Friday, April 22, 2011

California Raises the Renewable Energy Stakes

While the political opposition in Ontario continues to question the value of the province's Feed-in Tariff Program, the state of California has bet the windfarm on renewable energy. Last week, Governor Jerry Brown upped the ante by signing legislation which would require California utilities to get one-third of their power from renewable sources. This creates the most aggressive alternative-energy mandate in the United States.

Senate Bill 2 (SBX1 2) will extend the current 20% renewables portfolio standard target for 2010 to a 33% renewables portfolio standard by December 31, 2020. The former version had targeted investor-owned utilities such as Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric. The new law will also apply to municipal utilities such as the Los Angeles Department of Water and Power and the Sacramento Municipal Utility District, which manage about a quarter of the state’s electricity load.

The new mandate will also require utilities to draw some of their power from small local projects based near customers (i.e. distributed generation). This would include generation from rooftop solar PV or small wind. The full text of the bill can be viewed here.

Industry cited the long-term stability provided by the law as integral to moving away from the boom-bust cycles of renewable energy markets often dependent upon short-term government incentive programs. Russ Kanjorski, a vice president at Abound Solar, was quoted in the Los Angeles Times as stating, "The RPS requirements allow utilities to plan to meet higher renewable energy standards and orient the market towards meeting those goals."

Ontario's Green Energy and Green Economy Act and FIT Program were attempts to put in place a stable investment climate for business, which would create viable conditions for the development of a domestic renewable energy market. Of course there are valid concerns about aspects of an initiative as comprehensive as the GEGEA. That's why the government included a regular review period of the FIT Program. As a provincial election approaches in the Fall of 2011, Ontarians will have their say on whether to double down on the current strategy or fold and hope the Californias of the world are left holding a bad beat.

Sunny Days

Monday, April 18, 2011

Follow the Money: The Carbon Disclosure Project (by Neil Fairhead)

Following the positive reception of this last post, "Turn Signals," guest blogger Neil Fairhead returns with a look at the Carbon Disclosure Project and what we should take away from its role in the climate debate.  

Two weeks ago, the Carbon Disclosure Project (CDP) held its first workshop in Canada. Who? What? Why should I care?

The CDP is a small NGO based in England that provides questionnaires on carbon consumption and emissions (employing an accounting framework created by the Greenhouse Gas Protocol Initiative and adopted by nearly every GHG standard and program in the world) to the largest corporations in the world.  Moreover, it openly states that the CDP will publish the results, not anonymously but by name. The surprising thing is that these large companies are actually responding! A majority of the Dow Jones index and the S&P 500 have taken the survey! The CDP's 2010 survey achieved an 82% completion rate by the Global 500! How on Earth?

The answer is money. The CDP's request for information is supported by institutional investors representing very substantial funds. Back in 2006 the CDP had 225 investors involved. This year they have 551 institutional investors representing over US$71,000,000,000,000 of assets under management and yes that is the right number of zeroes - $71 trillion. To put it in a Canadian perspective, that is thirty times the total market capitalization of all the 1516 companies listed on the Toronto Stock Exchange at the end of March, and is rivals the figures for global economic output. So why do these investors support this NGO?

Because people with a lot have a lot to lose. They focus significant attention on risk identification, reduction and management. Now I do not claim to read minds but let's try to read between the lines. I suggest these institutional investors back the CDP because they are concerned that there is a significant probability that climate change is real and that we will have to reduce carbon emissions with a resulting reduction in the value of carbon emitting corporations. Their actions suggest further that they believe that the combination of probability and impact (how much they will lose if carbon reduction become necessary) is big enough that they want their investments to measure and to state publicly how much carbon they are emitting.

     "The Carbon Disclosure Leadership Index is a very important metric: the more transparent the company, the less risk to discover additional CO2 emissions (and costs) moving forward" stated Thierry Bros, Senior Gas Equity Analyst, Société Générale

Because institutional investors also have a lot to gain, they are increasingly recognizing that good performance in the environmental, social and governance space is a predictor of good financial performance as well. As noted by Seb Beloe, Head of SRI Research, Henderson Global Investors, "By enabling direct comparisons between companies, improvements in the quality of company strategies and performance in this area will undoubtedly accelerate."

