Tech startup: New Sky Energy Inc.
INITIAL LIGHT BULB: Physicist Deane Little moved to Boulder in 2006 with the idea of starting a company, only he wasn't quite sure what kind of company. He stumbled upon the concept of using water electrolysis to remove carbon from flue gas, and inspiration struck: New Sky Energy's now-patented technology makes "high value chemicals out of low-value salts," says Little, now the company's CEO. "I was amazed no one had commercialized it yet." After a year refining the technology and the business model, Little met Mike Ashford, a veteran of the carbon market, at a 2008 Rockies game, and he came aboard as the executive vice president of business development.
The company was a national finalist in last year's Cleantech Open (www.cleantechopen.com), one of three companies from the Rocky Mountain region to advance from an initial field of more than 60 companies, ultimately finishing in the top five. "We think we would have won, but we were a little earlier stage," Little says.
IN A NUTSHELL: New Sky Energy utilizes water electrolysis to turn water, carbon dioxide and inexpensive salts into hydrogen, oxygen, sulfuric acid and sodium hydroxide - a.k.a. caustic soda or lye. The industrial markets for these byproducts are so large that Little anticipates the company can be profitable even without a carbon market or cap-and-trade legislation.
"You can do it anywhere because carbon dioxide is everywhere, but you can get more carbon dioxide from near a coal-fired power plant," Little says. Such a location is a mixed blessing, however, due to increased concentrations of other contaminants as well.
Ashford pitches New Sky's technology in less technical terms: "We're mining carbon out of the atmosphere rather than the ground.
"We're essentially enabling companies and individuals to purchase products that have a lower carbon footprint than ever before," Ashford adds. "We essentially become a way to diversify supply away from the standard commodity markets to a dedicated supply that has all of these environmental benefits. It's a disruptive proposition - it changes the way a number of consumer goods can be made." He cites makers of plastics and glass as large consumers of sulfuric acid and lye.
New Sky's business model calls for the technology to be co-located at the plants of large buyers, who in turn can produce carbon-negative goods that cost the same or potentially less than the carbon-positive competition.
"With carbon-capture technology, usually you're generating something bad - you're creating another problem," says Mark Herbst, a veteran of high-tech manufacturing and entrepreneur who has served on New Sky's board since early 2010. "(New Sky's) solution doesn't generate other problems downstream. A lot of these new-energy companies are so dependent on high energy prices and government subsidies to be profitable." Not New Sky. "They don't need subsidies or oil to be at $100 a barrel. They make sense."
THE MARKET: The global market for the byproducts of New Sky's carbon-capture processes - sulfuric acid and lye - is on the order of $250 billion a year, Ashford says. They are used in the manufacturing of plastics, glass and numerous other goods.
FINANCING: New Sky Energy is staked with angel-investor cash and a contract with a California water agency to test its technology to turn hyper-salty water into a sellable product. The capital plan calls for an infusion of $1 million to $1.5 million to carry the company through pilot testing to commercialization in 12 to 18 months, followed by the pursuit of a $4.5 million Series A round - "but it could move faster," Ashford says.
where: boulder | FOUNDED: 2007 | www.newskyenergy.com
"There's more carbon in the form of anthropogenic emissions than there is in all of the consumer goods sold every year. And it makes better sense to sell carbon than to sequester it and store it underground."
- New Sky Energy CEO Deane Little