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©2009 ViTAL Economy, Inc.— 1 —
Energy ClusterTuesday, March 24, 2009
9:00am-11:00amMarion Man-Tra-Con office
ViTAL Economy Alliance Steve Martin- steve_martin@intervistas.us Rob Beynon – rob_beynon@intervistas.com
Industry Cluster Opportunity Analysis
Second Cluster Meeting
©2009 ViTAL Economy, Inc.— 2 —
Industry Cluster Second Workshop Agenda
Step One – Getting to A Vision
5 Min. – Welcome & Introductions
5 Min. – 60 Day Work Plan Review
10 Min. – Draft Cluster Vision Statement
10 Min. – Preliminary Cluster Research and the Interim Call
40 Min. – Indigenous Resources to Leverage
7 Min. – BREAK
Step Two - Action
20 Min. – Niche Market Prioritization
10 Min. – Cluster Recruitment Plan and Contact Assignments
10 Min. – One Month Cluster Team Work Plan
5 Min. – Next Meeting
©2009 ViTAL Economy, Inc.— 3 —
Southern Illinois will:• Be the fastest growing economic region in Illinois
• Be the regional gateway:– From America’s Heartland to the global economy
– From the global economy to America’s Heartland
• Be named a national and regional model for collaborative, regional rural economic transformation
• Achieve a positive balance between livability &
sustainable growth
Southern Illinois will:• Be the fastest growing economic region in Illinois
• Be the regional gateway:– From America’s Heartland to the global economy
– From the global economy to America’s Heartland
• Be named a national and regional model for collaborative, regional rural economic transformation
• Achieve a positive balance between livability &
sustainable growth
Why….? Connect SI Vision and Goals
©2009 ViTAL Economy, Inc.— 4 —
Stage #1: 60 Day Workplan – Where We Are
COMPLETED
STARTED
Research Team• Market attractiveness research – each
niche– Size– Growth rates– Business trends– Political, economic & business data
• Expanded value chain mapping• Niche market
– Demand trends– Supply trends– Regulatory and political trends
• Conduct hypotheses testing• Conduct preliminary industry interviews• Refine niche market focus• Prepare for interim conference call
Industry Cluster Team• Determine core cluster leadership team
• Draft cluster vision statement
• Complete cluster participant recruitment plan
• Conduct recruitment calls
• List indigenous resources leveraged – each niche market
• Link resources to hypothesis to be tested Begin list of key regional, national industry interviews
• Refine niche market focus
©2009 ViTAL Economy, Inc.— 5 —
Energy Industry Cluster Team Schedule
Cluster Work Plan Jan Feb Mar Apr May June July Aug
Stage 1: Formation x x x
Cluster Kickoff Event with VE x
Market-Segmentation, Attractiveness
Identify Niche Markets
Interim Conference Call x
Hypotheses Testing
2-3 Hour Update Meeting with VE x
Review Primary and Secondary Research
Stage 2: Recognize-Research x x x
Identify Trends and Opportunities
Interim Conference Call x
Refine Niche Market Opportunities
2-3 Hour Update Meeting with VE x
Identify Connectivity Requirements
Stage 3 :Report x x x x
Complete Competitive Analysis
Interim Conference Call x
Issue Cluster Report x
©2009 ViTAL Economy, Inc.— 6 —
Cluster VisionWhat is our goal? Jobs? Economic Impact?
©2009 ViTAL Economy, Inc.— 7 —
Draft Cluster Mission
The mission of the SI Energy Industry Cluster Team
is to support the achievement of the overall
Connect SI 2012 goals which include
5,680 energy industry jobs in SI region
©2009 ViTAL Economy, Inc.— 8 —
Additional Preliminary Research
©2009 ViTAL Economy, Inc.— 9 —
Waste to Energy - Cogeneration
Waste to Energy is the process of creating electricity from the burning of waste materials. It can produce electricity directly, or a fuel commodity such as methane, methanol, ethanol, or other synthetic fuels.
Waste to Energy (WTE)
In 2007, the US incinerated approximately 14% of its waste for energy, 88% of the resulting energy was used by electricity producers.
Source: US Department of Energy 2008, Recovered Energy Inc.
©2009 ViTAL Economy, Inc.— 10 —
Projected Waste Energy Markets Growth
Municipal Solid Waste Energy Generation Forecast
Source: Energy Information Administration
0
5
10
15
20
25
2006 2007 2008 2010 2015 2020 2025 2030
Bil
lio
n K
ilo
wat
tho
urs
US waste to energy forecast to reach over 22 billion kilowatt hours in 2030, accounting for 3% of renewable energy.
