Leveraging the Feds

Federal research programs represent an opportunity for private industry to get additional resources applied to their RD&D projects and other business goals. Many companies, and a few utilities, have been successful at this for a long time.

This discussion is an initial introduction to what it takes to tap the Feds, and DOE/Labs in particular. If there is interest, UFTO stands ready to dig deeper.

The good news is that: it can be done, as evidenced by the companies that do it successfully and repeatedly (“best practice”). The bad news is that it isn’t easy, especially starting fresh. “Startup costs” may be considerable, and the ongoing costs are significant as well, particularly administrative. Companies with a lot experience have advised: don’t do it for a couple $100K; be in for the long haul; it’s a means, not an end; and start with knowing what you want to do. Bottom line– there are resources, programs, and mechanisms that can lead to leverage, but if you want to drink, you have to go to the well.

Federal Tech Transfer

Starting in the early 80’s, Congress and executive orders have been steadily reshaping U.S. federal research policy to expand the importance of technology transfer. Over time, it has become easier and easier for federal agencies to grant private parties the rights to technology and IP developed at federal labs. Working with industry is now the norm.

The emphasis on tech transfer is aimed to get results of federal R&D programs into use — thus fulfilling a (new) mission to help U.S. industry be more competitive. Where these efforts provide resources, industry gets a chance for leverage –it’s just the other side of the same coin.

Where federal spending is targeted at policy goals (such as conservation or advancing a new technology), utilities can be particularly appropriate partners. Another point to keep in mind–the labs are always looking for ways to maintain funding for their programs. An outside funder can gain tremendous leverage by adding resources to ongoing programs which can adapt to meet the funder’s own requirements.

If a private company wins a government award to develop new technology, it usually has to come up with matching funds (especially if it expects to hold on to the resulting IP). From the company’s point of view, their portion is leveraged substantially compared with a go-it-alone approach. (In the case a startup, an equity investor who provides the matching funds will find that his money goes that much farther.)

For a good overview and introduction to federal tech transfer, see the Federal Lab Consortium’s “Green Book”, available online or in hardcopy. (scroll down, on left margin under “Resources”)

There are many contracting mechanisms for working with the government, ranging from outright grants to actual fee-for-service. National labs in particular like to say that contracting should not be an obstacle, that they will find a way to make it work. (Non-U.S. companies shouldn’t be discouraged from looking into opportunities– there usually are ways to deal with restrictions that might otherwise interfere.)

– CRADA (Cooperative R&D Agreement)
– Cost Share/Cofund
– Licensing
– User Facilities
– Work-For-Others
– Personnel Exchange
– Data & Information Exchange
– Consulting & Technical Assistance (by Lab personnel)
– Contracts
– Financial Assistance
– Grants (SBIR, Clean Coal, STTR, TRP, ATP, etc.)
– Consortia (“Industry Partnerships”)
– Informal Collegial Contact!

The main agency for energy is obviously DOE, and other agencies have extensive energy programs as well (e.g., DOD , NASA, Commerce, EPA, Agriculture, Transportation, Interior, etc.). Within DOE, two major programs account for most of the relevant activity:
– Energy Efficiency & Renewable Energy (EREN)
– Fossil Energy (FE)

Solicitations are handled by headquarters, regional program offices, or labs. NREL and NETL in particular seem to be heavily involved in supporting headquarters with administering solicitations and managing programs.
NREL-Nat’l Renewable Energy Lab, CO
NETL- Nat’l Energy Technology Lab; WV, PA — formerly METC & PETC

Solicitations Listings

EREN provides this site as a general starting point

DOE’s Seattle Regional Office publishes a comprehensive compilation of solicitations — from multiple agencies and foundations — relating to energy efficiency, renewable energy, and sustainable development. They maintain online a 15-20 page “Open Solicitations Summary” and also send out a monthly email announcement of all new items.
Go to “Open Solicitations” link to see the new monthly listings. Also note instructions on how to be added to the email distribution. The link “Open Solicitations Summary” will take you to the archive where you can download the complete list. (Be sure to look at the last page of the summary for additional information about sources of information.)

On behalf of Fossil Energy, NETL provides alerts, solicitations, CRADA lore, etc., at:
The “Solicitations” link gives a list of current and future opportunities (plus a link to archives).

All DOE solicitations are now handled through the new centralized Industry Interactive Procurement System (IIPS). It is used to post solicitations and amendments, receive proposals/applications, and disseminate award information. Entities wishing to participate in these solicitations will need to register at the IIPS Webster. Proposals will only be accepted through IIPS, unless otherwise indicated within the solicitation document.

