Clean Break

Syndicate content CLEAN | BREAK
	CLEAN | BREAK
The how, what and why of transitioning to a post-Paris world
Updated: 10 hours 59 sec ago

Episode 3 of the Clean Break Podcast

Fri, 04/22/2016 - 19:06

In this episode host Tyler Hamilton interviews Ron Dizy, managing director of the Advanced Energy Centre at the Mars Discovery District in Toronto. Discussion includes flywheel technology from Temporal Power, opportunities for Canadian cleantech companies in Chile and China, and how to reduce barriers that will help Canadian cleantech companies scale up.

Clean Break podcast Episode 2

Mon, 04/11/2016 - 20:54

In Episode 2 of the Clean Break podcast, host Tyler Hamilton reviews climate, energy and technology news of the past week and shares excerpts of an interview with Annette Verschuren, CEO of energy storage company NRStor.

 

Here’s the buzz on Ecobee, the smart thermostat crowding out the Nest

Tue, 04/05/2016 - 09:17

This story of mine appeared in the Spring 2016 issue of Corporate Knights magazine.

Stuart Lombard had no obvious reason to leave his job as a venture capitalist in 2007. Times were good. As managing partner with J.L. Albright Venture Partners in Toronto, he worked out of a swank office on the 44th floor of Brookfield Place, at the time known as BCE Place. The firm was one of Canada’s most successful early-stage investors in Internet and software startups, many of which were acquired by the likes of General Electric and Cisco.

Lombard also had major street cred in the technology world. During the 1990s he co-founded what grew to become Toronto’s largest Internet service provider, and as chief executive of Isolation Systems, a maker of virtual private network products, he built a company that in 1998 was sold for $37 million and at one point was owned by Intel.

So it was a surprise to colleagues when the mild-mannered Lombard told them he was giving it all up to start a company that makes a better home thermostat. “People thought ‘You’ve got to be nuts’,” recalls Lombard, explaining that he made the decision just weeks before Apple released its first iPhone. “It was based on this simple idea of helping people reduce energy, save money and reduce their carbon footprint.”

The way Lombard saw it, thermostats at the time were just too dumb and did a poor job of keeping people comfortable in their homes. Even the programmable kind – which most people don’t take the time to program – fell short, mostly because in the real world the movement of individuals in and out of a home doesn’t always follow a predictable weekly schedule. There was also the fact that thermostats pre-2007 were ugly plastic rectangles with monochrome LCD displays – a waste of wall space for a generation with higher aesthetic expectations.

Nine years later, Toronto-based Ecobee, the company Lombard founded, is creating major market buzz and holding its own against deep-pocketed newcomers and incumbents alike, most notably Google-owned Nest and longtime thermostat king Honeywell. Lombard says Ecobee has doubled the size of its business since launching its first product in 2009, and has outgrown three – soon to be four – head offices to accommodate its rapidly growing workforce, which today sits at about 120.

As for market impact, in six years the company has helped its customers save an estimated one terawatt hour of power, Lombard says. It’s the equivalent of taking a small coal-fired power plant off the grid for a year. According to the company’s own analysis, the average Ecobee user reduces energy consumed for home cooling and heating by 23 per cent. “People really, really love it,” says Lombard.

Ecobee started off well, making an early splash when it launched the industry’s first Wi-Fi-enabled thermostat. That first-generation device signalled the promise of the connected “smart” home and gave homeowners their first sense of where the market was destined to go. Customers could easily program the thermostat through its unique colour touchscreen or remotely through an Internet-connected device. Delivery of real-time weather reports was an added bonus. Ecobee could also do software upgrades to all installed thermostats without customers even knowing.

“When we launched, we were the only product of its kind, and we were kicking Honeywell’s butt,” says Lombard, apologizing in typical Canadian fashion for potentially sounding arrogant. He wasn’t, given that Honeywell controlled about 60 per cent of the thermostat market at the time. “It was really exciting,” he adds. “We were doing high-fives in the office.”

Nest bumps the hive

Ecobee’s current office is located on Toronto’s University Avenue in the historic Bank of Canada Building, a 60-year-old structure based on classical architecture that used to secure all the cash and gold in the region in theft-proof vaults. When the elevator doors open on the fourth floor, however, it’s like being in a time machine that reveals a portal to the 21st century.

Not that the office is anything special. It’s modern, as expected, and is a hive of activity typical of a tech company – young worker bees behind computer screens quietly typing away. It’s clear that what was deemed “crazy” and risky by Bay Street colleagues in 2007 has proved, in hindsight, a sane bet.

“Stuart has a gritty determination underneath,” says Jane Kearns, a senior advisor with the cleantech practice at the MaRS Discovery District, which counts Ecobee as an early client. “It’s impressive what they’ve done. They’ve really been smart about it.”

But Kearns, like others, had concerns when she learned that Google-backed Nest was coming to market with its own smart thermostat. Many saw the beautifully designed Nest device as an Ecobee-killer, even more so after Google purchased the company in 2014 for a whopping $3.2 billion (U.S.).

Nest Labs was co-founded in 2010 by CEO Tony Fadell, a former senior vice-president of Apple’s iPod division. Fadell helped design the iPod and reported directly to Steve Jobs. His commitment to aesthetics and ease-of-use while at Apple is reflected in the design of his “learning” thermostat.

I ask Lombard about the Nest factor. He says Ecobee was never “up against the ropes” financially and has always performed well, but admits that the emergence of Nest was a “shock to the system” that put tremendous pressure on Ecobee to up its game.

“When Nest came to market it was a wake-up call,” Lombard says. “Certainly there was this period where it felt like we had this twin that was smarter and better looking.” Until Nest launched, Ecobee thought it was playing in the NHL. After the first hockey puck-shaped Nest device was dropped in the market in 2012, “we felt more like champions of the North Toronto minor bantam hockey league,” he jokes.

Not resigned to being a second stringer in the big leagues, Lombard stayed upbeat. He viewed the arrival of Nest as an opportunity to make some big changes. Ecobee’s designers and engineers were tasked with giving the device a dramatic facelift, including a stylish, slim new look and a basket of novel capabilities.

Photo courtesy of Ecobee

When finally released in September 2014, the third-generation thermostat – called Ecobee3 – was greeted with great fanfare. It has consistently received more positive reviews than the Nest device. Within four months of launching, it unseated Nest as PC Magazine’s Editors’ Choice for smart thermostats, and the accolades keep rolling in.

“The Ecobee3 worked like a charm,” according to PC Magazine reviewer John Delaney, who praised the device for being loaded with features, easy to install and “best suited” for people with flexible schedules. Most recently, in January, Ecobee was named to the Global Cleantech 100’s Ones to Watch list, which recognizes new companies that are “catching the eye” of big market players.

Best Buy and Apple were quick to start carrying Ecobee3 in select stores and online, and eventually the device was available through all of their store locations. Home Depot also began stocking the thermostat, putting it side-by-side with Nest and high-end models from Honeywell. Heating and air-conditioning giant Carrier, an important distribution partner for Ecobee, dove in to become a minority investor. An even bigger market signal came in July 2015, when Apple decided to dump Nest from its stores and go exclusively with Ecobee3.

