Siemens has agreed to purchase RuggedCom for $382 million or $33 a share, compared to the $272.4 million or $22 a share offer from Beldon. It represents a 50% premium on a per-share basis and, quite frankly, Siemens is a better fit for RuggedCom and for keeping innovation in Ontario.

Siemens Canada, which is based in Burlington, Ont., has a strong and growing presence in Canada — about 4,400 employees and $3 billion in annual revenues. It is also pushing hard into the same smart grid space occupied by its main competitor, General Electric. Ontario is shaping up to become a hub of smart grid development in North America, so it makes sense for Siemens and Vaughan, Ont.-based RuggedCom to hook up.

I was the first journalist to write about RuggedCom with a story in the Toronto Star back in July 2006. Since then it has consistently grown revenues and profits, even during the downturn. “Either we’re going to get acquired by a strategic peer or reach a point where we’ve got … a good story to take it to an IPO,” company founder and CEO Marzio Pozzuoli confidently told me when we first spoke nearly six years ago. Pozzuoli, by the way, was a technology manager in GE’s power management operation before deciding to leave the company to found RuggedCom. Such a good move. The successful IPO part came true in 2007, and now the strategic acquisition part is coming true with the Siemens purchase. As Pozzuoli stated today, “We have great respect for Siemens and believe RuggedCom will be well positioned for continued growth and industry leadership under their ownership.”

Could RuggedCom have done it alone? Perhaps — but with the massive clout of Siemens behind it, it can do a heck of a lot better. That’s just how the cleantech space is expected to be over the coming years, as startups with great technology and proven leadership seek the resources and reach of established multinationals. An added benefit to this deal is that it seems to reinforce Siemens’ commitment to Ontario.

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Tyler Hamilton

We’ve all met them. Super-couples that hike together, run half-marathons side by side, and jump out of airplanes holding hands.

Sickening. Young and old, they make the rest of us feel inadequate.

But super-couples are an anomaly. The reality is that many couples aren’t such a good match when it comes to physical activity. Toronto-based Butterfield & Robinson, the high-end travel company that does bicycle tours throughout world, knows this first hand.

“With a lot of people who take our trips, one half of a couple really doesn’t want to do it,” says Norman Howe, president of B&R. “The one who doesn’t want to do it is intimidated by the idea that they won’t be able to participate as an equal with their partner.”

It’s partly why, about a year ago, company officials began exploring the benefits of adding electric bicycles to their fleet. The simple fact is that some tours are more difficult and demanding than others, be it because of longer routes or uneven terrain. The company’s bike trip to Tuscany is a case in point.

“It’s probably the scariest destination from a hill point of view,” says Howe.

Last October, the company held its annual end-of-season gathering and invited a number of electric bicycle makers to give product demonstrations. The E-Venture electric bicycle, manufactured by Swiss firm Scott Sports SA and equipped with a Bosch lithium ion battery system and drivetrain, got the highest grade. After the event, B&R purchased 30 of these e-bikes and added them to its European fleet.

“Our customers will get the option of using them for this first time this spring,” says Howe, adding that it is considered an upgrade so does come at a slight premium.

He emphasizes that the bikes are only assisted by electric propulsion – that is, they don’t rely exclusively on it. Travellers can’t ride them like mopeds or electric scooters. What they get is a boost when they need some help, such as when battling a head wind or taking on a steep hill.

“These things look like a bike, ride like a bike, feel like a bike, but when you hit the hills it just makes the experience a little better,” says Howe, adding that in his view it will be a “great democratizing thing” for people who may otherwise be reluctant to travel by regular bicycle. “And you still get a sense of accomplishment riding these things.”

The potential reaches far beyond the weaker half of a couple. It includes all consumers that have never given bicycle tours a thought, perhaps because of that intimidation factor. It also includes aging but devoted long-time customers, who can keep coming back every year even if the knees are starting to give out and energy levels are in decline. The e-bikes are designed to compensate.

Market research firm Pike Research has estimated that nearly half a billion e-bikes, electric motorcycles and electric scooters will be sold worldwide between 2010 and 2016. E-bikes would represent 56 per cent of that market, it predicted.

