Johnson Controls and Nexterra Energy Form Strategic Alliance to Offer Biomass Gasification
Johnson Controls and Nexterra Energy Form Strategic Alliance to Offer Biomass Gasification
Alliance expands renewable sources of energy supply options for customers
October 11, 2007: 11:03 AM EST
MILWAUKEE, Oct. 11 /PRNewswire/ -- Johnson Controls, Inc., a global leader in facility management and controls, has formed a strategic alliance with Nexterra Energy Corp. to offer biomass gasification solutions to Johnson Controls customers, including higher education, health care, government facilities and industrial operations.
Nexterra's patented gasification technology converts biomass into clean burning syngas that can be used to displace natural gas or fuel oil to generate heat and/or electricity. Under the strategic alliance agreement, the companies will jointly develop and implement biomass gasification projects that will enable customers to reduce energy costs, increase energy security, lower greenhouse gas emissions and become less reliant on fossil fuel by using locally sourced, renewable biomass fuel.
"As the cost of fossil fuels such as oil and natural gas increases and concern about their economic and environmental impacts grows, businesses and institutions are demanding alternative sources of clean energy. We selected Nexterra because it has demonstrated that its technology is cost-effective, versatile, easy to operate, and provides real solutions to real energy problems," said Don Albinger, vice president of renewable energy solutions for Johnson Controls. "Nexterra's capabilities add to a growing alliance of innovative energy technology partners that complement our existing renewable energy solutions and services."
Johnson Controls uses ingenious approaches to incorporate renewable technologies such as biomass, geothermal, solar and wind power with innovative energy efficiency strategies to provide customers long-term, sustainable solutions.
"Johnson Controls has worked successfully with Nexterra over the past four years," Albinger said. "Most recently we partnered with Nexterra to provide a $20 million biomass gasification system for the University of South Carolina that is scheduled for start-up this fall. We look forward to replicating this gasification solution across a range of institutional and industrial markets throughout North America."
"Nexterra is proud that an industry leader such as Johnson Controls has selected our technology as a key component of their renewable energy strategy." said Jonathan Rhone, Nexterra's President and CEO. "The marketplace is ready to commit to renewables, and Johnson Controls is well positioned to help Nexterra fast track our solutions into the institutional market."
About Johnson Controls
Johnson Controls is the global leader that brings ingenuity to the places where people live, work and travel. By integrating technologies, products and services, we create smart environments that redefine the relationships between people and their surroundings. Our team of 140,000 employees creates a more comfortable, safe and sustainable world through our products and services for more than 200 million vehicles, 12 million homes and one million commercial buildings. For additional information, please visit http://www.johnsoncontrols.com/.
About Nexterra Energy Corp.
Nexterra Energy is a leading developer and supplier of advanced biomass gasification systems that enable customers to self-generate clean, low cost heat and/or power using waste fuels "inside-the fence" at institutional and industrial facilities. Nexterra gasification systems provide a unique combination of attributes including design simplicity, reliability, versatility, ultra-low emissions, low cost and full automation to provide customers with a superior value proposition compared to conventional solutions. Nexterra is a private company based in Vancouver, BC, Canada. For more information: http://www.nexterra.ca.
Comments
This article is interesting because of its relevance to the recent strategic alliance class discussion. The article illustrates three concepts discussed in class: value of strategic relationship over time, shared goals and responsibilities when involved in a strategic alliance and the “deal thesis� or purpose of alliance.
First, the alliance between Johnson Controls and Nexterra is in a fairly slow cycle market. While the relationship between the companies has existed for over 4 years, this deal is a new and bigger collaboration opportunity. This matches with our class discussion on deriving significant value from an alliance over time. Second, the deal illustrates the shared goal the companies have created and their responsibilities. Together, they are targeting a growing market by building a new product and are utilizing their complementary resources and competencies to accomplish the goal. Without access to each other’s technology and market expertise, the companies would not be able to develop and deliver the biomass gasification system independently. Third, from Nexterra’s perspective this alliance provides access to a new geographic market where the company does not have a strong presence. Nexterra, a Canadian company, sold its gasification system to Johnson Controls in 2005 in order to enter the US market. Through this deal, Nexterra is further expanding its indirect presence in the US market.
Posted by: Prabhu Krishnamoorthy | October 12, 2007 6:00 PM