Needless to say, meeting the high standards that earned Apple’s exclusive endorsement gave Ecobee a major boost as the company entered the latter part of 2015. Rahul Raj, vice-president of marketing and e-commerce at Ecobee, says having the Apple “halo” hovering over Ecobee has been nothing short of huge.

“People know that we’re quality enough to be in the Apple store, so it gives them a kind of shorthand. Even if they don’t do their own research, just knowing it’s in that store means it must be pretty good,” says Raj, adding that it helped level the field with Nest when it came to brand awareness – particularly in the U.S. market. “The Americans have taken notice.”

Asked why he believes Apple kicked Nest out of its stores, Lombard kept it simple: “I think we have a better product.”

Sting like a bee

The bee is now swarming around the nest. Ecobee still trails Nest, but last year it surpassed Honeywell to become the second-best selling Internet-connected thermostat in the United States. It’s not an insignificant achievement. “They were ostensibly the Kleenex of thermostats, and we’ve overtaken them,” says Raj, who is convinced Ecobee is positioned to overtake Nest this year.

According to research firm NPD, Ecobee had 24 per cent of the smart thermostat market by mid-2015. Since then, there’s good reason to believe it has captured a larger share.

The market moves fast and can change abruptly, but Ecobee3 currently has an important edge over Nest. The $250 thermostat ships with a wireless sensor that can be placed in any room. Other home thermostats only measure temperature in a single location, usually the kitchen or living room. That often results in the ground floor being comfortable but upstairs rooms being too hot or cold.

Ecobee’s sensor can separately monitor temperature in another room, as well as when people come and go from that location. The sensor talks to the main thermostat, which uses a proprietary algorithm to spot patterns and calculate an ideal temperature balance. To bolster accuracy even more, up to 32 sensors (at $79 a pair) can be added to fine tune comfort, which is particularly handy in larger homes.

Scott Jenschke, who is responsible for heating and cooling merchandise at Home Depot’s headquarters in Atlanta, says this unique feature is what seems to be resonating the most with customers. It’s also what Delaney, in his PC Magazine review of Ecobee3, noted as a comparative weakness with the Nest thermostat. “The Nest can’t sense temperature or motion in other rooms, and may leave you shivering if you’re in another part of the house,” he wrote.

There are lots of other goodies. In late 2014, Ecobee launched its free Home IQ service, which gives homeowners detailed insights into how they’re using energy, what they can do to reduce costs, and how their home compares to neighbourhood averages. “If you start with the premise that people want to do the right thing, you just have to give them the tools to do it,” Lombard says. “We can tell them how fast their home heats up and cools down, how tight or leaky it is, and how efficient your (home heating and cooling) equipment is. If you capture that data on an anonymized basis, you even have the opportunity to inform public policy.”

This is all combined with real-time alerts and actions. When someone is away on vacation, for example, Ecobee3 can send an e-mail nudge if it appears the furnace has stopped working, potentially putting pipes at risk of freezing. Lombard tells of one customer who was alerted that his home’s air conditioner had been running for hours but, strangely, the house was not cooling down. The customer, perplexed at first, put two and two together: his daughter was having an unsanctioned party and the door was always opening as people came and went. “He confronted his daughter,” Lombard says. “She finally admitted it.”

Al Shuman, vice-president of marketing at Just Energy, a major natural gas and electricity retailer, says homeowners appreciate the control. “Honestly, what people most like is just the idea of adjusting their thermostat from their bedroom using their smart phone,” says Shuman, whose company has been an Ecobee partner for two years and this spring plans to mass market Ecobee3.

“It’s really intuitive, and so much improved over the second-generation one. People play with it more, they treat it as jewelry and take pride in it,” he says. Still, he gives Nest credit for boosting public awareness of the broader smart thermostat market. “We do get a lot of customers that ask how it compares to the Nest. At first blush people might say, hey, that’s not a Nest, but frankly, the features and functionality are there.”

Those features seem to get richer by the day. Part of the reason Apple gave Ecobee exclusive access to its online and brick-and-mortar stores is that it was the first smart thermostat certified to work with Apple HomeKit, the developer platform that allows non-Apple smart devices to interact seamlessly with iOS, the company’s proprietary mobile operating system. It allowed Ecobee to virtually mimic the Ecobee3 display through an app on the homeowner’s iPhone, iPad, iPod touch or Apple Watch. Users get control on the go, including the ability to issue voice commands through Siri.

HomeKit also enabled geofencing – the ability to instruct the thermostat to operate in a certain way based on the personal location of Apple device users in a household. For example, it can be told to lower the temperature when home occupants are more than five kilometres away, and crank it back up when someone gets within two kilometres of the house.

The move to HomeKit and closer partnership with Apple has put Nest and Honeywell on the defensive. “This year has by far been our best year ever, and it’s given us a lot more momentum just based on the increased awareness,” says Lombard, at the same time reiterating that Ecobee3 is also Android compatible. “Our Android users are just as important to us, but our Apple relationship just gets us the bigger mention.”

Avoiding colony collapse

Kearns at the MaRS cleantech practice says Ecobee’s ability to navigate through the Nest threat has been impressive, with the company gaining some crucial traction in the marketplace. But the technology sector never stands still, and with Google the long-term vision is to have Nest dominate the Internet of Things that are expected to make up a smart home. Already, Nest has a smart smoke and carbon monoxide alarm, and a Nest Cam with motion and noise detection that can double as a nanny-pet cam or home security product. All of these products can be controlled remotely through a smart phone. “Ecobee is trendy and popular, but it’s still a thermostat and they’re still a one-trick pony, which for me is a pretty risky place to be,” says Kearns.

Lombard has no intention of standing still. Ecobee continues to develop partnerships with major utilities and position its thermostat as a way for homeowners to participate in demand-response programs. Eventually, customers might be able to monitor and control electric vehicles and energy storage systems connected to their homes. Utilities, with customer permission and under specific conditions, could one day remotely control the energy consumption of tens of thousands of homes to better manage the flow of solar and wind energy on the grid.

Ecobee also has a public API, or application program interface, meaning anyone can develop their own app to add value and choice to the Ecobee app. Lombard says there are a thousand applications currently being designed around Ecobee3.

Given the huge amount of data Ecobee is collecting, there seems no end to how it can be used to improve the customer experience.

Clean Break podcast Episode 1

Tue, 03/29/2016 - 22:04

In this episode, host Tyler Hamilton reviews climate and energy news of the past week and talks about plans that two Canadian companies have to make carbon-neutral gasoline out of captured CO2 and renewable hydrogen.

 

Clean Break podcast – the pilot episode!

Mon, 03/21/2016 - 15:28

In this pilot episode of Clean Break host Tyler Hamilton reviews climate news of the past few weeks and talks about the progress Vancouver-based General Fusion is making in its journey to develop an inexpensive, made-in-Canada fusion power reactor. (Note: This is a work in progress.)

Nanticoke, once North America’s largest coal plant, to host 40MW solar farm

Thu, 03/10/2016 - 16:54

Okay, it’s ridiculous to compare a 40-megawatt solar PV park to a coal-fired power plant that could crank out 4,000 megawatts at peak capacity, but the fact Ontario Power Generation (OPG) got a contract today to build such a solar project at the old Nanticoke Generating Station is, at the very least, symbolically significant.

