Academics and private industry invest millions of dollars each year in energy research, but only a handful of ideas advance from theory to application.
Nevertheless, investors say there’s usually a secret sauce behind those who do succeed.
Bill Ellison, CEO of Baton Rouge-based Innovation Catalyst Inc., a nonprofit venture development organization, says marketable research often provides a scalable and affordable solution to an industry-wide “real world” problem.
“The innovation originates from someone who is an expert, has the necessary domain expertise and is able to pair their solution with a really big problem,” he says. “Better yet, it solves a problem for a huge market, and they already have a potential customer.”
Ellison accelerates the growth of early-stage businesses into venture-ready companies by providing capital, connections and coaching. In recent months, he has collaborated frequently with researchers funded by grants through the FUEL, or Future Use of Energy in Louisiana, initiative.
Supported by a National Science Foundation grant, FUEL is a partnership between LSU and more than 50 universities, technical colleges, state agencies and private industry partners.
FUEL and other accelerator programs serve a critical role, as they connect fledgling startups with mentors and investors.
“Our first priority is funding research by early-stage companies who are ready for professional funding,” says Stephen Loy, FUEL’s director of technology commercialization. “They’re at a point where they need a little bit more ‘oomph’ to get over that hump so that they can create a proof-of-concept and bring this to professional funders.”
FUEL funded five companies in its first year, with another five expected this fall.
Initially, we issued a call for applications and received about 80,” Loy says. “That blew me away. Until then, we weren’t sure of the landscape for startups and energy.”
In his role, Loy works with the selected companies to ensure they’re getting the resources they need and that they’re in a position to receive investor funding. Many times, the passion and enthusiasm of the researcher are significant factors in determining whether Ellison chooses to invest.
“You want to invest in the jockey, not the horse,” he says. “It starts with the team. If you don’t have someone who you think is going to be a rock star, who has integrity and is going to work hard, pretty much the evaluation stops there.”
Ellison is the sole investor in Codegig, one of the initial FUEL grant recipients. Codegig designs and deploys computer systems to help clients optimize workflow and make better decisions. “There are also two energy companies I’m looking at investing in,” Ellison says. “We work together to make these companies succeed.”
Most of the successful energy industry startups in Louisiana have gone through similar accelerator programs, where they’re often connected with mentors and investors. Ellison is also CEO of the Red Stick Angel Network, a group of “angel” investors who identify, vet, fund and grow companies.
“There are a lot of individuals who look for deals themselves and they’re harder to find,” he says. “I think they’re missing out on a lot of good deals by not joining angel groups because these groups see a lot of deals. We want to see some traction and we’re throwing fuel on the fire.”
Shell invests in FUEL-funded companies through its GameChanger program. Led by program manager Veronica Simmonds, GameChanger works with startups and businesses on unproven early-stage ideas that have the potential to impact the future of energy.
Shell asserts that its technological capacity, customer mindset, operational experience and market knowledge place it at the forefront of innovative and collaborative approaches to help build a sustainable energy future.
The program has been actively assisting Louisiana companies for years. In May, New Orleans-based The Idea Village partnered with Shell to launch “Coastal Innovation Challenge 2025,” an initiative designed to support innovative, early-stage startups tackling coastal climate challenges.
The program offers up to $150,000 in non-dilutive funding from Shell GameChanger, along with mentorship, technical support and accelerator programming led by The Idea Village.
To date, Shell GameChanger has supported more than 150 breakthrough ideas globally, transforming unproven concepts into scalable technologies across energy, sustainability and digital transformation.
The collaboration with The Idea Village brings the program’s global vision to the Gulf South’s most pressing environmental issues.
Evaluating the value of a concept
Determining which ideas have the ability to take root in the “real world” is a tricky—but necessary—proposition. “FUEL’s not in the business of doing research for research’s sake,” Loy says.
“We’re in the business of funding research so that we can commercialize it on the other end.”
FUEL uses a complex rubric for evaluating its applications, and depends heavily upon its Technology Commercialization Subcommittee, comprised of a diverse mix of professional funders, business leaders, entrepreneurial support organizations and university academics.
“Everyone reviews each application and issues a score,” he adds. “I could evaluate something from a business standpoint, but I’m not a chemist. I need someone to tell me a little bit about what’s behind the science of it, so we need people to tell us.”
As they’re going through the process, committee members examine the science and practicality of the investment, Loy says, “as well as how implementable it is and how it benefits the industry at large. “We’re also looking at the scalability of it—the research might be cute in a lab, but how can you scale that to meet the needs of the energy industry?”
For applicants who make the cut, FUEL doles out grants in four allotments. The payments are treated as investments, whereby FUEL requires frequent updates and quarterly reports on their performance.
“Whether you’re talking about an energy company or a food product company, it really comes down to the investor and the entrepreneur,” Loy says. “Can people get behind this person? Because at the end of the day, you’re putting your money into this.
“The science and the product are important, but being able to move the product forward, both from a marketing and a funding angle, is a whole different side of it.”
The company’s strategic plan and profitability are equally important. “For a startup with a $1 million to $2 million valuation, we hope that in a year or so that valuation will be $10 million and then move up to $20 million,” he adds. “That’s the metric that we have in the back of our brain when we’re looking at these companies.”
FUEL’s six core pillars encompass everything from water to carbon sequestration, “but our north star is the ‘waste to wealth’ concept,” Loy says. In that vein, they seek to develop new industries from local waste streams, such as biomass from agriculture, which can be converted into renewable fuels.
Louisiana Green Fuels, a company partnered with FUEL, converts sustainable forestry waste into renewable transportation fuel, while other initiatives explore using sugarcane by-products for valuable products.
UNO entrepreneurs take to ‘The Beach’
Shafin Kahn, vice president of innovation and technology commercialization at the University of New Orleans, says the university’s 30-acre research and technology park, “The Beach,” has taken on an energy focus of its own in recent months.
The Beach fosters collaborations between academia, industry and entrepreneurial endeavors, as well as provides office and lab space for various technology-focused companies.
Increasingly, they’re approached by energy companies needing solutions to specific problems. Case in point—Gulf Wind Technology in Avondale asked for help in designing wind turbine blades.
“We connected Gulf Wind to one of our mechanical engineering faculty, and that collaboration continues today,” Kahn says.
A UNO electrical engineering professor is also assisting a local energy provider with modeling the impacts of hurricanes on the power grid, utilizing intermittent energy sources such as wind and solar to improve resilience.
“They’re seeking to determine what impacts that would have in terms of the stability and resilience of the grid,” Kahn says. “How do we get to the point where we can very quickly get back online after a storm or reduce the number of outages?”
Additionally, the university operates a large wave tank that researchers use to test how certain structures react to waves and other conditions in the ocean. The data is then used to design new ship hulls, oil structures and floating wind structures.
More recently, the university has taken a more active role in coordinating the commercialization of its research, a responsibility given to Kahn’s office. UNO faculty can help create marketing and business plans for the companies, and an innovation management class provides additional support.
“We’re basically taking over the patent management and folding that into our other entrepreneurial activities, such as StartUp UNO,” Kahn says, referring to a business pitch competition for undergraduate and graduate students.
“In turn, we’re helping turn ideas into business plans and creating an ecosystem for new technology development out of the university.”
