International Energy Agency says current pace of clean energy development won’t cut it to avoid worst of climate impacts

My latest Clean Break column:

Tyler Hamilton

Climate-change skeptics like to call environmentalists “alarmists” because of their call for urgent action to reduce greenhouse-gas emissions. The skeptics say the science is too uncertain, that there’s no rush to act, and those who argue otherwise are sanctimonious lefties out of touch with reality.

For them it’s drill baby, drill.

It’s a convenient way of dismissing bad news, which is why it’s important when traditionally conservative organizations like the International Energy Agency weigh in on the issue with their own call for accelerated action.

This week, the Paris-based agency with an oil-soaked history said the world, if it has any hope of keeping the average rise in global temperatures to below 2 degrees C, needs to double its rate of spending on clean-energy infrastructure between now and 2020.

It goes on to say that if controlling carbon emissions is truly a priority, the world needs to spend $36 trillion (U.S.) between now and 2050 on low-carbon technologies, on top of the $100 trillion or so needed under a business-as-usual scenario.

“This is the equivalent of $130 per person every year,” said the agency, pointing out that the spending should be considered an investment rather than an expense. “Every additional dollar invested can generate three dollars in future fuel savings by 2050.”

The clean energy technologies we require already exist, the agency’s executive director, Maria van der Hoeven, pointed out. Offshore wind power, concentrated solar power and carbon capture and storage were cited by the agency as the technologies with the most potential but the least traction.

“It’s there and we’re not using it,” she lamented, at the same time urging governments to wake up to the “dangers” of complacency. “The evidence of climate change, if anything, has gotten stronger. At the same time, it has fallen further down the political agenda.”

The fact investment is nowhere near what’s needed is reason for concern, she added. On our current investment path, global carbon dioxide emissions are likely to nearly double by 2050.

“Are we on track to reach out 2-degree goal? No, we aren’t,” she said bluntly. “Our ongoing failure to realize the full potential of clean energy technology and tapping energy efficiency is alarming.”

It bears emphasizing: these are not the words of Greenpeace or Al Gore or David Suzuki; these are the words of a 38-year-old international organization whose original mandate, and the reason for its creation, was to monitor and manage global oil markets in the wake of the 1973 oil crisis.

The International Energy Agency has until the past few years placed energy security and economic development well ahead of environmental protection, and it has been repeatedly accused of having a fossil-fuel bias while underestimating the potential of renewable energy.

But these days it’s singing a different tune. Fatih Birol, the agency’s chief economist, has been quite frank over the past three years about what lies ahead. Commenting on global CO2 emissions data last month, Birol said the trend is “perfectly in line” with a temperature increase of 6 degrees C by 2050. That, he added, “would have devastating consequences for the planet.”

Alarmist, granola-munching tree hugger!

Perhaps this puts into perspective why so many environmental groups and members of the general public are concerned about projects such as the Keystone XL and Northern Gateway oil pipeline projects.

The companies behind them aren’t investing billions of dollars for infrastructure that will only be needed temporarily. They expect a payback, and that means keeping the infrastructure flowing with oil at high capacity for at least the next half century. The same thinking applies to coal-fired power plants built today.

“Fossil fuels remain dominant and demand continues to grow, locking in high-carbon infrastructure,” according to the energy agency. “The investments made today will determine the energy system that is in place in 2050.”

That’s what many people are worried about, and not just environmentalists. They know that the decisions we make today will have a profound impact on the quality of life of our children and their children tomorrow.

Some, including certain federal cabinet ministers, may deem that radical. Most common sense folk would call it risk management.

Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies.

Has the fuel-cell industry reached a tipping point?

There was a shareholder who stood up at Ballard Power’s annual meeting last week to share her experience with the company’s stock price. It pretty much summed up the frustration shared by most investors in the fuel-cell industry.

This investor has owned Ballard shares for most of 20 years. She sold in early 2000 when the stock hit $140 a share and did quite well. That was when the hype around fuel-cell powered cars was approaching its fever pitch.

Later that year she bought back into the company at about $120 a share, believing the stock was poised for another run. Bad move. The drop continued, to the point where today shares are struggling to stay above $1.

What’s a CEO to say? Ballard chief John Sheridan, who holds 500,000 or so shares himself, said he understood and felt the pain. But he emphasized, as he has in the past, that the market continues to undervalue fuel-cell companies generally and Ballard specifically.

