In New York yesterday, GE announced two big steps in its Ecomagination Challenge program. The company unveiled 12 investments, totaling $55 million, as the first round of its goal to put $200 million to work in power grid technology startups over the next 18 months.
Second, GE announced five $100,000 “Innovation Awards” for still- developing technologies identified from its novel effort to crowd source innovative energy technology opportunities from the Web. This batch included two of my favorites: WinFlex, which is developing a collapsible wind turbine rotors, for easier assembly, and IceCode, which is electrifying wind turbine blades to prevent power-sapping ice build-up.
In the big money category, GE and its venture capital partners are putting up $55 million into 12 startups, established companies and one academic program. Winners get more than investment funds. They’ll also have the benefit of warp-speed product development with the help of GE’s engineering and sales troops. Plus they’ll get guidance and financial help from leading VCs, including Emerald Technology, Foundation Capital, Kleiner Perkins Caulfield & Byers, and Rockport Capital.
For GE, the key is cultivating innovation from beyond its four walls. “What do I do? I’ve got 45,000 engineers and innovators, and 45,000 sales people. I can drive innovation at a scale these guys can’t do,” said Jeff Immelt, GE’s CEO and Chairman, at the announcement.
For today’s winners, all those engineers and sales experts offer a huge leg up. “For a startup, capital is necessary, but it’s never sufficient to build innovation,” said Thomas Noonan, the CEO of JouleX, one of the winners, which is making advanced grid-monitoring technology. “The work we’re doing with GE though their energy research labs, with access to their network, testing our products, has been extraordinary for a small, early-stage company.”
As you’ll see in the list below, this first round of winners was long on smart grid plays. This is no accident. Smart grid complements GE’s own ambitions in advancing its in-house power distribution and grid management technology.
Smart grid also offers some of the best growth potentials in clean tech, too, as Steve Vassallo of Foundation Capital pointed out during the announcement. While many cleantech plays are focused on the supply side of the opportunity — whether it’s converting photons to electrons, or switch grass to fuel — they’re very capital expensive to take commercial.
Conversely, Vassallo added, opportunities to reduce demand are more capital-efficient, faster to deploy, and not as dependent on subsidies because the solutions can deliver such quick savings to customers.