See Ontario cleantech startups and university projects at Green Living Show’s inaugural innovation exhibition

For the past six months I’ve been helping the organizers of the annual Green Living Show in Toronto create a Green Innovation Exhibition that shines a spotlight on clean technology invention and innovation in the province. The show and exhibition will be taking place between April 13 and 15 at the Direct Energy Centre (Exhibition Place). I encourage all of my friends and colleagues in the sector to attend.

The exhibition will showcase the most outstanding examples of clean technology designed and developed in Ontario. Exhibitors have been selected by a panel of experts, which included directors and senior managers of Investeco Capital Corp., Green Chip Financial, MaRS Clean Tech Fund, Corporate Knights, Green Living Enterprises and NGO sponsors. The Exhibition itself has the backing of Sustainable Development Technology Canada, MaRS Discovery District and the Ontario Centres of Excellence, and its exclusive private sector sponsor is GE Canada. In other words, this exhibition is the real deal. For anyone interested in seeing the engine under the hood of Ontario’s cleantech sector, visit the show to find out.

About 20 companies, mostly start-ups, will form the core exhibition. They range from makers of electric-assist bicycles, to developers of cutting-edge solar and energy storage systems, to those making the latest advances in the areas of green chemistry, energy efficiency and intelligent transportation. Solar Ship, a designer of a hybrid, solar-powered airship, will also have a presence at the show, and to top it off — like the cherry on a sundae — we will have the greenest project from this month’s Toronto Science Fair competition, as selected by myself and a representative from GE Canada. Innovation and invention in this field stretches far beyond commercial enterprise. Indeed, it often begins in the laboratories and research facilities of our academic institutions. So to further round out the exhibition, we are also including some of the top “green” research projects at Ontario universities.

You can see which companies and universities are attending by clicking here.

I’m really excited about this exhibition and it’s great to see a half year of hard work finally coming to fruition. We don’t shine a big enough spotlight on the Ontario cleantech sector. Sure, we do individual company profiles and hold industry conferences, but rarely does the general public get a chance to see all this great innovation in one place. And let’s face it, we need the public to get excited about this stuff, because this is where our political leaders take their cues. If we want more public investment in cleantech R&D and deployment then we have to get public buy-in. At the same time, busloads of school children attend the Green Living Show. This is an opportunity to educate and inspire young minds — i.e. the green engineers and entrepreneurs in our future.

I hope to see you there. For my colleagues in the business community, consider attending the morning Business Forum Panel on the first day where we will discuss the growing importance of corporate venturing in the Canadian cleantech sector. We have some top-notch senior panelists lined up, and it promises to be an engaging and insightful discussion.

Three years later, ZENN finally negotiates to get disclosure from EEStor… does it matter?

After major delays, missed deadlines, and pretty much three years of silence, EEStor will soon have to disclose where it’s at in terms of development of its much-anticipated (and for some, much written off) super, duper ultracapacitor-based energy storage technology.

It’s been a long time coming, and many have already declared the company dead — or at least close to it. Back in December 2010 Greentech Media posed the question: Is the EEStor saga finished? Since then, those who aren’t EEStor diehards have come to the conclusion that, yes, it’s pretty much over. Of course, EEStor was the major focus of a chapter in my book Mad Like Tesla (to buy on Amazon click here), so I have a personal interest in seeing things through to their true end. Based on comments made yesterday by EEStor-investor ZENN Motor Co. at its annual general meeting, the dream still appears to be very much alive.

Here’s what ZENN said on March 26 in a press release to report is first quarter 2012 numbers: “The Company recently participated as a minority investor in an equity financing completed by EEStor Inc. While the Company’s investment was small, the investment was part of a financing that provided EEStor with additional working capital to further the development of its power storage technology. Importantly, as part of the investment the Company was able to review certain aspects of the technology and obtain a covenant from EEStor regarding a timeline for near term public disclosure of the status of its technological development certified by an independent third party.”

A day later, at ZENN’s AGM in Toronto, company chairman and chief executive James Kofman gave EEStor investors and groupies a clearer picture of what to expect in the months ahead, and spoke about the state of ZENN’s relationship with EEStor, which hasn’t disclosed anything publicly since 2009.

“The relationship between ZENN and EEStor is as strong as it’s ever been, and certainly stronger than it’s been in many, many years,” Kofman said. “There is a very good dialogue between the companies, and regular rapport on many fronts… The recent announcement has demonstrated we really are in a good position with them, much better than we were a year ago. What everyone is looking for is real transparency and real disclosure. The announcement we made puts us finally on a path where we have a clear methodology for getting better public disclosure.”