“Demographics and economics are aligning to create a strong market opportunity for two-wheel electric vehicles,” according to Pike analyst Dave Hurst. “In some countries, these vehicles will be engines of economic growth, while in others they will be signals of broader consumer behavioral shifts.”

For B&R, it’s all part of the evolution of its business, and certainly shifting demographics play an important role. Average customer age lands somewhere in the low 50s – the classic baby boomer.

“The boomer crowd is in denial about aging, so they’re going to hang on to the activity component of their lives for as long as they can,” says Howe.

By adding e-bikes to its fleet, B&R is helping them to do. E-bikes may represent only 3 per cent of the fleet today, but as boomers age “I would imagine the number of e-bikes we have will grow as a percentage of our overall fleet,” he says.

No doubt, bicycle tour companies around the world are heading in the same direction.

Call it a boomer boost that leads to happier and healthier trails.

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

It’s nice to be loved.

The consortium, calling itself the Lake Ontario Offshore Network, aims to make Ontario the North American capital of offshore wind development. The group includes Windstream Energy Inc., the only company that holds a feed-in-tariff contract with the Ontario Power Authority to sell power from offshore wind turbines into the province’s electrical grid. It doesn’t matter that Windstream, because of the moratorium, can’t currently develop its project. It hopes that by bringing together an industrial consortium it can dangle thousands of jobs in front of the government and possibly convince the powers that be to reconsider its offshore ban.

The cast that has been assembled for this PR play is impressive. The consortium includes turbine suppliers Siemens Wind Power and Vestas Wind Systems, steel fabricator Walters Inc., steel supplier Essar Steel Algoma Inc. and a number of small and medium-sized companies — Anchor Concrete Products Ltd., Ortech Power, Samuel & Son Limited, Akzo Nobel Coating Ltd. and Bermingham Foundation Solutions, to name a few. In total, 18 companies/organizations large and small have signed on, representing a comprehensive supply chain and about 1,800 jobs that could exist over a five-year period if Windstream’s project ever got the go-ahead.

And what is this project? Windstream, which is based in Burlington, Ontario, is planning to build a 100-turbine, 300-megawatt offshore wind project about five kilometres west of Wolfe Island, which is an island just offshore the city of Kingston, itself about 250 kilometres east of Toronto. My own personal feeling is that it’s not the greatest site for development, if only because it’s not far from the onshore wind farm that’s currently located on Wolfe Island and has been a lightning rod for controversy from the beginning (partly because of the density of wind turbine development there). Windstream is proposing that the government keep its moratorium but allow an exemption for its $1.5 billion Wolfe Island shoals project, on the grounds that it would be a pilot project used as part of studies that would determine if further offshore development is the right step forward.

You’ll recall from an earlier column of mine that the “pilot project” approach is one that I support and proposed last July. Specifically, I wrote, “Maybe we would have been better off to focus initially on a public-private pilot project, one located several kilometres offshore in a carefully selected location; one that could be closely studied and be a launch pad for future economic growth.” I’m happy that Windstream has embraced this approach, and it will be interesting to see how the government responds to this invitation.

But here’s the thing: I’m not convinced this is the “carefully selected location” that would be ideal for a pilot project. I’m also not convinced that a 300-megawatt project could rightly be called a “pilot”. I understand the need to go big. There are simply better economies of scale. But if a pilot was truly what Windstream envisions, it should break up the project into smaller phases, with the initial pilot phase being no larger than 20 or so megawatts (similar in size to the world’s first lake-based wind farm in Lake Vanern, Sweden) with plans to develop larger phases once the pilot has been properly studied and ultimately convinces the Ministry of Environment that offshore wind makes sense for Ontario.

I would also argue that there are much better sites to consider for a pilot, including those once held by Trillium Wind Power before the government wiped the slate clear and unjustly forced all developers without a FIT contract to start from scratch. Trillium, by the way, had also started developing a supply chain consortium before the rug was pulled from under it, resulting in a $2.25 billion lawsuit filed against the Ontario government. One wonders how any company could trust dealing with Queen’s Park these days.

