Diaper-to-Diesel technology… seriously

My Clean Break column this week is about plans to build a facility in Quebec that will process used diapers into oil, gas and char using a pyrolysis process. Engineering giant AMEC has been contracted to build the plant, which will take in used diapers (infant and adult) from hospitals and seniors homes. It makes sense. Pyrolysis is a great technology, but the key to making it work — and by work I mean make a business out of it — is to assure you have a steady supply of predictable feedstock that’s not too expensive to collect and transport. When I say predictable I mean that the feedstock is the same. That is, no surprises like what you get with the mish-mash of stuff that comes from municipal solid waste. If you know the materials you’re dealing with, it’s easier to control the pyrolysis process and maximize its efficiency. Diapers are ideal for this reason — all you’ve got is plastic, fibre, poop, and pee — and in the case of collection and transportation, there’s already a system in existence that you can piggyback. In fact, the company accepting the diapers will make money, not spend it, by charging a tipping fee to the company that does the diaper pickup and disposal for institutions. It’s a model that could be replicated throughout industry with a wide range of materials — if we thought about it.

The output is synthetic gas, a diesel-like oil and char. The gas can be used for power and heat during the pyrolysis process, the char can be used in a wide range of application (or simply mixed in depleted soils, thereby sequestering the high content of carbon inside), and the oil can be used for heating or electricity production, the latter potentially sold into the grid — yet another stream of revenue. AMEC won’t name the company that’s doing this diaper-to-diesel project, but I hope it proves the model successful so that others can adopt it as well.

Bubbling under: Canada’s top 10 cleantechs

Corporate Knights, a national magazine about socially responsible business in Canada, released its list of the Top 10 publicly traded clean technology companies in Canada and a Top 10 list of the emerging cleantech leaders of tomorrow. (Disclosure: I was on the five-person advisory panel that selected the companies). The list was unveiled at the Cleantech Forum in Toronto on Thursday, an appropriate venue given the hundreds of VCs in attendance.

First, the bad news. The list of established publicly traded cleantech leaders was a difficult one to compile. We simply don’t have many large players in Canada, and the ones we do have are either in a struggling sector (fuel cells, such as Ballard) or have been acquired by foreign companies (i.e. GE’s acquisition of Zenon). Here’s the list in alphabetical order:

1) Boralex
2) Canadian Hydro Developers
Carmanah Technologies
4) Dynetek Industries
5) Hydrogenics
6) RuggedCom
7) SunOpta
8) Westport Innovations
9) WFI Industries
10) Xantrex Technology

While I like Boralex and Canadian Hydro, they’re both developers of wind and small hydroelectric projects so I personally don’t see them as cleantech — though I guess that’s a matter for debate. SunOpta is a very successful company that makes most of its money from making organic foods. Its bioprocess business, which is targeting cellulosic ethanol production, is still in its infancy and is more a startup than anything else. WFI Industries, meanwhile, isn’t even Canadian — it was selected because it lists on the Toronto Stock Exchange. That said, my faves on the list are Xantrex (power electronics), RuggedCom (smart grid communications), and Carmanah (solar LED lighting). Westport and Dynetek are interesting as well, and Hydrogenics is a solid company that’s had a tough time making fuel-cells and hydrogen a money-making business. I can’t emphasize how difficult it was to put this list together. If the criteria was strictly companies that are publicly traded, I suppose we could have added flow-battery developer VRB Power or hybrid-locomotive innovator RailPower, but both companies — while their technologies are exciting — have been hit with product problems and order delays. It’s a troubling sign that Canada has a long way to before it can claim to have built a financially healthy cleantech sector.

Now, the good news. Compiling the list of emerging companies was just as difficult, but for a completely different reason. The number of companies out there doing innovative stuff is quite large, and whittling them down to just 10 was quite the exercise. Here’s the list of companies that made the cut:

1) 6N Silicon (solar-grade silicon)
2) Enerworks (solar-thermal heating)
3) Ensyn Technologies (biomass pyrolysis)
4) Group IV Semiconductor (solid state lighting)
5) Iogen (cellulosic ethanol)
6) Magenn Power (floating wind generation)
7) Menova Energy (solar thermal, PV, lighting and algae production)
8) Plasco Energy (solid waste gasification)
9) REGEN Energy (intelligent load control)
10) Triton Logging (underwater log harvesting)

One thing I was surprised about, and this didn’t strike me at the time we were compiling the list, is that nine of the 10 companies come from Ontario, and a majority of those come from the Ottawa and Toronto areas. I’ll fully admit that there’s got to be some bias here, since I live in Toronto and Cleantech Group co-founder Nick Parker is also a proud Torontonian. I also know there are some terrific companies out west, particularly in Vancouver and around Calgary. Vicky Sharpe, CEO of Sustainable Development Technology Canada, was also on the advisory panel and would have a more cross-country perspective, given her mandate, but I should be clear now that the list could have just as easily been made up of B.C. or Alberta based companies.

