Hydro Energy Entrepreneur Wayne Krouse (Part 4)

SM: What did you do when you got the patent in October of 2005?

WK: I kissed it! I then put it in the bank vault. On a more serious note, I started focusing on the financial model and the business plan. I think it was on version 12 by then. I joined the National Hydropower Association and went to their conference in March of 2006.

At that point I had raised some funding from friends and family, and I started asking around for good companies who could do hydropower analysis and studies for us. We hired Hatch Energy for some feasibility studies.

In early 2007 Hatch felt we were at the limit of what we could do. We needed to do some computational fluid dynamics. We went up and saw American Hydro in York, Pennsylvania; they are conventional head-based turbine designers. We went to see if they would have any interest in helping us with the computational fluid dynamics design, but at the time they were so busy they did not have any spare time to help. Eventually we to Concepts NREC in Massachusetts, who were interested in helping us. We had raised a little more money by that point, which helped.

SM: Where did you raise the money from?

WK: Mostly friends and family. The first investor put in $100,000; the second investor, who was a very good friend from college, put in $250,000. We had someone put in another $50,000 then a group that did $25,000 and $100,000. They were all doctors up until we did our Series A round. This was all in 2006–2007.

SM: What were you going to do with the turbine manufacturers you had approached?

WK: When you measure flow in piping systems, you do it with ventures and pressure differentials. At the throat of a venture the velocity increases. Depending upon the approach and departure angles as well as the fluid type, you can control those velocities. I envisioned a design for a device that could get into the water to assist in water acceleration. It would allow for the turbine to be placed at the throat where the water velocity was highest and extract the greatest amount of energy. I had conceptual drawings of my thoughts, and those are what I took to Concepts NREC so they had an idea of where we were headed. I just needed an engineering firm to do the design and put the nuts and bolts together.

They did a feasibility level study which looked good. They liked the idea of the different application points for the technology. We are now wrapping up the first commercial project. It will be the first licensed project in the US.

SM: How did you get that project?

WK: Chuck Alsberg from the National Hydropower Association made some introductions for me. I had looked at the different states to see were the production tax credits were highest. In Minnesota they have a 2.5 cent per kilowatt hour state production tax credit. There is also a federal production tax credit for incremental hydropower, although my technology had never been tried or applied as an incremental hydropower ignition. We went to seven different dam operators and did some inspections and surveys in Minnesota. The Army Corp of Engineers Locking Dam No.2 was operated by the city of Hastings, and after surveying the dam that became our number one objective. I got in touch with the head of the city’s public works, Tom Montgomery, and spoke with him about what we were doing. He was a big supporter right off the bat. They were willing to let us use their license and modify it, but could not come out of pocket for anything. It has all been done with our equipment, and we have paid for everything.

This segment is part 4 in the series : Hydro Energy Entrepreneur Wayne Krouse
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