IIPS takes some getting used to. “Guest” users can see most everything, but navigation is not easy. Guest users click on “Browse Opportunities”, and are stuck scrolling through 100’s of listings by number. It’s worth registering for a password, otherwise you can’t use the “Main View” which gives you much better sorting capabilities (e.g., by contracting office).
>> or

[Caution: Don’t be surprised to see that “solicitations” in IIPS include everything DOE buys, from research (RFPs) to light bulbs to janitorial services. The Seattle list is a valuable filter.]


Some additional links that provide information and guidance on working with the government:

Argonne National Lab Tech Transfer Office

Laboratory Coordinating Council
Specifically geared to the major “Industries of the Future” from the DOE Office of Industrial Technology.

DOE Hydrogen and Fuel Cell Program
— Sign up to receive notices (right margin, at the bottom)


Advanced Technology Program: partners with the private-sector to develop broadly beneficial technologies. ATP applies across almost any technology area–R&D, (*not* commercialization). Proposal teams often include private companies, startups, labs, universities, etc.


Utilities and DOE

Some utilities have been working closely with DOE for a long time, and others are just now entering the game.

Electricity Advisory Board
Established Nov 2001 to advise on electricity policy issues. Specifically, the DOE’s electricity programs; current and future capacity of the electricity system; issues related to production, reliability and utility restructuring; and coordination between the DOE and state and regional officials and the private sector on matters affecting electricity supply and reliability. Chair is Lynn Draper, CEO of AEP. Many of the CEO members come from utilities that are household words in DOE. (NiSource, DTE, SoCo, etc.)

The Clean Coal Program, which began mid 80’s, has funded major projects with companies like AEP, Tampa Elec, SoCo, etc. The recent solicitation (Clean Coal Power Initiative Round One Proposals – 8/02) attracted a number of new players (Ameren, IP&L, LG&E, Wepco, etc.).

Efficiency & Renewables likewise sees old and new companies at its conferences and responding to its solicitations, particularly in DG, Storage, Hydrogen, etc. (SCE, Nipsco, DTE, Com Ed, SRP…)


Here is some advice compiled from conversations with people at DOE and in the utilities.

Know what DOE is trying to do that fits with your company’s goals
(attend workshops, review meetings, conferences etc.)

Get to know the people and programs, and understand what they’re up to.
( might be able influence what goes into an RFP)

Information/access is public, but only some companies bother to look.
extent of involvement depends on objectives

Work out a strategy, pick out a couple of areas, and put foot in the door.

Key is to find a (programmatic) match and a (contracting) vehicle.
(most DOE work is competed and cost-shared)

Follow the solicitations; understand procedures

Congressional earmark is a possibility, but doesn’t make any friends in DOE

Companies participate (in R&D/DOE) for variety of reasons
(PR, reg. pressures, …and sometimes… actual business goals!)

Don’t need to be insider (but it doesn’t hurt). DOE welcomes new faces and new ideas.

On Site Hydrogen for Generator Cooling

Proton Energy Systems, as you know, is one of the prominent new companies on the new “energy technology” scene, having done its IPO last Fall. One thing that sets them apart from other fuel cell companies is the fact that they have a successful commercial product line, namely the HOGEN hydrogen generator. While they continue development of an advanced regenerative fuel cell system based on PEM technology, the HOGEN is already entering the market, in many exciting applications. In discussions with David Wolff, VP of Marketing and Sales at Proton, I’ve learned that they are gearing up a significant effort to introduce HOGEN for generator cooling. I asked Dave to outline the main points of their story, so that UFTO companies could check into it sooner. Here is his note.

Thank you, Ed, for your enthusiastic support and knowledgable advice as Proton positions our products within the electric generator cooling market. As you are aware, electric generator cooling is only one of many exciting market segments for HOGEN hydrogen generators, but the electric generator cooling segment has many unique attributes which make this the right time for an onsite hydrogen solution. I will review the important issues in this e-mail.

Onsite hydrogen is not new in electric generator cooling:

– Onsite hydrogen via electrolysis is not a new idea for electrical generator cooling. General Electric sold electric generators equipped for self-generation of hydrogen using old-style KOH (potassium hydroxide – “caustic”) electrolyzers for many years during the mid-20th century. These systems were generally shipped to developing countries where the hydrogen infrastructure was non-existent, and the self-generation of hydrogen made it possible to have the high efficiency of a hydrogen cooled generator in these isolated areas. The downside to these old style electrolyzers was that they were very expensive, very labor intensive to operate (often requiring a dedicated staff of their own), were expensive to purchase, required constant maintenance, involved hazardous KOH electrolyte and asbestos cell separators, and had to be equipped with a compressor because they made hydrogen at a pressure of less than one psig.

