But what fires me up most is Energy Minister Chris Bentley’s reason for the delay to 2014.  He more or less blamed the federal government for being first to impose a delay, telling the Toronto Star it was essential to harmonize with the federal schedule. “To ensure a consistent approach and to make compliance easier for consumers, retailers and manufacturers, the province proposes to harmonize compliance dates for incandescent light bulbs with the federal government,” the Star quotes an energy ministry official in a statement.

This completely contradicts Ontario’s earlier motives. Remember, it was Ontario that made the first move, announcing in mid-April 2007 it planned a phaseout of inefficient bulbs. This made it the first jurisdiction in North America to make such a commitment. Apparently harmonization of policy wasn’t a concern back then, as the federal government didn’t announce its intentions to do the same until a week later. McGuinty at the time basked in the glow of showing leadership on this issue. Leadership and setting an example mattered. Now it apparently doesn’t. Following is more important now.

British Columbia, meanwhile, announced its own planned ban after Ontario and has already followed through. That’s leadership, the same kind of leadership it showed by introducing a carbon tax.

“Our research shows that during the past eight years alone, (commodity prices) have undone the decline of the previous century, rising to levels not seen since the early 1900s,” according to McKinsey. “In addition, volatility is now greater than at any time since the oil-shocked 1970s because commodity prices increasingly move in lockstep. Our analysis suggests that they will remain high and volatile for at least the next 20 years if current trends hold—barring a major macroeconomic shock—as global resource markets oscillate in response to surging global demand and inelastic supplies.”

The report talks of the surging demand for energy, food, metals and water as 3 billion new middle-class citizens emerge over the next two decades. In India calorie intake will rise 20 per cent per person, while in China per-capita meat consumption is expected to rise 60 per cent. While such dramatic growth of consumption isn’t unusual historically, and while we have managed to accommodate that growth in the past, McKinsey says things are very different this time around:

There are three differences today. First, we are now aware of the potential climatic impact of carbon emissions associated with surging resource use. Without major changes, global carbon emissions will remain significantly above the level required to keep increases in the global temperature below 2 degrees Celsius—the threshold identified as potentially catastrophic.

Second, it’s becoming increasingly difficult to expand the supply of commodities, especially in the short run. While there may not be absolute resource shortages—the perceived risk of one has historically spurred efficiency-enhancing innovations—we are at a point where supply is increasingly inelastic. Long-term marginal costs are increasing for many resources as depletion rates accelerate and new investments are made in more complex, less productive locations.

Third, the linkages among resources are becoming increasingly important. Consider, for example, the potential ripple effects of water shortfalls at a time when roughly 70 percent of all water is consumed by agriculture and 12 percent by energy production. In Uganda, water shortages have led to escalating energy prices, which led to the use of more wood fuels, which led to deforestation and soil degradation that threatened the food supply.

So where do we go from here? McKinsey, citing forthcoming research, says better resource productivity can maybe meet more than 20 per cent of the forecast 2030 demand for energy, steel, water and land. Higher prices over the long-term will also create incentives for “breakthrough” innovations that could reduce carbon emissions. But even then, a heck of a lot more needs to be done, the consultancy argues — and it won’t be easy. “Major policy, behavioral, and institutional barriers must be addressed,” it argues. “Yet as we enter a new era for commodities, there’s little choice but to act.”

Action. Now isn’t that a novel concept. Sure beats denial.

——————————-

Clean Break

By Tyler Hamilton

Jigar Shah thinks large when it comes to battling climate change.

That’s a good thing, because reducing humanity’s global greenhouse-gas emissions to a manageable level is a titanic problem needing equally enormous solutions.

Shah is the chief executive of Carbon War Room, a Washington, D.C.-based non-profit enterprise co-founded and funded by British-born billionaire Richard Branson.

His mission, as the organization’s name makes clear, is to wage a war against carbon emissions by harnessing the power of markets and entrepreneurs. The trick is to get massive amounts of private capital to flow in the right direction.