But Windstream is the one that finds itself in the fortunate position of being the only developer with a FIT contract. Whether the piece of paper it holds gives it the edge when it comes to pilot-scale projects, that’s unclear. After all, pilots are given special consideration. Presumably, FIT or not, picking the location of a pilot project should be based on the site, not the developer.

The saga continues…

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Tyler Hamilton

The Geological Survey of Canada put out a research paper in 2010 that concluded the country has enough geothermal heat to power itself many times over.

The big question is how much of that heat can be economically tapped?

As a general rule, the hotter and shallower the resource the more economical it is to exploit based on current technologies. The higher the temperature the easier it is to extract the volume of heat required to spin a turbine and generate electricity.

But there aren’t many places in Canada, beyond northern B.C., Alberta and the Yukon, that have that right combination of temperature and depth. Everywhere else, you’ll have to drill deep – as much as 10 kilometres down – to find enough heat. That’s a deal-breaker with respect to cost and risk.

It’s also a nut Ian Marnoch of Port Severn, Ont., is trying to crack. For the past seven years the Ontario inventor has been developing a new kind of “heat engine” that he says can generate electricity more economically from lower-grade heat. And that heat could come from anywhere: the ground, the sun, or an industrial waste process.

Not that the technology doesn’t already exist to do it. There are other heat-engine technologies out there, most notably those based on the Organic Rankine thermodynamic cycle. These systems transfer heat to a working fluid with a low boiling point, such as ammonia.

As the fluid heats up, expands and vaporizes it drives a turbine that generates electricity. The vapour is then cooled, condensing it back into a fluid which is recycled back through the process.

Marnoch’s heat engine works under a different principle. There is no vaporization of fluids. Instead, the Marnoch system relies on dry pre-pressurized air that expands and contracts as it is heated and cooled, causing pistons to turn that generate electricity.

This in itself may not be new, but it’s the way Marnoch has configured his machine that may give it an edge over other technologies. He says his thermal power engine can process heat much faster and at bigger volumes than Organic Rankine machines.

“It can process about three times as much heat by value as an Organic Rankine machine of the same size,” says Marnoch, adding that his heat engine can be designed to be much smaller and, therefore, less expensive.

That it operates more efficiently also means it can tap into lower temperatures that aren’t viable with other technologies. One area where Marnoch hopes to demonstrate the superiority of his design is in northern communities that currently rely on diesel generators for electricity production.

All he needs is the right temperature differential – that is, the gap between the heat source, such as the water in a deep mine shaft or temperature at the bottom of an old oil or natural gas well, and the heat sink, which would be the cool northern air.

If that gap is 20 degrees C or higher there’s potential to generate electricity. The system becomes more economical the wider the gap.

Marnoch has been working to perfect his patented heat engine with a team of PhD students and professors at the University of Ontario Institute of Technology, which has supported development of the machine for the past five years with funding from the federal and Ontario governments. The Ontario Power Authority and Ontario Centres of Excellence were also early funders.

The latest prototype of the machine is at the university’s new Clean Energy Research Laboratory, but Marnoch is eager to get the machine out in the field and tested in a real-world situation.

St. Marys Cement is one possible candidate. The company is exploring using the Marnoch engine to generate electricity from the waste heat of its Bowmanville cement plant.

“It is in very early discussions but we are very enthusiastic about the potential and what this can mean for industries with large volumes of low-grade waste heat,” says Martin Vroegh, environmental manager at St Marys.

Marnoch is hoping that the smaller size of his machine, relative to an Organic Rankine set-up, will make his technology more attractive to operators of industrial facilities, which often lack the real estate to host such equipment.

“It could open the door for us,” he says. “We just need to get out there and prove it works.”

If only it were that easy. Like any inventor or entrepreneur trying to bring a new clean technology to market, particularly one that directly challenges well-entrenched products, Marnoch knows he has many more hurdles to overcome and many years of trying.

It comes with the territory. But persistence is the soul of innovation, and Marnoch has plenty of it.

