There’s so much wind and solar development happening in Ontario as a result of the feed-in-tariff program that it’s easy to forget that FIT prices also exist for generating electricity from biogas and biomass. Indeed, the biogas option has been largely overshadowed even though as a source of electricity it’s arguably the best approach of them all — it’s dispatchable, it reduces methane emissions from manure, it’s a waste management solution, and it’s a way to ensure dangerous pathogens from in-field manure don’t leech into groundwater systems. There have been a dozen or so farm-based anaerobic digester systems deployed throughout Ontario, but there is potential for a whole lot more, not just from dairy farms, but for processing of municipal waste water, chicken/pig/turkey poop, organic matter from industrial food production, etc…

A good sign that more will happen was the announcement yesterday that Anaergia, which operates in Europe under the name UTS Biogas, has chosen Ontario as the location for its $70-million global headquarters, which will include R&D and manufacturing. The company expects to hire 200 people, and it plans to support and drive growth in biogas systems across Ontario and presumably the rest of Canada and northeastern parts of the United States. “The industry, in my view, is still in its infancy,” Andrew Benedek, company CEO, told the Toronto Star. “It has not evolved technologically. I really see an opportunity to become far away the leader of the world.” Benedek, a Canadian citizen, has a track record for running successful cleantech businesses. He was previously founder of Zenon Environmental, the Ontario-based water treatment company that went on to be purchased by General Electric in 2006 for about $700 million.

This is another healthy sign that the Green Energy Act and FIT program, despite their fixable problems and Hudak-spun controversy, are luring future-looking investments and jobs to the province.

It’s getting crowded on this rock.

The United Nations, which tracks world population growth, has upped its estimates. We know that we’ll pass the seven billion mark sometime this October, but the U.N. is now saying we could hit 10 billion within the century – nearly a billion more than expected. Actually, by 2050 we will likely hit 9.3 billion. For some perspective, the planet held five billion people back when Johnny Depp was just starting his career on the TV show 21 Jump Street (Yes, I admit, I was a huge fan of that show). That was the mid-1980s – not so long ago, is it?

Ten billion people are a lot of mouths to feed, bodies to hydrate and families to shelter. It translates into more vehicles on roads, more gigawatts of electricity demand, and more land needed for growing crops. And dramatically more garbage and pollution. It will become much more difficult for supply to meet this demand. Commodity prices will continue to rise, as they have been. Fresh water resources will become more scarce. Regional conflicts will grow. Greenhouse gas emissions will rise. This isn’t scaremongering, this is reality. Even climate skeptics must appreciate that the current path is unsustainable. Global warming isn’t the only reason to be concerned.

Now, reducing waste, eliminating inefficiency and doing things in a more intelligence way will help, but ultimately dealing with the planet’s population explosion will also require a complete rethinking of where we get energy and how we use it. We can’t simply “shoe-horn” renewables into an existing fossil-fuel infrastructure, at least not in the long term. We need to imagine an infrastructure that puts renewables and low-emission energy sources first, and then begin the difficult task of making the transition. Many barriers (entrenched interests, risk aversion, lack of political leadership and citizen buy-in) will need to be overcome, but what’s the alternative?

The Intergovernmental Panel on Climate Change released a short preview of an upcoming report today that asserts we can make the transition. It concludes that nearly 80 per cent of the world’s energy supply could by 2050 be met through deployment of renewable energy technologies — particularly those that capture solar energy. Now, it’s a highly optimistic scenario, but it’s what we need to help keep GHG emissions below 450 parts per million and keep the global temperature from rising beyond 2 degrees C.

Are we too intimidated by the daunting task ahead? Perhaps that’s part of the problem. The IPCC spends many years putting together a massive and comprehensive report on the climate and then plunks it down for all the world to see. It’s information overload — simply too much to digest in one sitting — and it gives the impression that we have a problem that’s too big to tackle. The IPCC’s Fourth Assessment was roughly 3,000 pages! The Fifth Assessment, currently in the works, will be an equally large tome filled with depressing conclusions and broad calls for action that no countries appear ready to embrace.

I agree with folks like Andrew Weaver from the University of Victoria, who is perhaps Canada’s top climate scientist. He says we need to start targeting the science and dividing the problem into smaller, more manageable chunks. ”The science behind the problem is so utterly solid is that what we need to do is start carving pieces off and dealing with those,” Weaver recently told me. (more…)

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?