Ontario’s Independent Electricity System Operator announced the results Thursday of its Large Renewable Procurement (LRP), which, for good reason, replaces the previous feed-in-tariff (FIT) program. The FIT program just couldn’t keep up with the pace of technological change and learning in the industry, and since the solar and wind industry in Ontario is now well established, it was time to abandon the rich premiums that came with the FIT and make the big boys of renewable energy compete for Ontario’s business.

In total, 455 megawatt of wind, solar and hydro was contracted out as part of the LRP:

  • Five wind contracts totalling 299.5 MW, with a weighted average price of 8.59 cents per kWh;
  • seven solar contracts totalling 139.885 MW, with a weighted average price of 15.67 cents; and
  • four hydroelectric contracts totalling 15.5 MW, with a weighted average price of 17.59 cents.

See list of projects here.

The lowest price Ontario got for wind was 6.45 cents, which is half of what it initially paid under its feed-in-tariff program. As Ontario’s Clean Air Alliance pointed out, that’s lower than what a re-built Darlington Nuclear Station is expected to cost, assuming it doesn’t go over budget (and history says it likely will). Now, nuclear is baseload, wind isn’t. But keep in mind that the purchased wind power comes risk-free to Ontario ratepayers. Can’t say that for nuclear deals in the province, no matter how much lipstick you put on a pig.

With solar, the lowest price locked in was 14.15 cents, which is remarkably close to what Ontario was paying for large-scale wind under its FIT program. It’s also significantly lower than rates for large-scale solar under the FIT program, which back in 2013 started at 34 cents and climbed from there.

These power purchase agreements (PPAs) show just how much solar costs have fallen — and will continue to fall. Now, you may be tempted to point to super-low cost solar contracts announced in places like California, Texas and New Mexico. Toronto-based Skypower has even bid 8 cents (U.S.) for projects in India. But keep in mind the solar regime isn’t as favourable in Ontario, the dollar is lower, and projects were tied to some social goals. For example, 13 of 16 projects include participation from one or more Aboriginal communities, including five projects with more than 50 per cent Aboriginal participation. I wonder, however, if the province could have secured even lower bids if it agreed to backstop loans on winning projects — perhaps from a green bond issue?

Still, the price is heading in the right direction. As the Canadian Solar Industries Association said,

“It is also the first time that a utility scale solar project has been contracted at a price that is lower than the retail rate of electricity in Ontario.”

That’s a milestone we should all remember.

But back to the OPG contract. Its significance wasn’t lost on Dan Woynillowicz, policy director at Clean Energy Canada.

“It’s both a powerful symbol and great progress to see a contract offered for a solar farm that will be built on the land once occupied by the Nanticoke coal-fired power plant, once Canada’s top greenhouse gas polluter.”

I wrote about OPG’s planned bid for solar projects last May in Corporate Knights. At the time, OPG was hoping to win up to 120 megawatts worth of projects, which would be spread across its shut down Nanticoke and Lambton generation sites, as well as its still-operating Lennox station near Kingston.

Here’s what I said:

OPG, a publicly owned crown corporation, has historically been held back from bidding on renewable energy projects, given that its sheer size and influence were seen as unfair advantages in a competitive, open market procurement process. The company supplies roughly half of the province’s power, mostly through nuclear and large hydroelectric facilities.

In June 2013, however, the Ontario government restructured its feed-in-tariff program such that only smaller renewable-energy projects could participate. Larger project proposals, those generally more than 500 kilowatts in size, would need to compete through a request-for-proposal (RFP) process.

And in a controversial twist, Energy Minister Bob Chiarelli directed the Ontario Power Authority to allow OPG to participate in all renewable energy procurement rounds.

I think it’s smart to let OPG enter this game. Sure, it’s a large publicly owned incumbent, but the solar market has matured and can hold its own. OPG also has unique experience (and recent success) partnering with aboriginal communities.

One potential hitch is that SunEdison is OPG’s development partner. The company is going through some tough times right now (the existential kind), and it’s unclear whether that will have an impact on OPG’s plans.

Climate and Mental Health Series in the Toronto Star

Thu, 03/03/2016 - 19:25

Earlier this week — Sunday and Monday — the Toronto Star ran several stories of mine that draw a direct link between climate change and mental health.

The first story, which to my pleasant surprise was run above the fold on A1 on Sunday, starts with Ontario coroner and former palliative care physician David Ouchterlony, who says his anxiety and despair over the growing climate threat has affected him more deeply — emotionally and psychologically — than the years he spent caring for dying patients or investigating causes of death. But Ouchterlony isn’t alone. The mental health impacts of climate change, particularly on those most vulnerable to it, is expected to grow and could become a serious public health crisis that we’re not prepared for and which, in Canada, is not even on the radar. This article provides an overview of the issue, how the American Psychological Association is taking it seriously, and how its Canadian counterpart and public healthy agencies in Canada aren’t really paying attention to this sleeper of an issue. Be sure to also read Ouchterlony’s own words in this thoughtful response to an e-mail I sent him last month asking: How is something like concern over climate change different from the kinds of feelings you have as a coroner, or had as a palliative care physician?

The same day the Star also ran a story focused on farmers, and how crazy and more extreme weather events linked to climate instability are making an already tough job more difficult. Farmers are a group with some of the highest rates of depression and suicide, and the fear is that climate change is going to make the situation worse for their mental health. Again, there’s not a lot of research in Canada looking at this issue, so these people are largely struggling silently.

Finally, on Monday the Star ran my article focused on climate change and its psychological impacts on northern and remote aboriginal communities. The story leans heavily on the pioneering research of Cape Breton University professor Ashlee Cunsolo Willox, who has spent considerable time over the past few years visiting Inuit communities in Nunatsiavut, Labrador, and documenting how populations there are coping mentally with the changes around them and how it’s impacting their way of life. Canada’s north is being disproportionately affected by climate change and these indigenous communities are on the front lines. They need our attention and our help.

The package touches on other vulnerable groups, such as scientists/environmentalists, the poor and elderly, and those directly affected by extreme weather events, such as floods, droughts and hurricanes. This last group I would categorize as sufferers of post-traumatic stress disorder, or PTSD. The other groups are struggling with a more anticipatory, existential kind of anxiety about climate change that can fuel hopelessness, despair, guilt and depression. Some might group this as “pre-traumatic stress disorder,” which I think is a useful term. A person quoted in one of my stories called it “the slow drip of climate change.”

As expected, some have commented that the series is alarmist and will only serve to feed anxieties. If telling the truth is alarmist, then so be it. Others will say I dwelled only on the problem and didn’t get deep enough into the discussion of how to bolster mental resilience. I should have focused more on positive developments, emerging new technologies, and adaptation as a way to short-circuit anxieties. I agree, that discussion is needed and that discussion will come. But first I had to identify that the mental health challenge is real — that it exists and has the potential to grow much worse as evidence of climate change becomes more apparent in our daily lives.