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

From a greenhouse-gas perspective, the emission reductions aren’t massive — up to 25 per cent reduction — but the real gains here are in the reduction of smog-causing pollutants. Nitrogen oxides and diesel particulate matter are reduced by 90 per cent. Over time, it leaves open the possibility of using renewable natural gas, sourced from landfill gas and municipal wastewater biogas, to displace its fossil fuel cousin. The city of Surrey, B.C., is already heading in this direction. It now requires that natural gas-powered trucks be used for its municipal waste collection, a service being performed by BFI Canada, which has purchased 75 trucks that run on CNG. At the same time, it is launching an organics collection program for Surrey’s 470,000 residents and businesses that will see the household waste converted into biogas that will be cleaned, conditioned and used in BFI trucks. Surrey hopes the new biogas facility will begin operation in 2014.

Toronto was supposed to head in this direction as well, but from what I understand the plan has unraveled under the administration of Mayor Rob Ford.

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By Tyler Hamilton

Technologies abound, many of them developed in Ontario, with promise to reduce the amount of energy consumption in buildings, particularly the big energy-hogging towers that dot our urban and increasingly suburban landscapes.

But the companies that construct these giant towers are notoriously conservative, as are the banks that fund them, so cracking into this massive market hasn’t been easy for newcomers.

Jamie James is trying to break down some walls. As a sustainability adviser to Canadian condo builder Tridel for nearly 10 years, James helped build an internal R&D program that tested out the performance of new energy-efficiency technologies for buildings.

In 2010, with Tridel’s blessing and support, he decided to “externalize” the program and expand it to other tower builders, with the goal of speeding up the time it takes to get new green building technologies to the larger marketplace.

Along this path, James found a partner in MaRS Discovery District, which donated office space. The non-profit social venture TowerLabs was born.

“I go to cleantech innovators who are targeting the real estate sector with the proposition that I can get you into the buildings and working with potential customers,” James explains.

TowerLabs acts as relationship maker and project manager, helping to get the technology installed and its performance measured in both real-world and test scenarios. “To go into a building and have real-live demos can go a long way toward showing that something is viable,” he says.

The approach is already paying off for Vancouver-based dPoint Technologies, which has developed a new type of air ventilation system that dramatically reduces the need to heat or cool fresh intake air, depending on the season.

Some rooftop ventilation systems found on condo buildings will take fresh air from the outside, heat it (if in the winter), and blow it through the inside of the building via a network of ducts. The air flows into the hallway of each floor and, moving through the gap at the bottom of doors, enters each condo suite.

Stale warm air, meanwhile, is expelled through the bathroom fans of individual suites. When that warm air is ejected, so is the energy within it.

The dPoint system, or Energy Recovery Ventilator, takes a very different approach. Rather than have fresh air come from a central ventilation system on a rooftop, each condo unit has its own individual air intake and exhaust box.

As warm, stale inside air is exhausted the dPoint system instantly recovers and transfers the heat to the incoming flow of fresh air. It does this using a special polymer membrane that also filters out impurities and transfers humidity between the two air flows as they move in opposite directions.

“This is really a dramatic shift in the way a building breathes,” says James, adding that the dPoint technology passed the “sniff test” and is gaining traction after a few initial tests with Tridel.

With TowerLabs’ help, about 740 dPoint systems are now being installed in two Tridel condo towers in Scarborough.

“If all goes well, dPoint go from being a near total unknown in the market less than 18 months ago to being a specification for the largest condo builder in Toronto,” James says. “So that’s kind of proving out the approach we’re taking.”

Tridel continues to play a key role, but TowerLabs is hoping to bring on other builders. It also plans to test out technologies at the tower being built as part of the expansion at MaRS.

Another technology being put to the test is a new type of variable speed motor used in heating, ventilation, and air conditioning systems from Toronto-based start-up InMotive.

To push warm and cool air around requires fans, and the motors that power those fans often only operate in two modes: completely on, and completely off. One way of saving energy is to swap out those motors with variable speed versions that can slow down or speed up based on air flow demands.

What InMotive has designed it was it calls a mechatronic variable speed drive that is more efficient and requires less maintenance than conventional variable-speed motor designs. TowerLabs helped the company get its first prototype tested in a high-rise building.

“The goal was to prove that the concept worked, and they achieved that,” says James, adding that more tests are planned as the product evolves.

