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Houston named semifinalist for major NSF energy transition funding opportunity

ON TO THE NEXT ROUND

Houston is in the running to receive millions from a program from the National Science Foundation. Photo via Getty Images

The National Science Foundation announced 34 semifinalists for a regional innovation program that will deploy up to $160 million in federal funding over the next 10 years. Among the list of potential regions to receive this influx of capital is Houston.

The Greater Houston Partnership and the Houston Energy Transition Initiative developed the application for the NSF Regional Innovation Engine competition in collaboration with economic, civic, and educational leaders from across the city and five regional universities, including the University of Houston, The University of Texas at Austin, Texas Southern University, Rice University, and Texas A&M University.

The proposed project for Houston — called the Accelerating Carbon-Neutral Technologies and Policies for Energy Transition, or ACT, Engine — emphasizes developing sustainable and equitable opportunities for innovators and entrepreneurs while also pursuing sustainable and equitable energy access for all.

“The ACT Engine will leverage our diverse energy innovation ecosystem and talent, creating a true competitive advantage for existing and new energy companies across our region," says Jane Stricker, senior vice president of energy transition and executive director for HETI, in a statement. "Texas is leading the way in nearly every energy and energy transition solution, and this Engine can catalyze our region’s continued growth in low-carbon technology development and deployment."

If Houston's proposal is selected as a finalist, it could receive up to $160 million over 10 years. The final list of NSF Engines awards is expected this fall, and, according to a release, each awardee will initially receiving about $15 million for the first two years.

"Each of these NSF Engines semifinalists represents an emerging hub of innovation and lends their talents and resources to form the fabric of NSF's vision to create opportunities everywhere and enable innovation anywhere," NSF Director Sethuraman Panchanathan says in a news release. "These teams will spring ideas, talent, pathways and resources to create vibrant innovation ecosystems all across our nation."

The NSF selected its 34 semifinalists from 188 original applicants, and the next step for Houston is a virtual site visit that will assess competitive advantages, budget and resource plans for R&D and workforce development, and the proposed leadership’s ability to mobilize plans into action over the first two years.

"Houston is poised, like no other city, to lead the energy transition. The ACT Engine presents a remarkable opportunity to not only leverage the region's unparalleled energy resources and expertise but also harness our can-do spirit. Houston has a proven track record of embracing challenges and finding innovative solutions,” says Renu Khator, president of the University of Houston, in the statement. “Through the collaborative efforts facilitated by the ACT Engine, I am confident that we can make significant strides towards creating a sustainable future that harmonizes economic growth, environmental protection and social equity."

NSF Engines will announce awards this fall after a round of in-person interviews of finalists named in July. With Houston's track record for building thriving industry hubs in energy, health care, aerospace, and the culinary arts, the region is eager to establish the next generation of leaders and dreamers responding to some of the greatest economic and societal challenges ever seen in America.

“Our energy innovation ecosystem is inclusive, dynamic, and fast growing," says Barbara Burger, energy transition adviser and former Chevron executive, in the release. "The ACT Engine has the potential to increase the amount of innovation coming into the ecosystem and the capabilities available to scale technologies needed in the energy transition. I am confident that the members of the ecosystem — incubators, accelerators, investors, universities, and corporates — are ready for the challenge that the ACT Engine will provide."

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The convergence of green banking with evergreen experimentation in support of a growing green economy sounds like just the right shade of green. Photo by micheile henderson/Unsplash

Green banking meets evergreen R&D with recent MOU

MONEY + MATTER

The term “Energy Transition” doesn’t merely imply change, it demands it. And with change comes another kind of change–usually of the dollars and cents kind.

While many aspire to embrace more sustainable and cleaner energy solutions in their communities, the affluence needed to deploy necessary infrastructure often sits just outside of reach. Until now, that is.

With the rise of “green banking,” securing financing for the adoption of energy efficiency, implementation of decarbonization technologies, and broader provision of renewable energy is now more accessible. Funds at green banks, backed by a blend of public and philanthropic contributions, tap into the modern trend of crowdfunding to support egalitarian and climate improvement efforts.

