There are many algae technology companies out there, but it’s nice to see these two Ontario companies actually doing something outside of the lab in a way that directly meets the needs of industry. In fact, Pond Biofuels has its sights set on China as well. The company revealed in December that its St. Marys project had been approved as part of the Asia-Pacific Partnership on Clean Development and Climate program. This means it will get funding to do a feasibility study that will assess the suitability of its technology for the cement industry in China.

In other words, it expects it will need 90,000 tonnes annually but wants to break this down into three our four chunks so it can have several suppliers. The final stage of conversion will begin in June 2012 and commissioning of the new equipment will likely start in August. OPG expects full-on commercial operation will happen by December. “The wood fuel pellet supply being considered under this RFIP will have a local content requirement such that the source of the wood fibre and the location of the production facilities that will produce the wood pellets shall be within Ontario,” according to the company. “OPG will require that the wood-based fuel pellets be accompanied by Chain of Custody Certification ensuring that the wood pellets supplied to OPG are manufactured from wood fibre sourced from well managed forests.”

In the Great Lakes St. Lawrence forest region of Ontario it’s estimated that there is about 1.475 million oven dry metric tons of wood fibre available for sustainable harvesting each year, or about 1.25 million if we take into account that some of the biomass will be used as fuel to dry the biofibre. So what OPG is requesting in this initial round is roughly 6 per cent of what’s available — and let’s not forget that pellets made of grass crops are also a potential source of fuel. Let’s keep in mind these converted coal plants will be used as peakers when using biomass fuel. This means there is plenty of biomass available for several units being targeted for conversion at the massive Nanticoke coal plant.

What we’re witnessing here is the beginning of the creation of an entirely new industry in Ontario developed around the need to economically harvest, pelletize and transport biomass fuel pellets to support the province’s coal phaseout strategy. This will create many jobs in parts of the province where jobs are needed most, and will establish a made-in-Ontario biomass fuel supply chain that can support the move to more distributed forms of biomass energy generation. There is plenty of opportunity here for entrepreneurs looking to play a role.

Enerkem uses a thermochemical fluidized-bed process to gasify municipal solid waste (organics, wood waste, plastics), demolition wood, and agricultural/forest residues. The resulting syngas is cleaned and, using a proven catalyst, can be turned into a variety of end products, including methanol, ethanol and high-value olefins (plastics). The company is in the process of building a waste-to-ethanol facility in Mississippi (75 million litres a year) and an Edmonton plant (36 million litres a year) that will also turn sorted municipal solid waste into ethanol. The Edmonton facility is being done in partnership with Greenfield Ethanol, Canada’s largest independent ethanol producer. Meanwhile, in Westbury, Quebec, the company has a commercial-scale demonstration facility that currently turns old wooden hydro poles into ethanol.

Rho Ventures, Braemar Energy Ventures and BDR Capital, all existing investors, participated in the financing round with Waste Management, along with new investor Cycle Capital. “This financing round validates Enerkem’s business and advances our path towards leadership in the waste and advanced fuels markets,” said Chornet in a release. In an earlier story (July 2008) I wrote for Greentech Media, Chornet said that burning waste or burning the syngas created from waste is, well, a waste. Based on electricity and ethanol prices at the time, a company can make three times more revenue per tonne of processed waste compared to a plant that simply burns its syngas to generate electricity, he said. Chornet also said Enerkem’s process is profitable with oil at $50 a barrel and if the company can get a competitive tipping fee to take the garage.

There’s no question that biofuels are controversial, particularly when we talk of growing corn and other food crops as a feedstock for producing ethanol and other green fuels. There’s much potential in second- and third-generation biofuels, using wood, agricultural, and municipal wastes and algae, but there’s considerable doubt that even these non-food feedstocks could allow us to make a meaningful dent in our fossil-fuel consumption. This is why targeting the airline industry makes sense. It only represents about 12 per cent of global petroleum consumption, so maybe we can serve this market with the non-food feedstocks we have.

Momentum in this area continues. Last week British Airways announced a partnership with U.S.-based Solena Group, which plans to build the first commercial plant in Europe dedicated to producing jet fuel from municipal solid waste — everything from food waste to grass cuttings. The waste will be turned into syngas using a plasma-arc process, and that gas will form the basic chemical building blocks for the green jet fuel.

Joshua Kagan over at Greentech Media has a good update on this trend.

I have an update on Ontario Power Generation’s biomass strategy in today’s Clean Break column. OPG will likely convert Atikokan to 100 per cent biomass by 2012, with some units at Nanticoke likely to follow a year later. Lambton and Thunder Bay plants are also being considered. The OPG executive heading up the transition, Chris Young, says the company is seriously investigating a fuel pellet mixture with both wood and agricultural residues (or dedicated crops, like switchgrass). OPG figures that coal plants converted to burning biomass will likely operate for another 10 years before decommissioning, at which point the pellet supply chain will be firmly established and the move to build a distributed fleet of newer biomass-burning plants can begin.