The first step to finding solutions is admitting we have a problem, and while only a small slice of the population suffers psychologically from what might flippantly be called the climate blues, I would argue that it’s a process we all have to go through if we are to become — emerge — more mentally resilient to the changes in our surrounding environment and how they affect our lives.

So let’s have the discussion. Let’s recognize the problem. Let’s devote resources to research. Let’s create a plan and the necessary support as part of municipal, provincial and federal adaptation measures. Both the Mental Health Commission of Canada and the Canadian Psychological Association need to develop a position, remembering it’s both a public health concern and something that can affect the country’s economic productivity.

Finally, feel free to reach out if you have a story to share.

CoPower puts the “green” in retail investing

Wed, 02/17/2016 - 13:00

This story was originally published in the Toronto Star.

By Tyler Hamilton

Investing directly in green energy projects just became a whole lot easier for Canadians looking to shift their savings away from fossil fuels.

CoPower, a start-up co-headquartered in Toronto and Montreal, has just launched a retail “green bond” that raises money for specific pools of solar, geothermal and energy-efficiency projects.

The five-year bond, the first of its kind to be available across Canada, offers a 5 per cent annual return, compared to less than 2 per cent for GICs and Canada Savings Bonds.

CoPower co-founder and CEO David Berliner

David Berliner, co-founder and chief executive of CoPower, said the company developed the product to fill a gap in the emerging marketplace for impact investing, a form of socially responsible investing that is not generally accessible to the average Canadian.

In essence, CoPower aims to democratize impact investing through a form of crowdfunding, the potential of which was, until recently, limited in Ontario by securities regulations.

“A lot of people have been trying to do investments that align with their values, increasingly in the green energy space, but they’ve found it hard,” said Berliner, 28, who founded the company two years ago to expand access to the market beyond sophisticated or accredited investors.

At this point, individuals looking to purchase the bonds have to do so in $5,000 increments, which might not be for everyone. The bonds can, however, be held in self-directed RRSP, tax-free savings and other registered accounts.

One of CoPower’s core innovations is an online platform — at copower.me — that walks investors through the registration process and assures all investments comply with securities regulations. An online dashboard allows for tracking of investments and the projects they’re tied to, creating a level of transparency that people find reassuring, Berliner said.

“Technology is definitely an enabler here. From the get-go, the vision has been to have an online platform that lets us reach a broader base of different investors,” he said.

Michelle Brownlee, director of policy at Ottawa-based think tank Sustainable Prosperity, said CoPower’s retail green bond appears to be unique in Canada. There are local community green bonds, such as those offered by ZooShare or SolarShare, but both are limited at this point to Ontario and are focused on specific technologies.

She said that by harnessing the collective power of individual investors, CoPower could become an important source of capital for many clean energy projects, which are expected to grow substantially over the coming years as Canada works to meet its Paris climate commitments.

“Green bonds are moving very quickly from niche to mainstream,” said Brownlee, adding that CoPower’s approach “could potentially be very big.”

About $66 billion (U.S.) in green bonds have been issued globally, of which $1.3 billion are Canadian, according to a December report from Sustainable Prosperity. The bonds have been targeted at and readily scooped up by institutional buyers, with Export Development Canada, the Ontario government, and Toronto-Dominion Bank among the biggest issuers so far.

The Trudeau government has said it will establish a Canada Infrastructure Bank that would also introduce green bonds, mostly to institutional investors but also the public “when appropriate.”

At the retail level, “there’s a huge pent-up demand for this kind of product,” said Tom Rand, a manager partner with ArcTern Ventures, a venture capital fund in Toronto that focuses on clean energy technologies.

“The financial community is really conservative, so it has taken an entrepreneur like David to come in from the outside and shake things up. It’s brilliant.”

If CoPower can pull it off, said Rand, others will more likely follow. “This will go far in educating the public.”

To keep the investment risk low, CoPower’s first bond is backed by two loans to clean power projects that are already built, operational and delivering returns — two large rooftop solar projects in southwestern Ontario and energy-saving building automation and LED lighting systems installed at Toronto’s Harbourfront Centre.

Over the time, CoPower will build its portfolio of projects and launch new rounds of green bonds along the way. Money raised will support loans to smaller clean-energy projects being built by a network of experienced energy development partners. They’re the kind of projects big banks tend to avoid.

“It’s an underserved market,” said Berliner, whose past work includes consulting for the mayor of New York City’s renewable energy office and coordinating sustainability initiatives at the University of Toronto.

CoPower got a major boost in October when RBC led an $850,000 round of financing in the company. Having RBC as an equity owner, Berliner said, “helps bring credibility to our team, business model and brand.”

China coal use falls for second year in a row: IEA boss

Tue, 01/26/2016 - 11:08

Here’s what Fatih Birol, executive director of the International Energy Agency, tweeted this morning:

Looks like China’s coal use fell in 2015 as it did in 2014 after rising for decades. Profound implications for energy & climate if continues

— Fatih Birol (@IEABirol) January 26, 2016

The key two words here are “if continues.” During the Paris climate summit, researchers from the Tyndall Centre at the U.K.’s University of East Anglia and colleagues in the U.S., Australia and Norway approached 2014 and 2015 coal use and emissions data with cautious optimism. Is it a lasting trend, or an anomaly? It’s still too early to say.

Driven mostly by a need to get local air pollution under control, China has put a 2020 cap on coal emissions. Less economic emphasis is being put on energy-intensive industries such as steel manufacturing and big investment continues in renewables. That, combined with an economic slowdown, has contributed to a shifting to a “new normal,” said Glen Peters from Norway’s Centre for International Climate and Environmental Research. “It’s happening faster than we expected.”

Assuming the latest data from China is more than just an anomaly, what does that mean in the battle to rein in global GHG emissions? Answering that question means knowing what will happening in India, which was described by the researchers as the big wild card. India’s actions over the next 20 years could make or break attempts to keep average global temperatures from rising above 2 degrees C – let alone keeping such temperatures “well below” that threshold, a target specified in the Paris agreement.

There’s been a lot of hope that global GHG emissions and global GDP have permanently “decoupled”, meaning we can achieve economic growth without increasing emissions. Usually the two rise in lock-step, but the researchers, in a paper published last month in the journal Nature Climate Change, reported that global emissions were expected to fall last year during a period of decent economic growth. That’s unusual – and potentially great news – given that emissions growth between 2003 and 2014 averaged 2.4 per cent.

We’ll see. Some believe India won’t pull its weight in the climate fight, while others point to the country’s determination to embrace renewables, particularly solar. During the Paris summit one of the big announcements came from Indian Prime Minister Narendra Modi, who spearheaded creation of a 120-country solar alliance to help realize the “dream of universal access to clean energy.”

On the other hand, one of the most sobering moments during the Paris conference was when I heard India’s energy-efficiency chief Ajay Mathur talk about one of the country’s biggest challenges: a fast-growing middle class that wants air conditioning. Studies forecast that India’s middle class could double to half a billion people before 2030, and these people will want more of the comforts that North Americans take for granted. India has had its share of heat waves and is expected to experience more as the climate changes, so who could blame them for wanting to keep cool – especially if they have the means?

Mathur’s wish list over the coming years: amazingly energy-efficient air conditioners, “using at least half if not a third as much energy as we use today, and affordable as well,” he said. “How do we make that happen?”

