With a funding boost from the Minnesota Legislature, a Minneapolis-based nonprofit is launching a new initiative aimed at making the North Star State a leader in clean energy.

On Thursday, Clean Energy Economy Minnesota (CEEM) formally announced the creation of a new initiative dubbed “Minnesota Energy Alley.” The effort has been underway since the 2023 legislative session, but it’s beginning in earnest now. Last session, state lawmakers appropriated $3 million for the Minnesota Energy Alley initiative.

The first order of business is to provide funds for startups participating in the ongoing Grid Catalyst accelerator program, which has been around since 2021. But legislators and CEEM leaders have other, bigger ideas in mind, too: Their larger aim, they say, is to replicate Medical Alley for the energy industry.

“We see this as a really important initiative in strengthening Minnesota’s economic competitiveness when it comes to clean energy business formation and technology deployment,” CEEM’s executive director Gregg Mast told TCB.

About $1.8 million of the Legislature’s appropriation will go toward seed funding projects in the Grid Catalyst program. Nina Axelson, the program’s president and founder, said that about $850,000 has been set aside for seed investments in the 2024 cycle. Her group is already planning for another iteration next year.

Also on Thursday, CEEM announced the six startups participating in Grid Catalyst’s 2024 program:

• Aza Power Systems, a Minneapolis-based company building “carbon-free” ammonia-powered engines
• Blip Energy, a Chicago-based startup developing residential-scale battery storage
• Carba, a Minneapolis-based company that won the MN Cup startup competition last year and is developing carbon sequestration technology
• NeoCharge, a California-based company creating electric vehicle charging options
• Preserv, a Massachusetts-based company creating “AI-powered 3D mapping” for infrastructure projects
• SolarSteam, a Canadian startup working on industrial solar heating.

Grid Catalyst’s biggest draw for startups is an opportunity to stage larger-scale demonstrations of their projects with industry partners. The organization has found partners on a piecemeal basis since its inception three years ago. But the legislative appropriation is new this year, and will provide some certainty for the next couple years.

Without a chance to demo their projects, Axelson said, many startups “languish in the commercialization valley of death.”

“That’s one of the reason we built the program,” she said of Grid Catalyst. “We heard from startups that this was keeping them from getting investments.”

Axelson sees Grid Catalyst and CEEM as two parts of the larger “clean energy ecosystem.” Entrepreneurs and emerging business can participate in the accelerator program, and then “graduate” into a CEEM member. Today, CEEM has over 60 business members, which includes huge corporations like 3M alongside smaller startups like 75F.

St. Paul-based startup Vessyll, which sells battery energy storage systems designed to combat power outages, is another graduate of the Grid Catalyst program.

The Minnesota Department of Commerce is administering the money for Minnesota Energy Alley through a grant. It’s a one-time appropriation, but Mast said he’s “confident” he can return to the legislature with success stories to lobby for continued state investment.

Though Grid Catalyst participants don’t need to be based in Minnesota, they do need to demonstrate their project at a Minnesota-based location with a local partner. Axelson said the overarching effort of Minnesota Energy Alley is a fresh opportunity to foster “homegrown innovation.”

“We all know about the ‘Minnesota miracle,’ and all the amazing things we’ve done across a whole range of technologies in minnesota,” she said. “For me, it just seems like the clear next thing is for us to emerge as leaders in clean energy and tech.”