And what is U of T’s estimated cost of supplying electricity from an existing coal plant converted to burning 100 per cent biomass? Roughly 12 cents per kilowatt-hour, which excludes the impact of carbon prices. Given that natural gas won’t stay low forever and will eventually be subject to carbon pricing, this makes the biomass option competitive (also with wind and nuclear) and at the same time is a winner when it comes to local green-collar job creation.

If OPG can pull this off, it would be another Ontario first — and something other jurisdictions can learn from.

The problem with this conclusion? Clarens based the life-cycle analysis on data that was mostly 10 years old. For example, some current algae cultivation practices, particularly those based on wastewater or sea water, tackle the fertilizer issue head on. So the age of the data is an important bit of information that should have been made very clear in the study — even the abstract. Ten years in the world of technology, particular cleantech, is a long time. I mean, the big R&D push around algae-based fuels only began three or four years ago, and 10 years ago the “cleantech” sector didn’t exist in name. Ten years ago the world was still wrapping its head around Y2K, George W. Bush was just getting into office, Google was still a start-up years from going public, and the TV show CSI (the original one) had its world premiere. In other words, you can expect data about algae cultivation to be, well, rather useless as a reflection of current practices.

This isn’t to blame Clarens. As he told the New York Times’ Green Inc., the most current data out there is simply unavailable to academia. It’s proprietary. “I’d be happy to model it if somebody produces it,” he said. This, of course, is a general problem with a lot of studies looking into lifecycle analyses. Researchers can only go with the data they can get, and perhaps this explains a lot of the earlier controversy around ethanol from corn. It’s still something we want to move away from, but certainly not as bad as guys like David Pimental of Cornell University like to paint it. I’d argue these studies should do two things: make a greater effort of emphasizing data limitations; and make a clear distinction between technologies/processes already deployed and those in pre-commercial phase.

Look at it this way: Can you imagine a study coming out in 2010 comparing different Internet search engines, but basing it on data available in 2000? Now, the Internet isn’t cleantech, but in certain areas there’s no reason to believe that the pace of innovation is any different.

Life-cycle analysis is hugely important work, but if it can’t keep up with innovation then it can become dated before it’s even published.

Meanwhile, Toronto-based Pond Biofuels Inc. says one of its CO2-to-algae demonstration projects has been approved as part of the Asia-Pacific Partnership on Clean Development and Climate program. The company, in partnership with cement manufacturer St. Marys Cement, has established a microalgae facility that uses CO2 from the neighbouring cement plant as a source of nutrients for the organisms. The algae is then expected to be harvested and used as biomass fuel in the plant’s cement kiln. Pond Biofuels will now get funding under the Asia-Pacific Partnership for a feasibility study that will assess the suitability of its technology for the cement industry in China.

My feature, by the way, starts out focusing on Florida-based Algenol. Many don’t realize the company’s technology emerged out of research at the University of Toronto, and that founder Paul Woods is a Canadian who was born, grew up and ran a natural gas marketing business in Toronto before heading south at age 36. Algenol’s chief science officer, John Coleman, is the U of T professor who worked with Woods over the past 25 years to perfect the Algenol process.

I’ve said this in many posts before, but I’ll say it again: These are exciting times people. The engine of innovation is in high gear.

I had a feature this weekend in the Toronto Star about the cap-and-trade system coming to Ontario and the likelihood an offsets market will be created a year or more before the 2012 launch of the program. The government here is working hard to align our own provincial system with the Western Climate Initiative, in which it is a member, as well as the Waxman-Markey bill under consideration in the United States (which will likely set the North American standard). The idea of allowing a carbon offsets market to emerge in advance of the cap-and-trade launch is a smart one, as it gives industry a way to prepare and it stimulates offset project development before the final cap-and-trade rules go into effect.

But here’s the problem: A good portion of offset projects are also electricity generation projects, such as wind, solar, biogas and hydroelectric. But in Ontario, if you want to sell your electricity to the power authority you sign a 20-year deal under a new feed-in tariff program. The tariffs are generous, but most developers are also hoping to keep the carbon credits they would qualify for so they can be sold as offsets.

Unfortunately for them, the Ontario Power Authority’s contract for power purchases stipulates that it — and by “it” I mean the Ontario government, which is ultimately the Ontario ratepayer — gets to keep all environmental attributes. This raises a number of issues:

First, by keeping the credits will this discourage green-energy development, which would be ironic given that the government’s new Green Energy and Economy Act was created — and highly touted, I should add — for the sole purpose of stimulating such development and the jobs that come with? It’s certainly possible, since it’s tough these days for developers — particularly smaller local developers — to raise capital for projects.

Second, what does the government plan to do with these credits? Will it sell them on carbon markets and throw the cash in the general treasury? Will it sell them and dedicate the revenues to a special clean energy fund aimed at stimulating further green power development? Or, will it simply retired the credits?

Personally, I think it has no choice but to retire the credits. The whole justification for having Ontario electricity consumers pay a premium for their power over the coming years is based on the idea that we must do our part to tackle climate change, and we must set an example for other jurisdictions to follow. But if the government, say, sells the credits to Ohio or Michigan so those states can go on burning coal, how is that fair to Ontario ratepayers — i.e. How can you explain to Ontario ratepayers that they’re paying a green premium so that other jurisdictions can go on polluting? Sure, the money from the sold credits would come back to ratepayers (maybe), but then what would be the sense in the end of pursuing green energy in the first place?

