Purdue University launches Center for Energy Systems and Policy to meld research, business, public policy

Along with Indiana’s ambition to become a nexus of alternative-energy development has come growing recognition in academia
that the challenge extends beyond perfecting a technology.

Engineers often are so focused on technical outcomes of their work that they don’t see the potential economic or public policy
implications. So, early last month, Purdue University launched the Center for Energy Systems and Policy to make sure its researchers
are working early in the process with business and public-policy experts at the university.

A little more predictive analysis of this sort may have lessened the unintended consequences of the rapid growth of the alternative
fuel ethanol, for example. Few know that better than Wally Tyner, co-founder of the center and a professor of agricultural
economics.

Tyner and his colleagues sounded alarm bells a few years ago, when ethanol plants sprouted in Indiana and other Midwestern
states. They predicted that the strong demand for corn would raise corn prices and, ultimately, prices at the supermarket.

Sure enough, not only did breakfast cereal become more expensive but so did meat, because corn is an animal feed. While corn
farmers celebrated higher bushel prices, profits were dashed for Indiana’s pork industry, the fifth-largest in the nation.

The impact intensified when Congress mandated that refiners blend an increasing amount of ethanol into gasoline as a way to
reduce demand on foreign oil.

"People hadn’t thought of the price of corn because they were looking at it one ethanol plant at a time," Tyner
said. "We
were ahead of the game because we were beginning to look at it as [part of] a whole system."

Tyner’s team wants to take a look in a more systematic way at other energy issues, such as the economics of time-of-day electric
pricing and plug-in electric vehicles.

General Motors plans to roll out a plug-in electric car by the end of 2010 and other automakers are exploring plug-ins. Most
owners likely will recharge them at night. That also happens to be when electric usage tends to be lower and thus less costly
for utilities to supply. Some utility companies already allow customers to buy electricity during the night at cheaper, off-peak
rates, via the use of electric meters that keep track of how much electricity is used at different times of the day and night.

Might the center, for example, be able to generate a model concerning time-of-day pricing’s potential in optimizing the market
for plug-in hybrids?

"The incremental cost of generating a little more electricity at night to charge plug-in hybrid electric vehicles would
be
very low," Tyner speculated. "If it were priced according to cost that is very low, then PHEVs would be even more
economical
because people would always charge them at night when prices were lower. We would not require any additional generating capacity.
We would just use the capacity we have more efficiently."

Multiple viewpoints

Bringing together experts from several disciplines to work on new energy systems could be helpful in other ways, such as in
giving university researchers a better indication of where the market is trending.

An electrical engineer might prefer the technical advantages of photovoltaic solar cells over the so-called thin-film collectors.
Thin film doesn’t produce as much electricity from a comparably sized collector. But unlike photovoltaic cells, they’re flexible
so they can be applied to just about any surface. They’re also less expensive, a key consideration for the marketplace.

"I can just see the scientists beating their heads against the wall trying to create a technical victory while not seeing
the economic advantages," Tyner said.

In this example, "economically, that technical efficiency gets trumped."

Venture capital firms see their share of technologies and products that could benefit from some early intervention in their
development of the kind the Center for Energy Systems and Policy plans to provide.

"Some things that are developed at the universities are never purposed for commercial use," said Scott Prince, a
former Silicon
Valley sales executive and co-founder of Clean Wave Ventures, which is trying to raise $100 million to invest in so-called
clean technology firms in Indiana. "Sometimes, the technology may be sound but the market hasn’t developed, so there’s
no
execution" option.

Even if not marketable at the time, university research is still essential in that it benefits private firms that later run
with it and bring it to market, said DeWayne Landwehr, director of the Flagship Enterprise Center, a small-business incubator
and growth-stage accelerator in Anderson. Commercial applications are first and foremost on the minds of these entrepreneurs,
as "they need to produce."




Urgency to energy

Tyner, and Purdue center co-founder Joseph Pekny, who heads Purdue’s School of Industrial Engineering, have argued there’s
a particular urgency when it comes to energy, however. Finding answers to the nation’s energy problems requires "goal-oriented"
research, and they argue that input from other disciplines early in the process, through the center, could improve the odds.

More recently, on Oct. 30, Purdue said it was joining with Indiana University and with IUPUI on an even broader application
of the same multidisciplinary approach to energy.

The three universities created the Indiana Consortium for Research in Energy Systems and Policy. It will seek to tap IU’s
strengths in environmental sciences and public policy, Purdue’s engineering and economic acumen, and IUPUI’s technical expertise
at the Richard G. Lugar Center for Renewable Energy.

Increasingly, federal government contract proposals require a minimum of three disciplines. Federal agencies also want to
see the track record of problem-oriented research experience, in addition to basic research.

The university initiatives come as Indiana gains commercial momentum in alternative energy. A dozen ethanol plants have been
announced or are already operating, plus four biodiesel plants that use soybeans.

Also, for example, the state is at the cutting edge of battery development for hybrid cars. Indianapolis-based EnerDel Inc.
develops lithium-ion batteries for hybrids while, just up Interstate 69, Nevada-based Altair Nanotechnologies makes its hybrid
vehicle batteries in Anderson.