Benefits of distributed energy resources

Power lines from above

Distributed energy resources, or DERs, are increasingly popular among utilities and wholesale electricity market participants. 

DERs are a category of power generation resources defined by their size and their location. Definitions vary, but few physical DERs would be larger than a couple of megawatts. Diesel or natural gas generators, microturbines, run-of-the-river hydro units, solar arrays, wind turbines, and battery energy storage units are common sub-megawatt DERs. For more on this, check out what are Distributed Energy Resources and how do they work.

DERs, being smaller in size than traditional power plants, have lower permitting requirements, use less land, and don’t involve extensive infrastructure upgrades. 

Crucially, many DERs are already there. DERs can be found within microgrids, central generation networks, and beyond. Numerous homes and businesses are now equipped with battery energy storage units or backup power generators designed for their own use. Increasingly, utilities and DER aggregators incorporate these assets in virtual power plants that support the wider electric grid. From a utility’s perspective, installing the communications upgrades and software platform needed to effectively control these existing assets as a virtual power plant is easier, less expensive and faster than building an equivalent generating resource from scratch.

DERs can also be located close to load centers. Most people don’t want to live next to a power plant, so historically, power plants have been built away from cities. In most parts of the world, this has led to a power grid development model where large remote power plants are connected to customers via long-distance transmission lines. These transmission lines are limited in capacity, creating a variety of constraints which utilities and grid operators must carefully manage. It’s not enough to generate electricity—the electricity also needs to be delivered to consumers. 

DERs, in contrast, can be deployed and located in densely populated areas. Residential energy storage units, for example, are found in population centers. Likewise, demand-response DERs are usually provided by factories located in industrial areas and, increasingly, by homes located in residential neighborhoods.

Different types of distributed energy resources are available for these various application scenarios.

Their unique attributes mean strategically placed DERs can deliver attractive benefits in return for a relatively small investment. These benefits can be categorized as follows:

Benefits of DERs: Transmission and distribution deferral

DERs located within or close to cities are not subject to transmission constraints in the same way remote power plants are. 

On the contrary, alleviating transmission and distribution constraints is one of the top reasons why utilities deploy DERs. This is known as transmission deferral, or distribution deferral. When, for example, a small city grows, there comes a time when existing transmission lines are no longer sufficient to carry all the electricity needed. Traditionally, a new transmission line would be built. 

Deploying DERs within city limits provides an alternative. A comparatively small investment in DERs can result in enough locally available capacity to sustain the incremental growth of the city for a few years. 

The additional capacity allows the utility to defer the construction of new power lines for a number of years without compromising the reliability of the city’s power supply. From a financial point of view, delaying such a major investment can save the utility, and in turn the ratepayers, a lot of money.

Distributed Energy resources provide a way for utilities to defer costly grid upgrades

Benefits of DERs: Generation capacity and balancing

In some cases, it may be possible to avoid building a new transmission line entirely. If enough DERs are deployed within a city, the DERs can potentially shave off the peaks in the electric demand coming from the city. Battery energy storage units, back-up generators and demand response resources, specifically, are all great ways to reduce peak demand. 

The result is the city overall has a flatter load profile, which is easier to support, reducing the level of investment needed in the regional electricity grid infrastructure. For example, this may delay or remove the need to build a new peaker power plant, upgrade a substation or build new transmission lines.

Peak-shaving assets are in especially high demand in areas where the potential for renewable energy such as solar or wind power is good. In some of those areas, the rapid growth of solar and wind power—under both distributed and centralized models—has made it very difficult to balance the electric grid. Solar and wind power resources are inherently intermittent, so other resources are needed for balancing them out. 

To simplify, for every megawatt of solar capacity on the grid, another megawatt of non-intermittent capacity needs to be available for cloudy days and for evenings—this is what peak-shaving resources do. 

Benefits of DERs: Ancillary services

Ancillary services make up the third category of DER benefits. 

Making sure consumers receive distortion-free AC current, with a frequency of exactly 50 Hz and a voltage of exactly 120V is not a simple task. The utility or the grid operator relies on a set of specialty service resources to achieve the required quality of service. 

For example, if a frequency deviation is detected on the grid, the system operator may request the intervention of frequency control resources. Frequency control resources can be power generation or demand-response resources. By adding or removing a small amount of power from the grid, they return the grid frequency to its nominal value. 

