While it’s a shame to see another promising Canadian venture scooped up by a foreign company, it seems GridPoint is serious about building up its Canadian presence and plans to more than double Lixar’s numbers in Ottawa. Lixar has built up quite a following within the industry, and it has done so quietly. Again, I’ll have more on that in a few days… stay tuned. But for background on what Lixar has done in Ontario, click here.

At one point in the interview, Chu made the following comment:

Well, I just want to reiterate what the President said in terms of how do you prepare the United States for the future — with some reasonable certainty we’re going to be looking towards higher oil and gas prices 10, 20 years from today. I think what the contractors are finding out about the climate, especially in the last five years, we will be looking at a carbon constrained economy, whether it’s two years from now or 10 years from now.

So this is an opportunity for the United States to say that’s where the puck is going to be — to quote Wayne Gretzky — 10 or 20 years from now this is where it’s going to be, so why don’t we meet in this new industrial revolution, meaning that we’re going to get energy, abundant energy, the clean energy. So we have the ability to lead.

Obama then chimes in:

I just want to point out my Secretary of Energy used a *very cool* Wayne Gretzky metaphor.

Then Chu continues:

You know, here’s this skinny kid who is arguably the greatest hockey player in the world. And they say how — and he says, I position myself on the ice. Well, how do you do it? I skate to where the puck is going to be, not where it’s been. And so for decades we’ve been trying to figure out how to — you know, this is where we wanted it — do we want it back to 1950? Well, it isn’t going to be back to 1950. And so this bill begins to say to America this is where it’s going to be and so why don’t we take the industrial lead on this.

I don’t know how many times I’ve heard the “where the puck is going to be” line in Canadian political speeches, particularly as it relates to energy. It’s become somewhat cliche here in Canada, so to hear Chu saying it kind of made me chuckle. Gretzky, of course, is a great Canadian. It’s ironic, given that the Canadian federal government appears to have lost sight of the puck.

Fact is, it’s better than what was there before. And considering the U.S. position on climate issues only a year ago, it’s a pretty spectacular feat to pass this kind of legislation in the House in the middle of an economic recession. It’s better than what Canada has, I’m sad to say. And I’m counting on the fact that this piece of law — assuming it can be pushed through the U.S. Senate — will light a fire  blowtorch under Canada’s federal government. It’s not perfect, but it lays the foundation. At the very least, it positions that U.S. battleship in the direction of its target, when not so long ago that ship was completely off course.

Congrats to my U.S. readers and friends on this landmark vote in the House. As former vice-president Al Gore remarked this evening in a published statement, “We are at an extraordinary moment, with an historic opportunity to confront one of the world’s most serious challenges. Our actions now will be remembered by this generation and all those to follow — in our own nation and others around the world.”

Here, here.

I’m more and more appreciating the potential role that biogas production will play as our economy moves away from fossil fuels. I have a story today on Toronto Hydro’s efforts to build a 10-megawatt generation facility in the city’s east end that would burn biogas pumped in from a neighbouring wastewater treatment facility. In return, the byproduct thermal energy from the generation process will be sent back to the treatment facility, which relies on heat for a variety of applications. This kind of co-generation setup makes oodles of sense and can — and should — be replicated across other municipalities. The Ashbridge’s Bay treatment facility in Toronto’s east end is ideal because of its size. As the largest facility of its kind in the country, it treats the wastewater that’s flushed from 1.3 million residents.

The opportunities to tap energy from decaying biomass are seemingly endless. Cavendish Farms, a maker of potato products in Prince Edward Island, recently announced the commissioning of a facility that turns potato waste into biogas, which is then used in the boilers of the potato processing plant. The company points out that not only is biogas displacing the use of oil, but oil no longer needs to be trucked into the plant, nor are trucks required to haul away the potato waste to a landfill. The on-site anaerobic digester that produces the biogas also produces a byproduct that can be used as a natural, organic fertilizer on the fields that grow the potatos. A true win-win-win. The company expects to reduce its carbon footprint by 30 to 35 per cent.

Toronto Hydro, meanwhile, has a bunch of other biogas projects in the hopper, including one landfill gas project and two projects that will involve the capture of biogas from the city’s green-bin waste (i.e. household organics). The utility is also in early talks with the Toronto Zoo about a project that would covert the dung from elephants, giraffes and other animals into biogas. As for the Ashbridge’s Bay project, it’s expected to get the final rubber stamp from city council next month, with construction beginning in the fall and full operation planned for the end of 2010.

There are hundreds of these projects just waiting to be developed across the province, and thousands across the continents. They represent the true spirit of decentralized energy production. And, while we don’t talk about this as much, they help solve a growing waste management problem.

Got an interesting package in the mail yesterday from lighting giant Sylvania, which is introducing a new line of LED-lit products. One is a bottle stopper — you know, those plastic corks you use to store an opened a bottle of wine? But this isn’t just any bottle stopper. Moulded within are two watch batteries that power an LED light that changes colors. The idea is that when you have guests over, you can impress them by lighting up the bottle of wine at the centre of the table. They also have drink coasters and place mats that do the same, creating a light show on the dining room table.

