Smart grid technology is helping us build a more sustainable future; but how can we ensure smart grids fulfil their full potential? Bastian Fischer talks about the challenges that need to be overcome before smart grids are widely adopted, and sets out the three main findings of its Future of Energy report: correct technology, customer engagement, and a focus on policy.

OriginOil, an LA-based company that was originally formed to develop technology that helped produce algae biofuels, has started to use its designs to make fracking more efficient.

The firm recently announced its Clean-Frac system, which it says helps provides a more efficient and less environmentally damaging form of fracking. It hopes the technology will be commercially available toward the end of the year.

Many industry experts were presented with demonstrations of the technology in April, and the response was particularly enthusiastic. Dr Gerald Bailey, OriginOil’s, oil and gas industry specialist and a former President of Exxon, told reporters: “The response by the operators was overwhelmingly positive. The discussion was all about how Clean-Frac enables the recycling of frac flowback or produced water, resulting in significant cost savings and environmental benefits. With OriginOil’s technology, operators will be able to significantly reduce the amount of fresh water purchased for the fracking process.”
Speaking to the Quartz website, CEO Riggs Eckelberry spoke about why they were refocusing their technology: “The reason we have put a lot of focus on oil and gas is that it’s a big industry – aglae is a lot more small scale.”

He added: “In west Texas, water trucking costs are adding 14 cents a gallon to the cost of a barrel of oil. You can clean up the water with our process and reuse it for two to three cents a gallon.”

Aerogels are ultra-light materials derived from regular gels, but where the liquid component has been replaced with gas. As well as being extraordinarily light they also have extremely low levels of thermal conductivity; aerogels are also incredibly durable. These properties alone mean it has many useful and commercially viable applications; aerogels are used as thickening agents and are the most efficient chemical absorber which makes it useful at the sites of oil spills.

Aerogels are usually carbon or silica based. Graphene aerogel is no different. It is unique however because of its sheer weightlessness. Such small density might be hard to grasp; a cubic centimetre of aerographene weighs only twice as much as hydrogen and has only one seventh of the density of regular earth air.

Graphene, from which the aerogel is made from, is a sheet of a single layer or carbon molecules. Researchers in Zhejiang found that through a simple freeze-drying process they were able to stack graphene layers in three directions; the only limit on the size is the dimensions of the receptacle the aerogel is made in. Researchers believe that there would be no problem creating aerogel blocks in any size.

As well as lighter, graphene aerogel is also more easily produced than other, more common, aerogels. Previously, aerogels had been produced using the sol-gel method, where a gel is dehydrated until only the aerogel is left. But researchers found that by using solutions of carbon nanotubes achieved the same results. Researchers at zhejiang essentially created a solution of graphene and carbon nanotubes, and after pouring into a container, freeze-dried it. The nanotubes have a cylindrical nanostructure which holds up the layers of graphene together, forming the aerogel. The nanotubes themselves are carbon molecules arranged in hexagons forming a tube.

Graphene aerogel has been found to have superb elasticity and can recover its shape entirely after being compressed by more than 90 percent. It can also absorb over 900 times its own weight in chemicals, at a rate of 68.8 grams per second. Lead researcher Gao Chao thinks that these properties will make graphene aerogel an efficient chemical absorber, capable of mopping up oil from spills, returning the oil when squeezed, then thrown back into the spill to absorb more oil; much like a sponge in a bucket of water.

The researchers are also hopeful that graphene aerogel will be as conducive as aerographite, its predecessor. If that proves to be the case it might just prove to be a useful component for new, lighter batteries with higher energy-densities. It is also a powerful insulator; picture have shown a thing slab of aerogel shielding crayons from the blue-flame of a Bunsen burner; which would otherwise have melted the sticks in seconds. The commercial potential for this type of aerogel is very promising.

Like-stories of little Jimmy America manning drones from a sunny California office have commonly plagued public forums in the perseverance of a distinctly lax drone policy, and will continue to do so until the necessary legal changes are made to vastly improve operational transparency.

Civilian casualties
Amid a growing accumulation of drone critics, the President, in February, sought to assure both Congress and the public of his plans to lessen any such justification for wild speculation. Obama pledged to the State of the Union of his intentions to ensure “our targeting, detention, and prosecution of terrorists” is in alignment with American laws and “even more transparent to the American people and the world.” Though not having uttered the word ‘drone’ at any such point, the President appeared to answer many of the questions being asked of the US military’s favourite toy.

