I wrote a Clean Break column this week on the need for more attention — serious attention — to matters involving the electric grid. My concern is that we put so much focus on new power generation, arguably a more sexy topic when we talk about wind and solar, and seem to forget that maximizing renewable output means improving the way the grid operates and expanding its reach. In other words, we need to be moving more aggressively toward a “smart grid” that’s self-healing and automated to the point where the energy from a wide variety of resources — wind, solar, ocean, biomass, biogas, geothermal — can be tapped, directed, managed and carried to where it needs to go.

Vinod Khosla has raised this concern and need. So has the U.S. Electric Power Research Institute, which considers grid modernization a top priority. Unfortunately, the utilities themselves and politicians don’t seem to get it — at least not yet. This could become a major bottleneck within a few years, so we need to start addressing it today. If we envision a world of electric cars, plug-in hybrids, smart appliances and more and more renewables, then the grid is what ties it all together and makes it work. The grid we have today, built with technologies from the 1950s, 60s and 70s, just won’t cut it.

What this will take is a vision from government — at all levels, but particularly federal government — and a clear policy direction with benchmarks we need to meet.

Toronto-based startup StormFisher Biogas has partnered with private-equity firm Denham Capital of Boston to create a $350 million fund that will be used to source out, construct or buy into about 30 biogas projects across North America. The composition of the fund will be part private equity and part debt financing.

StormFisher, started a couple of years ago by three MBA grads, is focused on sourcing out agricultural and food-industry byproducts that can be easily converted to methane gas using anaerobic digester technology. We’re talking everything from cow dung to grape residue from winemaking. The aim is to prevent all this material from entering a landfill where it will decompose and release methane (as a greenhouse gas 21 times more powerful than CO2) into the atmosphere.

For the company’s first three projects, located in Ontario, the biogas will be used to generate electricity that will be sold into the province’s electricity grid at 11 cents per kilowatt hour under its standard offer program. Outside of Ontario, the gas is likely to be sold into the natural gas distribution network and used for heating applications.

Denham has experience investing in this area. Last November it struck a $1.5 billion partnership with Recycled Energy Development (RED) to fund waste energy recycling projects across North America. RED’s chairman Thomas Casten is a pioneer in the development of combined heat and power systems and recovering industrial waste energy. Earlier this month RED signed a $50 million deal with West Virginia Alloys, the country’s largest silicon producer, to capture and make steam from the hot gases coming out of its silicon furnances. The steam will run a generator to produce 40 megawatts of electricity.

Casten has been a vocal advocate of waste-energy recycling in Ontario, but it seems the government here — while it has listened — hasn’t been keen to act. It’s a shame. As for StormFisher, it’s nice to see some local boys making lemonade from lemons and attracting the capital to do it.

As suspected, investors are beginning to hitch Montreal-based 5N Plus’s wagon to the success of First Solar, which busted past analysts’ expectations today by reporting an eightfold increase in profit in its fourth quarter. This news sent First Solar’s shares surging 30 per cent higher today and injected new vigour into a solar market that has taken a beating in recent weeks. Just behind it was 5N, which makes and is the largest supplier of high-purity cadmium telluride for First Solar. This material is a core ingredient to First Solar’s thin-film solar modules, which are benefiting from low-cost manufacturing. 5N saw its shares rocket 18 per cent higher today because of the First Solar news.

Now, some analysts have raised possible concerns that there will be constraints on cadmium telluride resources at some point, but likely not until 2011. They’ve also pointed out that First Solar will, if it’s smart — and by all accounts it appears very smart — begin to find new cadmium telluride suppliers and spread the wealth more equally between them and 5N. That said, there’s nothing stopping 5N from pursuing other solar customers and markets, and even if First Solar does spread the wealth more eventually 5N still stands to grow over time as First Solar’s demands become greater and greater.

Nice to see this Canadian company doing so well just two months after it’s IPO, which was priced at $3. Today the stock broke $10 before settling just under.

I don’t know about any of you, but it’s frickin’ cold in Ontario right now, so it’s this time of the year when we rely heavily on home heating. Ontario is a mish-mash of different technologies: resistance heating, natural-gas furnaces, oil furnaces and propane. Out of them all, the most affordable option is natural gas.

Now, natural gas is okay but it’s not ideal. It still emits greenhouse gases and NOx. It’s also becoming more volatile and is likely to become much more expensive over the coming years. Also, the power mix in Ontario will become cleaner over the next decade — no coal, more nuclear, hydroelectric, wind and natural gas. So there’s an argument that heating your home with electricity could be cleaner than using natural gas, if you can do it efficiently — in other words, if you can find a better way than using resistance heating.

This has many people in Ontario looking at geothermal. But these ground-source heat pump systems are a big gamble — with a big upfront pricetag and half the system underground, if something goes wrong with the installation it’s a major pain in the you know what to fix.

I wrote a story today (companion story here) on Hallowell International, a fairly new company based in Maine, that has developed an air-source heat pump that works in colder climates — i.e. Canada and the U.S. north. Company founder Duane Hallowell, a 34-year-old engineer who was a cryogenics expert with the U.S. Navy, realized that conventional air-source heat pumps that are popular in the U.S. south do not perform well in cold climates and are therefore not economical. So he went ahead and built his own, called Acadia, and it can operate efficiently down to minus 30 degrees C.

Hallowell argues that its system is three times more efficient than resistance heating, but on an annual basis cheaper than natural gas, propane and oil (though the payback on natural gas is longest). In downtown Toronto, where drilling bore holes for geothermal is prohibitively expensive, if not impossible, using an air-source system instead that requires no digging, is nearly as efficient as geothermal, and can provide both heating and cooling is an attractive proposition.

The company still has a long way to go to build confidence in the industry, but Mitsubishi is apparently coming out with its own competing model to Acadia, which is good news. It could be that over the next few years Acadia-style air source heat pumps will pose a major challenge to high-efficiency natural gas furnaces, particularly in densely populated urban areas, and give the gas company pause for thought.

There are plenty of different solar technologies out there claiming to be superior, but innovation continues to bring more surprises. I’ve got a piece at Technology Review today about research going on at McMaster University in Hamilton, Ontario, that could result in more efficient, cheaper and flexible solar cells composed of hair-like nanowires.

The nanowires — about 1,000 times thinner than a human hair — are literally grown on a substrate, whether it be silicon, metal foil, carbon-nanotube fabric or just glass. Some labs have grown the nanowires out of silicon, but the McMaster group has chosen Group III-V materials — such as gallium and arsenide — that are capable of absorbing much more energy from the sun than silicon. While the materials are expensive, they’re better — that’s why they’re used in solar panels for space-based applications. When used in nanowires, however, so little material is needed that it becomes affordable.

The McMaster lab basically seeds a substrate with nanoparticles of gold or aluminum and then exposes the particles to gases of gallium and arsenide. The nanowires grow upward from there, like a dense grass or a thick growth of stubble, as the gas crystalizes into a solid. It’s a very cool process. The challenge is to get a dense, high-quality and pure turf of nanowires to maximize efficiency. In principle, nanowires are better at light conversion because their length allows more absorption of energy when the sunlight hits their tips. But they’re thin enough to allow the excited electrons to escape, making it easy to collect the electrons and produce electricity.

McMaster has partnered with Cleanfield Energy, a developer of renewable technologies, and the Ontario government. Cleanfield and the Ontario Centres of Excellence have contributed about $600,000 to a three-year initiative that’s aiming to develop affordable nanowire solar cells with 20 per cent efficiency. Definitely a project I’ll be following over the coming years.