Ontario ups the ante on cap-and-trade

I hinted in two articles over the past two weeks (here and here) that Ontario was considering this move. Now I’ve got confirmation. Premier Dalton McGuinty put out a press release today announcing that the government is seriously exploring the idea of joining the Regional Greenhouse Gas Initiative, or RGGI, which is an agreement between nine states in the U.S. northeast and mid-Atlantic to establish a regional cap-and-trade program and emissions trading system. McGuinty went further and also said the province is looking at the Western Regional Climate Action Initiative, an alliance of five western states that includes California. The goal of these initiatives, at least to start, is to limit the emissions that come from power producers.

California Governor Arnold Schwarzenegger, New York Governor Elliott Spitzer and others encouraged Ontario to consider participation, which would bypass a Canadian government that seems intent on not having a national cap-and-trade scheme. Schwarzenegger called Ontario’s announcement “terrific news,” while Spitzer said he would “enthusiastically welcome” Ontario as a partner.

Now, “exploring” and “considering” is not joining, but this announcement — made so publicly — sends a direct message to the Harper government and gives Ontario an avenue to explore if Ottawa continues to refuse the idea of a cap-and-trade scheme. Hopefully other provinces will follow, as CIBC economist Jeff Rubin has predicted.

Welcome to the “Green” Dome

I have a piece in today’s Toronto Star about how the Rogers Centre, home of the Blue Jays baseball team and formerly known as SkyDome, is in the middle of a three-year retrofit program to dramatically increase its energy efficiency. Rogers Communications Inc., owner of the ball club and the stadium, has a goal of reducing the centre’s electricity bill by 33 per cent. So far, it has automated the lighting systems in about a third of the building, including private boxes, corporate offices, the underground parking garage and eventually all hallways, corridors and stairways. Sound, motion and sunlight sensors are being used to manage when the lights go on and off and when they should be dimmed to maximize efficiency. With the work done so far, savings on retrofitted lighting are expected to reach 75 per cent, according to Terry Mocherniak, CEO of Encelium Technologies, the Toronto-based company hired to do the lighting retrofit. The $3 million retrofit is expected to save more than $1 million a year with a payback of a few years. It’s an ambitious and inspiring plan that should be applauded and copied by others in the city and province.

Welcome to the “Green” Dome

I have a piece in today’s Toronto Star about how the Rogers Centre, home of the Blue Jays baseball team and formerly known as SkyDome, is in the middle of a three-year retrofit program to dramatically increase its energy efficiency. Rogers Communications Inc., owner of the ball club and the stadium, has a goal of reducing the centre’s electricity bill by 33 per cent. So far, it has automated the lighting systems in about a third of the building, including private boxes, corporate offices, the underground parking garage and eventually all hallways, corridors and stairways. Sound, motion and sunlight sensors are being used to manage when the lights go on and off and when they should be dimmed to maximize efficiency. With the work done so far, savings on retrofitted lighting are expected to reach 75 per cent, according to Terry Mocherniak, CEO of Encelium Technologies, the Toronto-based company hired to do the lighting retrofit. The $3 million retrofit is expected to save more than $1 million a year with a payback of a few years. It’s an ambitious and inspiring plan that should be applauded and copied by others in the city and province.

Turning syrup into bioplastic; taxing wind

A couple of my recent Toronto Star articles may interest. The first is about the suitability of maple sap/syrup as a substrate for producing biopolymers that can be used to make biodegradable food packaging and biocompatible medical materials, such as bandages and implantable drug-delivery systems. A team of scientists at Canada’s National Research Council found that a certain type of bacteria that produces natural biopolymers from sugars reacts quite positively to maple sap taken right out of the tree. They argue that using maple sap is more economical than using sugars from corn or sugarcane because no pre-treatment of the sap is necessary, thus eliminating substantial costs. You also don’t need to fertilize and irrigate the trees. The scientists figure that production of maple sap in Canada could be expanded to supply this new market, and they point to an existing — and quite large — maple syrup surplus that could be put to good use.

The second article, which appeared today, details how a Guelph, Ontario, man who put up a wind turbine on his private farm got dinged with a higher property tax assessment that erases much of his energy savings as a result of the turbine. The municipal-owned agency responsible for the assessments has put a hold on his tax increase until it can get clarification from the province’s Ministry of Finance. The fear is that increased property values, and hence an increase in taxes, will ruin the business case for a slew of proposed renewable-energy projects across the province — everything from wind and solar farms to biodigester facilities that generate electricity from cow manure. Let’s hope the ministry sorts things out without harming the potential growth of renewable energy in the province.

VRB and ATS updates

First the positive news: VRB Power finally shed some light on the progress of its wind energy-storage project in Ireland as part of a previously announced deal with Tapbury Management Limited. An independent feasibility study that was jointly commissioned by Tapbury and government agency Sustainable Energy Ireland found that using VRB’s flow battery technology to firm up wind power at the Sorne Hill Wind Farm would generate an internal pre-tax rate of return of 11.7 per cent and a post-tax return of 17.5 per cent for an equity investor. “In our experience, the current market for investments of this nature would find these returns attractive,” the report states. “We have no doubt that both banks and equity investors would be enthusiastic about such a project in the event that the technology is thoroughly tested and proven on a commercial scale.”

Based on the findings of the report and analysis of the optimal system design, Tapbury is increasing the size of its VRB storage system from the original 1.5 megawatt x 8-hour system to a 2 megawatt x 6-hour system. This increases the value of the contract to $9.4 million (U.S.) from $6.3 million. “This study demonstrates the economic viability of our systems for wind farms such as Sorne Hill,” said VRB chief executive Tim Hennessy in a statement. “This is largely due to our ability to enable wind powered generation to match many of the characteristics of conventional ‘base load and peaking plant’, thereby allowing wind power to be dispatched in a similar way to conventional generation.” It will be interesting, now, to see how quickly Tapbury and VRB move forward on this project, which Hennessy has touted as a “blueprint” for future projects across Ireland and other parts of Europe.

Now the negative news: ATS Automation has officially withdrawn its initial public offering of solar subsidiary Photowatt Technologies, citing “market conditions.” Notice they don’t say “poor market conditions,” because the market isn’t really that bad. What’s bad about this is ATS’ management, which has completely fumbled the ball on this much anticipated solar IPO. These guys have made one wrong call after the other and have let several windows of opportunity close on them. They dragged their feet on this IPO, they did a miserable job at marketing it, and throughout this whole process we’ve seen the solar business itself deteriorate — i.e. Spheral Solar has been written off and is unlikely to result in any future product for the company. Expect a shareholder coup out of this one. Word on the street is that some institutional shareholders are quite pissed at how things have turned out. And it’s a shame, given the opportunities in the solar market and the true potential of Photowatt.