Government policy is nice and has a role to play, but in Shah’s words the real action we need will only come about “using greed as a force for good.” And incremental steps won’t cut it. In a world that tends to measure greenhouse-gas emissions by megatons, Carbon War Room is only interested in tackling gigatons.

In other words, go big and move fast or lose the war.

Time appears to be running out – and it’s not environmentalists issuing the warning these days. Fatih Birol, chief economist at the International Energy Agency, said this week “the door is closing” on our ability as a society to keep global emissions and temperatures to within manageable levels.

We already know that temperatures are on course to rise 2 degrees C no matter what we do. We have about five years, said Birol, to put the world on a course that will keep the thermometer from rising much further. “I am very worried,” the economist told the U.K.’s Guardian newspaper.

One area where Carbon War Room is moving fast and aiming at a large target is energy efficiency in buildings, which accounts for about 20 per cent of global CO2-equivalent emissions.

For example, Shah and his team helped bring together a consortium that is aiming to spend $650 million (U.S.), to start, on energy-efficiency retrofits in commercial buildings scattered throughout Miami, Fl. and Sacramento, Calif.

Their approach, revealed in September, builds on the creative financing model I wrote about in last week’s Clean Break column, only in this case it’s focused on commercial real estate.

The consortium is led by Ygrene Energy Fund, which reviews retrofit proposals and then passes them off to technology and engineering giant Lockheed Martin. Lockheed does the building audits, calculates the energy savings that could come from a retrofit, and provides all technology and services required to achieve those energy savings.

Energi Insurance Services reviews what Lockheed promises and insures the deal. To add an extra layer of security, HannoverRe further backs Energi’s insurance policy. The idea is that risk has been reduced so much that Barclays Capital, the financing partner in the consortium, is more than happy to fund it all.

Barclay’s gets paid back through a charge on the building owner’s property taxes that is collected by the municipalities over 15 or 20 years. If done right, that charge is less than the energy savings achieved through the retrofit. And it’s all done off-balance sheet, meaning it doesn’t add to a building owner’s debt load.

Miami and Sacramento love it, too. “They are going to generate 17,000 jobs, and they will see city revenues increase from a jump in building permit fees and sales tax revenues,” says Shah, in Toronto last week to speak at an industry conference.

Carbon War Room’s target is to see $300 billion (U.S.) in capital deployed in this way by 2020, and Shah is convinced a tipping point has already been reached.

“We have 65 cities on three continents begging us to deploy (this model) in their cities right now, and we’re moving as fast as we can,” says Shah, adding that pension funds and big institutional investors, having seen Barclays take the lead, are now coming to the table.

“There’s nothing anyone can do to stop it. It has irreversible momentum,” Shah says. “I’m ecstatic about it.”

That’s the power of aggregation, scale and thinking large. It can tap into massive pools of capital that one-off projects can’t touch.

Toronto has its own program in the works called Tower Renewal, which is aiming to see 1,200 residential apartment buildings in the GTA retrofitted at a cost of about $6 billion over 20 years.

The plan is to create an arms-length entity called Tower Renewal Corporation that would manage the program and arrange all financing. Project director Eleanor McAteer says the potential for energy savings, emissions-reduction and job creation is huge.

“Our approach would be very similar to what we’re reading about in Sacramento and Miami,” she says.

“We’ve had some general discussions with the financing marketplace and yes, there is a great deal of interest, but we need to have regulatory approval from the province before we can enter into any serious discussions.”

The city asked the province to make those regulatory changes in summer 2010. As the end of 2011 fast approaches there’s still no word from Queen’s Park.

So as momentum around the world for this kind of climate solution builds, Toronto is sitting and waiting for a simple action from the province that will come at no cost to taxpayers or ratepayers.

What’s the holdup Premier McGuinty?