As Obama is yet to make good on his vague assurance of transparency, the vitriol is mounting on US claims to have “decimated Al-Qaeda ranks” incurring gross and unnecessary civilian casualties. As such, many are left wondering of the extent to which drone strikes are indeed successful in eliminating “extreme threats to the state” without impacting on innocents. The inexistence of an outright policy to neither confirm nor deny civilian casualties – otherwise termed collateral damage – means that those concerned are without legitimate assurances of drone strikes having not caused unwanted deaths.

The New America Foundation has, in this vein, compiled a database of drone strikes drawn entirely from news accounts. The resulting database indicates for an estimated 1963 to 3293 people to have been killed in Pakistan since 2004, of whom 430 to 635 are assumed to have been civilian casualties. Though those related to the project claim for improvements to both intelligence and munitions to have vastly reduced civilian deaths from 40 percent through Bush’s rule to “low single digits” now, it’s no less the case that these figures are indeed estimations.

Senior criticism
As the present drone policy perseveres to the detriment of US credibility, the list of critics has expanded to include those occupying – or to have occupied – senior legal positions. Harold Hongju Koh, previously the State Department’s top lawyer, said at a meeting of the American Society of International Law: “The administration is hurting itself by lack of transparency,” whereas former Defence Department legal counsel Jeh Johnson recently stated that: “[The US government] fails to officially confirm many of its counterterrorism successes, and it fails to officially confirm, deny or clarify unsubstantiated reports of civilian casualties. Our government’s effort in preserving the safety of the people risks an erosion of support by the people.”

Former director of policy planning at the State Department, Anne-Marie Slaughter, cites the issue as one capable of tarring Obama’s legacy. “The idea that this president would leave office having dramatically expanded the use of drones – including [against] American citizens – without any public standards and no checks and balances … that there are no checks, and there is no international agreement; I would find that to be both terrible and ultimately will undermine a great deal of what this president will have done for good.”

The stature of those issuing criticisms is highly indicative of the precedence proper military force is to take in determining Obama’s will to instill positive change. Though drone strikes are a proven and effective weapon against terrorism, the President is to adhere to a strict policy of transparency if he is to deter from more so undermining his credibility.

MAS Holdings has enjoyed 25 years of success thanks to its originality and creativity. Its  manufacturing capability, good ethics and sustainable focus continues to attract premium brands and retailers to the company. Mahesh Amalean explains how sustainability has been at the core of the business since its inception, and how empowering MAS Holdings’ female employees has added value to the company, as well as to Sri Lanka’s communities.

It is most commonly used in a formal sense in systems engineering and software engineering, but is often used in enterprise engineering. The requirements-gathering task and the necessity to use the best tools available is best demonstrated in standards development. This is becoming more complex day by day, and therefore increasingly challenging.

Standards being developed for the industries and technologies of today must be able to withstand the pressure of rapid market change, the high-speed evolution of existing technologies, the emergence of new technologies, and associated process change. Simultaneously, harmonisation is widening the range of stakeholder interest in the development of standards.

Faced with these challenges, it is essential that best practice is followed and that includes the use of powerful tools by anyone who is managing requirements. The requirements management function is the first step in a trail of traceability from requirements through use cases or user stories, model design, code generation, testing and deployment.

Preventing chaos
It is crucial to identify errors and discover needs during the requirements phase. Effective requirements management goes a long way to eliminating most design mistakes and reducing failures during the development process: we are all familiar with the saying ‘a stitch in time saves nine’, which advises early remedial action to avoid deterioration later.

This wisdom withstands time as many benchmark studies show it is much less expensive to identify and capture requirements early in the development lifecycle. Systematic and effective requirements management based on best practice captures risks earlier in the lifecycle and should help to reduce errors by controlling element characteristics in complex projects.

From the smallest business to the largest enterprise, cost overrun, project failure and in some extreme cases loss of life may well have been avoided had the requirements been complete. In the CHAOS Report by the Standish Group, which examines failed projects, three reasons were identified for project success: a clear statement of requirements; user involvement; and executive management support.