So what does that means? It means that going forward, as part of ZENN’s latest minority investment in EEStor, the company will have greater access to EEStor and insight into its progress. As well, EEStor will have to do a better job of disclosing that progress publicly. “I met (EEStor founder and CEO) Dick Weir before I joined the board and went down to Austin. We have kept a very regular dialogue. A number of directors have kept a regular dialogue with him, and also have visited with EEStor in Texas,” said Kofman, in an effort to give investors more confidence that ZENN isn’t oblivious to what’s going down in Austin.  “We now have a very clear agreement with EEStor which provides for a mechanism for them to publicly reveal where their technology is, and to do so certified by a third-party expert in the near term.”

Kofman continued: “Dick is a very secretive person, he’s very careful about his patents, and we respect that. We’ve worked incredibly hard over the last year to earn his trust. There were some issues that happened a number of years ago that made him very cautious about making any statements for fear they would end up in the public domain. I think we’ve demonstrated consistently to him we can be trusted. Through that he’s opened up more to us than he has in a very long time.”

So when can the world expect Weir and Co. to reveal what’s going on inside the walls of EEStor? “We’re expecting this before the summer, if not well before that time,” said Kofman. “It’s coming, and it’s very specific on what needs to be disclosed. So we’re excited.”

He said EEStor continues to file patents and work on its patent portfolio. “That’s critical because there’s a lot of competition out there.” But Kofman made clear that whatever developments there are at EEStor the technology, for all its potential, isn’t going to change the world tomorrow. “I think we’ve recognized that technology doesn’t just happen overnight. So even if there is in the near term some public disclosure that says where you are, it doesn’t mean you can just plug it into your Chevy Volt… It’s likely the EEStor technology will be used in some of the simpler applications well before automotive.”

Asked by one shareholder about EEStor’s competitive advantage against other up-and-coming technologies and startups, Kofman replied: “I don’t want to put words in Dick’s mouth. I will say Dick remains incredibly bullish that there is no technology like his technology… I’m paid to be a little more of a skeptic… We recognize eventually there will be competitive technologies one way or another, but in fairness to date we haven’t seen anything with the potential of this technology – not yet. But it will come.” He left open the possibility of major joint ventures, or even the scenario that ZENN would get bought out. “We’re going to do whatever it takes to get the most value for shareholders.”

As far as cash flow goes, he said he wasn’t comfortable with where ZENN was at — about $750,000 in the bank. For this reason, the company is going to look at doing a new round of financing to make sure the company can move quickly to leverage its investment in EEStor when the time is right.

One shareholder asked why EEStor has been selling off manufacturing equipment, and whether this was a sign it was running out of money and desperate. Kofman dismissed the idea. “I sold an old pair of skis the other day. It doesn’t mean I’m running out of money. I just don’t use those skis anymore. For EEStor, this is equipment they’re not currently using and don’t see a use for. And definitely capital is more interesting than equipment that’s going to get less valuable over time. They’re getting rid of equipment, as I understand it, that they’re not using and don’t expect to use.”

The reason why this update should not be dismissed as just another EEStor striptease is that it’s coming from Kofman, who is highly respected in the Toronto financial community and has his own reputation to protect. (See this little backgrounder prepared by TheEEStory.com). A veteran investment banker who worked at UBS Canada until 2009, Kofman joined Cormark Securities last fall as its vice-chairman. He holds that role in parallel to his dual chairman/CEO role at EEStor, which he first joined as a director in March 2011. As one Cormark colleague of Kofman’s told me recently: “He’s far too busy here, and it’s far too lucrative, for him to waste time at ZENN unless he felt it was ultimately worth it.”

Kofman, it should be pointed out, isn’t getting paid. He’s taking stock options only in the hopes that his contributions to ZENN will pay off. If nothing happens, he gets zero back — pretty much the same position ZENN shareholders are in. Shareholders seem to like the message. The stock is up 28 per cent as of noon today and could soon shed its penny-stock status.

So, perhaps EEStor will still surprise and survive… In the meantime, ZENN is sitting tight, slowing down cash burn, raising extra money, and waiting for the day that Dick Weir will make good on a very delayed and very important promise.

MaRS Cleantech Fund finally launches with goal to secure $30 million — good news for early-stage startups in Ontario (and potentially beyond)

This has been in the works for a while, so I’m delighted to hear that cleantech evangelists Tom Rand and Murray McCaig have formally launched their MaRS Cleantech Fund and, after first close, have secured half of their target of $30 million. I had a chance to chat with Rand in detail about the fund last September. Rand, a lead adviser in the MaRS Cleantech Practice in Toronto, explained that the fund is designed to feed the appetite of early-stage cleantech investors, starting with Toronto-area firms and expanding from there.