It’s the billion-dollar question for a country that, based on its current energy trajectory, is expected to become the world’s largest importer of coal by 2020.

This isn’t to downplay Birol’s comment today about China. That such changes are taking place in China is tremendous news that should be applauded and encouraged. But we need to see in India what is currently happening in China before intolerable levels of smog begins choking its urban populations. Fortunately, renewable energy technologies are much more mature and affordable compared to when China began its rapid growth phase. Also, India has the benefit of learning from China’s mistakes and it has the backing of developed countries that want to see it make the right choices. Finally, post-Paris, it has added pressure from the international community to get it right.

 

China coal use falls for second year in a row: IEA boss

Tue, 01/26/2016 - 11:08

Here’s what Fatih Birol, executive director of the International Energy Agency, tweeted this morning:

Looks like China’s coal use fell in 2015 as it did in 2014 after rising for decades. Profound implications for energy & climate if continues

— Fatih Birol (@IEABirol) January 26, 2016

The key two words here are “if continues.” During the Paris climate summit, researchers from the Tyndall Centre at the U.K.’s University of East Anglia and colleagues in the U.S., Australia and Norway approached 2014 and 2015 coal use and emissions data with cautious optimism. Is it a lasting trend, or an anomaly? It’s still too early to say.

Driven mostly by a need to get local air pollution under control, China has put a 2020 cap on coal emissions. Less economic emphasis is being put on energy-intensive industries such as steel manufacturing and big investment continues in renewables. That, combined with an economic slowdown, has contributed to a shifting to a “new normal,” said Glen Peters from Norway’s Centre for International Climate and Environmental Research. “It’s happening faster than we expected.”

Assuming the latest data from China is more than just an anomaly, what does that mean in the battle to rein in global GHG emissions? Answering that question means knowing what will happening in India, which was described by the researchers as the big wild card. India’s actions over the next 20 years could make or break attempts to keep average global temperatures from rising above 2 degrees C – let alone keeping such temperatures “well below” that threshold, a target specified in the Paris agreement.

There’s been a lot of hope that global GHG emissions and global GDP have permanently “decoupled”, meaning we can achieve economic growth without increasing emissions. Usually the two rise in lock-step, but the researchers, in a paper published last month in the journal Nature Climate Change, reported that global emissions were expected to fall last year during a period of decent economic growth. That’s unusual – and potentially great news – given that emissions growth between 2003 and 2014 averaged 2.4 per cent.

We’ll see. Some believe India won’t pull its weight in the climate fight, while others point to the country’s determination to embrace renewables, particularly solar. During the Paris summit one of the big announcements came from Indian Prime Minister Narendra Modi, who spearheaded creation of a 120-country solar alliance to help realize the “dream of universal access to clean energy.”

On the other hand, one of the most sobering moments during the Paris conference was when I heard India’s energy-efficiency chief Ajay Mathur talk about one of the country’s biggest challenges: a fast-growing middle class that wants air conditioning. Studies forecast that India’s middle class could double to half a billion people before 2030, and these people will want more of the comforts that North Americans take for granted. India has had its share of heat waves and is expected to experience more as the climate changes, so who could blame them for wanting to keep cool – especially if they have the means?

Mathur’s wish list over the coming years: amazingly energy-efficient air conditioners, “using at least half if not a third as much energy as we use today, and affordable as well,” he said. “How do we make that happen?”

It’s the billion-dollar question for a country that, based on its current energy trajectory, is expected to become the world’s largest importer of coal by 2020.

This isn’t to downplay Birol’s comment today about China. That such changes are taking place in China is tremendous news that should be applauded and encouraged. But we need to see in India what is currently happening in China before intolerable levels of smog begins choking its urban populations. Fortunately, renewable energy technologies are much more mature and affordable compared to when China began its rapid growth phase. Also, India has the benefit of learning from China’s mistakes and it has the backing of developed countries that want to see it make the right choices. Finally, post-Paris, it has added pressure from the international community to get it right.

 

Air Canada backs project to build biofuels supply chain for airports

Wed, 01/20/2016 - 18:10

An earlier version was originally published in the Toronto Star.

Canada’s aviation sector made history in 2012 after a number of test flights showed that renewable jet fuel could be blended with regular fuel without affecting airplane performance.

It started in April, when Porter Airlines used a blend of 50 per cent “biojet” fuel on a Bombardier turboprop, which successfully flew from the Toronto island airport to Ottawa. Two months later, Air Canada flight AC991 carried passengers from Toronto to Mexico City using a similar 50/50 mix. It was the first of two commercial test flights Air Canada conducted that year.

“We took 43 per cent of the carbon out of that flight,” said Teresa Ehman, the airline’s director of environmental affairs. “It was phenomenal. But it raised the next question: Why does this not happen every day?”

Environmental groups want an answer. Airline flight and passenger volumes are expected to double over the next 15 years, and if the aviation sector doesn’t change its behaviour, that also means a doubling of greenhouse-gas emissions — from slightly less than 2 per cent today to a projected 4 or 5 per cent by 2050.

At the Paris climate conference in December, there was pressure from a variety of parties to have the aviation sector included in the final text of the resulting international agreement. It didn’t work. Airlines were once again left to their own devices. Initially included as part of the Kyoto Protocol, oversight of international aviation emissions got punted in the 1990s to the International Civil Aviation Organization, which has sat on the issue for two decades and continues to be the chosen overseer. A plan of action is expected to be hammered out this year, but critics warn not to expect anything mandatory or ambitious.

The entire situation frustrates the European Union, which has tried twice to impose a carbon fee on international flights into and out of Europe. It backed down from its most recent attempt in 2014 after U.S. and Chinese airlines threatened to ignore it, but the EU signalled it would revive the effort if ICAO didn’t have its own plan in place by 2017.

The bottom line: airlines need to step up their emissions-reduction game,  and biofuels are expected to play a major role.

Will biojet fuel take off?

In many ways, making biojet fuel is the easiest part of the mission to decarbonize aviation. Many companies are already producing it in limited quantities, using ingredients that range from canola and camelina to animal fats and algae.

The bigger challenge, said Ehman, is coming up with an efficient and economical way of safely getting fuel from a production facility all the way to an airplane’s wing. Biofuels are an important component, but without a supporting infrastructure and supply chain that allows it to be consumed on a large scale across all Canadian airports, the market for this fuel will never grow large enough to matter.

To tackle this barrier, Air Canada has teamed with experts from industry and academia on a project that will blend 400,000 litres of biojet fuel with an existing fuel-delivery system at a soon-to-be-chosen airport. The current approach — driving a truck directly to the airplane — creates a parallel system that is too expensive and impractical in commercial volumes.

“It’s not just knowing if these fuels can work in the planes, because that is known already,” said Warren Mabee, director of the Institute for Energy and Environmental Policy at Queen’s University, which is part of the initiative. “What we are trying to do is be among the first to put together a supply chain so we can see what it takes to start delivering these fuels into a hub in a way that allows them to be more widely used.”