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

————————————————————————–

Tyler Hamilton

What is the province doing to help homeowners conserve energy and cope with rising electricity prices?

Not much these days.

Ontario’s earlier commitment to match rebates under the federal government’s program has long expired. The program was extended to March 31, 2012, but the province decided to pull its support.

Instead, we got the Clean Energy Benefit – a 10 per cent rebate on electricity bills that will be in place until 2015 at a cost to taxpayers of more than $1 billion a year.

That’s money that could have gone toward conservation programs. Now it’s being used to undermine conservation by giving consumers less reason to care about energy wastefulness.

It’s hardly a sustainable approach. Clearly, the only way to help Ontario ratepayers cope with rising electricity rates over the long term is to push for deep energy conservation in households across the provinces.

And here’s the thing: it could, if done properly, barely cost anything for the province and municipalities to make such a serious conservation push.

It turns out that a lack of subsidies isn’t the biggest thing holding back major residential energy-efficiency projects; it’s the lack of affordable and easy-to-access financing.

It’s also about the lack of willingness on the part of provincial and municipal leaders to embrace programs that have already had successful test drives south of the border.

These programs come under a variety of names, but at their core is the ability of a municipality to raise cheap capital through a bond issue and then offer low-interest financing to homeowners wanting to do major energy-efficiency retrofits.

Under such a model, the homeowner repays the city (with interest) over 15 to 20 years through a type of “local improvement charge” added to property tax bills. The idea is that the permanent energy savings from the retrofit would more than cover the cost of repayment.

Also, the charge is tied to the home, not the owner, so doesn’t add to personal debt load. When an owner sells the property the new owner takes over the charge but also gains the benefit of having lower monthly energy costs in a climate of rising prices.

“There’s huge interesting in this approach, from people at all levels of government,” says Sonja Persram, president of Sustainable Alternatives Consulting Inc. in Toronto.

She says 26 U.S. states have already changed legislation to permit this kind of municipal financing, and late last year Nova Scotia made similar changes in support of a solar-thermal installation program in Halifax.

“It can be delivered at no cost to municipalities, and some municipalities have been looking at having programs that are even slightly revenue-positive,” she adds.

Under contract with the David Suzuki Foundation, Persram spent the past two years studying the approach, which she calls Property-Assessed Payments for Energy Retrofits, or PAPER for short. Her findings were published in three reports that came out in April, May and August.

The research has been well received in both financial and building appraisal communities, and earlier this year the Toronto Real Estate Board passed a motion supporting creation of a PAPER program for Ontario.

There is a big roadblock, however, and this is where the province plays a crucial role. Toronto and other municipalities can’t offer this kind of financing unless Ontario moves, like Nova Scotia did, to pass enabling legislation.

Queen’s Park would also need to assuage the concerns of mortgage lenders. After all, if you as a homeowner get $30,000 in municipal financing to retrofit your home, a bank might not like that the lien for that amount placed on your property takes priority over a mortgage in the event of default.

(Such a concern raised by Fannie Mae and Freddie Mac in the U.S. has effectively brought all PAPER-like residential programs to a standstill until legal issues are resolved).

The province would have to make clear to all parties that it wouldn’t be the entire $30,000 that gets priority over the mortgage, but only any defaulted payments on that financed amount. That’s because once the property is sold, the new owner would take over the remainder of the retrofit financing.

“In order for such a program to work here you have to have the province, the financial institutions and the City of Toronto all sitting in the same room talking about this issue,” says Tim Stoate, an associate director and investment expert at the Toronto Atmospheric Fund. “I don’t think that conversation has happened.”

It needs to happen if the McGuinty government wants to pay more than lip-service to its energy conservation goals. It is unlikely happen, at least not at a scale that matters, if the province doesn’t step in as chief facilitator and coordinator.

Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies. Contact him at tyler@cleanbreak.ca

Mad Like Tesla: Underdog Inventors and Their Relentless Pursuit of Clean Energy was launched this month and has been well-received. The reviews so far have been positive, and awareness of the book is slowly building. But not fast enough. I want to take this moment to ask my readers, many of whom have already purchased the book (thank you!), to help spread the word. Share this link or the Mad Like Tesla website (www.madliketesla.com) on social media sites such as Facebook and Twitter. Refer to it when commenting on the various blogs you might follow. And for my media friends out there — whether in the mainstream press or the blogosphere — please consider a review, or alternatively, I’m happy to chat about the many odd and inspiring stories in this book. Please see press release here.

Thank you all for your ongoing interest and support. BTW: Many have asked, so I’m happy to report that the e-book version of Mad Like Tesla is now available at Amazon.com.

“This is an exciting time for REGEN as we receive follow-on orders from large corporate accounts. We’re excited to increase our channel partners’ revenues by delivering further value-added services to their customers,” said REGEN CEO Tim Angus. The company has had several successful pilot projects with utilities and is now focusing its efforts on the U.S. market, particularly California, where the company just opened up an office. It also has its eyes on the Northeast U.S., where there are plenty of demand-reduction and incentive programs that make this technology an attractive option.

Here’s how Rogers describes it: “At the heart of the system is an ultra-rugged, easy-to-use touchpad that consumers use to arm/disarm and manage their system. Available in wall-mount or table-top, the touchpad provides quick 1-touch access to home security functions, home automation apps for lighting, cameras and thermostats as well as multimedia apps for photos, traffic, weather and sports. When an alarm occurs, the touchpad instantly connects with the Rogers central monitoring station simultaneously over both Rogers cable and wireless networks. The touchpad constantly communicates with its highly encrypted smart sensors throughout the home, checking their status, signal strength, battery level and even room temperature.”

The customer can control the systems through a wireless device, such as an iPhone, and alternatively, the customer can get alerts on his/her wireless device via text message or e-mail.

Sounds quite comprehensive, and certainly using this kind of platform makes it easier for Rogers to add new sensors and services to the mix as its customer base becomes more comfortable with the system. Now, the issue of cost. This doesn’t come cheap. You can get the starter kit for $149 if you sign up for a three-year term, which isn’t a bad deal given that most people usually stick with the security services they choose. (If you don’t sign a multi-year deal, the kit will cost $749).  Monthly plans start at $39.99 for basic service, and sensors can be added on an a-la-carte basis or as part of “value packs” that can be purchased at a discount. You also can’t install the system yourself, so there’s also a one-time installation fee of $99.

Then again, if home security is the focus and the rest is gravy, then maybe consumers won’t balk at the cost. Whatever the outcome, I’m glad Rogers is testing the waters with this because I truly believe this is the only way energy management technologies will be widely introduced into the residential market. Here’s a Rogers video explaining the service here (notice the big emphasis on security).

In traditional demand-response, companies such as Comverge and EnerNOC sign up dozens, potentially hundreds of clients that agree to reduce their energy demand when asked.  When a heat wave hits and electricity demand spikes, a power system operator will ask a Comverge or EnerNOC to orchestrate a large-scale demand reduction for a specific period of time. These companies (and their clients) get paid to reduce their electricity, with the idea being that the cost of such programs is far less expensive than the cost of building (and paying for) a natural gas peaker plant to do the job — that is, negawatts is cheaper than natural gas megawatts.

EnerNOC, for example, said it was able to reduce power demand across the United States last week by 1,230 megawatts when asked to kick its services into action.

But this is only one form of demand-response. What about the second-by-second fluctuations on the grid that require what the industry calls “regulation”? Regulation is a way to constantly balance supply and demand on the system, and it’s usually accomplished by power generators that get paid a hefty premium to do the job (In Ontario hydroelectric facilities in Niagara Falls play a major role). In early 2010, Enbala Networks decided to participate in an Ontario Independent Electricity System Operator (IESO) program aimed at proving that demand-response could work for regulation services as well.