TowerLabs also has Tridel testing out a solar co-generation system, which supplies electricity through photovoltaic panels and harvests solar heat at the same time.

“Once you get the innovation in there you can really change its fate overnight,” he says.

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

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Tyler Hamilton

My family flew to North Carolina during the holiday to visit relatives and, being aware of new baggage fees, we made every effort to pack lightly.

Of two adults and two children we had only one item to check in. Not bad. But it still meant paying $25 to get the bag to Charlotte and another $25 to get it back home. Had we each checked just one bag for our one-week trip, it would have cost the family $200.

I point this out because I’m perplexed by Air Canada’s strong opposition to the European Union’s new aviation carbon tax, which went into effect Jan. 1.

The airline — as well as other members of the National Airlines Council of Canada — has no problem arbitrarily adding $50 to the price of a 2,500-kilometre round trip to the United States.

But it won’t tolerate the European Union slapping on a carbon tax that would only add $1.45 to a $500 round-trip ticket between Toronto and Frankfurt, Germany, a journey that covers five times the distance.

How did I come to $1.45? Anyone can calculate the impact on any trip to Europe. Just go to the website of the International Civil Aviation Organization at and click on the carbon calculator link at the bottom-left of the screen. Or click here.

A round trip between Toronto and Frankfurt generates 922 kilograms of carbon emissions per person. Per tonne, the price of carbon emissions on the European market is about $10.50, so the price for 922 kilograms would be $9.68.

But that’s not what airlines would initially have to pay per passenger. Under the new European aviation tax scheme, airlines still get a free pass for 85 per cent of their emissions. With the tax only applying to the remaining 15 per cent, that works out to $1.45 that will surely be passed along to consumers.

As industry observer Bill Hemmings said, “Commercially it’s a non-event.” Airlines arbitrarily change online flight prices on a minute-by-minute basis by much larger amounts.

Yet Air Canada and its fellow airlines in Canada, the United States, China, India, Russia and Japan insist on demonizing the fee and amplifying talk of trade wars and unproven claims of job destruction. It doesn’t matter that the European Union Court of Justice ruled recently that the new tax does not contravene international law.

“This ruling by no means settles this matter,” George Petsikas, president of Canada’s airline council, said defiantly after the European court ruling.

Those opposed to the EU’s actions argue that the matter of emissions reductions in the global aviation industry is best addressed through a “coherent, multilateral framework” via the International Civil Aviation Organization (ICAO).

The solution, they feel, is to create yet another international initiative that likely will lead to more delay and inaction on pressing climate matters.

Been there, done that. What’s admirable about the EU approach is that it’s about more action and less talk. Understandably, it’s tired of waiting for the rest of the world to get its act together.

The aviation sector accounts for 3 per cent of global emissions, but both its share of global emissions and its absolute contribution are expected to grow under a do-nothing scenario that isn’t sustainable.

To be fair, the industry hasn’t been idle. Fuel efficiency has improved by 16 per cent between 2001 and 2008, according to the International Air Transport Association. Since 1990, major Canadian airlines have improved fuel efficiency by 31 per cent.

But it’s not enough, and there’s a whole lot more that can be done. A sector-specific carbon tax that grows gradually and includes more countries over time will accelerate innovation and give the most fuel-efficient airlines an edge over competitors.

As airline fleets are renewed there will be greater incentive to embrace more efficient engine technology and light-weight materials, such as carbon fibre, in the design of new aircraft.

The air transport association estimates the industry will spend $1.5 trillion on new aircraft by 2020, resulting in more than a quarter of the global fleet being replaced. It’s important to make sure new aircraft are built and purchased with fuel-efficiency top of mind.

Airlines will also be more motivated to use renewable jet fuel products in old and new aircraft to offset their carbon footprints. There’s tremendous promise with respect to carbon-neutral jet fuels derived from algae, wood waste, inedible plants such as camelina, and even industrial waste gases.

One advantage is that aviation is a relatively easy market to target. There are fewer than 2,000 airports around the world that serve as major fuelling hubs for airplanes, so the required infrastructure changes to accommodate renewable jet fuel are quite manageable. Contrast this with the hundreds of thousands of fuelling stations that service cars worldwide.

