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Alberta Clean-Tech Industry Conference, Red-Deer
Tom Rand, P.Eng. Ph.D.Cleantech Practice Lead, MaRS Discovery District
Saturday, Sept 18, 2010
Kicking our Habit …
It’s possible!
Will be very difficult – scale, speed, capital.
It’s necessary & urgent.
www.kickthefossilfuelhabit.com
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It’s possible.
Why Necessary & Urgent?
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If emissions stay steady, we’ll blow our carbon budget for (a 75% chance of) exceeding 2
degrees of warming by 2021.
Peak Oil?Climate Change – Limiting Warming to 2 degreesPeak Oil – Straw-man over long term
Back in 1989 …
“ climate change … could alter the way we live in the most fundamental way … It is life itself
that we battle to preserve.“
Margaret Thatcher, to the UN General Assembly.
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Smart Policy
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Nations will be net sellers or buyers of CleantechRisk = probability * consequences Long-term, high-carbon growth is self-defeating
Scale of Opportunity
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“Trillion Dollar Question”: What do you get for a trillion dollars?
Pace of Growth
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1. Linear, Free-Market Driven 2. Non-Linear, Policy/Event-Driven
1. Commodity-based , open-ended supply chains.
2. Scalable, simple manufacturing processes.
3. Low technical risk; financeable.
4. Leverages existing infrastructure.
Successful companies:
Efficiency: GDP / energy
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EnergyPer $
Efficiency( $ Per Energy )
Increasing Wealth
Japan, Germany
Canada
*
*
China
India
Developed
Developing
Efficiency: GDP / carbon
*US
Efficiency: GDP / carbon
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Planet Traveler – North America’sLowest-Carbon Hotel
75% reduction in C02, With positive cash flow.
Bio-fuels or Electrons ?
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Enough salt-water irrigation and processing capacity to:
Replace half of the world’s oil supply.
“There’s just not enough fresh water and arable land to produce enough biofuels to replace the petroleum”
Dennis Bushnell, chief scientist, NASA Langley Research
Clean Sources: Solar
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Clean Sources: Wind
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Clean Sources: Geothermal
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Clean Sources: Hydro
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Clean Sources: Ocean
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Energy Internet: Networks
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Continental: Grid-balancing – Reliability.
Regional: Distributed - Generate/store power anywhere.Local: Demand Response – Smooth demand.
Storage: Distributed and grid-scale.
Energy Internet: Storage
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Time
PowerPower
Release thisEnergy
Store thisenergy
Hurdles to Required Scale
1. Existing (relatively cheap) Infrastructure
1. Existing Preconceptions
1. Deployment of Capital; slow, risk-averse
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Cleantech: Creating Markets
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Science InventedPolicy
Policy Options: Canada
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1. Price carbon: price stable, no target
2. Cap and Trade/Dividend: target specific, price uncertainty
3. FIT – technology specific – tech neutral?
5. Regulation
4. Green Bonds
- Generate low-cost capital
- Motivate pension funds, insurance assets
Green Bonds: Shifting Financial Resources
Pension Funds
General Public Long-term CleantechInfrastructure
Government backing
Savings accounts, money marketsGov. Bonds, Other long-term investments
High RiskHigh Rates
www.kickthefossilfuelhabit.com
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Alberta Clean-Tech Industry Conference, Red-Deer
Tom Rand, P.Eng. Ph.D.Cleantech Practice Lead, MaRS Discovery District
Saturday, Sept 18, 2010
Green Bonds – Low Cost Debt
Venture Capital
Early-StageTechnology Manufacturing
B-Rounds, etc.
Innovation/Manufacturing Cycle
Project Finance / Demand
Low Cost $ $ $ $ $
www.kickthefossilfuelhabit.com
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Green Bonds – The Details
Government-backed Bond - Privately-run fund
Issue just above regular US bond rate
Attract pension fund money (> $ 100 Trillion)
Project finance at issue rate + 1% (cover fees)
Only cost to government is defaulted loans
Mitigate with liens, strong diligence - and
Highly-motivated private sector fund manager
Single success metric: $ / tonne CO2
Cost: ~ $1 / tonne CO2 (@ 10% default rate)
Technology neutral – gov does not pick winners!
See www.greenbonds.ca for full detailswww.kickthefossilfuelhabit.com
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