Of course the link to financial performance should not come as a surprise. Carbon dioxide is a waste product. Every bit of it that is emitted is associated with consuming fossil fuel - and fossil fuel (unlike sun, wind, waves or falling water) has to be paid for. Minimizing fuel consumption per unit of production is not only good for the environment, it is also good for the bottom line. It is a proxy for efficient operations processes.

If you read my last entry, you will know that I am interested in getting below the surface and identifying actions that signify a real shift in attitude and behaviour. Over the last year we have witnessed continued doubt being cast on the reality of climate change, or to be precise anthropogenic global warming. To be fair some comments demonstrate the duty of doubt that every scientist owes - but many more are driven by other agendas. When I hear or read about them, I reflect again on these institutional investors, of their knowledge, their resources and of what they have to lose and gain. Guess to whom I give more weight?  That's right, the actions of those with $71 trillion to protect and grow.

(Ed.: Recognizing the importance of emissions information to Canadian investors, the Ontario Securities Commission released CSA Staff Notice 51-333, which provides significant guidance to reporting issuers on the type of environmental, including climate, information they are required to disclose. This Notice was developed with helpful input from the Climate Change Lawyers Network, which provided the OSC with a significant submission on carbon disclosure rates among Canadian issuers.  Read more about the submission here.)

In a post-Kyoto world, institutional investors may be the most effective route to achieving the changes we need to sustain and pass on a good world. The remarkable achievement of the CDP is to provide a focal point for their attention and, I hope, resulting action. 

Other Resources:

Other carbon initiatives relevant to Canadians and Canadian investors, apart from government mandated reporting, e.g. Environment Canada's Facility Greenhouse Gas Reporting requirement or Alberta's Greenhouse Gas Reporting Program, include:
  1. The Climate Registry:  A nonprofit collaboration among North American states, provinces, territories and Native Sovereign Nations that sets consistent and transparent standards to calculate, verify and publicly report greenhouse gas emissions into a single registry. The Climate Registry Information System (CRIS) is the Registry’s online GHG calculation, reporting, and verification tool. CRIS also provides public access to the Registry’s verified emission reports.
  2. The Regional Greenhouse Gas Initiative: The first market-based regulatory program in the United States to reduce GHG emissions. Ten Northeastern and Mid-Atlantic states (CT, DE, MA, MD, ME, NH, NJ, NY, RI, VT) have capped and will reduce CO2 emissions from the power sector by 10% by 2018. The ten states participating in RGGI have established a regional cap on CO2 emissions and are requiring power plants to possess a tradable CO2 allowance for each ton of CO2 they emit. 
  3. Three major investor coalitions focused on climate change risks, the European Institutional Investors Group on Climate Change (IIGCC), the North American Investor Network on Climate Risk (INCR) and Australia/New Zealand Investor Group on Climate Change (IGCC), are launching an international survey of investment practices relating to climate change early in 2011.
  4. C40: Originally the Large Cities Climate Leadership Group and now a group of 40 very large cities, who recognise that “home to half the world’s population and growing rapidly, cities consume over two-thirds of the world’s energy and account for more than 70 percent of global CO2 emissions.” Toronto is a member of C40 and formerly held the position of Chair under former Mayor David Miller.
~ Neil Fairhead

Tuesday, April 5, 2011

Partners in Project Green Discusses Economics of Rooftop Solar

As mentioned in an earlier post, Wakulat|Law worked with Zizzo Allan Climate Law to co-author a report entitled Barriers to the Adoption of Rooftop Solar for Partners in Project Green which is a project being operated in the Pearson Eco-Business Zone.

PPG comprises approximately 12,000 hectares in the Greater Toronto Are, including Toronto Pearson International Airport as well as portions of the Region of Peel, City of Toronto, City of Mississauga and City of Brampton. More than 12,500 primarily small and medium-sized businesses employing over 350,000 people call the Zone home. PPG's main objective is to improve these business' financial and environmental performance through more efficient resource use.

The scale of potential savings in the Zone is significant. An assessment of the current energy-use in the Pearson Eco-Business Zone was completed. A 2007 annual assessment reviewed all non-process energy requirements, which were estimated at 5,801,000 MWh of total electricity consumption and 46,447,000 GJ in natural gas consumption in 2007.