US waste to energy forecast to reach over 22 billion kilowatt hours in 2030, accounting for 3% of renewable energy.
©2009 ViTAL Economy, Inc.— 11 —
Strong Niche Growth Projected
Source: US Department of Energy
The US uses 14% of its waste for energy. In some European countries, as much as 40% of waste generates energy.
The US uses 14% of its waste for energy. In some European countries, as much as 40% of waste generates energy.
US Municipal Solid Waste (MSW) Disposal
©2009 ViTAL Economy, Inc.— 12 —
Energy Markets: Production/Capacity
The majority of US waste to energy is on the East Coast. The Midwest region used 1% of its waste for energy in 2004.
The majority of US waste to energy is on the East Coast. The Midwest region used 1% of its waste for energy in 2004.
©2009 ViTAL Economy, Inc.— 13 —
Cluster Scale: Will the Cluster Contribute to SI’s Goals?
Source: Sysav, GreenField Ethanol
The Sysav waste to energy facility in Malmo, Sweden sees 200 refuse collection vehicles tip waste per day. The combustion process happens 24 hours a day. The waste left over after combustion is recycled.
The Sysav waste to energy facility in Malmo, Sweden sees 200 refuse collection vehicles tip waste per day. The combustion process happens 24 hours a day. The waste left over after combustion is recycled.
Edmonton has signed an agreement with Greenfield Ethanol for a $70 million biofuels facility that will use 90% residential waste diversion from landfills to produce 36 million litres of biofuel per year.
Edmonton has signed an agreement with Greenfield Ethanol for a $70 million biofuels facility that will use 90% residential waste diversion from landfills to produce 36 million litres of biofuel per year.
Examples of the scale and scope of WTE projectsExamples of the scale and scope of WTE projects
©2009 ViTAL Economy, Inc.— 14 —
Energy Niche Examples – C02 Capture
The separation of CO2 from sources of emission or the atmosphere.
It can be done through post-combustion or pre-combustion techniques.
It can be stored permanently underground or transported by pipeline for industrial uses.
CO2 Capture and Sequestration
New and existing power and fuel plants can be retrofitted with CO2 capturing technologies.
Source: Department of Energy
CO2 Capture Process
©2009 ViTAL Economy, Inc.— 15 —
CO2 Capture Niche Market Segmentation
Enhanced Oil Recovery
Enhanced Oil Recovery
Material SynthesisMaterial
Synthesis
Fuel SynthesisFuel Synthesis
ChemicalChemical
The best segments have Potential, Lifespan, Accessibility, and
Profitability
CO2 can be reused in several intermediate chemicals and commodity materials. It has been used by oil companies for EOR and can increase the extraction of oil by as much as 20%.
Transportation/Pipelines
Transportation/Pipelines
C02 UsesC02 Uses
©2009 ViTAL Economy, Inc.— 16 —
SI CO2 Capacity
CO2 Capture and Storage
CO2 Capture and Storage
Saline formations in the Illinois Basin have potential CO2 storage capacity from 20-79 billion metric tons.
Saline formations in the Illinois Basin have potential CO2 storage capacity from 20-79 billion metric tons.
Source: Department of Energy
©2009 ViTAL Economy, Inc.— 17 —
Cluster Scale: Will the Cluster Contribute to SI’s Goals?
Source: US Department of Energy
CO2 is sent via pipeline from a coal gasification plant near Beulah, N.D. to the Weyburn Oil Field in Saskatchewan. It is expected to result in an additional 130 million barrels of oil and a 25 year life span increase of the oil field.
CO2 is sent via pipeline from a coal gasification plant near Beulah, N.D. to the Weyburn Oil Field in Saskatchewan. It is expected to result in an additional 130 million barrels of oil and a 25 year life span increase of the oil field.
CO2 captured from an ADM ethanol plant in Decatur, Illinois will be stored in the Mt. Simon Sandstone to test sequestration potential in the Illinois Basin. Drilling was set to begin in February of 2009 and 1 million tons of CO2 could be injected over three years.
CO2 captured from an ADM ethanol plant in Decatur, Illinois will be stored in the Mt. Simon Sandstone to test sequestration potential in the Illinois Basin. Drilling was set to begin in February of 2009 and 1 million tons of CO2 could be injected over three years.
