cleantech sector.
To date, ACRE companies have raised $330 million in capital and has incubated 40 companies, creating more than 340 jobs, with the companies enjoying a survival rate above 90%.
Pat Sapinsley’s article in Crain’s New York Business, is at this link: "Want to build smart cities instead of dating apps? Come to NYC".