Requirements management is the essence of successful project outcomes whether it is software or product development for business or engineering, change management, or project management. One simple necessity is to ensure that the business and IT stakeholders understand each other.

Seeing is understanding
A visual representation of how requirements interact and depend on one another is powerful; it can help users understand what they want by using mind mapping to give a clear and contextual idea of their requirements.

Collaborative tools, such as Enterprise Architect from Sparx Systems, provide the ability to electronically document requirements and capture any artefacts (audio, video, pdf, etc) in a common model. This requirement model provides a complete, inclusive and easy-to-understand picture for stakeholders, which creates assurance and strengthens stakeholder commitment.

Requirements management is the essence of successful project outcomes

Again, where users are uncomfortable with written requirements, a picture is worth a thousand words, since a group of related concepts is often easier to remember than written material. This is why the use of mind maps assists with problem solving; different stakeholders, by visualising relationships, can more readily recognise their shared concerns about a given requirement.

Mind mapping improves verbal communication by enabling stakeholders to outline their thoughts spatially and subsequently articulate the meaning behind the concepts they have outlined. Using mind maps, the group can provide support to the individual by helping them find the words to communicate concepts represented by the mind map.

The system or product being produced displays quality aspects that result from effective requirements management. The requirements statement identifies a necessary attribute, capability, characteristic or quality of a system in order for it to have value and use to a user.

Matching expectations
Quality is not an accident and such statements are created on the basis of a well-considered and effectively executed process involving all the relevant stakeholders. The objective of requirements management is to increase the probability that a given project will deliver applications with the expected functionality.

With complete traceability from mind mapping, requirements and business process to software design and deployment, the overall likelihood that problems will be introduced is effectively mitigated. This expectation is more realistic with the ability to store requirements in a central and secure location, track artefact inter-relationships and control changes to single and group requirements.

Today, it is not uncommon for development teams, customers and stakeholders to be geographically dispersed, and efficient tools are necessary to link and organise people working on shared, complex projects. Using tools such as Sparx Systems’ Enterprise Architect, these stakeholders can effectively collaborate on projects by understanding who is working on specific tasks, what roles are to be filled and who has responsibility for the various aspects of the project.

Different team members and stakeholders must be able to input information that is relevant to their roles and activities, and is useful to the other members of the project. This implies the necessity to capture this information in a model that is available to all team members, overcoming their geographical limitation. Since the requirements function is essentially a detailed tapestry of the project elements, their definition, their inclusion and their traceability must be visible to the entire team.

For instance, a database analyst, a programmer and a security analyst could be assigned to work on a requirement. These resources must be managed to ensure their availability to work on assigned tasks, which exposes the need for integration between requirements management and resource management tools. Again, depending on the particular role, tools such as Enterprise Architect provide many different role-dependant views of the same information.

Under the scheme, Mexican private sector workers must contribute up to five percent of their payroll to the National Housing Fund, which is used by Infonavit to grant a series of mortgages and financial products to low income workers, at competitive interest rates. Employees with access to Infonavit funds have been the fastest growth segment for homeownership over the past decade, and the institute predicts it will supply 3.3 million new mortgages between 2013 and 2017; allowing a large scope for social change and development in the area.

“Its mission is to generate progress in Mexico by accompanying the mortgage-holder: helping to meet their housing needs and increasing the net-worth for their families,” explains Alejandro Murat Hinojosa, CEO of Infonavit. “The institute is built on four pillars: better coordination between housing institutions; the reduction of the housing deficit; adapting the urban and social housing models; and to generate wealth and quality of life through housing for mortgage-holders and their families.”

Social institute
Infonavit is a social institute as well as a financial one. When employers contribute the funds on behalf of employees, it allows the latter group to use these funds to access bigger loans and mortgages. The institute has a huge scope; 68 percent of the mortgages issued in Mexico are provided by Infonavit. Murat Hinojosa says: “When we talk about better coordination among the housing institutions and better articulation and allocation of resources, we have to consider four fundamental elements: community building; re-diversification of verticality; commitment to the environment; and information and technology.”

These are not the words of a profit-minded individual, but of a social crusader committed to bettering the lot of others. “We try to integrate these elements by stimulating better access to public services and infrastructure for communities.”