Ancillary services have been traditionally provided by large production units such as coal power plants. In recent years, however, DERs have emerged as valid alternatives for certain categories of ancillary services.

Some categories of DERs, for example, are great at providing fast response services such as fast frequency control. At best, large thermal power plants take several minutes to start up or ramp up when responding to frequency control calls. Battery energy storage units, in contrast, can respond in milliseconds. 

Likewise, residential demand-response resources can provide load reductions in seconds or less. 

In some areas, DERs have been so successful they have almost entirely displaced traditional power generation units for certain categories of ancillary services. In the United Kingdom, for example, more than 90% of ancillary service capacity contracts awarded by the grid operator in the past several years have gone to aggregated demand-response resources, energy storage units, or hydroelectric power plants. DERs may thus have contributed, in an indirect way, to the retirement of coal and gas-fired power plants, which previously subsisted by offering ancillary services to the grid.

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Cummins Office Building

Cummins Inc.

Cummins, a global power technology leader, is a corporation of complementary business segments that design, manufacture, distribute and service a broad portfolio of power solutions. The company’s products range from internal combustion, electric and hybrid integrated power solutions and components including filtration, aftertreatment, turbochargers, fuel systems, controls systems, air handling systems, automated transmissions, electric power generation systems, microgrid controls, batteries, electrolyzers and fuel cell products.

How to transition your fleet to natural gas engines

semi trucks on highway bridge

There are many considerations for fleet managers who want to switch to natural gas engines. Some of the key factors include driver education, maintenance, and having a refueling strategy in place. With an effective transition plan, the benefits of natural gas don’t take long to materialize for customers, drivers, maintenance technicians, fleet managers and business owners.

Driver education on natural gas engines

When it comes to operating the vehicle, drivers will find natural gas engines perform and behave very similarly to the diesel vehicles they have been used to. There are, however, some differences. For example, fuel is not measured in gallons but in pressure in the tank as it is a gas. When the weather is colder, the pressure reading on the fuel will be lower. However, this does not mean that there is less fuel. So, there is a certain level of driver instruction and experience required to interpret these levels. Additional training on safety topics, such as detecting gas leaks and safe refueling practices, is also required. Learn more about how drivers experience natural gas engines.

Maintenance principles of natural gas engines

Natural gas engines can provide a number of economic benefits over diesel engines, such as not needing to add diesel exhaust fluid or complete regens. This is in large part because natural gas engines do not require a complicated exhaust treatment system. The clean combustion profile of natural gas means that such systems are not required. Maintenance is thus simpler and less expensive. 

Maintenance crews also tend to have a more pleasant experience working on natural gas engines compared to diesel engines. There is no diesel to spill on their clothes, and the engine is not covered in soot, reducing the need for detergents and additives in the oil. 

When you switch to natural gas engines, special care must be taken to properly maintain a natural gas vehicle as there are some differences to diesel engines. Most natural gas engines, for example, are spark-ignited and thus feature spark plugs. It is very important to replace the spark plugs according to the recommended service schedule. During installation, care should be taken to maintain the cleanliness of the spark plugs and to install them using the correct torque. Only manufacturer-approved spark plugs should be used as they are extensively tested and certified for each engine. 

Because natural gas engines operate at higher temperatures than diesel engines, it is important to use the appropriate engine oil. For that reason, Valvoline’s Premium Blue One Solution Gen 2 is an exclusively Cummins-approved oil for both natural gas and diesel engines. Higher temperatures lead to higher requirements in the oil for resisting oxidation and nitration. Using purposely formulated natural gas engine oil can increase the recommended service interval by up to 50%. Fuel filters should be drained daily and replaced every 1000 engine hours. Valves should be adjusted according to the maintenance schedule. 

Refueling plan for natural gas engines

Locally managed refueling stations should also be kept in good operating condition to maintain the cleanliness of the fuel supply going into the engine. This will reduce the maintenance needs of the engine and extend the effective vehicle life. 

