Those of you who frequent this blog know that I mention Sustainable Development Technology Canada quite regularly (picture to the left is of SDTC chief Vicky Sharpe). That’s because the federal agency, which was created nine years ago, has introduced me over the years to so many interesting, innovative and ambitious clean technology companies. SDTC does the screening. It carries out the due diligence. It offers funding for demonstration projects. It forces the hand of private investors that might not otherwise open their doors or pockets. It offers guidance. Introduces partners and customers. Need I say more? This agency has given dozens of promising green technologies and the companies behind them a solid chance of success. For every dollar of public money it has invested, it has tapped into twice as much (actually more) from the private sector. Over the past few years, that has translated into $515 million in public funding being leveraged to attract about $1.2 billion in mostly private funds.

That’s why in my Clean Break column this week I argue clean technology, and specifically the efforts of SDTC, need to be part of the country’s election dialogue. We need to build on the progress SDTC has achieved to date, not abandon the momentum at a time when major world economies — Germany, China, India, Brazil, the United States – are racing to establish a dominant position in the emerging global green economy.

The leaders of the political parties looking to run the next government need to be asked: How are they prepared to support clean technology innovation and green economic development in Canada?

You’ll recall that last year the Canadian federal government refused to inject more funding into Sustainable Development Technology Canada, an agency that has proven crucial to helping Canadian energy and environmental innovations cross the “Valley of Death.” SDTC has contributed hundreds of millions of dollars to clean technology demonstration projects and leveraged twice as much from the private sector. It has enough money to fund probably one more round of projects, after which it will exist simply to manage its existing portfolio of projects (it also manages and issues grants from a separate biofuels fund). To stop funding new clean technology innovation now would be a huge mistake, and SDTC officials have made this clear to the federal government. We’ll find out at 4:30 pm today, after details of the federal budget go public, if the Harper government will continue to fund the agency’s activities. If it doesn’t, this will be a sad day for cleantech in Canada…. stay tuned.

My friends over at Earth2Tech are reporting that Toronto-based Morgan Solar, a promising concentrated solar PV startup, is heading into its round B of financing and hopes to raise between $20 and $25 million. Up until now the company has raised about $20 million, slightly less than half from private investors and the rest through government grants. Morgan Solar, in my talks with them, is serious about keeping its R&D and some manufacturing in Toronto, but it sees the first major volume happening at a new facility it plans to build in California. I don’t think Morgan will have trouble raising the money. I’ve seen the technology, know the founders well, and have talked to their early investors. There is solid commitment there and a sense that what the company is working on is truly ground-breaking. 

Montreal-based 5N Plus, meanwhile, is diversifying its business through acquisition. The company is the main supplier of cadmium telluride to First Solar and others, such as Abound Solar. But analysts were concerned 5N wasn’t diversified enough and was too dependent on its business with First Solar. So 5N decided this week to acquire Belgian-based MCP Group, which is a producer of specialty metals such as bismuth, gallium, indium and selenium. This allows 5N to tap into the market for CIGS solar cells (that is, copper indium gallium selenide cells), but also a whole range of other products: LEDs, flat-panel displays, fuel cells and other forms of energy storage.

Heading to the West Coast, biomass gasification expert Nexterra has raised $15 million in equity financing from Tandem Expansion Funds and ARC Financial. Nexterra makes small-scale biomass CHP systems based on the gasification of biomass. The systems are ideal for distributed generation in a hospital, university, industrial or municipal setting, and because it is ultra low emission it is a good fit for urban environments. The company has a solid partnership with General Electric and just snagged some government funding for a large biomass-based CHP system at the University of British Columbia, which says the 2-megawatt system when it’s up and running in 2012 will reduce its demand for natural gas by 12 per cent.

In Florida, algae-to-ethanol startup Algenol has acquired its German partner Cyano Biofuels GmbH. Okay, the company isn’t based in Canada, but Algenol’s founder Paul Woods is a Canadian who grew up in the Toronto area and kickstarted the natural gas retail market in Ontario before moving south. And some of Algenol’s core innovation comes out of the University of Toronto, so I consider the company an honourary Canadian corporate citizen. Cyano Biofuels is an expert in producing hybrid algae that can produce ethanol, and Algenol was already a minority shareholder in the company. Algenol saw the all-out acquisition as a way to accelerate the commercialization of its Direct-to-Ethanol process using genetically enhanced cyanobacteria, or blue-green algae. I’m a fan of Algenol, which is the focus of a chapter in my upcoming book Mad Like Tesla.

Finally, Sustainable Development Technology Canada issued another round of grants to 17 companies doing cleantechie stuff. I’ll go through some of these in more detail later, either as part of a Clean Break column or a quick post. But check out the list — there are some interesting projects there. As I’ve always said, SDTC funding rounds are like Christmas time for cleantech news junkies like myself.

My Clean Break column today in the Toronto Star talks about why the city, which under previous Mayor David Miller practically banned discussion of energy-from-waste, should open its mind and have an honest dialogue about options for turning the city’s hard-to-recycle solid waste into useful products, such as electricity, ethanol or green chemicals.