This wouldn’t be possible without LED efficiency. But it also shouldn’t be possible. It’s pointless. It merely encourages more waste. The batteries in most cases can’t be replaced. The batteries run out after 60 hours of use, after which most people will be inclined to chuck the item in the garbage.

This is a prime example of new energy-efficient technology enabling more consumption, more waste. “While seemingly perverse, improvements in energy efficiency result in more of the good being consumed – not less,” said Jeff Rubin in 2007 when he was chief economist at CIBC World Markets. He cited the Khazzoom-Brookes postulate, which argues that “as improvements in energy efficiency lower the cost effective cost of energy relative to what otherwise would have prevailed, the resulting substitution and income effects that flow from any price change result in more of the good being consumed.”

The battery-powered LED bottle stopper and coasters may be small examples of the Khazzoom-Brookes postulate in action, but they all add up. It warns us that technology alone won’t save the day, and in some cases can set us back.

In the end, it’s the rough equivalent of making coal, but doing it in a few hours instead of a million or so years. It’s considered better — and likely cheaper — than the capture and sequestering of fossil-fuel CO2 emissions because it doesn’t just avoid the release of emissions; so-called charcoal sequestration can lead to the extraction of CO2 from the atmosphere. This makes it carbon negative. Turning some of the biomass into charcoal prevents new emissions, but the new generation of biomass that grows also absorbs CO2 from the atmosphere. Over time, the cycle of charring biomass and growing new biomass can act like a big global carbon vacuum.

The trick is doing it on a large enough scale to matter. EnCana researcher Subodh Gupta, a big believer in charcoal sequestration, recently argued at the Canadian International Petroleum Conference in Calgary that the best way to demonstrate that the approach works is to start with the organics and even some plastics collected from municipal solid waste. It solves many problems. For one, you can leverage an existing municipal MSW collection network, so no extra costs there. Second, pyrolysis systems can be economically set up at central MSW collection points. Third, a municipality can better manage its waste by reducing how much of it goes to landfill. The charcoal produced is essentially crushed and stored in existing landfills, where it will sit inert for centuries. (A good way for municipalities to earn carbon credits, too).

Gupta argues that if it works well with MSW, and at scale, then it can expand to other areas over time. He even did a comparison to using MSW for other purposes — such as electricity-from-waste and ethanol-from-waste — and concluded that sequestration of MSW-based charcoal is cheaper to implement and, with the benefit of carbon credits, more economical overall. That said, we’re already seeing huge competition for biomass resources driven by the quest for carbon-neutral fuels and power.

Gupta’s enthusiasm for charcoal sequestration is shared by more than just James Lovelock, who says that if he was a betting man he’d put all his money on biochar. The Weather Makers author Tim Flannery supports it, as does NASA scientist James Hansen. Sure, you’ve got skeptics like Heat author George Monbiot, who recently slammed the approach in a column for the U.K. Guardian. But nobody is calling charcoal sequestration a silver bullet, as Monbiot suggests. It’s one promising option in the climate mitigation toolbox. Nobody is suggesting that we use prime agricultural lands to grow crops that we would then turn into charcoal. By making that connection Monbiot is doing his readers a disservice.

Would Monbiot be against turning all the dead and decaying pine trees in B.C. — victims of pine beatle infestation — into charcoal? Municipal solid waste? Would he be against farmers choosing to turn their own crop residue into charcoal, which can be used as a soil enhancer for their own land?

It’s with great delight that I read about the handful of U.S. utilities that are seriously testing out various conservation, smart grid, storage and renewable technologies in an effort to extend greener offerings to customers. The latest is Duke Energy’s McAlpine Creek project, part of which involves the deployment of a 50 kilowatt solar PV array, consisting of 213 solar panels, at a substation that feeds the grid or, alternatively, can charge up a 500-kilowatt zinc-bromide battery system.

Duke hasn’t revealed any detail of the specific vendor technologies it is using, but I’m betting that the battery system for this particular pilot comes from Mass.-based Premium Power, which is largely operating in stealth mode at the moment. For one, the company’s TransFlow 2000 product fits the bill. It has 500 kilowatts of power and stores up to 500 kilowatts  2.8 megawatt-hours, is UL and CSA certified, and one of its main applications is for the time-shift of renewable generation energy. Boston Power, backed by VantagePoint Venture Partners, claims its storage product costs the same as pumped storage over the long term, or about 2 cents per kilowatt-hour. I also remind that last October, when Robert F. Kennedy Jr. spoke at an event in Toronto, he mentioned that Duke Energy had ordered $100 million worth of Premium Power’s batteries. An advisor and partner with VantagePoint, Kennedy also said a Canadian utility had ordered $100 million of the batteries as well.

