Energy from Unusual Sources

A slew of entrepreneurs are looking well beyond sunlight and wind. Think: tornadoes, algae, giant kites, and lightning

By Olga Kharif

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Chances are that Louis Michaud is one of very few people who spend their days trying to make tornadoes. A year ago, the retired petrochemical engineer put together what looked a bit like a high-tech kiddie swimming pool. Only rather than splashes, this pool tends to generate twisters about as high as the garage.

Michaud is shopping this prototype around to energy companies, hoping to get funding to build a tornado pool the size of a sports arena. The plan is to use warm air expelled by, say, the cooling system of a nuclear power plant, to create tornadoes that stretch up to 9 miles high, spinning turbines to generate electricity. Michaud figures that such a tornado could generate as much power as a nuclear plant (BusinessWeek, 6/26/07), though he allows that his idea is "the type of thing that's outside the norm."

But as the nation hunts for ways to reduce both pollution and U.S. dependence on foreign oil, outside the norm is exactly where many entrepreneurs are poking for inspiration. With prices for traditional fuels still riding high, it's more economically feasible to pursue potential energy sources that might otherwise appear to be "way out there," from algae and huge kites to lightning bolts.

Diverse Energy Sources

The demand is clear: Sales of energy generated from alternative sources, including corn-based ethanol, solar panels, and fuel cells, rose 37.5% in 2006, according to Clean Edge, an industry consultancy. That trend could accelerate, based on predictions by some that the nation is heading for a fuel shortage over the next decade. Recently, the North American Electric Reliability Council, a utility industry organization, predicted a shortfall by 2015. "We are moving from a mono culture," reliant on just a few traditional fuels like oil and coal, "to a diverse range of energy sources," says Ron Pernick, co-founder of Clean Edge. "There's room for new players."

True, many of the kookier-sounding concepts are still in deep development within large corporations, universities, and, of course, the garage. In August, Sony (SNE) announced advances on a biobattery that produces power from a sugary solution, but won't discuss any potential timing for commercial availability yet. Universities are pumping out ideas that might never appear in their present, theoretical form. Recently, two Massachusetts Institute of Technology architecture students proposed capturing energy from the footsteps of crowds by installing special floors near popular sightseeing spots where tourists stampede daily.

Funding from Several Corners

But projects that are further along are finding serious investors. The research firm New Energy Finance estimates that venture capital and private equity investments in clean energy from will grow at an annual compound rate of 17% through 2013. One company with a quirky idea that got funded is LiveFuels, which is trying to generate biofuel from algae grown in pools. Because algae grows superfast, it can produce many times more oil per acre than corn or other crops seen as potential fuels. In May, LiveFuels received $10 million in funding from individuals including David Gelbaum, who has backed environmental organizations such as the Sierra Club.

Other energy entrepreneurs, such as Finavera Renewables, have turned to the stock market for help funding their unorthodox ideas. Finavera, which listed on Toronto Venture Exchange earlier in the year, unveiled a giant $2 million buoy designed to harvest wave power. The AquaBuOY 2.0, which is being tested off the coast of Newport, Ore., looks like a circular yellow platform that's 15 feet across.