The company issued a call in June 2010 for municipal and industrial partners that had the flexibility, when asked, to reduce power demand regularly throughout the day and night. Ideal candidates were water and wastewater treatment facilities, wood chipping and rock crushing facilities, companies that had large electric boilers, chillers and battery charging loads, and partners that relied heavily on industrial ventilation. In other words, anyone that used lots of electricity for equipment that could easily be turned on and off without materially affecting the overall operation of the organization. You might call it flexibility harvesting, and Enbala has built a smart grid platform that does it well.

Enbala went ahead with the pilot project and a year later the company and the IESO appear satisfied with the outcome. Now that proof-of-concept is out of the way, it will be interesting to see where it leads. Will Enbala be able to replicate it in other jurisdictions and turn it into a vibrant money-making business? Will the IESO expand the pilot into a full-scale commercial program, giving the Ontario grid a faster and cheaper way to balance supply and demand?

The smart grid demands no less, and this approach will become increasingly important, along with energy storage, as we add more intermittent renewables to the power mix.

Hamilton, energy and technology writer for the Toronto Star, examines some of the latest, most far-out green energy innovations and the people behind them. How far-out? Take, for example, a retired engineer’s idea to produce electricity via an artificial tornado, or a plan for a space-based power station that would harvest the sun’s energy, using microwaves to beam it down to earth. Other gizmos and processes seem more amenable to commercial success and social acceptance: Hamilton tells of a secretive company called EEStor that claims to have made a breakthrough in energy storage, and of a team building a low-cost nuclear fusion reactor. He strikes a fine balance between hope and hard realism when considering barriers to energy transition. As the “tornado guy” says, upon considering financial and regulatory obstacles: “Holy crap, that’s a lot to get through.” VERDICT: Mad Like Tesla is easy to get through, even for readers with only a basic knowledge of energy issues. Hamilton makes complex technologies comprehensible, and he clearly enjoys the remarkable human stories behind the science. Many of the risk takers and visionaries portrayed are Canadian (rocker Neil Young makes a cameo appearance!), but this book’s strong appeal should transcend all borders.

Can’t complain with that. The book is scheduled for public release on Sept. 1 and is already available for pre-order on a number of sites, including Amazon.com/Amazon.ca and Indigo.ca. The book won’t break the bank, either. We decided to do paperback release on first run to make the book more accessible to a larger audience. You can likely pick it up for $13 or so. I built a Web site I’m not entirely happy with, so plan to have a newly designed site finished by the end of August. Stay tuned!

For some reason, a large percentage of the population really dig getting Air Miles. There’s trophy value to them, and while they’re worth much less than cash itself, members of the Air Miles program seem to treasure these rewards more than cash. An odd phenomenon, but a good one. That’s because for government agencies and utilities and transit authorities, handing out Air Miles in exchange for good behaviour is much cheaper than handing out cash in the form of discounts and rebates. And because they’re partnered up with LoyaltyGroup, which has direct access to and detailed information on nearly three-quarters of Canadian households (i.e. about 10 million), it gives them a less expensive yet highly more targeted way to reach out to consumers — at least when compared to that relatively ineffective and expensive medium called advertising. The Ontario Power Authority, the first agency to work with Air Miles on such a program to encourage energy conservation, found that it spent two-thirds less but got seven times the results compared to its advertising- and rebates-based approach a year earlier. You’ll get more details on that if you read the column.

Since working with the OPA, Air Miles for Social Change has run with the concept and now has about 25 similar programs on the go across Canada. It’s catching on.

It’s not that issuing rewards for good behaviour is an entirely new thing. It’s what Toronto’s Lowfoot.com is doing, as well as New York City-based Efficiency 2.0 — both focused on energy management for consumers. But what Air Miles brings to the equation, at least in Canada, is unmatched reach into households. And with that comes the power to influence positive change with carrots instead of sticks — not that we don’t need both.