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Op-Ed (G&M), An arm's-length green bank would accelerate Canada's climate transition

Op-Ed (G&M), An arm's-length green bank would accelerate Canada's climate transition

In order to accelerate Canada's transition to a low-carbon economy, and unlock private sector creativity in so doing, Rand proposes Canada/Ontario set up an arm's length 'green bank'. With a clear mandate, and free to be sensitive to the dynamics of market signals, such an institution would be far more effective in disbursing climate-related funds than a government ministry. Read it here:

An arm’s-length green bank would accelerate Canada’s climate transition


Ont. Long Term Energy Plan: Innovation at Last!

Originally published on Dec 13, 2013 Countries all over the world are rebuilding their electrical systems. Hundreds of billions of dollars are pouring into the emerging “smartgrid” sector. Ontario’s latest Long Term Energy Plan has, for the first time, an explicit focus on innovation. It will accelerate Ontario’s burgeoning smartgrid sector into this large and growing global market. That’s a good bet.

Intelligent, responsive electrical grids form the backbone of the now inevitable transition to a low-carbon economy. Smartgrids are more efficient, better able to accommodate distributed intermittent energy sources like wind and solar, and are resilient to the sort of blackouts that brought much of North America to a standstill in 2003. The technology that makes them smart – automated energy networks, sensors and data analytics, next-generation power electronics, energy storage – is projected to be a $400 billion market by 2020.

Ontario’s smartgrid companies are already moving fast. But we need to be aggressive to take full advantage of our innovative entrepreneurs and world-class utilities. Good strategic policy and a creative regulatory environment can entrench a first-mover advantage. When we solve problems with innovation at home, we build technology that’s in demand everywhere.

That’s why the Long Term Energy Plan is so important. It’s about next-generation jobs as much as it is about energy. And it contains some very promising economic initiatives – an expanded Smartgrid Fund, real targets for energy storage, and the convergence of information technology and demand response as a cornerstone of conservation.

Innovation and infrastructure don’t normally make comfortable bedfellows because regulators prefer the tried and true to the new and novel. Historically, that protected ratepayers from expensive experiments. But today’s creaky old grid needs innovation. It’s old, over-loaded, and inefficient.

An expanded Smartgrid Fund facilitates partnerships between homegrown companies and utilities for innovative projects that improve the grid, but wouldn’t normally get past the regulator. Utilities get a smarter grid, ratepayers get a more efficient one - and Ontario companies get that first reference project they need to go after export opportunities. And that benefits us all.

Ontario has established a 50 MW target for energy storage. That’s a bold move, and a smart one. International investment in storage over the last two years has skyrocketed to over a billion dollars. The industry is projected to be worth $30 billion within a decade. Ontario has some leading horses in this race: Hydrostor’s underwater compressed air system, Temporal Power’s ultra-low friction flywheels, Hydrogenics’ hydrogen generation and eCamion’s grid-scale lithium batteries all compete.

But Ontario goes further by establishing an independent assessment of the benefit these projects bring to ratepayers. Energy storage can ease transmission congestion, reduce the need for costly system upgrades, provide frequency regulation to ensure power quality, and solve the intermittency problem of renewables without burning natural gas. Grids everywhere face the same problems. Cracking those markets is made a lot easier by the financial, regulatory and operational experience that comes with partnering at home.

No smartgrid effort can skip intelligent demand response – conservation without having to flip switches or adjust thermostats. Ontario has committed to reduce peak power by ten percent - the equivalent of two and a half large power plants – by 2025. That’s a big enough commitment to drive commercial markets. IT and sensors, coupled to energy assets, will do the bulk of the work automatically.

But Ontario has also put the consumer front and center, by leveraging a little appreciated competitive advantage. We’ve got one of North America’s  largest installation of smart meters. For many of us, it’s just an expensive box on the side of our house. That’s about to change.

The Green Button Program, an initiative led by the Ministry of Energy, MaRS and local utilities, lets consumers securely share energy data with innovative third-party service providers. This helps us understand energy use, cost, and conservation by linking us to user-friendly mobile and web-based devices. Soon, you and your kids will get more energy literate together in game-like settings that use your home as a model. A better-informed public makes better decisions, and will be less confused as energy policy is inevitably weaved further into 21st century social fabric.