Fred Ghatala, who as partner with Vancouver-based consultancy Waterfall Group is leading the research effort, said it comes down to lower costs in an industry where fuel purchasing and delivery represents a substantial part of an airline’s operational budget. “Reducing costs where possible when using low-carbon fuels is fundamental to the future of those fuels.”

The University of Toronto, McGill University and the International Air Transport Association are also part of the project as members of the BioFuelNet Aviation Task Force. Funding is coming from the Green Aviation Research and Development Network, which gets its support from the federal government and Canada’s aerospace sector.

Crucial to get it right

Ehman said Air Canada has been working to solve this carbon dilemma for nearly five years. After its biofuel test flights, the airline worked with Airbus and the BioFuelNet team to study Canada’s ability to supply biojet fuel, asking how much the country could produce and how much the fuel would cost. It then passed that research along to Transport Canada, which did its own Canadian feasibility study.

The industry has to get it right. For its part, Air Canada has done a good job of finding efficiencies in its operations, with measures to reduce aircraft weight, improve fleet maintenance and streamline routes. Out of 20 transatlantic airlines measured for operational efficiency, Canada’s biggest airline tied for fourth place behind only KLM, Aer Lingus, Airberlin and Norwegian Air, according to a November report from the International Council on Clean Transportation.

In Europe, airports themselves are committing to be carbon-neutral by 2030 through an increase in efficiency and use of solar power. But on-the-ground or in-the-air efficiency can only go so far, said Ehman, pointing out that fuel consumption represents more than 95 per cent of any airline’s emissions.

As a global industry, airlines have made a voluntary commitment to increase the fuel efficiency of their fleets by 1.5 per cent annually and achieve carbon-neutral growth beyond 2020. By 2050, the industry says it will cut its absolute GHG emissions in half compared to 2005 levels.

The only way to get there is with biofuels, and if that’s going to happen, Air Canada wants to make sure a vibrant market is developed domestically to keep jobs and money in the country. “There’s a paradigm shift happening,” said Ehman. “It’s important for Canada to take a lead in this.”

Mabee echoed that view. “This is the way the world is moving. We have to deal with emissions in every sector, somehow. So let’s figure this out.”

Canada’s advantage

Canada is in an ideal position to lead development of aviation biofuels.

For one, it has all the resources it needs to sustainably produce vast quantities of biofuel, whether from agricultural and forest residues or specially grown oilseed crops such as canola or camelina. Second, the country has the domestic expertise to refine those materials into a certifiable product that the industry can trust.

Homegrown companies such as Hamilton-based Biox and Enerkem of Montreal could be ideal producers of the fuel down the road. “They have the building blocks to start assembling those types of molecules,” said Mabee, director of the Institute for Energy and Environmental Policy at Queen’s University. “But the key part of this, what is missing, is a policy driver for it. We don’t have a government mandate to make these fuels.”

A renewable fuel standard, like the federal requirement that gasoline contain at least 5 per cent ethanol, is one policy option. Another is a B.C.-style low-carbon fuel standard, which requires a 10 per cent reduction in the carbon intensity of gasoline by 2020. Putting the aviation sector under the umbrella of a carbon tax might also be considered.

But it makes no sense to knock on the government’s door if a barrier such as fuel distribution makes it overly difficult for the industry to comply. And while some might ask why batteries or hydrogen or solar technology isn’t being considered as an alternative, Mabee offers a reality check. “Solar planes and battery-powered planes are nice research efforts, but practically biofuels are the only way to go.”

This article was part of a series produced in partnership by the Toronto Star and Tides Canada to address a range of pressing climate issues in Canada leading up to and following the United Nations Climate Change Conference in Paris. Tides Canada supported the partnership to increase public awareness and dialogue around the impacts of climate change on Canada’s economy and communities. The Toronto Star had full editorial control and responsibility to ensure stories are rigorously edited in order to meet its editorial standards.

Canada’s clean electricity exports to triple under U.S. Clean Power Plan

Mon, 01/18/2016 - 12:11

Originally published in the Toronto Star tablet edition, Star Touch.

By Tyler Hamilton

As Canada’s petroleum sector struggles with the reality that sub-$30 (U.S.) oil could be here for some time, the country’s power sector is prepping for a dramatic increase in U.S. demand for clean electricity.

Call it a shift from pipelines to power lines.

Action on climate change is the reason — more specifically, U.S. President Barack Obama’s Clean Power Plan, which aims to slash carbon dioxide emissions from power plants by a third by 2030.

The plan is expected to triple the flow of Canadian electricity into Midwestern and northeastern border states, part of a broader U.S. effort to comply with the international climate obligations that 196 countries agreed to in Paris.

Stakeholders from the Canadian power sector are calling it a breakthrough. “We are very pleased with the outcome,” said Patrick Brown, director of U.S. affairs with the Canadian Electricity Association (CEA).

Clean electricity imports from Canada are a multibillion-dollar opportunity, but have typically not counted toward state-level renewable energy mandates. After being heavily lobbied, however, the U.S. Environmental Protection Agency recognized imported power, including hydroelectricity, as an important way for states to comply with the new federal emission rules.

Brown said 80 per cent of electricity generated in Canada is emission-free, versus about 20 per cent south of the border. “That’s a real competitive advantage that we believe the Canadian government and provinces need to leverage,” said Brown, adding that an education effort is underway to make state officials more aware of the import option.

The North American Electric Reliability Corporation, which monitors and regulates grid stability in Canada and the U.S., estimated in a report last April that net Canadian electricity exports under the Clean Power Plan could grow three-fold between 2020 and 2030 as demand for renewable power grows in states such as Ohio, Michigan, New York and jurisdictions in New England.

In 2014, such exports represented $3 billion in cross-border trade, meaning the market could be worth $9 billion annually within the next 15 years. The projections are consistent with the preliminary findings of a new high-level report prepared by Boston-based consultancy London Economics International.

“States could decide they don’t want Canadian power, as there’s nothing in the plan that says they should use it. But it does encourage states to look in that direction,” said Andrew Finn, an associate of the Canada Institute at the Woodrow Wilson International Center for Scholars in Washington, D.C.

Finn has spent the past few years pointing to Canada as something more than just the oil sands and pipeline projects, both of which have overshadowed the hydro import option.

“Frankly, the Keystone XL pipeline project took so much oxygen out of the room, but with that out of the way this idea has more room to breath,” he added.

Longer term, some observers say the size of the export market has potential to reach $40 billion a year. Jatin Nathwani, a professor of engineering and environment at the University of Waterloo, estimates that clean electricity trade to the U.S. could soar 10- to 20-fold over the next few decades as part of a continental-wide effort to reduce greenhouse-gas emissions.

“Such an epochal change is conceivable over a 30- to 50-year timeframe consistent with the timelines for achieving a low-carbon economy,” Nathwani argued in a 2014 analysis that was featured in a report from the Canadian Academy of Engineering.

But the transition from pipelines to power lines comes with its own set of challenges, not unlike those experienced by Keystone XL proponents. Long distances and sometimes rough geography make for high upfront infrastructure costs and considerable risk, especially in the face of any political or public opposition to transmission infrastructure routes.

The fact that the constitution gives the provinces authority over electricity generation and transmission has historically been a sticking point.