That said, the ease with which we chose Ontario companies somewhat validates the feeling by many, including myself and Parker, that southern Ontario needs to get its act together and do a better job of recognizing, nurturing and enabling the emerging cleantech companies in the region. I know you can’t force the creation of a cluster — it’s more an organic process — but you can recognize something that’s already there. We need to brand the region. Do a better job of recognizing its strengths, and position it as a place that attracts venture capital, talent and the kind of jobs that could re-energize Ontario’s struggling manufacturing sector. It’s also a great opportunity to create products that could be exported around the world. It would, I should add, be great to see corporate leaders, such as RIM co-CEO Jim Balsillie and BCE new chief George Cope, embrace and promote the sector, not just as good corporate citizens but as the heads of companies that have a role to play in providing communications and software that enables clean technologies. We have too few high-profile names in this region, so who we have we need.

Sustainable Development Technology Canada has played a huge role, not just in Ontario but nationally, in helping emerging cleantech companies get through “the valley of death,” as SDTC CEO Vicky Sharpe described it during the conferece. The “valley” is that point where startups have a difficult time raising early-stage capital to demonstrate their technology. VCs, particularly Canada’s overly conservative VCs, stay clear of that risk. Those companies that do end up raising capital end up relying on VCs in the United States (who better see a good opportunity when it meets them in the face). “The issue we have is a very conservative venture capital community that does not recognize opportunity in its own backyard,” said Sharpe while the Corporate Knights list was being unveiled.

She’s absolutely right. It’s the reason why the list of “emerging” companies to choose from was so huge, and the list of “established” companies to choose from was so scant. Yes, VC investments in Canadian cleantech companies hit a record in this third quarter, but many call it an anomoly at a time when cleantech’s proportion of overall VC investment in Canada is shrinking while in the U.S. it’s growing. As well, how much of that money in this record third quarter came from U.S. venture firms? I imagine it’s a lion’s share.

Among some relevant quotes at the Cleantech Forum:

“I’d like to see Canada develop policies that give us a competitive advantage,” said Robin Louis, president of the Canadian Venture Capital Association, describing local VC investment in cleantech as unhealthy. “I’d like to see us do it for Canada, and crush the rest of the world!”

“The trillion-dollar question is how Canada captures some of that (cleantech) action. It’s no longer good enough for us to just chop down trees and suck oil out of the ground,” said Toby Heaps, founder and editor of Corporate Knights.

“We’re too quiet about our own successes,” said Peter Love, chief energy conservation officer of Ontario.

Ditto. Ditto. Ditto — if you ask me. And now I end my patriotic rant.

Telcos casting themselves as green

Bell Canada, the largest telephone and Internet company in Canada, put out a press release today promoting two tools that help customers quantify and better appreciate the carbon savings that come from using certain telecommunications products. Hoping to tap rising concern over the size of corporate carbon footprints, BCE has made available a “Smart Metering Guide” and “Green Meeting Calculator” that, according to the company, “shows how virtual meetings through Bell Conference Solutions can make a real difference in reducing greenhouse gas emissions and cutting travel costs.” The calculator lets customers measure the amount of greenhouse gas emissions they can cut through virtual meetings. “A business can reduce emissions by about 150 kilograms using a two-hour Web conference instead of a plane flight between Toronto and Montreal for one person,” the company states. “That’s equal to emissions produced by lighting and heating an average Canaidan household for eight days.”

Bell says its own employees avoided about 1.7 million tonnes of greenhouse gas emissions in 2006 — equivalent to the annual emissions of 344,000 mid-size cars — by opting to use teleconferencing instead of travelling by car or airplane to meetings.

Now, this is obviously a self-serving announcement aimed at milking the public’s concern over global warming. It’s no different than Nortel during the SARS crisis in Toronto attempting to promote its teleconferencing software as a way to avoid global travel that could expose employees to the infectious disease. Same goes for those exploiting fears over a possible Avian flu outbreak. The fact is Bell isn’t launching any new products, it’s merely doing a better job of explaining how its existing products can replace travel and thus cut down on carbon emissions. It should have explained this years ago. At least now it’s offering a way for customers to measure the impact, and you can’t fault them for that.