The institute has a vast history of helping the lower income members of Mexican society onto the property ladder. Last year alone, Infonavit granted over 578,000 loans, of these 63 percent were focused toward title-holders that earned less than four times the minimum wage. “We are attending the lowest segment, and that is very important to us”, says Murat Hinojosa.

Infonavit’s resilience in the face of changing governments is due to its adaptability

“We have a strategic agenda, based around four fundamental points: housing needs, financial sustaintability, social balance and scope of policies. When we approach our financial model, we have understood that it is not about a financial product, but about generating quality of life.”

The institute is a fundamental part of the Mexican government’s strategy to combat housing needs in Mexico, and has been for the past three administrations. Infonavit’s resilience in the face of changing governments is due to its adaptability. When it was founded in the 1970s, mortgages were exclusively for buying new-builds; it was a valuable strategy at the time that helped boost Mexico’s building industry.

But in recent years, upon noticing a change in its client’s demand, Infonavit created loan products to meet several other needs, such as building own homes, and renovating and buying previously owned property. “Infonavit is a social mortgage financial institution. Our mandate establishes that we should work with low income areas, or segments that commercial banks don’t serve,” says Murat Hinojosa.

“What we have been able to achieve over the past few years is a cross-subsidy model that gives us the opportunity to establish more competitive interest rates, so we can benefit title-holders…

“The great opportunity Infonavit is excited about today is to migrate from a traditional housing model to a more integrated urban and sustainable model of competitive cities.”

Empowering communities
Part of Infonavit’s modernisation strategy has also been to develop a whole range of sustainable financial products. The ‘Green Mortgages‘ programme, which accounted for 400,000 loans in 2012, is aimed at promoting sustainable elements in the housing industry, such as solar panels. “It benefits people by giving them better control of their budgets in energy and water consumption, and gives them the opportunity to lower CO2 emissions,” says Murat Hinojosa. “So not only would we foster a commitment to the environment, but we would enable our title-holders to have more control over their energy and water budgets, and generate huge saving as well as reduce their carbon footprints.”

Infonavit’s Green Mortgages scheme is also central to its urban development strategies. Most of these mortgages are granted to urban developments. “We consider a commitment to the environment with better transportation and better community building,” says the CEO. “This is important because, if people are happy where they live, our financial products will certainly be more robust. But we will also be achieving our most fundamental goal of generating quality of life and net worth. We want to be generating social as well as economic wealth.

The institute has a vast history of helping the lower income members of Mexican society onto the property ladder. Last year alone, Infonavit granted over 578,000 loans

“We have gone beyond the need for new housing to identify the preferences of our clients. So now we have generated products that address the needs of people buying new houses, or expanding or renovating their houses. We are also trying to address the renting model, which Mexico has not been able to tackle properly.”

Infonavit’s approach to risk and return, which is fundamental financially, is also unique. “We have a motto at Infonavit: “as long as there is a willingness to pay there will always be a solution”,” says Murat Hinojosa. The institute is just as concerned about its social scope as it is about returns. “It is important to consider the quality in the housing and how to achieve a community. If we achieve these two fundamental elements we will be generating net worth.”

For Infonavit, it’s vital that loans contribute to the betterment of the communities where the beneficiary-employees choose to settle. One of its most successful programmes in recent years is aimed at improving communities not only for residents, but also municipalities.

The Municipal Competitiveness Programme in Housing aims to provide much-needed relief for local purse strings. “Today in Mexico, many of the municipalities lack resources, planning capacity and financing to better their communities,” explains Murat Hinojosa. The programme gives incentives to municipalities that meet high standards of community building and sustainable urban development.

Infonavit offers financial support to local projects, and helps implement action plans. “By doing this, we are helping municipalities generate the resources they need to build better infrastructure in their communities.”

But the programme goes one step further and allows municipal authorities to collect property taxes from Infonavit, together with mortgage payments. This has significantly boosted tax collection by ensuring taxpayers can use their Infonavit titles to pay their taxes.

Thinking ahead
The Mexican mortgage lender is clear in its goals for the future: Infonavit will continue to push through and consolidate its human capital – financial sustainability – making its operational model one of the most efficient in Latin America. “We will achieve this with a great strategic agenda and good corporate governance,”says Murat Hinojosa. “We will continue loaning and accompanying our title-holders through life, and supporting them with their housing and financial needs.