Native natural gas is an abundant and cost-effective fuel source for a modern fleet, available in gaseous form (CNG) or liquified form (LNG). Natural gas refueling infrastructure is not as common as other fuels such as diesel. A plan should be put in place for the refueling of vehicles to ensure a successful transition of natural gas in our renewable future

Natural gas fleets are particularly attractive to businesses that are structured around a central depot where their vehicles can return each night. Infrastructure can be built to refuel the fleet in a cost-effective and efficient way through slow fuel fill stations. Slow fuel fill stations provide advantages in that, at the end of the day, the driver can connect the supply to the vehicle and not have to worry about it anymore. Several dedicated refueling lines can be provisioned for each vehicle, meaning drivers will not have to wait in line to refuel. Fast fill solutions also exist, where natural gas is compressed on site and stored in tanks so that it is available to quickly fill the next vehicle to arrive. 

If natural gas engines are relevant to your needs, don’t forget to also check our answers to frequently asked questions about natural gas engines. These answers cover topics such as cost, practicality, and feasibility of integrating natural gas into commercial fleets.


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Puneet Singh Jhawar

Puneet Singh Jhawar

Puneet Singh Jhawar is the General Manager of the global natural gas business for Cummins Inc. In this role, he is responsible for the product vision, financial management and overall performance of the natural gas business. Over his 14-year career at Cummins, Jhawar has cultivated successful relationships with a number of Cummins’ largest customers. Jhawar has extensive global experience, with roles based in the Middle East, India, Europe and the US.

The role of hydrogen engines in environmental sustainability

semi on a bridge around greenery

In the United States, medium and heavy-duty vehicles are responsible for about a quarter of all transportation greenhouse gas emissions. They’re also the cause of about a third of NOx emissions from mobile sources. It’s no wonder the commercial transportation sector is being asked to reduce emissions.

It’s necessary to limit emissions of both greenhouse gases and common pollutants. Government regulations are not the only factor driving these reductions. The growing demands of customers who prefer to do business with more environmentally friendly service providers is another. Some companies also believe that reducing their emissions is needed to ensure the long-term sustainability of their business.

Switching to vehicles with hydrogen engines can provide a range of additional benefits in numerous applications.

Hydrogen engines and GHG emissions reduction

Hydrogen is a carbon-free fuel. Commercial vehicles or equipment with these engines can accelerate decarbonization by delivering over 99% reduction in carbon emissions. You can learn more about how hydrogen engines work in on-highway applications.

If green hydrogen is used, these vehicles will also have low to zero “well-to-pump” greenhouse gas emissions.

In relation to fossil fuels, well-to-pump emissions consist of all the greenhouse gas emissions prior to fueling a vehicle. These are also the resulting emissions from the extraction, processing and transportation of the fuel up until the time when it is dispensed at a fuel station. By extension, the well-to-pump emissions of hydrogen includes the emissions caused by the activities needed in fuel manufacturing and delivery.

Gray hydrogen has high well-to-pump emissions. It’s made from methane using a common industrial process. Therefore, gray hydrogen shouldn’t be used to reduce a vehicle’s greenhouse gas emissions.

Green hydrogen, in contrast, is made using processes that don’t release any greenhouse gases. The electrolysis of water using renewable energy, for example, is a way to manufacture green hydrogen.

No fuel is totally free of well-to-pump greenhouse gas emissions. It’s impossible to fully decarbonize all activities connected to supplying fuel. Green hydrogen, though, comes as close to being zero-carbon as any fuel can.

Hydrogen engines and emissions of common air pollutants 

Hydrogen combustion product is primary water vapor, simply because hydrogen fuel doesn’t have other elements such as carbon or sulfur. With hydrogen engines specifically, there are no carbon emissions from the fuel itself. Moreover, when green hydrogen is used, there are also no greenhouse gas emissions from the production of hydrogen fuel.

Hydrogen engines, however, can generate small amounts of NOx molecules. NOx is the product of a reaction between nitrogen and oxygen molecules present in the air. It takes place under the combustion temperatures in the engine cylinders. To avoid releasing excess amounts of NOx, vehicles with a hydrogen engine will require an aftertreatment system to eliminate NOx from their exhaust.