“Support for expansion of electricity generation and transmission facilities — on a vastly increased scale — as part of a deliberate national ‘export driven’ strategy is either limited or all too often met with derision or outright hostility,” Nathwani wrote.

Still, the opportunity could prove irresistible. As more sub-national jurisdictions move to price carbon, and as more vehicles and industrial activities switch to running on electricity, power consumption is expected to rise in the United States faster than domestic developers can keep up.

The International Energy Agency, meanwhile, has warned in one scenario that the accelerated retirement of aging U.S. nuclear reactors could see nuclear power supply drop by as much as 70 per cent by 2040.

“The demand for electricity is going to keep going up,” said Dan Woynillowicz, policy director at Clean Energy Canada. He added that in a post-Paris world it will need to be low-carbon electricity, which bodes well for Canada.

“We need to get that message out in the same way we’ve had that full offensive championing the oil sands,” Woynillowicz said. “Imagine if we took that same level of effort to promote clean electricity exports?”

That’s exactly what some observers expect Prime Minister Justin Trudeau will do when he visits the White House for a state dinner with Obama. The two leaders have already indicated that closer co-operation on climate action and energy policy will be part of their discussion.

As for what Trudeau should do to stimulate investment on the Canadian side, Woynillowicz said it comes down to reducing risk and creating market certainty. That means creating political and financial supports, such as federal loan guarantees, and rallying the Canadian public behind the idea.

“Hopefully the Canadian government has learned some lessons in light of its experience on the pipeline side,” he said.

This article was part of a series produced in partnership by the Toronto Star and Tides Canada to address a range of pressing climate issues in Canada leading up to and following the UN Paris climate summit. Tides Canada is supporting this partnership to increase public awareness and dialogue around the impacts of climate change on Canada’s economy and communities. The Toronto Star had full editorial control and responsibility to ensure stories are rigorously edited in order to meet its editorial standards.

After Paris, it’s time for Canada to finally join IRENA

Thu, 01/14/2016 - 11:54

IRENA is the International Renewable Energy Agency, a UN-affiliated organization established in 2009 to promote awareness and growth of renewable energy technologies on the global stage. It’s a kind of counter-balance to existing agencies that have long represented the fossil fuel and nuclear industries. The idea for IRENA goes as far back as 1981, but it took a quarter century to get the political traction it needed.

Today, 145 countries have officially joined IRENA and another 30 are in the process of becoming members. That would bring the total to 175. By comparison, the 42-year-old International Energy Agency has only 29 members, while the 59-year-old International Atomic Energy Agency has 167 members.

Canada is a founding member of the IEA and IAEA, yet Canada is the only G8 countries not part of IRENA. In fact, all other G8 countries were founding members of IRENA. Canada isn’t even in the process of joining, yet China, India, Australia, Saudi Arabia and Iran are already members. Even Syria is signing up. The only other large country that sits with Canada outside of this massive international group is Brazil.

The Harper government avoided it like the plague. Not joining made a statement that even like-minded governments in Australia refused to make. But times have changed. Canada has a new government that says it’s serious about taking climate action. Canada played an important role in reaching a binding international climate agreement in Paris last month. Canada’s provinces have set ambitious emission-reduction targets that will require accelerated deployment of renewable energy. The country simply can’t afford to remain on the outside of IRENA.

So what’s the government’s position? Here’s the answer I got back after posing the question:

“‎The Government of Canada was recently asked to join the International Renewable Energy Agency. This request is still under review,” said Caitlin Workman, press secretary for Catherine McKenna, Canada’s federal minister of environment and climate change.

It’s safe to say that since IRENA was founded the invitation for Canada to join has been a standing one.

Some might say: Who cares? It’s just another international agency that costs money to join and doesn’t offer much in return. I’d argue it does offer value. It will keep Canadian officials more abreast of global trends in renewable energy, but more important, it will give Canada a seat at a table filled with dozens of countries looking for the skills, knowledge and technology required to transition their economies away from fossil fuels.

The export opportunities for Canada are immense. The World Bank, in a report released in September 2014, estimated that investment in clean technologies in developing countries over the next decade will exceeded $6.4 trillion (U.S.). Of that, $1.9 trillion will be focused on renewable energy technologies, with a significant chunk of that creating an opportunity for small- and medium-sized businesses. In my opinion, that number is likely low-balling the opportunity, especially in the wake of the Paris climate summit.

IRENA is an opportunity for Canada to identify the needs of others, and the role it can play in meeting those needs.

Already, representatives from its 145 members are gathering in Abu Dhabi for IRENA’s sixth-annual assembly to discuss the role of renewables just one month after the Paris summit. There will be much to discuss as they tease out the details of the Paris agreement, and much back room dealmaking that Canada will not be a part of.

Canada should be there showing leadership.

 

 

Solar is booming in Ontario, but you’d never know it from the data

Wed, 01/13/2016 - 14:19

Ontario’s Independent Electricity System Operator released its annual “Electricity Data” report on Tuesday, and it breaks down the supply mix in 2015, 2014 and 2013. On the surface there hasn’t been a big shift over the past three years. We see that nuclear and hydro output has been fairly consistent. Natural gas generation was up slightly in 2015 compared to 2014, but was still lower than 2013 levels. Coal has been completely phased out, but at only 2 per cent of the mix in 2013 it wasn’t a dramatic change.

Wind as a share of the electricity mix has doubled to 6 per cent since 2013. Electricity from biofuels more than doubled, but still represents less than 1 per cent of the mix.

Then there’s solar. Looking at 2013 data, you might be confused to see Ontario didn’t have any solar on the grid. A teeny weeny bit appeared in 2014 and that increased 14-fold in 2015, but still represented a measly .25 terawatt-hours of electricity in a system that generates 154 terawatt-hours a year. In other words, a rounding error.

It’s a misleading figure, and it makes solar look like an insignificant contributor to Ontario’s electricity system, which couldn’t be further from the truth.

So what’s the deal? The above figures are for transmission-connected generation, meaning only the biggest solar projects connected directly to the transmission system are recognized. Those projects total 140 megawatts on a grid with 27,000 megawatts of capacity.

But look under the hood and you see something quite different. When accounting for solar that is connected to the local distribution system, the figure is an impressive 1,766 megawatts.

“So over 90 per cent of solar in Ontario isn’t being included in their annual figures,” points out Keith Stewart from Greenpeace Canada. “If we did include it all, solar would be about 2 per cent of total generation. It’s a clear example of how conventional power-sector thinking is blinded to the role of renewables and the evolution towards a more decentralized grid.”

In other words, this so-called “embedded” solar generation is making a big difference, especially during times of summer peak demand when the sun is shining strong and air conditioning loads put stress on the grid.