That said, Bell is doing more — particularly in the area of energy management. It has a pilot project in the Toronto area that’s testing the use of home energy-management software that rides over its broadband network. It’s a slick product, giving homeowners the ability to better measure how they use electricity and remotely control (through a work computer or BlackBerry, for example) what is using power and what isn’t in the home. As Ontario moves to a smart meter system that enables tiered pricing for peak and off-peak electricity use, this kind of interface will be quite valuable. Bell also plans to sell the service to utilities that want to become demand-response aggregators. So, in this sense, Bell is truly embracing “cleantech.”

There’s considerable debate out there over whether homeowners and businesses will use this kind of energy-management platform. Some say it’s too complicated; that people don’t have time to set their energy preferences or respond to market signals; that people who drive SUVs and readily pay higher gas prices don’t care about saving $10 a month on their hydro bill. I disagree — only because over the years I’ve seen how people have taken to things like Internet banking, online bill payment and presentment, and VoIP services such as Skype. These all have learning curves and require effort on the part of users. But if using them benefits us in some way — whether to save money or offer convenience — a significant portion of the population will eventually embrace it.

Curious to know your thoughts.

Electrovaya shares rocket as battery JV revealed in India

Toronto-based Electrovaya Inc., a maker of advanced lithium superpolymer batteries for electric vehicles and other applications, has struggled to compete for financing and attention in a market where rival, better-funded companies such as A123 Systems have captured the love of cleantech watchers eager to see an electric-vehicle revolution unfold, starting with plug-in hybrids. Despite its financial woes, Electrovaya does have a competitive technology. So investors were understandably revved up after reading the announcement that the company is establishing a joint-venture with Electrotherm, the leading manufacturer of electric vehicles in India. The two companies plan to build a manufacturing plant in India capable of producing 10-megawatt-hours per month of battery storage. Electrovaya, while taking an equity position in the joint venture, will get payment for the use of its battery technology and a royalty payment down the road based on plant output. An added bonus is that Electrovaya would have the exclusive right to export the batteries manufactured in the plant to other countries, for example, China.

Now, caution, caution, caution. This is a penny-stock company with falling year-over-year revenues announcing a “non-binding memorandum of understanding,” meaning nothing in this deal is solid beyond a handshake. It’s encouraging, but anything could happen and it’s difficult from our comfortable desks in North America to monitor the status of this development. That said, investors liked the news, which sent Electrovaya’s share price skyrocketing by 54 per cent today — from 28 cents to 43 cents on the Toronto Stock Exchange. And the fact is, Electrovaya’s technology — which the company claims has five times the energy density of lead-acid batteries and less than one-third the weight — is being tested by a variety of potential buyers.

Hell, if the company can’t get respect in North America good on them for milking connections in India. Let’s hope this is a real deal with promising results down the line, not a vapor announcement meant to boost a money-losing company’s lagging share price and make a few people richer in the process.

Heat-recovery tech for drains hits Home Depot

A small Waterloo, Ontario-based company called RenewABILITY Energy Inc. has convinced Home Depot Canada to carry its drain heat-recovery systems for sale on its Web site. The company’s Power-Pipe technology is basically copper tubing that wraps around a residential drain pipe. Cold water is pumped through the tubing and captures the heat from drain water after it comes out taps, dishwashers, washing machines, etc…. The warmed up water from the tube is then sent to the residential hot water tank, which doesn’t have to burn as much natural gas or use as much electricity now because the water has been pre-heated by several degrees. It’s a simple system, sold in a variety of designs by a number of different companies, that should be required in every home. The company claims the system will pay for itself in two to five years, it can be used in new and old homes, and it can reduce home energy consumption by 5 to 10 per cent. Not bad when you consider the hot water portion only accounts for 20 to 30 per cent of total home energy use.

The Power-Pipe comes in three models — 36-inch, 48-inch and 60-inch long tube models ranging from $600 to $1,000 (Canadian) and including the cost of installation. Just type in “Power-Pipe” in the HomeDepot.ca search engine. “The typical 60-inch Power-Pipe unit can bring you cold water temperature up from 10 degrees C to as much as 24 degrees C,” the company says.

I’m not sure about U.S. or European availability and incentives, but in Canada customers who purchase the system can also qualify for up to $300 in federal and provincial incentives. It’s good to see Home Depot giving some profile to this simple approach to achieving energy efficiency in the home.