However, green bank financing is structured with repayment of–or a return on–capital expected at the end of the term, meaning approval tends only to be granted to proven and established projects well past the research and development stage. Given the Energy Transition is, for the most part, still in its infancy, clearing such hurdles can be difficult.

But Houston is full of dreamers and doers; researchers and entrepreneurs eager to tackle the next big challenge. It would come as no surprise then, that Texas’ first green bank, the Clean Energy Fund of Texas (“CEFTx”), bucks tradition with a novel Memorandum Of Understanding (“MOU”) co-signed by the Houston Advanced Research Center (“HARC”) to finance efforts staunchly entrenched in R&D activity.

As the Energy Transition foothold grows, Houstonians are compelled not just to invest in green initiatives, but to drive them. Which only makes sense, considering the deep expertise in energy innovation led most recently by the Houston-area shale revolutionaries from Mitchell Energy. Established over 40 years ago by George P. Mitchell himself, HARC plants the seeds of transformation at the intersection of science, resilience, sustainability, and the environment.

Per the March 29 news release from CEFTx, John Hall, President & CEO of HARC says, “We are excited to join forces with the team at Clean Energy Fund of Texas as they drive green investment in low-income and disadvantaged communities. Our research expertise and experience in managing state and federal grants will be a true benefit to Texans.”

The recent MOU brings Energy Transition visionaries the capital necessary to explore, test, develop, and deploy innovative solutions from conception to maturity. Entrepreneurs at all stages of the business lifecycle are encouraged to apply for funding on the CEFTx website or connect with HARC at an upcoming event to discover how the two entities can take ideas from dream to reality.

“It’s an honor to work with the esteemed researchers at HARC, who have been studying sustainability for decades,” says Stephen Brown of CEFTx in the release. “Together we can be even more effective at kickstarting investments in solar power, retrofits, and other technologies that help create the green workforce of tomorrow.”

The fresh approach to funding set up by CEFTx and HARC positions new companies to succeed and enables existing companies to progress in the transition to a more sustainable #futureofenergy. It’s just the sort of sense that is needed to truly drive change.

Kanin Energy set up shop in Greentown Labs last year to grow its impact on the energy transition. Photo via Getty Images

This energy transition startup taps Houston to grow, build its waste-heat-to-power tech

eyes on hou

Waste heat is everywhere, but in Houston, the Energy Capital of the World, it is becoming a hot commodity. What is it? Janice Tran, CEO of Kanin Energy, uses the example of turning ore into steel.

“There’s a lot of heat involved in that chemical process,” she says. “It’s a waste of energy.”

But Kanin Energy can do something about that. Its waste-heat-to-power, or WHP, concept uses a technology called organic rankine cycle. Tran explains that heat drives a turbine that generates electricity.

“It’s a very similar concept to a steam engine,” she says. Tran adds that the best term for what Kanin Energy does is “waste heat recovery.”

Emission-free power should be its own virtuous goal, but for companies creating waste heat, it can be an expensive endeavor both in terms of capital and human resources to work on energy transition solutions. But Kanin Energy helps companies to decarbonize with no cost to them.

“We can pay for the projects, then we pay the customers for that heat. We turn a waste product into a revenue stream for our customer,” Tran explains. Kanin Energy then sells the clean power back to the facility or to the grid, hence decarbonizing the facility gratis. Financing, construction, and operations are all part of the package.

Kanin Energy began at the height of the COVID-19 pandemic, in the spring of 2020.

“We started like a lotus. A lotus grows in mud — you start in the worst conditions and everything is better and easier from there,” says Tran.

That tough birth has helped provide the team with a discipline and thoughtfulness that’s been key to the company’s culture. Remote work has forced the team to get procedures clearly in place and react efficiently.

Back in May of 2020, its inception took place in Calgary. But the team, which also includes CDO Dan Fipke and CTO Jake Bainbridge, began to notice that many of their customers were either based in Houston or had Houston ties.

A year ago, the Kanin team visited Houston to see if the city could be a fit for an office. In July of 2022, Tran opened Kanin Energy offices in Greentown Labs.

“We’re hiring and building our team office out of Greentown. It’s been really great for us,” she says.

