Case Study

A Leading US Utility Partners with Startups on Sustainable Forest Management

The Situation

Millions of acres of California’s forests must be better managed to foster healthier growth with a lower likelihood of wildfires.

Our client alone trims and removes more than 1 million trees near its wires across its territory each year to mitigate wildfire risk, and as many as 15 million acres of California forests need some form of restoration.

However, today, healthy forest management is not economically sustainable without non-market support. The cost of removing unmerchantable wood from the forest is too high and the value generated from that wood is too low.

ProblemSpace Approach

State-of-the-art technologies and approaches had not yielded an answer to these challenges, so one electric utility looked to the innovation community for novel ideas.

Our client launched an innovation challenge through ProblemSpace by ADL Ventures, tapping into the entrepreneurial community for ideas that might change the economics of managing the forest.

Our client sponsored three challenges:

1. Next-generation woody biomass collection and harvesting technology.

Our client alone trims and removes more than 1 million trees near its wires each year to mitigate wildfire risk, and as many as 15 million acres of California forests need some form of restoration. Novel ways to reduce the cost and/or hazards of woody biomass collection could benefit utilities, landowners, and communities across California.

2. Next-generation woody biomass densification and transportation technology.

Transportation of woody biomass from collection sites to either concentration/feedstock yards or to conversion facilities accounts for roughly 25% to 50% of the total delivered cost. Densification and moisture reduction can drive important transportation cost reductions, yet most existing densification technologies are prohibitively expensive.

3. Expanding markets for woody biomass products​. 

Woody Biomass is today an underutilized resource for reuse in other products, especially in the case of biomass considered “non-merchantable.” Finding novel ways to increase the value of products created from woody biomass could benefit utilities, landowners, and communities, and citizens across California.

The Open Innovation Challenge

Together with ADL Ventures, our client assembled a remarkable cross-section of stakeholders to help create the “market pull” conditions that are key to effectively managing California’s forests.

Our client recognized that this is a systems problem that cannot be solved by any one organization or government entity. ADL and our client gathered dozens of the most important thought leaders with diverse perspectives to collaborate on this challenge. Participants included multiple client utility divisions, the US Forest Service, the US Endowment, Center for the Study of Force Majeure, American Forest Foundation, Joint Institute for Wood Products Innovation, and the UC-Davis California Biomass Collaborative.

This stakeholder network not only volunteered their expertise on the approaches most viable commercially and technically, but they also proactively offered advisory and financial assistance to the entrepreneurs in their path to commercialization.

Client stakeholders expressed interest in working with seven of eight top submission finalists to support the acceleration of their concepts towards scalable commercialization.

ADL Ventures reviewed over 100 submissions of novel ideas in response to the three challenges posed to the innovation community. Eight of those innovators were selected as finalists to present to the Client and external stakeholder committee.

Seven finalists received interest in continued engagement with the Client and the external stakeholder group. Commitments for support included: pilot R&D projects, market validation tests, customer discovery, biomass feedstock support, introductions to likely buyers, and introductions to funding sources.

Two startups in particular moved into discussions to launch R&D pilots with the client utility.

1. Forest Concepts is a company that bales small diameter wood rather than chipping, leading to significant onsite operational savings.

2. Takachar is a mobile torrefaction product that can densify biomass in the forest and can be deployed with small capital investment. Both solutions could decrease the cost of managing the forest and Takachar’s technology can help create higher-value products for previously unmerchantable wood.

The client has provided letters of support for >$1M in grant funding for Forest Concepts and Takachar through collaboration with the external stakeholders. Additional R&D grants are expected as new pilot data comes in from existing test projects. The ProblemSpace process helped our client and other California stakeholders accelerate the path toward commercial deployment for the innovations that are best positioned to dramatically decrease the cost of harvest, collection, and transportation while increasing the value of the end products made from the biomass feedstock.