“We see great opportunities in the future. We need a model that continues to understand better the preferences of our clients and to continue bringing them the solutions they need in rent, in growing the size of their property, and solutions to buy new or older houses. We need to understand that we need to have a wider scope. We see the possibility of generating housing solutions for all Mexicans.

In that regard, we are aligned with the President, Enrique Peña Nieto, who has asked all housing institutions to generate mortgage solutions for those underserved workers who donít have the access to social security in housing. These are the municipal and state workers, armed forces, police and small business owners. The three fundamental opportunities for the future are renovation in housing, a wider scope attending underserved worker and rental schemes which do not exist in Mexico.”

Netherlands-based Locamation has been developing its own set of smart grid solutions that are highly adaptable to changing circumstances. The New Economy spoke to the firm’s Chief Operating Officer, Pascal Bleeker, and its Director of Sales and Marketing, Alexander Schoenfeldt, about how the industry is developing and what the company is able to offer utility firms in the drive towards greater efficiencies.

Maintaining high standards
Bleeker says it is its extensive experience in the industry that enables it to match the needs of its customers: “[We] have 30 years experience of automating industrial and electrical systems with real-time information and communication technology. This know-how can be found in all our products and solutions. Our ambition is continuing to turn new innovative ideas into available and proven solutions for the smart grid world.”

The company places considerable emphasis on providing a secure and stable solution for its clients, which are primarily utility companies, and it is continually testing the strength of its security to make sure it is up to scratch. Its SASensor product, a substation automation solution based on an open software and system platform enables Locamation to offer a customisable and secure service to clients.

Bleeker says: “Besides reliability and performance, the highest level of security has always been our continuous goal in our product development, and has been proven in several hacker tests over the last few years. This approach has actually helped us be flexible in meeting customer requirements, and this flexibility is helping our customers to mitigate investment risks and achieve business goals.”

Proving that flexibility
While flexibility is obviously a strength, added costs if things are continually changed is challenging too. Locamation says its flexibility is appreciated by utility companies and that it enables its customers to actually cut costs. By using a software approach, the company is able to seamlessly deliver necessary upgrades, new functions and fixes when required. In the past, utility firms would be tied into expensive equipment that would either need to be replaced or discarded.

Schoenfeldt says: “Everybody is aware of some uncertainty in the future, but the preparatory steps network companies can take by using SASensor will result in a better preparation to face future demands and prevent stranded costs. Like utilities may have meters that are not future-proof, with no security provided, as hardware encryption is not in place. With SASensor, they will have the flexibility.”

In the past few years… distribution companies have started to prepare for future challenges, rather than waiting for regulatory decisions

Changing regulations can also impact on utility firms, and so increased flexibility allows companies to adjust accordingly, says Schoenfeldt: “Utility firms have changed their viewpoints in the past few years significantly, from a government-owned monopoly to a customer and profit-oriented service provider. This is an ongoing trend. Specifically, distribution companies have started to prepare for future challenges, rather than waiting for regulatory decisions. ”

“Within this transformation, the distribution companies realise that moving forward in small technical micro-steps will not help them to manage the cliff of their future market model. So they need to change their business model.”

SASensor will also help in the smart buildings sector, creating greater efficiencies. Bleeker says: “In the near future, buildings will not only become zero emission houses, they will become an active grid component with available capacity for other consumers. The impact to the grid will be significant and does require control in load and frequency management. With SASensor, we can activate and utilise these building capabilities much more efficiently than with conventional technology.”

The importance of collaboration
Working together with other companies, as well as local authorities, is crucial to implementing smarter power solutions that benefit communities. Regulations are not currently designed to help the industry, but local authorities are lobbying central government on its behalf.

Bleeker says: “The regulation is not well planned for supporting smart grid initiatives. We also need to get financial benefits from this. It’s not only about reliability and sustainability; people are also looking at the financial effects. Local government is lobbying central government to change the tax laws to help make these projects financially viable.” The tide is turning, however, and many countries are piloting new smart-grid schemes in the hope that they will prove a success.