“What I’ve seen as a lead in MaRS over the past few years is a pipeline of opportunities that is unparalleled,” Rand told me then. “It’s only by associating yourself with an institute with that kind of pipeline that you can have this kind of seed investment vehicle.” What happened, initially, is that Rand found himself being an individual angel investor to many of the companies passing through MaRS’ halls — Morgan Solar and Hydrostor, among them. He figured, having talked to other angels like himself, that there was a serious appetite in the market for the creation of a seed fund that could take advantage of these more speculative, early-stage investment opportunities. MaRS had this incredible pipeline, he said, “but what we don’t have is risk money in the order of half a million dollars to $2 million that can get these companies to a Round A funding stage. Everyone knows seed funding is the place to be, but it’s difficult to do. We aim to fill that gap.”

Added Rand: “We’re willing to take technology risk when other people aren’t… We’re a filtered deal-flow engine for venture funds and big corporations. We do the triage for them.” He said the private fund — made up of angels and entrepreneurs willing to put their own flesh in the game — will complement some of the early stage funding and grants that, in Ontario, come from agencies such as the Ontario Power Authority and Ontario Centres of Excellence.

This is what Ontario needs, so kudos to Rand and McCaig for taking the bull by the horns and getting this done. Obviously, the idea for them is to make money for fund investors, but it’s an investment vehicle that was desperately needed in Ontario and, by leveraging the pipeline of opportunities provided through MaRS, will hopefully grow. The first two investments made so far are in GreenMantra Technologies, which can turn old plastic bags into lubricants and other useful chemicals, and Smart Energy Instruments, which makes advanced smart sensor devices for smart grid equipment.

Read Rand’s own MaRS blog entry for more details.

My quick review of Ontario’s much anticipated FIT Review

Snipped this map from the Ontario Power Authority’s two-year FIT program review. Here are some key takeaways from the review:

  • Solar prices are coming down, and in some cases way down. Small rooftop and ground-mount installs (under 10 kw) will see the FIT rates fall roughly 31 per cent . Large ground-mount systems of 500 kilowatts or higher will see rates fall by 21 per cent.
  • Wind of all sizes will see rates drop by about 15 per cent.
  • Other renewables, such as hydro, biomass and biogas, will remain the same.
  • Going forward, FIT prices will be set when contract is offered, not at time of application.
  • It’s being recommended that the government review supply and demand at end of 2013 and consider rising its green energy targets.
  • Up to 50 megawatts of contract capacity is being reserved for hydroelectric.
  • FIT rate reviews and adjustments will now take place annually.
  • Regulatory approvals are being streamlined in some areas.
  • Projects with a minimum of 15 per cent equity participation from aboriginal groups or communities will get extra points that give them priority in the queue. More points go to projects that have municipal or aboriginal council support.
  • 10 per cent of remaining FIT contract capacity will get set aside for projects that have a minimum of 50 per cent community or aboriginal ownership.
  • It looks like programs that offer supportive funding for community and aboriginal projects, such as the Community Power Fund, will get a boost based on recommendations from fund manager and program administrator.

A lot of coverage of this is making it seem like the government is reacting to rural protest against wind and solar farms, and unfounded public concerns about higher energy costs due to green energy. This is partly true, such as with the move to give communities more say, to encourage greater community participation, and to set aside capacity for projects with community ownership. These are all good moves. But the reduction in solar and wind prices, that was all to be expected. This is how FIT programs work — prices are supposed to come down over time. Even for solar, many in the industry seemed prepared to accept a reduction of around 25 per cent to reflect lower technology costs. The 15 per cent reduction for wind is also fair, in my view. My own opinion, however, is that large-scale solar should have seen greater reductions, and small rooftop rates should have seen lower reductions. MicroFIT solar installations, taken together, are still so small that they barely register in the overall price mix. Large solar projects benefit from economies of scale, do have a much greater impact on electricity prices, and should have taken a slightly larger rate haircut.  There’s also the fact that small rooftop projects aren’t controversial and make it possible for more citizens to participate in Ontario’s energy future.

What I didn’t see in this review was a much-needed call to accelerate transmission build-out and upgrade distribution systems with an eye to modernizing our electricity system — i.e. building a smart grid that makes the system more efficient and can accommodate more renewables. This entire area, in my view, has been neglected. There was also no talk of creating FITs for geothermal heating/cooling and solar thermal, and no talk of moving larger projects — particularly large wind projects, of say 20 megawatts or more — to the RFP model we used to use. Also, no talk of trying to work energy storage into the mix. At the moment, the FIT program discourages experimentation with solar because wind and solar producers aren’t penalized for producing energy during off-peak times when we don’t need it. The failure to come up with a FIT rate that differentiates between peak and off-peak times won’t lead to the kind of innovation we need.