There’s no question the industry has had a history of over-promising and under-delivering, and it continues to pay dearly for miscalculations. German automaker Daimler AG predicted a decade ago that 100,000 fuel-cell car engines would be produced annually by 2005.

Even less ambitious targets—but no less unrealistic—have been missed. Ballard told Time magazine in 1999 that fuel-cell vehicles would be economical by 2010. PricewaterhouseCoopers predicted in 2001 that sales of the vehicles would reach one million a year by 2010.

Of course, we know how that turned out. Around mid-2000 the government and auto industry began shifting attention to battery-powered vehicles. The media lost interest, tired of reporting on yet another pilot project or hydrogen-powered bus sale.

Big investors, more importantly, lost their appetite for the technology. Too much had been spent, and it was taking far too long for the promised hydrogen economy to emerge. Time to move on.

Technology analyst Brian Piccioni, most recently of BMO Capital Markets, said governments are in no mood these days to spend, let alone engage in another wave of support for fuel cell projects. And raising capital from the private sector remains a huge challenge.

Despite this tough environment, there was a true sense at Ballard’s annual meeting that the industry is nearing a tipping point.

No, I’m not suggesting that fuel-cell cars will soon be in a showroom near you. That’s still a long-term dream given existing infrastructure challenges. But fuel cells are seriously beginning to gain traction in certain sectors and for specific applications.

Volumes are building to impressive levels, costs are coming down, and some companies – Ballard among them – are flirting with profitability.

Since 2009 Ballard’s average product cost has fallen by 60 per cent. Revenue is expected to surpass $100 million in fiscal 2012, more than double 2009 results. As a result, the company is projecting it will have positive cash flow in the second half of 2012.

It also expects to hit the breakeven mark for “adjusted” earnings before interest, taxes, depreciation and amortization, which is a sneaky way of measuring operating performance that excludes certain items. It does, however, hint at true profitability within reach.

“It’s a true milestone in our history and our industry as well,” Tony Guglielmin, chief financial officer of Ballard, told shareholders.

In fact, there’s a bit of a race to profitability going on in the industry, with companies such as FuelCell Energy and ClearEdge demonstrating that they’re closing in on that goal.

More telecommunications firms are seeing the benefits of fuel cells for providing clean back-up power. More municipalities are adding fuel cell-powered buses to their fleets, and more warehouses are ditching lead-acid batteries in favour of fuel-cell forklifts. It’s not a tsunami, mind you, but it’s also not a trickle anymore.

This isn’t just because it’s the “greener” option. Products are gaining traction because, in certain applications and geographies, they are cost-competitive and simply better.

Another growth area is the use of fuel cells for distributed power generation, either to more efficiently use natural gas or biogas to produce electricity, or to use surplus or off-peak renewable energy to make and store the hydrogen that powers fuel cells.

As more renewable energy sources are added to the power mix of grids, there will increasingly be a need to store and later retrieve that energy on a large scale. Grid stability will come to depend on it.

For that use, the hydrogen and fuel cell combo might have been too expensive five years ago, but today it fits the bill in many jurisdictions and for many companies. The outlook will only get better.

So is Ballard under-valued? Judging by the direction of its costs, sales and industry trends, there’s a good argument that it is.

We may not see the hydrogen economy that gave shareholders $140 a share 12 years ago, but the fuel-cell market is poised for growth and Ballard – after a long and painful transition – is finally in a good place.

Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies.

Canada’s James Gosling, the “father of Java,” embraces robotics and ocean science

Had the pleasure this past week to chat with James Gosling, the Canadian who invented the Java programming language. As you’ll read in my Clean Break column below, Gosling has spent the past 10 months working for a small company that makes ocean-scouring robots that are powered by wave energy and the sun. It’s a big change for the computer scientist, who is used to working for big companies such as Sun Microsystems and Google. But I bet it’s a hell of a lot more fun…


Tyler Hamilton

Calgary-born computer whiz James Gosling is known in the technology world as the “father of Java,” the write once, run anywhere programming language used on billions of mobile phones and Internet servers.

But having spent the past two decades of his life producing Java applications for other people, the 57-year-old computer scientist is now getting a chance to use it himself. After 26 years working at Sun Microsystems and a more recent five-month stint at Google, Gosling decided in August 2011 to leave the world of big IT and dive – literally – into the ocean.

