TMCnet - World's Largest Communications and Technology Community



Inside Buffalo's bid for clean energy [The Buffalo News, N.Y. :: ]
[June 28, 2014]

Inside Buffalo's bid for clean energy [The Buffalo News, N.Y. :: ]

(Buffalo News (NY) Via Acquire Media NewsEdge) June 29--FREMONT, Calif. -- What makes a pair of Silicon Valley clean energy companies pick Buffalo as the site for their new factories? Tom Caufield, a Soraa director and adviser who was a key player in the LED lighting company's decision to become part of the RiverBend project, knew firsthand about the bustling hub created by the state's massive investment in Albany's semiconductor industry. Before joining Soraa, Caufield worked for IBM's semiconductor business in New York State and, as a Novellus executive, worked with the SUNY College of Nanoscale Science and Engineering when the semiconductor equipment maker established its first venture in the Capitol District.

When Caufield heard that the state was interested in trying to use the Albany model to create a hub for clean energy and technology in Buffalo, around the same time that Soraa was starting to hunt for potential sites to expand its production, he was intrigued.

"I said, 'Man, that's exactly what we're doing.' I know how this model works. I've seen the success of it. I lobbied and said how do we become part of this," he said.

About five miles to the south, in another Fremont office park, executives from solar panel manufacturer Silevo were having the same discussions with a site consultant about future expansion for a factory that would serve as its production hub in North America. That search brought them in touch with officials from the nanoscience college and state economic development officials who already were working on plans to make a clean energy hub a centerpiece of Gov. Andrew M. Cuomo's Buffalo Billion economic development plan for the region.

"We could see what they'd done previously in the semiconductor industry and could say, 'OK, they know how to make it happen,'" said Christopher Beitel, Silevo's executive vice president. "There was a proven track record and a strong commitment from the governor, so we could say let's go have some discussions and see if we can make it a reality." At RiverBend, those resources add up to an initial state commitment of $225 million to build and equip the site's factories with state-of-the-art equipment. And that turned out to be an offer Soraa and Silevo couldn't refuse.

The clean energy hub is perhaps the boldest part of Gov. Andrew M. Cuomo's bold plan to remake the Buffalo Niagara economy through his Buffalo Billion economic development program. With an unprecedented commitment of state resources, the Cuomo administration has launched a handful of major efforts to jump-start the region's economy by initiatives aimed at spurring innovation and the development of new businesses, bolstering the region's advanced manufacturers and pumping new resources into the medical and technology industries here.

"This is a different Buffalo," Cuomo said during a recent stop in Buffalo.

"We were in the steel business. We were in the manufacturing business and that business is now gone," he said. "We had to reinvent ourselves and come up with a new economy ... We're finding new business lines. We're turning that corner." Using a model that has been likened to the state building a sophisticated kitchen where tenants can use the costly gear to make their own recipes, the Capitol District has become a thriving hub for the semiconductor industry.

More than 3,100 people work at a sprawling $20 billion nanotechnology research complex that has established ties to more than 300 companies since it opened in 2001. Another $1.5 billion research and production facility in Marcy, now under construction outside Utica, is expected to create more than 1,000 other jobs. In Rochester, the state is turning an abandoned Kodak building into a solar manufacturing and technology development facility for the nanoscience college as part of a $100 million project.

RiverBend extends the Albany model to Buffalo.

No guarantees Through it all, the state is trying to create a critical mass, said Pradeep Haldar, the vice president of entrepreneurship, innovation and clean energy programs at the nanoscience college.

"We're fostering the entire upstate region to be tech-friendly," Haldar said.

Alain Kaloyeros, the chief executive officer of the nanoscience college, said: "These companies will serve as the foundation of what's going to be the innovation economy in Buffalo." There is no guarantee it will work. George Palumbo, a Canisius College economist, said creating an entirely new industry in a region involves immense challenges. If it were easy, he said, governments across the country would be doing it.

But the effort got a big boost last month when Silevo agreed to be acquired by SolarCity, a leading solar power system installer backed by billionaire Elon Musk. Immediately, SolarCity executives said they planned to make the Buffalo factory five times bigger than Silevo intended, boosting its annual capacity to one gigawatt of solar panels, up from the 200 megawatts in Silevo's original plan.

"It's a huge validation of their technology," said Shyam Mehta, a solar industry analyst at GTM Research.

Going forward, the region will have to build up a chain of suppliers for the solar panel factory -- something that industry experts think has a better chance of happening because of the scale of SolarCity's plans. The region will have to grapple with the challenges of training workers, many of whom have experience in traditional manufacturing but lack any familiarity with the production of solar panels. And it will be done without a gradual buildup, starting with one of the biggest solar panel factories in the world, Mehta said.

David Strungis, a Moody's Investor Service analyst, said the state's approach is untested and noted that the clean technology industry can be especially volatile as new technologies are developed, supplanting older systems, and regulations change, which potentially could reduce incentives for one sector of the clean energy market and benefit another.

"This project's ability to spur future development is dependent, in part, on the continued growth of the clean technology industry," he said in a report.