Examples of the scale and scope of CO2 projectsExamples of the scale and scope of CO2 projects
©2009 ViTAL Economy, Inc.— 18 —
There are seven Regional Carbon Sequestration
Partnerships spanning the US and Canada. The Midwest
Geological Sequestration Consortium (including
Illinois) accounts for 9% of stationary source CO2
emissions
There are seven Regional Carbon Sequestration
Partnerships spanning the US and Canada. The Midwest
Geological Sequestration Consortium (including
Illinois) accounts for 9% of stationary source CO2
emissions
Source: US Department of Energy, 2008
Energy Markets: Production/Capacity
©2009 ViTAL Economy, Inc.— 19 —
Observations
©2009 ViTAL Economy, Inc.— 20 —
Energy Cluster
ViTAL Economy Alliance Steve MartinRob Beynon
Industry Cluster Value Chain Mapping
Identification of a set of regional goals and issues to be addressed, ex.• Increase regional average wage• Raise per capital income• Lower Poverty• Increase private payer healthcare coverage
Determine market segmentation for each niche market
Identify niche markets and hypotheses for each initial industry
Determine market attractiveness for each niche market
• Market size, growth rates, general trends, demand trends, supply trends, market profitability
Cluster team and research team test hypotheses
Conduct primary and secondary research review
Identify and quantify industry trends and opportunities
Cluster team inventory of indigenous resources supporting niche markets
Cluster Team conduct regional industry cluster mapping
Determine top two industry clusters to be opportunity analyzed
List the key questions that need to be answered for each hypotheses
Return and identify other
niche markets if current are not
feasible
Return and identify other
niche markets if current are not
feasible
Develop strategic and implementation strategy
ViTAL Economy Industry Cluster Opportunity Analysis
Prioritize niche markets for continued primary and secondary research
Start
Cluster Analysis Milestones
• Milestone #1
• Milestone #2
• Milestone #3
• Milestone #5 & #6
©2009 ViTAL Economy, Inc.— 22 —
Regional Niche Markets:Hypotheses from the 1st Meeting and Call
Niches Hypotheses Hypotheses Hypotheses
Algae Biofuels SI has indigenous resources to support production
SI has CO2 production to support Algae growth
SI has relevant basic and advanced R&D
Waste to Energy
SI has a sufficient waste stream to support energy production
SI has sufficient landfill gas (methane)
Smart Grid Utilities committed to smart grid improvements in SI
Undeveloped applications exist
SI has indigenous resources: R&D, delivery, applications
Electric Vehicles
Significant developing market opportunities for EV technology
SI has indigenous resources to develop and serve this market
Wind Energy Components
SI has excess manufacturing capacity
SI has available workforce SI has indigenous R&D in advanced composite materials
Readiness Assessment Identified Markets• Green Technologies
• Mining Technologies
• Clean Coal
• Bio-fuels
©2009 ViTAL Economy, Inc.— 23 —
Regional Niche Markets:Initial Research Completed
Niches Hypotheses Hypotheses Hypotheses
Waste to Energy
4 waste sites in SI are large enough to support commercial power generations
The generated energy can be sold into the grid
CO2 storage capacity
Geologic formations in SI are suited for C02 storage
C02 has multiple industrial uses
C02 could be created by energy production or used to create energy
Coal to liquid fuels
SI has a significant supply of appropriate coal
SI is suitably situated for a coal gasefication site
Cogeneration Cogeneration is a developing source of energy opportunity
Cogeneration opportunities are readily developed as additions to existing sites
Additional energy generated can be sold into the grid or used for other purposes
Algae Biofuels Algae biofuels will be a significant area of energy growth
SI has the indigenous resources required to support them
SI has significant relevant research assets
Readiness Assessment Identified Markets• Green Technologies
• Mining Technologies
• Clean Coal
• Bio-fuels
©2009 ViTAL Economy, Inc.— 24 —