 

Something to Remember: Key Climate Milestones in 2015

Mon, 01/11/2016 - 14:06
  • Began with the warmest winter on record globally.
  • Hottest year on record globally.
  • Toronto had the hottest Christmas Eve on record for a Canadian city, with the thermometer reaching 15.4 degrees C.
  • 2015 was last year we’ll see atmospheric CO2 concentrations below 400 parts per million, above which the global climate starts getting wacky.
  • The average global temperature increase averaged 1 degree C above pre-industrial times for the first time.
  • Tropical cyclone Patricia went off the hurricane category scale with winds of over 320 km per hour.
  • The Arabian peninsula was hit by two consecutive cyclones, unprecedented in the region.
  • After four years of drought California was the driest it has been in 500 years.
  • Jurisdictions such as B.C. and Alberta had their worst-ever wildfire seasons.
  • Record flooding hit northern England, winter tornadoes hit Texas and record heat crippled southern Australia.
  • Year ended with the North Pole being warmer than Toronto, Chicago, Boston, and even some parts of California.
  • And, we got a binding global climate agreement in Paris…. Yay!

Could proposed B.C. refinery be the future of liquid fuels?

Sat, 01/09/2016 - 23:54

A shorter version of this story appeared originally in the Toronto Star.

By Tyler Hamilton

As oil giants headquartered in Calgary face the reality that the best days for their industry could be behind them, the towns of Chetwynd and Dawson Creek in northwestern British Columbia hold out hope that better times lie ahead.

It is on about 1,000 acres of land straddling both municipalities that a small B.C.-based company called Blue Fuel Energy plans to build an industrial-scale refinery that could create enough low-carbon gasoline to fuel 20 per cent of vehicles in Canada’s third-largest province.

Called the Sundance Fuels project, it’s expected to create about 1,500 construction jobs and another 150 permanent positions. But beyond a boost to the local economy, the project carries broader significance for what it represents to Canada’s petroleum sector: a path to phasing out the “fossil” from its fuels in a world that must dramatically reduce its greenhouse-gas emissions.

Blue Fuel chief executive Juergen Puetter, the mastermind behind the $2.5 billion-plus project, has coined the term “liquid electricity” to describe the clean synthetic fuel his venture will produce. Initially, Blue Fuel’s pump-ready gasoline will be made from plentiful B.C. natural gas, not Alberta crude oil, and will have a carbon footprint 10 per cent smaller. It will achieve this by making its refinery more efficient than conventional refineries and using zero-emission hydro and wind power from B.C.’s grid to drive as many steps in the process as possible.

Not bad – enough, in fact, to comply with low-carbon fuel standards in B.C. and California – but nothing to brag about.

It’s just the start, says Puetter, whose ambition seems to have no limit. “By having the refinery in place, we could ultimately make our fuel not just low carbon, but 100 per cent renewable,” he says.

PROVEN TECH

How would that work? It comes down to basic chemistry. Any refinery that makes gasoline is just juggling carbon and hydrogen molecules – hence the word hydrocarbons. The molecules in natural gas are reformulated into something call synthesis gas, which in turn is refined into methanol. In Blue Fuel’s case, it plans to use technology licensed from ExxonMobil to convert that methanol into gasoline.

But natural gas, or any fossil fuel for that matter, doesn’t have to be the original hydrocarbon source. Puetter’s longer-term plan is to install machines called electrolyzers that use clean B.C. electricity to split water into oxygen and hydrogen gases. Carbon would come from the CO2 emissions captured from existing industrial facilities or, as technology evolves, directly from the air. Over time, the idea is that the supply of waste CO2 and renewable hydrogen will grow and the use of natural gas will shrink. Eventually, the fossil in the fuel is squeezed out of the final formula.

“Nobody so far has been able to prove this to be fundamentally wrong,” says Puetter, conceding that it’s been a challenge raising the capital to get the project moving. Still, he’s aiming for gasoline to start flowing out of Sundance by 2020. “If I told you this has been easy I’d be lying.”

Puetter isn’t a mad inventor who hatched the idea in his garage. He has a track record, having founded several successful businesses – including Bionaire, a maker of indoor environmental control products, and Hydroxyl Systems, a water and wastewater treatment company. He developed the first commercial wind farm in B.C. and for five years sat as chairman of federally funded Sustainable Development Technology Canada, where he is still a board member.

The fact that Michael Macdonald, former senior vice-president of global operations at Methanex, the world’s largest methanol maker, joined Blue Fuel as its president lends serious credibility to the venture; as does the decision by RBC Capital Markets to lead the company’s hunt for financing.

Blue Fuel is also not the only company pursuing this idea. The first commercial plant to produce gasoline from natural gas began operation 30 years ago in New Zealand, and in 2011 a company called Carbon Recycling International opened up a small refinery in Iceland that makes methanol out of captured CO2 and hydrogen produced from clean electricity.

Even German carmaker Audi is testing the waters. It has partnered with a company called Sunfire to make “e-diesel” made from CO2 and renewably produced hydrogen. A portion of its clean fuel has also been made from CO2 captured directly out of the air using technology developed by Zurich-based Climeworks.

Closer to home, a Calgary-based company called Carbon Engineering wants to use CO2 collected from its own air-capture technology to produce gasoline using a different process than the one Blue Fuel has chosen. “Our vision has always been about doing this at large scale,” says company CEO Adrian Corless.

Puetter says he can see Carbon Engineering one day becoming a supplier of CO2 to Blue Fuel. “But first we need to reduce the cost of CO2 capture,” he says. “It’s coming down, but it’s not economical yet on a large scale.”

CARBON NEUTRAL GASOLINE?

Still, the technology exists and it’s easy to see a future where the liquid fuels we use don’t add carbon to our atmosphere. It’s a tall order. But if oil is truly an economic addiction, synthetic fuel made from recycled carbon could be what methadone is to a heroin addict, and would address the reality that not all vehicles – from big trucks to airplanes – can run on battery power alone.

“There’s a market opportunity coming that really is quite extraordinary,” says Puetter, envisioning a day when big oil companies make their products with clean energy, instead of using fossil fuels to extract and produce dirtier fossil fuels.

The oil giants, after all, are already in the business of making liquid hydrocarbons. They have the project management experience, engineering skills and deep pockets needed to gradually transition from fossil to clean synthetic fuels, and the existing infrastructure – such as pipelines – to get their product to market.

“We believe we’ll be the first plant that is truly a gateway to that future,” added Puetter. “Our refinery will hopefully be a poster child for bridging the fossil fuel industry to renewables.”

Leah Lawrence, president and CEO of SDTC and past chair of the Calgary Chamber of Commerce, said Blue Fuel Energy is an important piece of the ultimate puzzle: what Canada’s energy sector might look like in a carbon-constrained world.

“For the first time we’re seeing a rapid uptake of technologies where before we couldn’t see how they all fit together,” said Lawrence. “Now we’re seeing it. Now you can see how a transition might happen.”

So is the oil industry paying attention? Does it care?

“It’s astounding how the oil boys club in Calgary is unwilling to change,” says Puetter, admitting that what he’s trying is “outside the box” and without precedent in Canada. The financial community has been an equally tough sell. “All they see is the risk. They don’t see the upside,” he says.

This article was part of a series produced in partnership by the Toronto Star and Tides Canada to address a range of pressing climate issues in Canada leading up to the United Nations Climate Change Conference in Paris, December 2015. Tides Canada is supporting this partnership to increase public awareness and dialogue around the impacts of climate change on Canada’s economy and communities. The Toronto Star has full editorial control and responsibility to ensure stories are rigorously edited in order to meet its editorial standards.