Still haven’t nailed down who the Canadian utility is, but clearly Duke’s latest pilot project involves the TransFlow system. I spoke briefly with Bic Stevens, senior vice-president of business development at Premium Power and he remained cagey about the relationship with Duke. He would neither confirm nor deny that Duke was using the company’s product, though acknowledged it’s only a matter of time before details emerge. “As units get shipped out to big utilities they’re going to choose to advertise it or not advertise it, and eventually word will get out,” he said.

I would love to learn that it’s an Ontario utility (Ontario Power Generation, or Hydro One) testing out the Premium Power product, but I’m guessing — and this is purely a hunch — that Alberta’s EPCOR Utilities is the buyer. If there’s anyone reading this who has the scoop, please tell — I promise to keep a secret

I had a feature this weekend in the Toronto Star about the cap-and-trade system coming to Ontario and the likelihood an offsets market will be created a year or more before the 2012 launch of the program. The government here is working hard to align our own provincial system with the Western Climate Initiative, in which it is a member, as well as the Waxman-Markey bill under consideration in the United States (which will likely set the North American standard). The idea of allowing a carbon offsets market to emerge in advance of the cap-and-trade launch is a smart one, as it gives industry a way to prepare and it stimulates offset project development before the final cap-and-trade rules go into effect.

But here’s the problem: A good portion of offset projects are also electricity generation projects, such as wind, solar, biogas and hydroelectric. But in Ontario, if you want to sell your electricity to the power authority you sign a 20-year deal under a new feed-in tariff program. The tariffs are generous, but most developers are also hoping to keep the carbon credits they would qualify for so they can be sold as offsets.

Unfortunately for them, the Ontario Power Authority’s contract for power purchases stipulates that it — and by “it” I mean the Ontario government, which is ultimately the Ontario ratepayer — gets to keep all environmental attributes. This raises a number of issues:

First, by keeping the credits will this discourage green-energy development, which would be ironic given that the government’s new Green Energy and Economy Act was created — and highly touted, I should add — for the sole purpose of stimulating such development and the jobs that come with? It’s certainly possible, since it’s tough these days for developers — particularly smaller local developers — to raise capital for projects.

Second, what does the government plan to do with these credits? Will it sell them on carbon markets and throw the cash in the general treasury? Will it sell them and dedicate the revenues to a special clean energy fund aimed at stimulating further green power development? Or, will it simply retired the credits?

Personally, I think it has no choice but to retire the credits. The whole justification for having Ontario electricity consumers pay a premium for their power over the coming years is based on the idea that we must do our part to tackle climate change, and we must set an example for other jurisdictions to follow. But if the government, say, sells the credits to Ohio or Michigan so those states can go on burning coal, how is that fair to Ontario ratepayers — i.e. How can you explain to Ontario ratepayers that they’re paying a green premium so that other jurisdictions can go on polluting? Sure, the money from the sold credits would come back to ratepayers (maybe), but then what would be the sense in the end of pursuing green energy in the first place?

Finally, what carbon credits are the Ontario Power Authority justified in keeping? I can understand — and generally support — the reasoning behind keeping carbon credits related to indirect electricity displacement. That is, the amount of carbon that’s avoided when solar or wind power or any other renewable displaces fossil-fuel-based power generation. It’s here where Ontario ratepayers have the right to keep those credits and see them properly retired. But some renewable power developers, such as those collecting biogas from anaerobic digesters and landfills, have a strong argument for keeping at least a portion of the credits.

Here’s why: Biogas-based power generation both displaces fossil-fuel-based electricity and it destroys methane, a greenhouse gas that’s 21 times more potent than carbon dioxide. You can earn carbon credits from methane destruction, even if you just flare the biogas instead of burn it to produce electricity. Given this, why should the power authority have the right to those credits? The agency’s reach, one could argue, should be limited to the portion of a project that deals directly with electricity generation.

Biogas projects are important to Ontario. They can supply dispatchable renewable power that displaces fossil fuels. Anaerobic digesters can kill bad microbes from livestock manure that can contaminate water systems (remember Walkerton?). And they keep methane from slowly creeping into the atmosphere.

They should be encouraged, not discouraged. This means flexibility of policy, and a recognition that not all projects and technologies are created equal.

NOTE: If you want to keep up to date as the Ontario government develops its cap-and-trade program, visit www.carbonomics.ca (the URL is mine, which I forwarded to the government site because it had an insanely long URL. I’ll likely keep the link in tact for at least a few months)

NOTE II: I’m not a fan of cap-and-trade, because it’s complex to set up and it adds another thick layer of bureacracy to government. It also creates a new class of lawyers, accountants, etc… who take their cut of the action, and it’s so complex that there’s room for abuse — not unlike the abuses that set off the derivatives crisis that helped plunge the global economy into recession and almost led to a collapse of Wall Street. I’d much prefer to see a carbon tax, which is more efficient and transparent and less open to abuse. But cap-and-trade seems to be the way the world is going, so who am I to question it?