Schoenfeldt adds: “A lot of European countries have understood the need to change the regulatory funding model. We have seen this start in the UK. In Germany, Poland, Belgium, and Austria they are preparing the next regulatory period, and every country is coming to an agreement about how the grid costs are covered. Every government is interested in results, and so that is why there are so many pilot projects around to provide them with real experience.”

Last year, Locamation announced it had begun a number of pilot schemes with companies in the UK. In October, it was conducting a pilot with Scottish and Southern Energy Power Distribution. The pilot will run for a year and see a substation with Locamationís SASensor HMV product. Earlier in the year, the company revealed it had struck a pilot deal with Western Power Distribution and UK Power Networks, two of the largest power distribution networks in the UK.

Working together with other companies, as well as local authorities, is crucial to implementing smarter power solutions that benefit communities

Keeping an eye on progress
In the past, utility firms would only be able to monitor how their grids were running at specific times, creating mere snapshots of how they were operating. Locamation’s approach is to continuously monitor grids, building intelligence into the substations.

Bleeker says: “As we continuously monitor the standard key performance indicators of power quality, load, phase angle, we decided to filter the continuous information stream, and log and record the data specials in order to get early signals of potential outages or failures already on substation level.”

“The network companies have the requirement to understand better and start to manage the grid differently. For this grid insight, we change from a yearly-to-daily picture and will end with a live movie of the critical locations and stress points in the network topology. The benefit of this new grid intelligence, including documentation and the possibility to remotely control, is keeping the network healthy, cost-efficient, secure and reliable.”

Smart grids are going to become more important as communities attempt to use their electricity in a more efficient manner. Creating a sustainable network of energy provision is a goal that will ultimately benefit communities everywhere.

Bleeker says: “Just imagine: the electricity grid will become the most powerful network of societies and industrial life, being their blood and nerve system at the same time. Automation and self-healing mechanisms have been put in place to enable society to use electricity at any point, at any time and to meet any demand it has.”

For this network to be achieved, there will need to be support from regulators, as well as the industry, ensuring that a standardised set of systems is in use so that collaboration is possible. As Bleeker says: “Locamation understands its responsibility to provide standardised, intelligent, designed system architecture, and devices and software in combination with basic and customer-specific software functionalities in a collaborative community of customers and partners.”

Schoenfeldt agrees: “Our ambition should be to create a standardised platform for the industry. There are standards for metering, for substation communication, for in-home platforms. The interoperability will make them all work together.”

Firms like Addison Lee do not require drivers to undergo the sort of exhaustive training necessary for a black-cab license (known as ‘the Knowledge’) and have benefited from an easy-to-use phone system.

New tech, old industry
In the last year, black-cab drivers have embraced new technology as a means of fighting back against the minicab firms. Hailo, an application initially launched on Apple’s iOS platform towards the end of 2011 by some entrepreneurs and black-cab drivers, has enjoyed a rapid uptake by both customers and drivers.

I’ve always believed it’s what’s been missing in any taxi market in any city in the world

The app enables customers to order a taxi in seconds, even allowing them to track its progress on a map. Payment is taken either through a card account or by cash. Since launching, the app has been downloaded by roughly 10,600 of the 23,000 black-cab drivers in London, with most praising the increase in business they’ve seen. More than 225,000 customers have also downloaded the app.

One of the co-founders, Jay Bregman, told Londonlovesbusiness.com the reasons the app has been so successful: “We build better networks that mean cabbies are closer to more hails and availability is higher for customers without paying a fortune. What also gives us an edge is that the taxi community trusts us because former taxi drivers themselves are behind the business.”

Even though Hailo takes a cut of the fares drivers receive, many are pleased with the way it has boosted trade. One of the aspects most appreciated is the freedom drivers have to use the service whenever they want. They aren’t tied to a working schedule, as with minicabs, and retain the freedom and flexible working hours they’re used to.

Bregman told Wired magazine: “We aim to deliver to drivers only 20 to 30 percent more incremental fares each day to fill their downtime. So we always have more drivers than we need. Hailing times in London are mostly down to two minutes, and they’re falling.”