Industry clusters and market sub-segments with an indigenous competitive advantage are identified through the asset mapping and research process
PEOPLE
TECHNOLOGY
INFRASTRUCTURE
LOCATION
NATURALRESOURCES
INDIGENOUSASSET MAPPING
FOCUSES
PRELIMINARY CLUSTER
LIST
PRIORITIZEDCLUSTER AND
MARKET SEGEMENT LIST
ASSET MAPPING PROCESS
PRELIMINARY CLUSTER LIST
SCREENED AGAINST INDIGENOUS ASSETS
©2009 ViTAL Economy, Inc.— 25 —
Fuel Energy Source
Generation Energy Storage
Transmission Distribution Customer Energy
Services
Company Presence
Special Infrastructure
Skilled Workers R&D/Innovation
Step #1 – Identify each element of the industry value chain Step #2 – Identify whether the element exists in the study region
Discover the SI Energy Value Chain Elements
Distributed Power
Energy Storage
Fuel Energy Source
Generation Transmission Distribution Customer Energy
Services
©2009 ViTAL Economy, Inc.— 26 —
Identifying SI indigenous assets
Distributed PowerDistributed Power
Energy StorageEnergy Storage
Fuel Energy Source
Fuel Energy Source
GenerationGeneration TransmissionTransmission DistributionDistribution Customer Energy
Services
Customer Energy
Services
Microsoft Office Excel 97-2003 Worksheet
©2009 ViTAL Economy, Inc.— 27 —
BREAK TIME
Identification of a set of regional goals and issues to be addressed, ex.• Increase regional average wage• Raise per capital income• Lower Poverty• Increase private payer healthcare coverage
Determine market segmentation for each niche market
Identify niche markets and hypotheses for each initial industry
Determine market attractiveness for each niche market
• Market size, growth rates, general trends, demand trends, supply trends, market profitability
Cluster team and research team test hypotheses
Conduct primary and secondary research review
Identify and quantify industry trends and opportunities
Cluster team inventory of indigenous resources supporting niche markets
Cluster Team conduct regional industry cluster mapping
Determine top two industry clusters to be opportunity analyzed
List the key questions that need to be answered for each hypotheses
Return and identify other
niche markets if current are not
feasible
Return and identify other
niche markets if current are not
feasible
Develop strategic and implementation strategy
ViTAL Economy Industry Cluster Opportunity Analysis
Prioritize niche markets for continued primary and secondary research
Start
Cluster Analysis Milestones
• Milestone #1
• Milestone #2
• Milestone #3
• Milestone #5 & #6
©2009 ViTAL Economy, Inc.— 29 —
Prioritizing Niche Markets: Group QDT
Opportunity Thumb Nail Description
Name:
Relevant Indigenous Resources:
Market Opportunity Served:
How It Addresses Connect SI Goals:
Opportunity Thumb Nail Description
Name:
Relevant Indigenous Resources:
Market Opportunity Served:
How It Addresses Connect SI Goals:
©2009 ViTAL Economy, Inc.— 30 —
Prioritized Niche Market Teams
Niche Market Action Team
Team Name:
Who Will Help:
Niche Market Action Team
Team Name:
Who Will Help:
©2009 ViTAL Economy, Inc.— 31 —
Observations
©2009 ViTAL Economy, Inc.— 32 —
Cluster Recruitment PlanHow Are We Going to Get the Right People Here?
©2009 ViTAL Economy, Inc.— 33 —
Overall Roles and Responsibilities
• Establish a leadership team
• Recruit members to the cluster team
• Keep industry cluster team members engaged
• Identify existing local research
• Attend key cluster meetings providing input and analysis
• Create and lead action teams
• Provide input and analysis of market niches and hypotheses
• Conduct industry cluster asset mapping
• Provide input to final report
• Present cluster report in public session
• Provide guidance and advisement to VE industry cluster approaches
• Provide key primary research based upon the cluster work plan
– Market Attractiveness
– Macro and Micro analysis
• Regional and national industry interviews
• Provide facilitation of key industry cluster meetings and teleconferences
• Transfer knowledge to the cluster team
• Prepare final cluster report
Industry Cluster Team Research Team
©2009 ViTAL Economy, Inc.— 34 —
Cluster Recruitment Plan
• Next Steps
©2009 ViTAL Economy, Inc.— 35 —
WorkplanWhat are we doing next?