Ten months ago Gosling joined a small company co-headquartered in Silicon Valley and Hawaii called Liquid Robotics, maker of a self-propelled, fully autonomous marine research robot that scours the oceans collecting scientific data with solar-powered sensors.

As Liquid Robotics’ chief software architect, Gosling’s job is to design the back-end systems to best store, manage and visualize what’s expected to become a growing volume of data as more robot drones, called Wave Gliders, are added to the global fleet.

“What could be cooler than robots in the ocean doing science?” Gosling tells me during an interview.

Indeed, they are the first marine robots to use the inexhaustible energy from ocean waves to propel themselves without fuel, meaning zero-carbon mobility.

Each Wave Glider comes in two parts. The first floats on the wavy surface of the water and looks like a surfboard covered in solar panels. It is connected by a six-metre “umbilical” cord to a multi-winged device below called a glider.

The motion of the waves causes the board to bob up and down in the water, movement that is mimicked below by the glider. The wings and fin on the glider are design in such a way that the up and down movement is translated into forward thrust. Navigation can be controlled remotely or pre-programmed into the robot.

“Most people have been trained to try to harness waves for electricity generation, and that turns out to be really, really hard,” Gosling tells me. “But getting thrust? That’s worked out well for us.”

So well that Liquid Robotics broke a Guinness World Record in March when four of its Wave Gliders each travelled roughly 6,000 kilometres across the Pacific Ocean on a meandering journey from the shoreline of San Francisco to Hawaii. The previous record for an unmanned wave-propelled vehicle was 4,630 km.

Two weeks ago the robots embarked on the final stage of their 16,700-km voyage. Departing Hawaii, two will head to Japan and two to Australia. They should get there by early 2013, possibly earlier.

Gosling says people don’t realize how rugged the Wave Gliders are until, as he has, they’re in the water swimming with them. “When you see pictures of them they look deceptively simple, but they can handle amazing weather,” he says.

That includes eight-metre high waves, gale force winds, and powerful ocean currents. The only serious run-in for one Wave Glider was a shark attack. “This shark just went nuts on it,” Gosling says. “He lost a tooth. He was all over this thing, but all he ever did was scratch the paint.”

So what’s the point of this ambitious Pacific expedition? The sensors on the robots will collect and wirelessly transmit an unprecedented amount of detailed information about ocean conditions.

This includes data points on ocean temperature, wave height, weather conditions, water quality and chemistry, and many others that will shed light on the impacts of global climate change and pollution (though any kind of sensor can be attached to suit the mission, be it scientific or commercial).

Liquid Robotics is making the data available to any scientist, educator, and student – even the general public. As part of what it calls the PacX Challenge, it and its sponsors are offering a $50,000 prize to the research proposal that makes best scientific use of the data. The idea is to raise awareness of Wave Glider capabilities and ocean science in general.

Gosling, who considers himself an environmentalist but not the card-carrying type, admits there’s a huge feel-good aspect to working with a company like Liquid Robotics. The oceans are under stress and the climate is a catastrophe happening in slow motion, he says. Raising awareness of and understanding the problem, its impact and how to adapt is crucial.

“Boy, if we had 10,000 of these in the ocean we’d be able to do an immensely better job of predicting the weather. Even if we just had 100 out there in the Atlantic we could really change hurricane predictions,” he says.

“With so much of the earth, we really don’t know what’s going on.”

Using renewable-powered robots to find out more is, in his words, “incurably cool.”

Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies.

Hydrogenics sells electrolysers and services for 2MW European “power-to-gas” project

Hydrogenics will get a chance to prove to new equity owner Enbridge Inc. that its power-to-gas strategy has a future, at least in Europe. The Mississauga, Ont.-based maker of electrolysers and fuel cells announced yesterday it is supplying Germany’s E.ON, the world’s largest investor-owned gas and electric utility, with a range of services and equipment to support a 2-megawatt power-to-gas project in an energy storage facility to be located in Falkenhagen, Germany. The facility will allow E.ON to convert surplus renewable electricity in Germany into hydrogen that can be stored in its natural gas pipeline network. The facility is expected to be operational sometime next year.

“When compared to current utility-scale solutions, Power-to-Gas offers unmatched energy storage capacities. Over a 24-hour period, the Falkenhagen facility will be able to store over 30 MWh of energy,” said Daryl Wilson, president and CEO of Hydrogenics.

Click here to read more about power-to-gas and Enbridge’s investment and partner with Hydrogenics.