Five Questions With: Thorne Sparkman

Managing director of Slater Technology Fund talks about the ARPA-E Energy Innovation Summit, which focused on the renewable energy sector. More

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Five Questions With: Thorne Sparkman

"Financially, we have to be brave enough to invest deeper in the companies that succeed in the seed level, and that entails looking beyond government programs to the private sector."
Posted 3/12/14

Thorne Sparkman is the managing director of Slater Technology Fund, a state-backed venture capital group that makes targeted investments in local technology startups, including several in the renewable energy industries.

After attending the ARPA-E Energy Innovation Summit held Feb. 24-27 in Washington, D.C., Sparkman spoke with Providence Business News about the state of Rhode Island’s own renewable energy sector.

PBN: From your perspective, what was the big take-away from the ARPA-E Summit?

SPARKMAN: Innovation is accelerating, and venture capital investments disappearing. There continue to be potent technology collaborations, and eager and committed entrepreneurs and committed graduate students. That part is incredibly compelling, but we are currently on the back side of a classic venture capital bubble, and many of those who focused on the energy sector for years have found other sectors – or other jobs. This leaves a gap between where we transform ideas into technologies that will drive the energy industry, and it increases the length of time it takes to get worthy ideas to market.

We need to fill that gap, and ARPA-E’s work, supported as it is by our federal delegation, and inspired by the relentless climate leadership by Sen. Sheldon Whitehouse, is more important than ever.

PBN: How does Rhode Island measure up to other states in terms of its renewable energy initiatives?

SPARKMAN: Rhode Island has a renewable portfolio standard, which is good; however, our implementation goals aren’t as aggressive as other states. We’ve also set up a distributed generation law – essentially a feed-in tariff – which was well conceived and executed at the pilot stage, and is generating results in the state both from a developer perspective and in the form of more renewable energy. From a goals and objectives standpoint, Rhode Island is pointed in the right direction and we should stick to our portfolio goals and expand on our distributed generation.

Frankly, other than a robust offshore wind regime, we don’t have the renewable resources that would attract waves of utility-scale developers and the investment they require. There’s a reason that there has been a boom of wind in Texas and a boom of solar in the Southwest. In fact, 97 percent of Rhode Island’s ISO grid-connected renewable energy comes from one source – the country’s second-largest landfill gas development.

Where Rhode Island is more likely to make its mark is in the creation of exciting new energy technologies, which will change how energy is generated, or integrated, or better yet stored or conserved in the first place. That’s where the Slater Fund has been focused.

PBN: What are some renewable energy companies in Rhode Island that you’ve worked with personally, and how could the technologies they’re developing change how we use and understand energy?

SPARKMAN: VCharge is a company the Slater Fund has invested in, which controls electric devices like space heaters, cars and other storage-equipped devices over the internet. They’re able to monitor how much power costs in real time, and how much a device will need, and thus have the ability to buy the right amounts at exactly the right time. In addition, they can sense when the grid has too much power on it – which sometimes happens accidentally due to renewable sources – and they are paid by the grid operator to help integrate that energy and rebalance the grid. Using software and advanced algorithms, users are paying less, and ushering in renewable energy without even knowing it.

VoltServer is another company where the Slater Fund led the company’s first venture capital round. VoltServer is commercializing a form of digitized electricity, which can be transferred along with data on a single cable. The cabling can actually sense tiny losses so quickly and accurately that a person can literally touch a live wire, and the system will shut off before the person is harmed. As telecommunications companies continue to wire and rewire society, and solar developers accelerate the pace of rooftop deployments, this innovation has the potential to save billions in infrastructure costs.

PBN: How do you view the role of Slater Technology Fund and other investors in supporting renewable energy startups?

SPARKMAN: Even the most impressive technology doesn’t make an impact until it is installed and proliferating in society, and for this we rely on the startups who commercialize the technologies. But these companies and the entrepreneurs who build them won’t be “sustainable” either, without investors willing to take a risk and support them. Getting traction, especially in the risk-adverse energy space dominated in part by slow-moving utilities, can take time and money. The Slater Fund supports energy technology companies by investing the necessary time and money, by making introductions to teammates and potential customers, and by helping build syndicates with other like-minded investors.

PBN: What’s Rhode Island’s next step in advancing the local renewables industry?

SPARKMAN: The Slater Fund has seeded some really promising ventures, and the energy technology space is getting more, not less, exciting. Despite this, the bottom has fallen out of the venture capital market, which these companies were looking to for their next level of capital. We need to get behind these companies now in two ways: Financially, we have to be brave enough to invest deeper in the companies that succeed in the seed level, and that entails looking beyond government programs to the private sector; secondly, to speed their growth and adoption, we have to make sure that these companies are networked into the larger energy ecosystem – regionally, nationally and internationally. That means helping them partner with larger companies, serve bigger markets and raise money from multi-national strategic partners rather than just venture capitalists. In short, we have to think as big as they do.

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