Manufacturing and operating hydrogen engines with existing resources

Using hydrogen engines also helps the environment in an indirect way. Hydrogen engines are similar to regular internal combustion engines, which benefits fleet operators. Hydrogen engine production can occur economically and at scale using existing factories. When used in certain commercial applications, a dense fueling infrastructure isn’t needed. Hydrogen buses, for example, can refuel each night using fueling stations located at the central bus depot. Thanks to these attributes, hydrogen engines are easier to adopt than hydrogen fuel cells for many applications.

Inevitably, the use of hydrogen engines in medium and heavy-duty applications will lead to a greater availability of green hydrogen. It will also drive scale in the manufacture of hydrogen storage components used in other hydrogen technologies. As a result, hydrogen engines are well-positioned to prime the hydrogen economy and, indirectly, accelerate the pace of decarbonization.

If you are interested in learning more, don’t forget to check out answers to frequently asked questions around hydrogen engines.


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Jim Nebergall

Jim Nebergall

Jim Nebergall is General Manager of the Hydrogen Engine Business at Cummins Inc. and leads the company’s global efforts in commercializing hydrogen-fueled internal combustion engines. Hydrogen internal combustion engines are an important technology in the company’s accelerated path to decarbonization.    

Jim joined Cummins in 2002 and has held numerous leadership roles across the company. Most recently, Jim was the Director of Product Strategy and Management for the North American on-highway engine business. Jim is passionate about innovation and has dedicated his Cummins career to advancing technology that improves the environment. He pushed the boundaries of customer-focused innovation to position Cummins as the leading powertrain supplier of choice, managing a portfolio ranging from advanced diesel and natural gas to hybrid powertrains. 

Jim graduated from Purdue University with a bachelor’s degree in electrical and computer engineering. In 2007, he completed his Master of Business Administration degree from Indiana University.

Benefits of hydrogen engines in transportation

semi driving over a bridge over a river

Hydrogen is poised to take a meaningful role in the world’s sustainable energy landscape. No sector stands to benefit more from the use of green hydrogen as an energy carrier than the commercial transportation sector. When people think about hydrogen for commercial vehicle use, they often think of fuel cells battery electric. Internal combustion engines (ICE), however, are also a viable way to power a vehicle with hydrogen. Hydrogen ICE engines can achieve the same outcomes as fuel cells in terms of reducing greenhouse gas emissions, but with a smaller upfront investment. Engine familiarity can make switching to hydrogen engines easier. Internal combustion engines are more known to users and manufacturers than fuel cell vehicles.

Environmental benefits of hydrogen engines

Hydrogen vehicles—whether powered by a fuel cell or an internal combustion engine—do run with a zero-carbon emission fuel: hydrogen. But measuring CO2 generated at the well-to-wheel level is a little more complicated. It depends on the source of the hydrogen and how it’s made. Traditionally, hydrogen production comes from an industrially process known as steam methane reforming. Steam methane reforming causes significant quantities of CO2 to be released. Hydrogen produced in that manner is known as gray hydrogen and is used in large quantities in chemical and petrochemical industries. 

Fortunately, there is a way to produce CO2-free hydrogen. It’s called electrolysis. The electrolysis process consists of breaking down water molecules into hydrogen and oxygen using electricity. CO2-free resources, like wind, water and solar, generate this electricity. Vehicles running on the fuel produced by this process—green hydrogen—are effectively CO2-free. These and more environmental benefits can be found in hydrogen engines.

Economic benefits of hydrogen engines

Hydrogen vehicles are great for the environment but owning and operating one can be expensive. The cost of hydrogen vehicles and the cost of green hydrogen, however, are decreasing rapidly. Hydrogen vehicles with an internal combustion engine could cost less than fuel cell vehicles. They may also be less expensive than a battery electric vehicle of similar size with an equivalent range. That’s because they are almost entirely identical in design and construction to regular gasoline and diesel vehicles. They can be mass produced using the same supply chains and the same factories. Therefore, hydrogen engines have the opportunity to benefit today’s emerging hydrogen economy.

The cost of green hydrogen production and purchasing is expected to continue to decrease. This will happen as electrolysis technology matures and government regulations and incentives kick on. In the long term, the cost of $1.5 per kilogram of hydrogen may be within reach. In the U.S., the Department of Energy’s Hydrogen Shot seeks to reduce the cost of clean hydrogen by 80% to $1 per 1 kilogram in 1 decade (“1 1 1”). In some areas, the cost of the hydrogen itself is already surprisingly low. In Norway, for example, recent green hydrogen production projects report costs as low as $3.5 to $4.5 per kilogram of hydrogen. This is equivalent to about $30 to $40 per million British thermal units (BTU)- less than the prices recently reached by natural gas on European markets. It is important to note that the pricing dynamics of hydrogen and natural gas vary across geographies.

