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©2009 ViTAL Economy, Inc. 1 Energy Cluster Tuesday, March 24, 2009 9:00am-11:00am Marion Man-Tra-Con office ViTAL Economy Alliance Steve Martin-

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Presentation on theme: "©2009 ViTAL Economy, Inc. 1 Energy Cluster Tuesday, March 24, 2009 9:00am-11:00am Marion Man-Tra-Con office ViTAL Economy Alliance Steve Martin-"— Presentation transcript:

1 ©2009 ViTAL Economy, Inc. 1 Energy Cluster Tuesday, March 24, 2009 9:00am-11:00am Marion 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

2 ©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

3 ©2009 ViTAL Economy, Inc. 3 Southern Illinois will: Be the fastest growing economic region in Illinois Be the regional gateway: –From Americas Heartland to the global economy –From the global economy to Americas 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 Americas Heartland to the global economy –From the global economy to Americas 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

4 ©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

5 ©2009 ViTAL Economy, Inc. 5 Energy Industry Cluster Team Schedule Cluster Work PlanJanFebMarAprMayJuneJulyAug Stage 1: Formationxxx Cluster Kickoff Event with VEx Market-Segmentation, Attractiveness Identify Niche Markets Interim Conference Callx Hypotheses Testing 2-3 Hour Update Meeting with VEx Review Primary and Secondary Research Stage 2: Recognize-Researchxxx Identify Trends and Opportunities Interim Conference Callx Refine Niche Market Opportunities 2-3 Hour Update Meeting with VEx Identify Connectivity Requirements Stage 3 :Reportxxxx Complete Competitive Analysis Interim Conference Callx Issue Cluster Reportx

6 ©2009 ViTAL Economy, Inc. 6 Cluster Vision What is our goal? Jobs? Economic Impact?

7 ©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

8 ©2009 ViTAL Economy, Inc. 8 Additional Preliminary Research

9 ©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.

10 ©2009 ViTAL Economy, Inc. 10 Projected Waste Energy Markets Growth Municipal Solid Waste Energy Generation Forecast Source: Energy Information Administration US waste to energy forecast to reach over 22 billion kilowatt hours in 2030, accounting for 3% of renewable energy.

11 ©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. US Municipal Solid Waste (MSW) Disposal

12 ©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.

13 ©2009 ViTAL Economy, Inc. 13 Cluster Scale: Will the Cluster Contribute to SIs 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. 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 projects

14 ©2009 ViTAL Economy, Inc. 14 Energy Niche Examples – C0 2 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. CO 2 Capture and Sequestration New and existing power and fuel plants can be retrofitted with CO2 capturing technologies. Source: Department of Energy CO2 Capture Process

15 ©2009 ViTAL Economy, Inc. 15 CO 2 Capture Niche Market Segmentation Enhanced Oil Recovery Material Synthesis Fuel Synthesis Chemical The best segments have Potential, Lifespan, Accessibility, and Profitability CO 2 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 C0 2 Uses

16 ©2009 ViTAL Economy, Inc. 16 SI CO 2 Capacity CO 2 Capture and Storage Saline formations in the Illinois Basin have potential CO 2 storage capacity from 20-79 billion metric tons. Source: Department of Energy

17 ©2009 ViTAL Economy, Inc. 17 Cluster Scale: Will the Cluster Contribute to SIs 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 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 projects

18 ©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 Source: US Department of Energy, 2008 Energy Markets: Production/Capacity

19 ©2009 ViTAL Economy, Inc. 19 Observations

20 ©2009 ViTAL Economy, Inc. 20 Energy Cluster ViTAL Economy Alliance Steve Martin Rob Beynon Industry Cluster Value Chain Mapping

21 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 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

22 ©2009 ViTAL Economy, Inc. 22 Regional Niche Markets: Hypotheses from the 1st Meeting and Call Niches Hypotheses Algae Biofuels SI has indigenous resources to support production SI has CO 2 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 workforceSI has indigenous R&D in advanced composite materials Readiness Assessment Identified Markets Green Technologies Mining Technologies Clean Coal Bio-fuels

23 ©2009 ViTAL Economy, Inc. 23 Regional Niche Markets: Initial Research Completed Niches 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 CO 2 storage capacity Geologic formations in SI are suited for C0 2 storage C0 2 has multiple industrial uses C0 2 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

24 ©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 NATURAL RESOURCES INDIGENOUS ASSET MAPPING FOCUSES PRELIMINARY CLUSTER LIST PRIORITIZED CLUSTER AND MARKET SEGEMENT LIST ASSET MAPPING PROCESS PRELIMINARY CLUSTER LIST SCREENED AGAINST INDIGENOUS ASSETS

25 ©2009 ViTAL Economy, Inc. 25 Fuel Energy Source GenerationEnergy Storage TransmissionDistributionCustomer 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 GenerationTransmissionDistribution Customer Energy Services

26 ©2009 ViTAL Economy, Inc. 26 Identifying SI indigenous assets Distributed Power Energy Storage Fuel Energy Source Generation Transmission Distribution Customer Energy Services

27 ©2009 ViTAL Economy, Inc. 27 BREAK TIME

28 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 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

29 ©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:

30 ©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:

31 ©2009 ViTAL Economy, Inc. 31 Observations

32 ©2009 ViTAL Economy, Inc. 32 Cluster Recruitment Plan How Are We Going to Get the Right People Here?

33 ©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 TeamResearch Team

34 ©2009 ViTAL Economy, Inc. 34 Cluster Recruitment Plan Next Steps

35 ©2009 ViTAL Economy, Inc. 35 Workplan What are we doing next?

36 ©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:

37 ©2009 ViTAL Economy, Inc. 37 Next Steps

38 ©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 Cluster Backup Slides

39 ©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

40 ©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

41 ©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

42 ©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 #3Report 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 Implementation Institutionalize

43 ©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.

44 ©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 not everything that counts can be counted. Albert Einstein Not everything that can be counted counts and not everything 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.


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