Finally, what carbon credits are the Ontario Power Authority justified in keeping? I can understand — and generally support — the reasoning behind keeping carbon credits related to indirect electricity displacement. That is, the amount of carbon that’s avoided when solar or wind power or any other renewable displaces fossil-fuel-based power generation. It’s here where Ontario ratepayers have the right to keep those credits and see them properly retired. But some renewable power developers, such as those collecting biogas from anaerobic digesters and landfills, have a strong argument for keeping at least a portion of the credits.

Here’s why: Biogas-based power generation both displaces fossil-fuel-based electricity and it destroys methane, a greenhouse gas that’s 21 times more potent than carbon dioxide. You can earn carbon credits from methane destruction, even if you just flare the biogas instead of burn it to produce electricity. Given this, why should the power authority have the right to those credits? The agency’s reach, one could argue, should be limited to the portion of a project that deals directly with electricity generation.

Biogas projects are important to Ontario. They can supply dispatchable renewable power that displaces fossil fuels. Anaerobic digesters can kill bad microbes from livestock manure that can contaminate water systems (remember Walkerton?). And they keep methane from slowly creeping into the atmosphere.

They should be encouraged, not discouraged. This means flexibility of policy, and a recognition that not all projects and technologies are created equal.

NOTE: If you want to keep up to date as the Ontario government develops its cap-and-trade program, visit www.carbonomics.ca (the URL is mine, which I forwarded to the government site because it had an insanely long URL. I’ll likely keep the link in tact for at least a few months)

NOTE II: I’m not a fan of cap-and-trade, because it’s complex to set up and it adds another thick layer of bureacracy to government. It also creates a new class of lawyers, accountants, etc… who take their cut of the action, and it’s so complex that there’s room for abuse — not unlike the abuses that set off the derivatives crisis that helped plunge the global economy into recession and almost led to a collapse of Wall Street. I’d much prefer to see a carbon tax, which is more efficient and transparent and less open to abuse. But cap-and-trade seems to be the way the world is going, so who am I to question it?

Another company that’s overlooked by U.S. media is Ottawa-based Cyrium Technologies, which just announced record performance from its commercially manufactured multi-junction solar cells, which are based on quantum dot technology. “Cyrium’s first generation solar cells offer efficiencies of 40 per cent or higher together with a nearly constant conversion efficiency for solar concentrations from 200 to greater than 1,000 suns,” the company said. This is a big deal, given that the other “records” touted to date, which range from 40.8 to 42.8 conversion efficiency (these claims are in dispute — see Wikipedia entry), have been limited to the lab. Cyrium, on the other hand, is actually manufacturing limited quantities of its cells for testing by potential customers. And the company isn’t resting on its laurels, either. “Cyrium anticipates its second generation product will reach 43 per cent efficiency within one year and third generation products are targeted to be at 45 per cent within two years,” the company said.

Meanwhile, Montreal-based Enerkem has been granted a permit to commence construction of what it’s calling the “world’s first commercial municipal waste-to-biofuels facility.” The $70 million facility, located in Edmonton, Alberta, will take municipal solid waste that’s left over after recycling and composting and will convert that waste into ethanol using Enerkem’s process. The project is a joint-venture between Enerkem (technology supplier) and Greenfield Ethanol (ethanol producer). “This unprecedented project is set to change the dynamics of the waste and fuel industries by making waste — that would otherwise be landfilled — a resource for transportation fuels,” said Enerkem CEO Vincent Chornet. I know I won’t be the only one following this project closely.

Finally, honorable mention goes to Toronto-based WhalePower, which has just made it as a finalist at the prestigious INDEX international design competition in Copehagen, Denmark. You may recall WhalePower’s new wind-turbine blade design, which is inspired by the humpback whale’s tubercle-line flipper. This bumpy leading edge gives the whale more agility in water. WhalePower has adapted the design to turbine blades, allowing for more efficient capture of wind energy and access to this energy at lower speeds. There are five categories in the Copenhagen competition, and the winner of each category gets 100,000 Euros. Winners will be selected in August and the winning designs will also become part of a touring show through Asia and Europe. WhalePower is competing in the “community” category against some tough competition, including Shai Agassi’s Better Place.

But enough with the bragging Canuck — let’s end on a more negative note. First Ballard Power’s stock-market bubble burst, then it sold off its stake in the automobile fuel-cell portion of its business, and now it’s leaving the residential micro-CHP market. Vancouver-based Ballard announced today it was dissolving its joint-venture with Japan’s EBARA Corporation, which through EBARA Ballard Corp. manufactured, sold, and serviced residential cogeneration systems based on Ballard’s fuel-cell technology. The business case just wasn’t there, said Ballard CEO John Sheridan. With the micro-CHP market now dumped, that leaves forklifts and backup power for telecom towers. You’ve got to credit Sheridan for keeping it focused and realistic, but it’s difficult not to contrast the humbled company of today with the overhyped, overvalued Ballard of 10 to 15 years ago.