April 2012 Issue • Volume 40 • Issue 4

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Local Flavor: Clean Tech and Renewable Energy Clusters in Colorado

Elizabeth Stephan, Colorado College-Colorado Springs

As anthropogenic global warming continues to swiftly progress, clean technology, innovation, and diffusion of renewable energy technologies are needed more than ever nationwide. Colorado is a leader in the clean tech industry. According to a 2009 report by Pew Charitable Trusts, Colorado is one of the top three states with large and fast-growing clean energy economies. The Metro Denver Economic Development Corporation’s (MDEDC 2011) “Colorado Industry Cluster Profile on Energy” reported that Colorado ranked fourth out of the 50 states in clean tech employment concentration in 2010, and its clean tech “subcluster” ranked eleventh in absolute employment. MDEDC also reported that Colorado has 19,420 direct jobs in clean tech, and that direct employment had grown 8.9 percent since 2009. Colorado also ranked third in the Milken Institute’s 2010 State Technology and Science Index, which accounts for research and development inputs, risk capital and entrepreneurial infrastructure, human capital capacity, technology and science workforce, and technology concentration and dynamism.

The renewable energy sector in Colorado is buttressed by a number of supporting institutions and policies. The state is home to the Department of Energy’s National Renewable Energy Lab and several major public research universities involved in renewable energy research, including, but not limited to, Colorado State University, the Colorado School of Mines, and the University of Colorado-Boulder. The state itself is actively working to create a favorable climate for renewable energy business, research, and development. In 2010, then Governor Bill Ritter signed two executive orders meant to boost venture capital investment in clean tech startups. Additionally, Colorado adopted a Renewable Portfolio Standard (RPS) in 2010 that will require the state to acquire 30 percent of its energy from renewable sources by 2020. The RPS was an increase over two smaller RPSs that the state had adopted in 2004 and 2007. This RPS is key to the development and expansion of the renewable energy sector in Colorado. Businesses, it seems, are taking note of Colorado’s leadership: Metro Denver Economic Development’s report points to at least seven companies that have relocated to or are opening their first U.S.-based branches in Colorado.

Clean Tech Clusters

The state appears to be home to a renewable energy cluster economy, with 70 percent of its clean technology jobs located in Jefferson, Boulder, Larimer, and Denver counties. Whether that 70 percent constitutes a cohesive whole or a string of separate industries is unclear; collaboration, for example, does not necessarily follow from geographical proximity and/or clustering. In my research of 49 support organizations, including nonprofits, local, state, and federal government agencies, industry associations, economic development organizations, advocacy organizations, universities, utilities, and research labs, I found that there was considerable segmentation in the clean tech industry in Colorado.

A network analysis of inter-organizational ties found seven structurally equivalent blocks with greater and lesser degrees of connection among them. One of the most important of these blocks is a Northern Colorado-specific group that is extraordinarily internally cohesive. All the organizations in this node are located in Larimer County, approximately one hour north of Denver. What accounts for the internal cohesiveness of this group of organizations?  Event attendance seems to play a large role in keeping organizations in touch in Northern Colorado. Organizations attend each other’s events, renewable energy-specific events organized by the city of Fort Collins, and networking events. Several organization members also sit on other organizations’ advisory boards as another method through which they stay connected.

Forging Partnerships at the University level

Colorado State University (CSU) is also involved in the city and community through more specific outlets that forge partnerships not only between the city and the university, but also between public and private organizations. These joint efforts likely contribute to the cohesion of the region. FortZED, for example, is a project of the UniverCITY Connections group. FortZED aims to transform the downtown area and the main campus of CSU into a net Zero Energy District through conservation, efficiency, renewable sources and smart technologies. Described as a collaborative effort that brings together diverse partners, the initiative involves public, private, and grassroots organizations. City-university partnerships are mutually beneficial. One of my interviewees noted that “the city sees the university as a way to really bolster their clean energy mission…and the university sees it [the city] as…kind of a test bed to do research on green energy and smart grids and new techniques for dealing with urban problems.”

Denver, Colorado

Denver, Colorado

While internal cohesion is important and beneficial for the Northern Colorado group, connecting to the rest of the state is not as easy. Although the Interstate 25 corridor (which is the main artery running the length of the state from north to south along the front range of the Rockies) would facilitate north-south collaborations, the distances between the major cities mean that there is still considerable geographic isolation. For example, the distance between Colorado State University in Fort Collins and National Renewable Energy Laboratory’s (NREL) facilities in Golden complicates partnering with NREL—a national laboratory solely dedicated to advancing renewable energy and energy efficiency technologies. “Our students,” a member of CSU’s Supercluster explained, “would have to rent an apartment down there if they were going to spend a significant amount of time” in NREL’s labs. Though, he said, while they are actively working to strengthen this partnership, the geographic strain on the relationship for at least CSU and NREL was clear.

Hurdles Remain

The Colorado renewable energy sector overall does not appear to be a fully cohesive whole, but rather a loosley connected agglomeration of organizations complicated in part by geography. The Northern Colorado area has the vision, supportive policies, incubation capabilities, and some of the grant money that is needed to create an innovative cluster, but their small size heightens the importance of overcoming geographical barriers to collaboration with organizations in Denver, Boulder, and elsewhere in Colorado. Northern Colorado seems poised for success based on these characteristics, but its contributions will be limited if it cannot effectively plug into the rest of Colorado’s renewable energy sector.

If we are to develop the capacity to transition into a new energy economy, we will need several vibrant renewable energy clusters that can rapidly improve the efficiencies of renewable energy technologies and swiftly commercialize those improvements. Individuals and departments in the public, private, and nonprofit sectors can contribute to the creation of those clusters, take proactive steps to enhance industry operations, and ensure the presence of fertile soil in which ideas can take root and grow.

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