Taxi across the water
Such has been Hailo’s success in London that it’s already expanded to nine cities around the world, with highly competitive – and potentially lucrative – New York added in February. One of the founding drivers from London, Russell Hall, told the BBC he saw the model as transferable to many cities: “I’ve always believed it’s what’s been missing in any taxi market in any city in the world. What we’ve created in London will go to any city.”

In New York, however, the company faces stiff competition from another start-up, called Uber. More established in the US, Uber recently began signing up ordinary drivers so they can offer their own taxi services. Another market many firms are looking at is Japan, with Tokyo offering considerable rewards to whoever cracks it first. Hailo’s Chairman, Ron Zeghibe, told the Financial Times: “Japan’s market alone is worth $25bn and Tokyo weighs in at twice the market value of either London or New York. We will become Japan’s first end-to-end mobile taxi app.”

Hailo recently secured $30.6m investment from venture capital firms, including Twitter and Foursquare investor Union Square Ventures, as well as Accel Partners, Japanese telecom firm KDDI and Richard Branson. Since its inception, the company has received over $50m in backing, reporting over $100m in sales in 2012.

A self-proclaimed environmentalist who reportedly spends his free time scaling 200ft California redwood trees, Acting CEO Matt Horton’s business methods are both pragmatic and principled in their makeup. Having originally worked as a venture capitalist in the Silicon Valley office of @Ventures, Horton invested a great deal of time and entrepreneurial spirit in the formation of Propel’s initial business plan in 2007. While at first being intended as a vendor for high-blend biodiesel, the company was later repositioned to offer multiple fuel types.

The company, while offering a variety of fuels, focuses primarily on ethanol-based fuel derived from corn, most notably used in E85 and E10 fuels. At present, Propel – in partnership with Solarzyme – is trialling algae-derived fuels at Propel gas stations throughout California. The pilot programme is the first such instance of algae fuel being sold to US consumers and saw sales rise 35 percent through January and February this year.

Location, location, location
Having opened 31 retail stations across California and Washington as of January 2013, Propel is strengthening the foundations for what Horton terms the “slow, but exciting” transformation of the US automotive industry. Last year, Propel secured $21m worth of funding for the furthered construction of 200 fuelling stations over the next two years. Both government and private investment types back the company. This has included the recent procurement of $11m in equity capital and $10m in debt financing from a number of venture capital firms.

The alternative fuels industry is dependent on its largest competitor as a pathway into the market

Propel is currently based in California, where the company benefits from the Low Carbon Fuel Standard, through which the company aims to reduce carbon intensity in transportation fuel. Though similar laws are implemented across the US, few are as stringent or progressive as California’s laws for the reformation of environmental strategy.

Location is integral to Propel’s business strategy in that it seeks to target those of an adaptable and enterprising sort to best ensure the maximum adoption of its product. Though the oil industry is considered to have a chokehold on US markets, Propel demonstrates a confidence in its consumers beyond that of competing companies. Using software built by the company, Propel chooses locations it believes best suit its technical requirements. Horton said: “In this business, the vehicle drives everything. You can have all the infrastructure in the world, but if there aren’t any vehicles around that use it, it’s not going to make any difference.”

Capturing the base
Propel ultimately seeks to create an extensive network of fuelling stations, as well as determine similarly minded consumer bases whose ultimate profit lies in the wider acceptance of alternative fuels throughout the US. Horton’s optimism is highly representative of the company’s healthy cash flow and future projections, having averaged 300 percent growth since 2010 and received in excess of $10m in revenues through 2011. With continued commitments to both R&D and spearheading advances in alternative fuel developments, Propel is looking to expand into further states throughout the US.

There are inherent challenges to the furthering of this project. Geoff Cooper of Renewable Fuels Association said: “The gasoline stations don’t want a competitor, but the alternative fuels industry is dependent on its largest competitor as a pathway into the market.” Regardless of such obstacles, Horton maintains that ‘The energy industry is ripe for disruption,” as well as stating his belief that Propel can better the cause of renewable fuels across the US.

Most reassuring for Propel’s future is Horton’s confidence in the market: “I believe strongly in the power of business and the American consumer to drive change. A company like Propel moves us in a more sustainable direction, rather than relying on regulation and government mandates.” Horton’s willingness to instigate change and innovation, as opposed to waiting on slow and inconsequential reforms, will surely allow Propel Fuel to reduce the US’  negative environmental impact.