In Europe, one regulation is aimed at manufacturers of medium and heavy-duty vehicles. It will require that manufacturers ensure that, by 2030, the trucks they sell emit 30% less CO2 than current trucks do. This regulation could motivate OEMs to actively support the deployment of hydrogen ICE. Hydrogen trucks will have to be priced to sell. Some OEMs can also expect to contribute to the buildup of a hydrogen production and distribution infrastructure. This may be comparable to the way that certain battery electric vehicle makers have been building charging stations along major roadways.

There are various hydrogen incentive and subsidy programs in the legislative and regulatory pipeline around of the world. For example, the European Union plans to update its minimum energy taxation requirements. The goal is to set the minimum tax applicable to low-carbon hydrogen sold. Motor fuel will be €0.15 per gigajoule, or about 2 cents per gallon gasoline equivalent. That’s about a hundred times smaller than the minimum fuel tax applicable to gasoline at? €10.75 per gigajoule, or about €1.3 per gallon. Such policies could rapidly narrow the cost gap between hydrogen and traditional fuels.

Hydrogen engines bring a familiar technology

Hydrogen engines are an ideal transitional technology towards carbon-free transportation. On paper, fuel cell vehicles can be more efficient than vehicles with an internal combustion engine. For most applications, the hydrogen fuel cells should therefore be preferable to hydrogen engines. In the long term, this is probably the case. In the near term, hydrogen engines are going to be the more practical option for many commercial vehicle fleets. Fuel cells technology is rapidly evolving, and fleet owners rarely want to take on risk associated with technology that is relatively new. Hydrogen internal combustion engines, in contrast, are based on a familiar technology known for its reliability. Hydrogen engines can also integrate into a vehicle with any change to the drivetrain, transmission or chassis. This makes the switch easier for owners. They can swap out engines and continue operating the vehicles that they know and trust.

Commercial vehicles with a hydrogen engine may still be relatively expensive, but they are one of the best options available to businesses who seek to reduce the emissions of their vehicle fleet. As hydrogen becomes more affordable and more available, the cost of operating a hydrogen vehicle will decrease. You can read more about how hydrogen engines work and the most frequently asked questions.


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Jim Nebergall

Jim Nebergall

Jim Nebergall is General Manager of the Hydrogen Engine Business at Cummins Inc. and leads the company’s global efforts in commercializing hydrogen-fueled internal combustion engines. Hydrogen internal combustion engines are an important technology in the company’s accelerated path to decarbonization.    

Jim joined Cummins in 2002 and has held numerous leadership roles across the company. Most recently, Jim was the Director of Product Strategy and Management for the North American on-highway engine business. Jim is passionate about innovation and has dedicated his Cummins career to advancing technology that improves the environment. He pushed the boundaries of customer-focused innovation to position Cummins as the leading powertrain supplier of choice, managing a portfolio ranging from advanced diesel and natural gas to hybrid powertrains. 

Jim graduated from Purdue University with a bachelor’s degree in electrical and computer engineering. In 2007, he completed his Master of Business Administration degree from Indiana University.

How do hydrogen engines work for off-highway applications?

combine harvesting food in field

The pressure on heavy industries to meet decarbonization goals is increasing. There are few suitable low-carbon alternatives for off-highway equipment. This includes excavators, wheel loaders, tractors and combines, among others. To meet the requirements of round-the-clock, high-energy usage in difficult environments, hydrogen internal combustion engines are a straightforward solution. 

Hydrogen internal combustion engines vs. hydrogen fuel cells

Hydrogen fuel cells and internal combustion engines are the two ways to power vehicles using hydrogen. Fuel cell electrical vehicles (FCEVs) transform hydrogen’s chemical energy into electrical energy using a fuel cell “stack.” The resulting electricity drives electric motors and batteries that act as a buffer. Hydrogen internal combustion engines (ICE) work in the same way as conventional combustion engines. They burn fuel to generate heat and mechanical energy. You can learn more about the complimentary benefits of FCEV and ICE technologies.

