Friday, August 29, 2008

Cache & Packets

Texas team-up killed Bay State chances with Vestas

By Efrain Viscarolasaga

Last March, the Massachusetts alternative energy business community worked feverishly to convince the powers that be at Denmark-based wind turbine maker Vestas Wind Systems A/S that the Bay State would be the perfect home for the company’s new North American headquarters. One of the biggest selling points was the region’s bevy of universities and research groups.

What region, they asked rhetorically, can offer access to the likes of Harvard University and MIT — two of the most well-known and respected names in academia — as well as locally renowned institutions such as the University of Massachusetts, Worcester Polytechnic Institute and the University of New Hampshire, with the University of Maine being within striking distance? None, was the rhetorical answer.

But after Vestas announced Houston would become the company’s new North American home, it appears that the region’s greatest strength turned out to be its undoing.

According to sources close to the Vestas courtship, including Greg Watson, senior adviser for clean energy technology at the Massachusetts Executive Office of Energy and Environmental Affairs, Vestas’ decision to choose beef over clam chowder (the horror!) came down to two factors — the Danish company’s desire to be close to the traditional energy industry, and its ability to collaborate with local universities.

Few would argue Texas’ advantage over Massachusetts when it comes to traditional energy — it is, after all, the largest oil-producing state — but the Bay State losing to Texas in a battle of university and research might leave some New England natives scratching their heads.

The fact of the matter is, while Massachusetts was able to offer a much wider breadth of university talent, the local schools included in the hypothetical collaborations with Vestas did not present a common (or even similar, according to one person familiar with the process) policy for the handling of intellectual property.

Texas, on the other hand, presented a common IP policy through the The Lone Star Wind Alliance, a collaboration of western universities, research groups and private companies, including the University of Houston’s Cullen College of Engineering, The University of Texas at Austin, Texas A&M University, Texas Tech University, West Texas A&M University, the Houston Advanced Research Center, Stanford University, Montana State University, New Mexico State University, and Old Dominion University.

“(The Alliance) had a formal and pre-arranged agreement mapped out, and (Vestas) felt they could hit the ground running and wouldn’t have to enter into individual negotiations with each university,” said Watson.

By offering a common contract to each university, Vestas is able to avoid the time-consuming contractual negotiations that come with technology transfer from a research group to a commercial venture.

Watson said the local universities involved — including Harvard, MIT and the University of Massachusetts — had begun to formalize such an agreement at the time of the Vestas decision, but it had not been finished. Watson said the groups are still working to move forward on such a coalition, for future projects. In addition, other sources said the state continues to work with other large, unnamed alternative energy companies in the hopes of attracting them to Massachusetts.

As an ironic postscript, Texas created the Lone Star Wind Alliance as part of its bid for the National Renewable Energy Laboratory wind-blade testing facility last year. The U.S. Department of Energy originally put out a bid for one facility, but was unable to choose between proposals from Massachusetts and Texas and awarded one facility to each region, in Charlestown and Houston, respectively.