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City Cultivates Alliances to Grow Clean-Tech Businesses

BY CANDICE REED

Environmental causes are hot, and cities across the country are taking note. Mayor Jerry Sanders recently announced the formation of a Clean Technology Initiative, a sure sign that San Diego also is banking that green energy could create big profits.

His proposal announced April 10 is intended to “promote the expansion, attraction and retention of businesses that develop products and technologies that provide environmentally sustainable solutions.”

The city’s economic division is working with UC San Diego and the San Diego Regional Economic Development Corp. to develop a clean-tech business cluster in the region, and the city is putting the juice behind local environmental startups.

“We have the access to funds to help local companies further develop their business plans,” said Bill Anderson, director of City Planning and Community Investments. “The city is the facilitator in this plan and we are trying to focus on sustainability.”

Global Connect, a UCSD program promoting technology-based enterprises, will be assessing the cluster of clean-tech businesses while the city has plans to create a new position , a clean technology program manager , who will execute the city’s clean-tech policies.

But changing “America’s Finest City” into “America’s Greenest City” may be tougher than it looks.

“Everyone’s been talking about going green and jumping on the bandwagon,” said a city spokesperson. “No money has been put towards the (clean technology) plan, but there is a plan to hire a program manager very soon. In all honesty, we had a vacancy in another department so it won’t cost us extra to hire this person. I just don’t think this plan has really been flushed out.”

Jason Anderson, director of economic development for the local Economic Development Corp., said the EDC’s role in the initiative is to encourage existing biotech firms and telecommunication companies to institute green practices, and advertise the city as an ideal home for new green projects.

“Our first step is to see what we can do for the businesses already operating in San Diego as far as clean technology goes and then we are trying to encourage new ventures to make San Diego their base,” Anderson said. “We’re all about focusing on the business climate in regards to clean technology at this time.”


EDC Supporting Green

Anderson said the EDC is partnering with UCSD and hosting monthly roundtable discussions with local business leaders as well as joining other clean-tech organizations, such as the Cleantech Venture Network, to support the green industry. Print ad campaigns as well as other marketing plans are being implemented to encourage new clean businesses to make San Diego their base.

The clean-tech industry is also gaining political and legislative support at the federal and state levels.

Gov. Arnold Schwarzenegger has already called for the world’s first low-carbon fuel standard, which would reduce carbon emissions from transportation fuels in the state by 10 percent by 2020.

Good news, according to Jeremy Hayden, a law partner specializing in clean-tech at the San Diego office of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC, who said that venture capitalists are more than ready to invest in green businesses.

“All of these recent events bode well for the future of clean-tech, both here in San Diego and elsewhere,” Hayden said. “We’ve seen a marked increase in clean-tech venture capital and private investment over the past couple of years and it’s very important that the political leadership of the city has embraced the concept and the goal of forming a clean- tech cluster here in San Diego.”

The law firm has completed more than 30 transactions in clean-tech during the past 18 months, including such high-profile deals as EnerNOC Inc.’s recently completed initial public offering and CoalTek Inc.’s most recent venture capital financing.

Hayden said the impression of growth has been confirmed by available data from the research firm New Energy Finance Ltd., noting that venture capital and private equity investments in clean-tech grew nationally 167 percent in 2006, reaching $7.1 billion from $2.7 billion in 2005.

“And we expect aggregate investment dollars to increase in 2007,” Hayden said. “San Diego has all of the infrastructure , intellectual, technical and human resources , to become a clean-tech hub.”

Some local startup companies agree heartily with Hayden, as the city has given them a helping hand in acquiring grants, a heads-up on available property for industrial facilities and help in attaining city permits.


City’s Autos Save Energy

Recently, Mayor Sanders issued a new regulation requiring San Diego City vehicles to be turned off when “not actively engaged in providing city services” in an effort to reduce emissions. The mayor’s office noted that a similar regulation at the Miramar landfill saved the city $2 million in fuel costs in 2006.

Entrepreneur Nicole Kennard wants to take city vehicles a step further towards saving energy by replacing all diesel vehicles with biodiesel vehicles that run on fuel made from recycled vegetable oil.

Kennard, founder and president of New Leaf Biofuel, and her partner Dave Richards, co-founder and vice president of operations, are trying to firm up plans to open a production facility that will convert used cooking oil collected from local restaurants into biodiesel, which they will sell to the city.

“The city has been very supportive of us in helping find city land to build our site,’ Kennard said. “Eventually, we would like to see city vehicles as well as all other fleets run on some sort of biodiesel blend.”

Kennard said that lower prices for diesel fuel once slowed the search for alternative fuels, but with the price of diesel moving up ward the search is on, and her company, she said, has found the answer to reducing dependence on foreign oil as well as protecting the environment.

“Biodiesel is an alternative renewable fuel made from plant and animal oils that is used in diesel engines, and it reduces emissions 75 percent on average compared to petroleum diesel,” she said. “When Rudolph Diesel invented the engine, he made it to run on peanut oil. I think that the direction the city is going towards in regards to clean technology is very positive and we’re very happy about getting caught up in the political push towards renewable energy.”

The duo collects waste vegetable oil from more than 250 local restaurants and processes it at a small facility in the Logan Heights neighborhood of San Diego. Recently, the team received a $590,000 grant from the California Air Resources Board to continue their research for the renewable, cleaner-burning diesel alternative.

Although the biofuel won’t be for sale until the end of the year, both Kennard and Richards use the alternative fuel in their personal vehicles.

The city has also been receptive to another green startup, Bull Moose Energy LLP, a local company currently developing ways to turn green waste into an energy source to produce electrical power. The goals are reducing greenhouse gas emissions while diverting waste from local landfills.

“With the city’s help, we’re coming up with long-term solutions in regards to the energy and waste issues the city is facing,” said Amanda Martinez, president and chief executive officer of Bull Moose, which is located in Otay Mesa. “We’re all working really hard to get this all moving towards becoming a reality.”

Martinez said that the new Bull Moose Energy facility, which now employs about 40 people, will eventually be located in “a zone targeted for economic growth.” She said the facility will operate a clean-burning system and is expected to divert 400 to 500 tons of waste per day away from county landfills.

The company’s Otay Mesa facility has a contract with San Diego Gas & Electric Co. to produce 20 megawatts of electricity for 13,000 homes a year, starting in 2008.

“The city is really working hard to get this all going and they’re encouraging a lot of other entities to set up shop here,” Martinez said. “The political environment is very open to renewable energy projects and I really believe that we can make San Diego the place for environmentally minded businesses.”


Candice Reed is a freelance writer based in Vista.

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