©2009 ViTAL Economy, Inc.— 36 —
Stage #1 Work Plans Next 60 days
Industry Cluster Team• Determine core cluster leadership team • Draft cluster vision statement • Complete cluster participant recruitment plan• Conduct recruitment calls • List indigenous resources leveraged – each
niche market• Link resources to hypothesis to be tested
SLIDE 29• Begin list of key regional, national industry
interviews• Refine niche market focus
Research Team• Market attractiveness research – each niche
– Size– Growth rates– Business trends– Political, economic & business data
• Expanded value chain mapping• Niche market
– Demand trends– Supply trends– Regulatory and political trends
• Conduct hypotheses testing• Conduct preliminary industry interviews• Refine niche market focus• Prepare for interim conference call
Interim Conference Call - Date: Time:
Month #3 Meeting - Date: March ? Time: Location:
©2009 ViTAL Economy, Inc.— 37 —
Next Steps
©2009 ViTAL Economy, Inc.— 38 —
ViTAL Economy Alliance Steve Martin- steve_martin@intervistas.us Rob Beynon – rob_beynon@intervistas.com
Industry Cluster Opportunity Analysis
Second Cluster Meeting
Energy ClusterBackup Slides
©2009 ViTAL Economy, Inc.— 39 —
Industry Cluster Team Guiding Principles
1. Industry cluster leadership and participation are key to generating outcomes
2. Work plan discipline, completing all elements of each phase, is key to achieving success
3. Trust and respect is required between companies and individuals
4. Collaboration is recognized as a key to achieving regional goals
5. Uncovered opportunities will have action teams assigned with leadership immediately
The Vital Economy Industry Cluster approach achieves measurable results through the recognition
and endorsement of key principles
The Vital Economy Industry Cluster approach achieves measurable results through the recognition
and endorsement of key principles
©2009 ViTAL Economy, Inc.— 40 —
I. Market Description/Segmentation
II. Market Attractiveness• Market size--regional, national, international• Market growth rates• General business trends within markets• Demand trends--regional, national, international• Supply trends--regional, national international• Market profitability
III. Regions Competitive Position to Produce a Product or Service• Local production capabilities• Local technical capabilities• Local capacity utilization• Cost components, i,e, labor, raw materials, finance costs, etc• Cost curve position vis-à-vis potential regional, state, national and
international competitors
Framework…Cluster Assessment Outline
©2009 ViTAL Economy, Inc.— 41 —
IV. Timing Issues to Establish Competitive Position in Market• Length of time to establish industry• Likely actions of potential competitors
V. Financial Viability and Financial Resources Required to Pursue Opportunity
• Business Case Assessment• Capital requirements• Availability of capital at the regional, state and national level
Framework…Cluster Assessment Outline
©2009 ViTAL Economy, Inc.— 42 —
Industry Cluster Roadmap
Stage #1 – Formation
• Establish broad-based core leadership team
• Define the industry cluster, geographic boundary, and niche or sector identification.
• Invite and recruitment of key cluster participants
• What will keep a participant at the table for 18 months?
• Define industry cluster team vision
• Pursue short term wins
Stage #2 – Recognize & Research
• Begin industry cluster mapping
• Be on the lookout for linkage opportunities
• Map the industry cluster indigenous resources
• Determine economic value of the industry
• Identification of workforce development needs
• Industry cluster gap assessment
• Global and national industry research exchange
• Pursue short term wins
START 3 MONTHS 5 MONTHS 8 MONTHS
Stage #1 Stage #2 Stage #3 Report
Stage #3 – Report• Global and national industry
research exchange• Analysis and apply new
information into the industry economy
• Benchmarking the industry cluster
• Delivery of Industry Cluster report
• Pursue short term wins
ImplementationInstitutionalize
©2009 ViTAL Economy, Inc.— 43 —
Framework…Structured Fact-Based Analysis
1. Structured framework utilizes fact-based hypotheses• Followed by fact information gathering and analysis
• To prove or disprove the hypothesis
2. Defines the “boundaries” of an issue and breaks it down
into component parts
3. Eliminates blind alleys quickly, allowing you to focus on
the main issues
The VE approach uncovers opportunities for the industry clusters in SI.
It does not apply a “generic silver bullet” method typical of other processes.
The VE approach uncovers opportunities for the industry clusters in SI.
It does not apply a “generic silver bullet” method typical of other processes.
©2009 ViTAL Economy, Inc.— 44 —
Framework….Hypothesis Testing
1. A set of propositions based on facts already at hand, and intuition to
address issues, challenges, and industry and economic trends.
2. Propositions will be prioritized and evaluated through questions,
research and Quick and Dirty Testing (QDT)
“Not everything that can be counted counts and noteverything that counts can be counted.” Albert Einstein
“Not everything that can be counted counts and noteverything that counts can be counted.” Albert Einstein
Today, you as the core cluster team members will define the key initiatives of this cluster team as you determine the critical questions (hypotheses) for the research team to analyze.