One small note: It was good to see that domestic content rules are being created for concentrated solar thermal technology. The absence of these rules has made it difficult for Toronto-based Morgan Solar to participate in the FIT program.

Former CEO of Home Depot Canada takes reins of energy storage initiative

My latest Clean Break column in the Toronto Star

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Tyler Hamilton

Annette Verschuren, the former chief executive of Home Depot Canada who once worked for the agency in charge of Nova Scotia’s coal mines, has dedicated the next phase of her career to being an enabler of renewable energy.

Verschuren announced last week that she is taking on the role of executive chair at energy storage start-up NRStor Inc., which was created to help commercialize new energy storage technologies and has an ambitious plan to set up the first energy storage park in Canada, most likely in Ontario.

“This sector has always been an interest to me,” Verschuren said in an interview. After leaving Home Depot Canada, she spent a lot of time travelling — visited 15 countries, in fact — and got to see both the potential and challenges of deploying renewable energy in jurisdictions that could benefit from it most. “Energy storage is the missing link.”

NRStor itself is the creation of Toronto-based Northwater Capital Management Inc., an early stage investor in a number of clean technologies, including energy storage. One of its major investments to date includes Newton, Mass.-based General Compression Inc., a pioneer in the development of compressed-air energy storage systems.

Such systems use off-peak, surplus or intermittent electricity supply to compress and inject air into underground storage areas, such as depleted oil and gas reservoirs or salt caverns. At peak times when the electricity is needed most, the air is released and drives a power-generating turbine as it decompresses and expands.

General Compression has figured out a way to do this without assistance from fossil fuels and in a way that emits virtually no carbon emissions. In a partnership with ConocoPhillips, the company is developing a 2-megawatt demonstration project in Texas that can back up wind farms by absorbing their excess energy and dispatching it when needed.

It’s not perfect. For every 100 units of energy that goes into what is essentially a compressed-air “battery” only 70 to 75 units come back out. But such “round-trip efficiency,” as it’s called, is consistent with chemical batteries and other storage technologies.

Another Northwater investment is Mississauga-based Temporal Power Inc., developer of a highly efficient flywheel energy storage system that I first wrote about in April 2011.

Flywheels are basically large cylindrical masses in a protective housing that are designed to spin in a near frictionless environment. Electricity used to spin the mass is stored as kinetic energy — that is, the spinning itself — and when that rotating mass is connected to a generator the energy is converted back into electricity.

Jeff Veltri, founder and chief technology officer of Temporal, says the less friction there is the more efficient the device. His flywheel system has such low friction, he claims, that it can hold up to 95 per cent of its charge for several hours — a breakthrough if demonstrated in real-world conditions. The company is collaborating with Hydro One on a pilot project to prove just that.

Verschuren said the energy storage park NRStor plans to build will incorporate both General Compression’s and Temporal Power’s technologies. The company is also looking at a variety of battery technologies. She insisted this isn’t going to be just another demonstration project.

“This storage park would be a commercial operation,” she said. “I’m very interested in making money, making things happen, at the same time recognizing what problems are in the world and how we can solve them.”

Sites across Canada are under consideration, but she hinted the timing may be right in Ontario. There are plenty of salt caverns and depleted gas fields in southwestern Ontario that could prove ideal for compressed-air energy storage. The area has plenty of wind farms that could be greatly enhanced with backup storage, and the transmission infrastructure is there.

Ontario could also benefit tremendously — particularly these days. Lower energy demand as a result of a slowing economy, uncharacteristically warm winter weather, summer conservation efforts, rain-charged hydro resources, inflexible nuclear power stations, and intermittent wind resources all add up to more occurrences of power surpluses.

Instead of paying other jurisdictions to take the excess power we generate, why not store it and use it for ourselves when we need it most?

Unfortunately, getting a multi-megawatt storage park built in Ontario won’t happen overnight. Regulations, for one, need changing. We need clearer rules that determine how storage operators can buy and sell what is essentially an electricity service.

“My job is to set this up,” said Verschuren. “We’ll put a plan together, logically, and we’ll be working closely with the regulatory environment to get those rules in place.”

It won’t be easy. Home Depot might sell storage solutions to new homeowners, but adding shelving and closet space is nothing like the buying, storing and selling of megawatt-hours on a grid.

And just how many megawatts does Verschuren see her storage park reaching? “We want to go to 2,000 megawatts,” which is close to the size of two nuclear power reactors in Ontario, she said. “But it will be a stepped up process.”

Ambitious — and welcome. Glad somebody is giving it a shot, and helping pave the way for others to follow.