How Proton’s HOGEN hydrogen generator has changed the playing field for hydrogen generators:

Proton’s HOGEN hydrogen generator uses innovative Proton Exchange Membrane (PEM) electrolysis technology instead of the customary liquid electrolyte technology to achieve electrolysis. But it is not just the interesting technology, but the total advantages of the system that make the difference:

– Very compact systems – our boxes are 10% of the size and weight of the “traditional” KOH systems, and half the size and 30% of the weight of the “advanced” KOH systems now being introduced by Stuart, Hydrogen Systems and others.
– One box, all-in-one “Plug and Play” design – our systems contain all required components in a single box for ease of installation.
– The average installation time for a HOGEN 40 hydrogen generator is a couple of hours: a 380 installation and startup takes one day start to finish.
– Unmanned operation – Proton’s HOGEN hydrogen generators operate unattended and require routine maintenance only once per year
– Fast delivery from stock – Proton has begun routine production of the HOGEN 40 hydrogen generator and they will be available for rapid delivery
– Process pressure without a compressor – HOGEN hydrogen generators deliver 150 psig or higher (depending on model) UHP grade hydrogen without the need for a mechanical compressor, eliminating the cost, electrical consumption, maintenance and operational complexity associated with the use of a hydrogen compressor.
– Highest purity – our systems deliver 99.999+% pure UHP grade hydrogen without the need for purification and without the risk of KOH carryover
– Aggressive pricing – our systems offer superior performance and are priced at or below the cost of a complete system offered by our competitors.

While Proton has introduced exciting new technology and convenience, some of the excitement is driven by changes in the electrical utility
market and industrial gas market:

– Under regulation, utilities used to have little incentive to reduce costs, since they were guaranteed a cost-plus profit – in essence
– the more they spent, the more they made. All this has changd under deregulation, and utilities are examining every chance to reduce costs.
– The cost reduction efforts have squeezed plant staffing, and the staff that used to be used to monitor the frequent hydrogen
– deliveries (hydrogen is a highly hazardous material and procedure is that the deliveries would be monitored by plant personnel) is no longer available. By eliminating or reducing deliveries, a HOGEN hydrogen generator frees up staff.
– The price of hydrogen has been rising at the rate of 10+% annually for the past several years (propelled by increases in natural
– gas, diesel fuel, regulation and labor) – the “cost to beat” for electrolysis is getting easier.

It is important to note that use of a HOGEN hydrogen generator may not eliminate the need to get delivered backup gas, and to have the ability to get hydrogen gas delivered for a generator refill (approximately once annually). The most cost-effective generator is sized to meet the steady-state needs of a generator, not the refill. For example, we know that a GE Frame 7 gas turbine requires approximately 21 cubic feet of hydrogen per hour for makeup gas, but requires 7500 scf of hydrogen to refill the generator after it has been purged of hydrogen. The refill gas is best supplied though a bulk delivery by an industrial gas supplier or some other supply method.

Also be aware that Proton’s fundamental business philosophy is that we will access our markets through qualified incumbent distribution methods. In the case of hydrogen supply, the incumbent method is through industrial gas companies such as Air Liquide, Praxair, Airgas etc. Since we believe that sites will continue to require backup storage (often rented) and delivered gas for refilling after a purge, we believe that Proton’s business goals and the customers’ total requirements for technology, products and services may be best suited by accessing HOGEN hydrogen generators through industrial gas suppliers.

Beyond products and services, industrial gas suppliers can supply financing services to electric utilities. We are finding that in the new business environment, that generating stations are looking for a maximum two year payback on capital expenditures. We are often right on the edge of a two year payback, and thus it is difficult for the facility to make the right decision. Financing via a full service lease from an industrial gas company makes it an operating expenditure rather than a capital investment and makes the right decision easier to implement.

Current models of HOGEN hydrogen generators deliver 150-200 psig hydrogen without a compressor. We expect to be building systems within the near future that can deliver 1600 psig and up without a compressor. This would eliminated the need for delivered backup hydrogen because the systems would be able to pressurize the existing tube banks present at many electrical generating plants to their working storage pressure – making our own backup gas.

While the opportunities in generator cooling for HOGEN systems are exciting in the U.S. and in Western Europe, there are even more exciting opportunities possible outside of these areas. In many developing countries, regional and national utilities have been so desperate for reliable hydrogen supply that decades ago they purchased a small number of old fashioned KOH electrolyzers with large reciprocating compressor which they set up at centralized sites and they fill their own cylinders which they then truck hundreds of miles to their various electric generation sites. Thus they have the worst of both worlds – high cost hydrogen, and high cost distriibution. Our proposed “White paper” (which may be the presentation that we give at Power-Gen Latin America in Oct ’01) will talk about replacing this far flung network with compact onsite hydrogen generators at each generation station, allowing the old central systems to be retired, decreasing costs and increasing reliability.

Hope this information is helpful. Thank you again for your enthusiasm and assistance.

David E. Wolff
V.P. Marketing and Sales
Proton Energy Systems
50 Inwood Rd.
Rocky Hill, CT. 06067
(860) 571-6533 x254
(860) 571-6505 FAX