The California Clean Energy Fund announced it will award a $1-million grant to a Northern California university to establish a center for energy efficiency.

“We consider energy efficiency to be a major piece of our overall clean-energy agenda,” said Lisa Bicker, president of the fund known as CalCEF. “The creation of this center is one clear signal we’re sending that we believe energy efficiency should receive attention.”

Energy efficiency has been in the national limelight as the U.S. Senate debates energy conservation measures such as reducing oil use and increasing energy efficiency standards and incentives (see Clean Energy Gets a Boost).

Clean Energy Gets a Boost

Environmentalists had flamed U.S. President Bush’s clean-energy bill for its lack of enough energy conservation (see Clean Energy Firms React to Bush’s Latest Proposals).

In the meantime, states have taken the lead in energy efficiency and clean energy. “The states and much of the private sector are well ahead of the federal government,” Rodrigo Prudencio, a principal with Nth Power, said last week. The California Energy Action Plan lists energy efficiency as the state’s highest priority.

But Ms. Bicker said state universities have paid little attention to energy efficiency, and no other energy efficiency center exists yet in California.

California

CalCEF is a $30-million fund that was created as part of the 2003 Pacific Gas and Electric’s bankruptcy settlement. The utility filed for bankruptcy after the California power crisis in 2001, and shareholders must pay the money gradually from 2004 to 2008.

California

The charter requires that CalCEF is used to benefit the PG&E service territory in Northern California. That’s why CalCEF decided to restrict the grant applicants to universities in the upper part of the state, Ms. Bicker said.

Northern California

CalCEF will accept proposals from universities until December 15, and will consider their leadership qualifications, an action plan identifying initial work products, a plan for involving the public and private sectors, and their strategy for launching and building the center, including a five-year plan for staffing and fundraising, said Ms. Bicker.

“We’re looking for a center that can advance innovations and accelerate the commercialization of energy-efficient products and services,” she said.

In March, the fund announced that three venture-capital firms—Nth Power, Draper Fisher Jurvetson, and VantagePoint Venture Partners—would each invest and manage $8.5 million of the fund, along with some of their own money.

The companies said the $25.5 million would be invested in clean-energy companies, including renewables, energy efficiency, energy storage, and enabling technologies and services. All profits will be reinvested into the fund.

Mr. Prudencio said he agreed with CalCEF’s decision to invest in a college center. Combining a variety of funding methods is a “unique and valuable” approach to advancing clean-energy technology in California, he said.

California

“[CalCEF] has made a strong commitment to venture stage investing and is now making a further strong commitment to research stage projects,” he said. “Both advance the promise of more energy technology and advanced energy solutions for California.”

California

Ms. Bicker said CalCEF chose to spend the $1 million on a university center, rather than on a startup, because “We believe the potential for return is much greater than perhaps it might be by investing in a single company.”

A university can take an interdisciplinary approach, combining the government, the private sector, and academia, and influence the entire energy efficiency landscape, she said.

“If you look at biotech, software, or computers, much of that innovation was born in university laboratories,” said Ms. Bicker. “It makes sense that we in California would leverage and harness the tremendous resources contained in our universities and point it toward the model of energy efficiency.”

California

After the university investment and VC investments are made, CalCEF will have $3.5 million left over. CalCEF hasn’t decided what to spend that money on, but wants to develop a “California-centric” portfolio, with investments in areas where the state can excel, Ms. Bicker said.

California has a natural advantage in such areas as diverse renewable products, advanced transportation, and IT-related clean technology, as well as in energy efficiency, said Ms. Bicker.