Why should off-highway applications consider hydrogen engines?

A major benefit of hydrogen combustion engines is that they are built on a familiar architecture. A hydrogen ICE can be installed in the same equipment as a diesel engine while also using the same transmission, cooling systems and hydraulic systems. Maintenance practices and costs are also comparable to diesel engines. The major difference to consider is the on-board hydrogen storage system, which Cummins has added to its technology portfolio with the Cummins and NPROXX joint venture.

Hydrogen internal combustion engines are appealing in off-highway applications. They operate in difficult environments with elevated levels of dust in the air, greater vibrations and extreme ambient temperatures. Hydrogen ICEs can also decarbonize off-highway work sites with their 99%+ reduction in carbon emissions as compared to diesel engine powered equipment. Additional benefits of hydrogen engines can be found in the mobility and transportation sector.

Which industries can benefit from hydrogen engines?

A hydrogen ICE will work in any application where diesel engines are used today. For that reason, a wide variety of off-highway use cases can benefit from hydrogen power.

Those who work in agriculture are familiar with the use of hydrogen in the production of ammonia fertilizer; however, they may not have considered what benefits hydrogen engines could bring to agricultural equipment. Hydrogen ICE can meet the demands of the most challenging applications. Hydrogen ICE is robust to extreme operating and environmental conditions witnessed in agriculture applications. Versatile has already taken the lead to plan the integration of Cummins 15-liter hydrogen engine into their tractors.

Industries that require high load factors and high equipment utilization face the biggest challenge in finding viable low-carbon and zero-carbon solutions. Electric vehicles may struggle under daily usage expectations and will experience extensive downtime to recharge. Hydrogen, on the other hand, is well suited for the diverse off-highway applications in the construction, agriculture and mining markets. Excavators, wheel loaders and other equipment can benefit from quick refueling times and diesel-like performance, durability and reliability of hydrogen ICE.

Cummins is planning to offer two hydrogen internal combustion engines, available in 6.7 and 15 liter variants. The engines are a part of Cummins’ new fuel agnostic platform, where below the head gasket each fuel type’s engine remains the same. Leveraging these platforms with low-carbon and zero-carbon fuel will help industries dramatically reduce greenhouse gas emissions within the decade. The platform commonality minimizes changes to the equipment design, ultimately reducing integration complexity for the equipment manufacturer. 

What infrastructure investment will facilitate hydrogen adoption? 

Fueling infrastructure is a critical element for off-highway applications. Hydrogen is well suited for easy distribution because it can be transported to the required location in the same way diesel fuel is today. Hydrogen has the added flexibility of local onsite production using an electrolyzer with renewable energy. Furthermore, existing natural gas infrastructure can be converted to transport hydrogen at a low cost. Investing in the hydrogen economy will contribute to growing the infrastructure needed to facilitate adoption. As an example of progress, the recently passed Inflation Reduction Act will offer tax credits for clean hydrogen production and hydrogen refueling stations in the United States. 

If you are interested in learning more about hydrogen engines, don’t forget to also check our answers to frequently asked questions about hydrogen engines. These answers cover topics such as the different hydrogen fuel options, emissions and feasibility of integrating natural gas into commercial fleets.


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Jim Nebergall

Jim Nebergall

Jim Nebergall is General Manager of the Hydrogen Engine Business at Cummins Inc. and leads the company’s global efforts in commercializing hydrogen-fueled internal combustion engines. Hydrogen internal combustion engines are an important technology in the company’s accelerated path to decarbonization.    

Jim joined Cummins in 2002 and has held numerous leadership roles across the company. Most recently, Jim was the Director of Product Strategy and Management for the North American on-highway engine business. Jim is passionate about innovation and has dedicated his Cummins career to advancing technology that improves the environment. He pushed the boundaries of customer-focused innovation to position Cummins as the leading powertrain supplier of choice, managing a portfolio ranging from advanced diesel and natural gas to hybrid powertrains. 

Jim graduated from Purdue University with a bachelor’s degree in electrical and computer engineering. In 2007, he completed his Master of Business Administration degree from Indiana University.

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