With the company now in its commercialization stage, Tran says that becoming part of the Houston energy ecosystem has been invaluable for Kanin.

The investments being made in climate tech and in energy transition make Space City the right place for the company. For Canadian-born Kanin Energy, Houston is now home. Investors across the nation, including Texas, are now helping Kanin to blossom, much like the lotus.

Janice Tran is the CEO and co-founder of Kanin Energy. Photo via LinkedIn

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This article originally ran on InnovationMap.

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Tesla Q1 profit falls by more than half, but stock jumps amid production of cheaper vehicles

EV evolution

Tesla’s first-quarter net income plummeted 55 percent, but its stock price surged in after-hours trading Tuesday as the company said it would accelerate production of new, more affordable vehicles.

The Austin, Texas, company said it made $1.13 billion from January through March compared with $2.51 billion in the same period a year ago.

Investors and analysts were looking for some sign that Tesla will take steps to stem its stock's slide this year and grow sales. The company did that in a letter to investors Tuesday, saying that production of smaller, more affordable models will start ahead of previous guidance.

The smaller models, which apparently include the Model 2 small car that is expected to cost around $25,000, will use new generation vehicle underpinnings and some features of current models. The company said it would be built on the same manufacturing lines as its current products.

On a conference call with analysts, CEO Elon Musk said he expects production to start in the second half of next year “if not late this year.”

New factories or massive new production lines won't be needed for the new vehicles, Musk said.

“This update may result in achieving less cost reduction than previously expected but enables us to prudently grow our vehicle volumes in a more capex efficient manner during uncertain times,” the investor letter said.

But Musk gave few specifics on just what the new vehicles will be and whether they would be variants of current models. “I think we’ve said all we will on that front,” he told an analyst.

He did say that he expects Tesla to sell more vehicles this year than last year's 1.8 million.

The company also appears to be counting on a vehicle built to be a fully autonomous robotaxi as the catalyst for future earnings growth. Musk has said the robotaxi will be unveiled on Aug. 8.

Shares of Tesla rose 11 percent in trading after Tuesday’s closing bell, but they are down more than 40 percent this year. The S&P 500 index is up about 5 percent for the year.

Morningstar analyst Seth Goldstein said the company gave guidance about its future that was clearer than in the past, allaying investor concerns about production of the Model 2 and future growth. “I think for now we're likely to see the stock stabilize," he said. “I think Tesla provided an outlook today that can make investors feel more assured that management is righting the ship.”

But if sales fall again in the second quarter, the guidance will go out the window and concerns will return, he said.

Tesla reported that first-quarter revenue was $21.3 billion, down 9 percent from last year as worldwide sales dropped nearly 9 percent due to increased competition and slowing demand for electric vehicles.

Excluding one-time items such as stock-based compensation, Tesla made 45 cents per share, falling short of analyst estimates of 49 cents, according to FactSet.

The company’s gross profit margin, the percentage of revenue it gets to keep after expenses, fell once again to 17.4 percent. A year ago it was 19.3 percent, and it peaked at 29.1 percent in the first quarter of 2022.

Over the weekend, Tesla lopped $2,000 off the price of the Models Y, S and X in the U.S. and reportedly made cuts in other countries including China as global electric vehicle sales growth slowed. It also slashed the cost of “Full Self Driving” by one third to $8,000.

Tesla also announced last week that it would cut 10 percent of its 140,000 employees, and Chief Financial Officer Vaibhav Taneja said Tuesday the cuts will be across the board. Growth companies build up duplication that needs to be pruned like a tree to continue growing, he said.

Musk has been touting the robotaxi as a growth catalyst for Tesla since the hardware for it went on sale late in 2015.

In 2019, Musk promised a fleet of autonomous robotaxis by 2020 that would bring income to Tesla owners and make their car values appreciate. Instead, they've declined with price cuts, as the autonomous robotaxis have been delayed year after year while being tested by owners as the company gathers road data for its computers.

Neither Musk nor other Tesla executives on Tuesday's call would specify when they expect Tesla vehicles to drive themselves as well as humans do. Instead, Musk touted the latest version of Tesla’s autonomous driving software — which the company misleadingly brands as “Full Self Driving” despite the fact that it still requires human supervision — and said that “it’s only a matter of time before we exceed the reliability of humans, and not much time at that.”