But John Slenker, the state Labor Department's regional economist in Buffalo, thinks the RiverBend complex, once it opens next year and as it grows to include other companies, could turn into a powerful magnet for engineers and workers with the technical skills needed to operate the sophisticated equipment used by Soraa, Silevo and other potential tenants.

'The right approach' Making solar panels and LED lights involves sophisticated manufacturing techniques similar to those used to make computer chips. Soraa's California production facility, for instance, includes several clean rooms, staffed by workers who must be covered from head to toe in special clothing, commonly called bunny suits, designed to keep dust, dirt and other tiny particles of debris from its manufacturing space.

Much of the equipment in RiverBend will be similar to the machinery used to make computer chips. The companies use technology that applies a microscopic coating of whatever element is needed. This process is used in numerous forms of advanced manufacturing, and therefore would be valuable to a variety of companies if Soraa or Silevo did not work out.

"What we liked about Silevo and Soraa is that they have the right manufacturing approach," Kaloyeros said. "Those are two of the first to use the same manufacturing protocols that are used in the computer chip and the semiconductor industry, with clean rooms and the exact same tools and the same protocols to ensure reliability and to ensure yields." Silevo's factory in China, located about 1 1/2 hours from Shanghai, encountered production problems when it opened because of the high levels of air pollution there, forcing the company to bring in additional equipment to improve the air quality within its new plant.

"There are a mountain of device physicists and individuals in the semiconductor industry in Albany that can help us advance continued performance improvements with our device technology," Beitel said. Silevo has been talking with state officials about potential joint projects that could involve state solar research facilities in Albany or Rochester, he said.

"The way it could work is that we could work on a joint project that allows us to potentially co-license the intellectual property, where I could use it for my field of use and CNSE could license it, not to a solar manufacturer, but to maybe an adjacent industry like semiconductors," Beitel said.

Soraa's Caufield saw similar opportunities to tap into the nanoscience college's resources, including their research work on next-generation phosphors, a key component in LED lighting.

"They can become great partners for us," he said.

"It's amazing how much the semiconductor industry, not just the innovation but the manufacturing protocols, have become the driver for so many other industries," Kaloyeros said.

"This is part of what's helping them, that they're coming to tap into this know-how, this infrastructure and this supplier network we already have in place. Even the equipment they're buying is from the same equipment suppliers that we use for the semiconductor industry," Kaloyeros said. "The synergy there, the leveraging, is priceless." The Albany model The promise of a $225 million state investment in a new plant, with state-of-the-art production equipment that Soraa and Silevo can use, also had enormous appeal, allowing the companies to operate in new factories without taking on all of the construction and operating costs they would face by doing it on their own.

Under the Albany model, the state will own the buildings and much of the equipment within them, greatly reducing the upfront expense that companies like Soraa and Silevo have to absorb to expand their operations in Buffalo and become tenants in the clean energy hub.

"The package definitely helps us be more competitive," Beitel said. "We think Buffalo is really attractive when you look at the whole landscape, from labor costs, talent, electricity costs, support from the government to shipping logistics." Both companies said they looked at numerous other sites before picking RiverBend. Silevo considered locations in California, Arizona, Texas, New Mexico, Missouri and Louisiana.

"The New York option was the most attractive," Beitel said, citing the state's "strong subsidy," a good pool of potential workers and the solid infrastructure for manufacturing that exists in the region, including access to shipping through the Great Lakes.

"The fact that we're right next to Lake Erie and are able to get the product out was very attractive," Beitel said.

"We considered Louisiana, but the talent base there was nowhere near as close to what we could do in terms of Buffalo. Maybe the cost of the labor was cheaper, but we had significant reservations in term of our ability to have a talent base that we could attract, as well as keep employed," he said.

Caufield said Soraa looked at sites in Alabama and Mississippi, as well as overseas locations, such as Malaysia, Singapore, Indonesia and China before settling on RiverBend.

"This was an opportunity that balances incentives that were competitive and an area where it's easier for us to control our intellectual property and had an easier way of expanding," he said. "This is the beginning." Critical mass Caufield, a St. Lawrence University and Columbia University graduate, cautions that even under the most optimistic timetable, it will take years for the RiverBend hub to develop. Soraa's own plans for RiverBend are expected to take five years to pan out.

"It doesn't start overnight. It starts with the kind of things this program starts with. Then this whole ecosystem evolves. Then because there's a critical mass, other companies come in because they need to be part of it," he said. "Does it start overnight with everyone there? No. It grows." email: ___ (c)2014 The Buffalo News (Buffalo, N.Y.) Visit The Buffalo News (Buffalo, N.Y.) at Distributed by MCT Information Services

[ Back To's Homepage ]

Technology Marketing Corporation

35 Nutmeg Drive Suite 340, Trumbull, Connecticut 06611 USA
Ph: 800-243-6002, 203-852-6800
Fx: 203-866-3326

General comments:
Comments about this site:


© 2018 Technology Marketing Corporation. All rights reserved | Privacy Policy