Jet fuel also represents less than 8 per cent of global demand for oil products, so it’s not as daunting as tackling the market for consumer vehicles, which consume more than 40 per cent of oil supply.

The industry says it is already going down this innovation path. That only makes the EU carbon tax even more benign. The EU, meanwhile, has said that any airline headquartered in a country with similar emission-reduction policies would be exempt from the EU tax.

So what, exactly, is the fuss all about? It’s about the rest of the world not liking Europe taking the lead and telling it what to do, and even though it’s clear that we need to do it.

It certainly isn’t about the financial interests of travellers, who have been and will continue to be penalized much more by arbitrary fees designed to pad the bottom line.

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

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Tyler Hamilton

Has the global economy entered a long period of persistently high, volatile commodity prices?

That’s a question asked recently by international consultancy McKinsey & Co., which analyzed a century of data and found that the trend – for at least the next 20 years – doesn’t look good.

The previous 100 years told a different story. Since 1910, it found that the average combined price (inflation-adjusted) of food, agricultural raw materials, metals and energy reached its lowest historical level in the late 1990s.

Sure, there were big dips during the post-World War I depression and the Great Depression a decade later. But major technological advancements in areas such as exploration, extraction and cultivation allowed us during prosperous times to satisfy the demands of a growing global population, while keeping commodity prices at record lows.

“This ability to access progressively cheaper resources underpinned a 20-fold expansion of the world economy,” according to McKinsey’s analysis.

But that same analysis shows that the past decade has bucked a century-long trend. The commodity price decline achieved over the previous 90 years has, in just eight years, been completely wiped out, says McKinsey. Pre-WWI peak prices were surpassed in 2010, and all of this is happening during extremely trying economic times.

Shouldn’t commodity prices, like during past recessions and depressions, be falling?

Not this time around, the consultancy says. “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.”

There are many reasons why this time is different. Our world population surpassed seven billion in 2010 and of that, three billion will join the ranks of middle-class consumer over the next two decades, putting immense stress on those natural resources that give us energy, food, metals and fresh water.

McKinsey, which says we are entering a new era for commodities, throws out a few sobering stats: by 2030 the global vehicle fleet will double, per-capita calorie intake in India will jump 20 per cent, and Chinese consumption of meat — production of which is energy- and water-intensive — will rise 60 per cent.

Technology, no doubt, will continue to help us boost the supply of the commodities we have come to depend on, but the concern is that it can’t do it fast enough to meet rapidly growing demand.

Meanwhile, attempts to do so will require more expensive approaches and access to more remote locations — for example, drilling for oil in the Arctic — adding cost and putting more pressure on the fragile ecosystems we depend on.

On the issue of environment, there’s also the parallel need to rein in carbon emissions to avoid catastrophic changes to the climate by the end of this century. In other words, what we’re faced with today is unprecedented, and it will require an unprecedented response.

Of interest is that some corporations are already responding, and in doing so are positioning themselves as leaders of their respective packs over the long run.

A recent Harvard Business School study that tracked the performance of 180 corporations over nearly two decades found that the most progressive companies with respect to sustainability policies and practices outperformed their peers.

A big part of this is about resource-productivity. As commodity prices increase those companies that can best minimize waste and be most efficient with the consumption of energy and water are also the ones that will be most competitive.

In addition to cutting costs and reducing their exposure to volatile commodity prices, they’ll reduce their greenhouse-gas emissions and avoid paying future prices placed on carbon.

McKinsey says the future will be all about “squeezing greater productivity” from natural resources. “Better resource productivity could single-handedly meet more than 20 per cent of forecast 2030 demand for energy, steel, water and land,” it estimates.

This bodes well for the many clean technology companies I have written about in this column over the years.

Never has there been a greater need for technologies that can help us, for example, reuse scarce water resources, reduce the carbon footprint of the products we consume and services we use, and turn what has traditionally been considered waste into valuable products or sources of energy.

These may be trying economic times, but the companies that test drive and ultimately embrace these technologies will be much better off in the long run. There will be short-term risks, but they must be measured against the longer term risks of not acting.

This is something investors may want to keep in mind as we enter 2012.

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