I’m reposting a recent entry from the blog of Ontario’s Environmental Commissioner, Gord Miller, to put Ontario’s green energy strategy – largely, its feed-in-tariff program – in perspective. Conservative pundits, anti-wind groups and other angry birds in the province like to point out how green energy is hurting hard-working families, but this is far from the truth. Natural gas and nuclear contracts contribute more, and while Miller recognizes that over the next few years green energy costs will represent a larger portion, that’s not the case today or in the near future so all the scare-mongering is just a blatant attempt to mislead voters and steal votes. Here’s how Miller lays it out:

There has been much effort made in the media to lead the public to believe that their electricity bills have been spiralling due to the cost of subsidies to wind and solar initiatives of our energy conservation programs.  The 80 cents/kilowatt hour (kWh) for solar is frequently cited as the greatest offender, even though that rate only applies to rooftop solar with a capacity of 10 kW or less. In total, such installations currently amount to just 34 MW out of the 37,000 MW of installed generation in the province.   Not mentioned are the subsidies paid to our private natural gas generators, or those paid to Bruce Power, when the market price doesn’t meet their guaranteed price (which is almost all the time).  The latter subsidies involve 70% of the global adjustment monies paid out, simply because they pay for the delivery of much more power.  In fact, the Ontario Power Authority paid out $1.35 billion in 2010 to meet gas and nuclear power purchase agreements.

So how significant are the subsidies to renewable energy and the monies paid for conservation in a typical residential electricity bill anyway?  To answer that we had better clarify what a typical electricity rate is per kilowatt hour delivered to your home.  There has been much confusion about that as well.

A typical electrical bill consists of a charge per kWh of electricity used, plus a charge for transmission and distribution, plus a fixed fee to the utility, plus a regulatory charge, plus a debt retirement charge, plus HST, less the 10% the Province has just given us in the clean energy benefit.  It is a complicated system to be sure. To get an estimate of a representative rate, we looked at a typical home that heats with natural gas and uses 800 kWh of electricity per month, and we compared that to a similar house with electric heat that uses typically 2500 kWh of electricity per month (averaged over 12 months).  Although the costs per month obviously varied ($105 vs. $303) the cost of electricity per kWh “all in” was the same, about 13 cents.

So how much of that is due to renewables and conservation?   In 2010, the Ontario Power Authority paid electricity resource costs of $317 million for conservation programs, and $269 million for renewables.  That is a lot of money – but you must realize that it is recovered over a total Ontario consumption in 2010 of 142 terawatt hours (that’s 142,000,000,000 kWh), which amounts to 0.4 cents per kWh (split roughly equally between conservation and renewable subsidies).  So the cost of conservation and all the renewable subsidies in 2010 amounted to 0.4 cents of the 13 cents we paid for a kWh in our homes.  A significant amount, perhaps, but hardly the bogeyman that it is so often made out to be.

In fairness, it must be acknowledged that this 0.4 cent amount will rise as more green energy comes on line in future years, but in 2010 that is what it was.  During these times when we are publicly discussing a long-term electrical energy plan, I think it is important to be honest about the current cost of electricity.

Now, I think we need to start moving larger-scale wind and solar projects to a competitive bidding process to keep FIT costs from escalating too much, too quickly, but clearly the impact today doesn’t justify what public outcry there has been.

Vancouver-based geothermal energy developer Magma Energy Corp., itself the creation of recent industry consolidation, has broadened its horizon even further with a plan to merge with hydro and wind developer Plutonic Power, also of Vancouver. The new company is expected to have a market capitalization of about $575 million and will rename itself Alterra Power. Here’s an investor presentation breaking down the deal.

This deal makes a lot of sense, as Magma CEO Ross Beaty explains well in the company’s press release. “It has the potential to lower the cost of capital to develop each company’s existing growth assets, to enable those assets to be developed more quickly, and to better attract new opportunities for future development,” said Beaty. “Geothermal will remain a core focus of the new company, but hydro, wind and solar assets will be solid business platforms for future growth. In the renewable energy business, bigger is better and this combination will achieve that while enhancing returns to each company’s shareholders.”

There’s no doubt big is better in any energy development business, and if bulking up does give the new company access to cheaper capital this could open up plenty of opportunities. Even in a market like Ontario, with guaranteed feed-in-tariff rates for 20 years, banks are still reluctant to work with small companies without charging them an arm and a leg. This isn’t the way it’s supposed to be, but it’s the sad reality. Alterra is wise to bulk up, and in doing so is on the way to creating one of the largest pure-play renewable energy developers in Canada.