For Ontario, it’s as aggressive a plan as we could have hoped for from a Ministry so closely scrutinized for the past year. It establishes innovation as a key link between energy security and economic development. Smarter policy for a smarter grid.

CBJ: Climate Disruption: Threat becomes Reality

We lay out the big picture in a recent editorial in the Canadian Business Journal.

Bottom line? If Canada could capture just 2% - the same small percentage figure used to belittle the importance of Canadian climate action - of the emerging global cleantech market, our cleantech sector would be larger than automotive.

Keystone compromise faces up to realities

First published in the Toronto Star, March 29 2013. Ottawa should link additional petroleum flows going south on Keystone to a hard cap on future extraction rates.

The expansion of the Keystone XL pipeline has become a lightning rod for the battle between long-term climate concerns and shorter-term economic benefit. Opponents say Canada’s tarsands are one of the world’s most carbon-intensive and environmentally destructive sources of oil. Proponents argue they’re a politically stable source of oil in a world fraught with risk. Both are correct. A compromise on Keystone is essential if Canada is to become a responsible energy superpower in the complex 21st century world of carbon constraints. I suggest the Canadian government take the lead by linking additional flows going south on Keystone to a hard cap on future extraction rates and priority access in all Canadian pipelines based on the carbon content of the oil. This compromise reflects facts on the ground and aspirations for change. Like all good compromises, everyone loses and everyone wins. Climate hawks like me recoil in horror at yet another long-term high-carbon infrastructure project, built in the very teeth of an increasingly angry climate. For us, Keystone reaffirms industry’s capacity and willingness to burn enough fossil fuels to tip an already unsteady climate into a very unfriendly state. The question behind the Keystone protests is simple: if we can’t stop now, when? But let’s be honest. We’re not shutting down what’s already developed anytime soon, no matter how urgent the climate crisis. That oil will get to market, by pipeline, truck or rail. A pipeline increases profit, not production. But the oilpatch has not yet spoken openly about the hard limits on extraction that climate change demands. They, too, must be honest: we cannot burn all the economically recoverable resources we want. According to the International Energy Agency, more than 80 per cent of the world’s proven reserves of hydrocarbons must be left in the ground if we are to have even a slim hope of limiting warming to 2C. Oil companies the world over face the same problem. Canada has an opportunity to take the lead in that discussion. Our energy sector can easily accept development constraints and still profit. Indeed, a shortage of skilled labour already limits development. But everyone also wins. The oilpatch gets another pipeline, and higher profits. Companies compete to lower the carbon content of their fuel in order to gain access to those pipelines. And by agreeing to limit production, Canada gets a stronger card to play in what will be intense international negotiations on carbon constraints. Nobody who’s looked into Canada’s carbon kitchen thinks we have a snowball’s chance in July of meeting our existing obligations to reduce emissions. But with a renewed commitment to real carbon constraints — not just “emissions intensity” gobbledygook — we regain the credibility to negotiate an agreement that’s in our long-term interests. Even our burgeoning biofuels sector benefits. Since the carbon content of fuel defines your place in the pipeline queue, biofuels will always have priority. There’s little need for biofuel pipeline access now, so it’s no threat to the oilpatch. But as the biofuel industry matures it will need infrastructure to grow into. There are three kinds of biofuels. Additives like ethanol and biodiesel, as well as drop-in fuels like green diesel, have markets now. They’re mixed in the final fuel near the point of sale. They don’t need a pipeline, and couldn’t be mixed with heavy oil anyway. But next-generation mixed hydrocarbon biofuels — like that produced by Kior — require refining. With priority pipeline access they don’t need to raise extra capital for refining. The Keystone compromise means all pipelines become transitional infrastructure. They serve short-term energy needs, but enable a low-carbon future. Keystone expansion also takes pressure off the Northern Gateway, which is off-the-charts when it comes to threatening pristine wilderness and aggravating native sensibilities. Environmentalists should be happy about that. The tarsands are one of Canada’s most divisive subjects. Whether environmentalists like it or not, current development will not be shut down. But the oil sector’s social licence to expand operations is under legitimate threat. Right now the world sees an aggressive Harper government battling environmental groups, a growing portion of the public, and angry native Canadians. They see a Canada that can’t have an adult conversation about climate change and carbon constraints. A compromise on Keystone offers us an opportunity to demonstrate we can still do what we’ve always done best: brings opposing sides together.