It didn’t take the Tesla CEO long to begin expounding on the possibility of turning on self-driving capabilities for millions of Tesla vehicles at once, although again without estimating when that might actually occur. He went on to insist that “if somebody doesn’t believe that Tesla is going to solve autonomy, I think they should not be an investor in the company.”

Early last year the National Highway Traffic Safety Administration made Tesla recall its “Full Self-Driving” system because it can misbehave around intersections and doesn’t always follow speed limits. Tesla's less-sophisticated Autopilot system also was recalled to bolster its driver monitoring system.

Some experts don't think any system that relies solely on cameras like Tesla's can ever reach full autonomy.

Chevron launches $500M clean energy fund to target low carbon fuels, advanced materials

fresh funding

Chevron Technology Ventures has announced its latest fund raised to deploy capital into clean energy technology.

CTV's Future Energy Fund III has reportedly launched with $500 million — an increase from its second fund from 2021 that was valued at $400 million. The inaugural Future Energy Fund was established in 2018. Each fund has targeted separate technologies — from capture, emerging mobility, and energy storage in fund I to industrial decarbonization, emerging mobility, energy decentralization, and circular economy in fund II.

"Future Energy Fund III, launched in 2024, will continue to look forward in the areas of focus for the earlier two funds and aims to expand investment in the areas of novel low carbon fuels, advanced materials, and transforming carbon to higher-value products," reads Chevron's website describing the Future Energy Funds.

The first two funds have invested in over 30 companies and has more than 250 other investors supporting low-carbon innovations.

CTV, based in Houston, has strategic partnerships with organizations within the Houston innovation ecosystem, including Greentown Labs, Rice Alliance for Technology and Entrepreneurship, the Ion, The Cannon, and the HX Venture Fund.

"CTV engages a range of startup companies, investors, incubators and accelerators to access technology that can be used across Chevron now and in the future to enable us to operate more efficiently, to lower the carbon intensity of our operations and launch viable new businesses," reads the CTV site.

Founded in 1999, CTV invests in emerging energy technologies as well as incubating startups in its Catalyst Program. Last month, CTV added Cerebre, a software-as-a-service company that works with its customers to unlock and leverage data to tap into AI tools and digitization, to the Catalyst Program.

UH inks international partnership for hydrogen solutions

mou for hou

The University of Houston and Heriot-Watt University in Scotland signed a memorandum of understanding earlier this month that celebrates an official partnership between the schools in education, research and innovation for the energy transition.

The universities will particularly focus on hydrogen energy solutions, according to a statement from UH.

"I am thrilled to witness the official celebration of our shared commitment to advancing transformative energy solutions,” Ramanan Krishnamoorti, vice president for energy and innovation at UH, says in a statement. “Through this partnership, we aim to harness our collective expertise to address pressing energy challenges and drive sustainable innovation on a global scale."

UH President Renu Khator and Principal, Vice-Chancellor and Professor of HWU Richard A. Williams signed the memorandum on April 11. Faculty members from UH and HWU then held a two-day technology workshop in Houston where the teams discussed areas of collaboration and future projects.

Through the partnership, the schools aim to offer more opportunities for students and faculty via interdisciplinary research, student exchange programs, joint degree offerings and industry partnerships around the world. HWU, for instance, has five campuses throughout Scotland, the UAE and Malaysia.

“This agreement represents a pivotal milestone in the international development of our global research institutes, forging a new partnership to address the most pressing societal challenges that lie ahead,” Gillian Murray, deputy principal of business and enterprise at HWU who attended the signing, adds in the statement.

Houston has been a hub for notable partnerships focused on the energy transition in recent months.

The Greater Houston Partnership and the Houston Energy Transition Initiative announced last month during CERAWeek that they had signed a memorandum of understanding with Argonne National Laboratory, a federally-funded research and development facility in Illinois owned by the United States Department of Energy and run by UChicago Argonne LLC of the University of Chicago.

The partnership aims to spur the development of commercial-scale energy transition solutions.

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