They’re doing it in Edmonton with Enerkem, which is turning sorted municipal solid waste into ethanol. They’re doing it in Ottawa with Plasco Energy, which is turning residual municipal waste into syngas that’s used for generating electricity. Trash giant Waste Management, an investor in Enerkem, has been investing heavily in technologies that can cleanly convert waste into useful chemicals and fuels in a safe way that releases virtually no emissions into the atmosphere — at least not, obviously, until any end fuel product is burned. But this fuel product would be displacing a fossil fuel using materials that might otherwise degrade in a landfill and release methane or contaminate groundwater.

This is an area where I part with many of my friends in the environmental community, and believe me, I’ve had my share of debates over a beer. But the landfill option is not better, in my view, and while I fully support waste diversion programs I don’t believe we can ever get to 100 per cent diversion. There’s a lot of wood waste, clothing, unrecyclable plastics, and even certain paper and plastic products can only be recycled so many times. What happens with this garbage? Advanced energy-from-waste technologies, like those being built by Enerkem and Plasco, can help municipalities manage their waste in their own back yard and get a source of energy in return.

I’m not saying we should drink the Kool-Aid, no questions asked. But at the same time, I’m a believer that the technology has changed over the years, the economics have improved, and some systems being piloted and built for commercial use today are dramatically different than the dirty incinerators built in the 1970s. Skepticism is fine, and encouraged, but not when it’s accompanied by outright dismissal or repeated attempts to compare today’s technology with what stirred up controversy 20 years ago.

It’s a conversation Toronto needs to have.

I have a story in MIT Technology Review today that looks at a very cool engine design from a Vancouver-based startup called Etalim.  The story gives a somewhat technical explanation of how the engine works, but basically its a hybrid of a thermoacoustic engine and a Stirling engine. What’s impressive about this technology is that — according to the company, at least — it’s compact, made of non-toxic and recyclable materials, easy and inexpensive to manufacture, can use any source of high-grade heat (biogas, biomass, natural gas, solar, fossil fuels), and is not subject internally to mechanical friction, meaning the product is highly reliable and has a long life with very little need for maintenance.

Stirling engines, to put it simply, use heat to drive a piston as a fixed volume of gas, such as helium, heats, expands, then cools and contracts. This cycle of expansion and contraction repeats itself, and the higher the heat the higher the power. Problem is, there is a lot of mechanical friction and all of this has to operate within a sealed vessel under high temperature and high pressure. Leakage of gas is a big challenge. Rubber seals and lubricants don’t cut it, so parts have to be machined precisely to achieve metal-on-metal fittings and this adds a lot of cost, and even then, long-term reliability can be an issue. Etalim founder and chief scientist Thomas Steiner, a former chief physicist at Creo (where he worked side-by-side with Michel Laberge, founder of nuclear fusion startup General Fusion), decided to turn to thermoacoustics to solve the problem.

Research into thermoacoustics has been around for years, but it’s still a relatively new area. I’m not qualified to say too much about it, suffice to say it involves the bizarre interaction of thermodynamics and acoustics — i.e. heat can be used to stimulate the creation of intense sound waves that can be used to achieve mechanical work. Dr. Greg Swift, a thermoacoustics expert at Los Alamos National Laboratory and someone I quote in the article, has a great little essay here that describes what thermoacoustics is all about.

In a nutshell, Steiner designed an engine core that eliminates all rubbing parts (i.e. mechanical friction). The piston is replaced with a thick steel plate fixed to the engine wall. Helium gas on the top side of the plate is heated, triggering intense sound waves that cause the plate to vibrate. Below the plate and separated by a thin layer of helium is another metal plate — a diaphragm – attached to a shaft. As the first plate vibrates it causes the diaphragm (and the shaft) to move rapidly up and down. And I mean rapidly — 30,000 cycles per minute. The shaft is connected to a linear alternator that induces an electric current as it moves up and down. That movement is very minimal at only 200 microns so Etalim has had to cleverly configure its alternator to capture such small movement. (See video with this post to get a visual of how this all works).

The end result is a highly efficient and durable compact engine that moves less gas per cycle than a conventional Stirling engine but compensates by achieving dramatically more cycles per minute. Etalim is aiming to manufacture engines that can supply 1.6 to 3 kilowatts and it believes it can get the cost down to a stunning 15 cents per watt, which is more than competitive with internal combustion engines and leaves fuel cells in the dust. It if can deliver, this would change the economics of microCHP (combined heat and power) for the home, biogas/landfill generation, solar thermal power generation and a whole host of distributed generation applications in need of a small, efficient and affordable engine that’s agnostic to fuel or energy source, as long as it supplies heat.

Etalim has a long way to go. It made its first prototype last year and proved that the design works as expected, but efficiency was low — just 10 per cent. The second prototype will come this spring and will aim for up to 30 per cent efficiency, with hopes of achieving 40 per cent by the time Etalim comes out with its first commercial product in 2012. That puts it in the territory of fuel-cell efficiency, but at a fraction of the cost. Etalim’s goal is to reach 50 per cent, but it has to figure out how to design the engine to handle temperatures exceeding 1,000 degrees C, meaning some use of ceramic materials will be necessary.

This is a great emerging story. So far the company has raised about $4.7 million, roughly half private equity (no VC) and the rest a grant from Sustainable Development Technology Canada for a demonstration project. It will likely be seeking $6 to $8 million in a first round of VC financing this summer.