Since the solar barrier report's publication in May 2010, PPG has aggressively worked with its stakeholders to advance the Zone's understanding of Ontario's green energy regulatory framework and the opportunities and risks of implementing rooftop solar photovoltaic projects.

This past March PPG brought together a number of local businesses to further delve into these issues. The sessions included an overview of the Ontario Feed-in Tariff program and approval process for renewable energy projects, along with identifying technical considerations that could impact the economics of rooftop solar projects. A few project proponents also shared their experiences with installing rooftop and ground-mounted solar installations at their facilities.

The following presentations are now available for viewing on the Partners in Project Green website:
~ Rob

Sunday, April 3, 2011

Energizing Ontario's 2011 Election

Update:  A mid-March poll I found over at the informative blog shows the provincial Progressive Conservatives polling ahead of the Liberals 44%-35%.

While the twitterverse, blogosphere and stratosphere are riveted by the "will they, won't they" back-and-forth between the leaders of the country's two largest federal parties on the question of whether these guys will meet in a head-to-head debate during the current election, another political tit-for-tat is taking place in Ontario. It has been ongoing since last Fall, but now Premier Dalton McGuinty's provincial Liberal Party can be seen to be more aggressively firing back at Progressive Conservative Leader Tim Hudak's laundry list of critiques. And Ontarians have about six more months of this sniping before the provincial election on October 6. Given that pollsters are suggesting the parties are running neck-and-neck, it's fair to assume that rhetoric will ramp up in the coming months. As in war, there is a good chance that truth will be the first victim.

The Energy Issue
The Progressive Conservatives are spending a considerable amount of time addressing the issue of energy. In particular, they are focusing their discontent on the government's conservation programs and flagship Green Energy Act and Green Economy Act. Dubbed "precedent setting" by noted industry analysts such as Paul Gipe, the provincial Tories are less enamoured with the changes blown in by the Act. Their main complaints include:
  1. Rates: According to the Tories, the recent rise in electricity rates can be partly attributed to the implementation of the GEGEA and its Feed-in Tariff programs. The government acknowledged there had been an increase (and likely a future trajectory of increases) and responded with a 10% reduction on electricity bills. However, there is a debate as to the significance of the GEGEA on that increase.
  2. Smart Meters: The Tories have also cited the implementation of the time-of-use smart meter program as a threat to electricity bills since day-time rates will significantly increase. Their response has been to propose giving a choice to end-users between a flat-rate or adopting the time-of-use pricing. Providing this option would likely make it more difficult to meet the program's objectives of smoothing peak demand, more easily conserving and educating Ontarians about true energy costs.
  3. Lack of Local Planning: A major criticism of the GEGEA, which even led to a since dismissed lawsuit, has been the reduced role of local communities in the planning process of renewable energy projects. Opposition to wind farms has been the most virulent and focuses on the question of health issues. In response, the government imposed a moratorium on offshore wind power development. However, opposition groups want municipalities to be given back approval powers and have a further examination of the possible health effects of wind turbines. The Conservatives are just as likely to scrap aspects of the FIT program as much as they are to reform it to the liking of these groups.
Facts, Schmacts
To paraphrase a former General Manager of the Toronto Maple Leafs, "Facts, schmacts!" Just as Cliff Fletcher theorized a hockey team could be built by means other than solid drafting, politicians seem to believe they can win elections without necessarily relying on facts.

First, it should be noted that Ontario's Chief Medical Officer of Health, Dr. Arlene King, has reported that the scientific evidence does not demonstrate any direct causal link between wind turbine noise and adverse health effects.

Second, in an effort to provide some actual data related to the cost of the GEGEA to Ontario's energy system, the office of the Environmental Commissioner of Ontario has run the numbers. Commissioner Gord Miller took these facts to the people of Ontario recently on an episode of TV Ontario's The Agenda:

Hopefully, Ontarians will continue to have access to real analysis supported by real data about ALL issues in the upcoming election. It is a credit to true public servants such as Dr. King and Commissioner Miller that we at least have some anchors in understanding the energy issue while all that hot air is blowing.

Absence, Explained

Hi Friendly Folks,

As with any amateur blogger worthy of that moniker, I have let ye olde blog slip over the past couple months. The first half of that absence can be easily explained, while the second half is probably best chalked up to simple inertia.

Wildebeest Camp - Solar Umbrella
What is this "absence" I speak of? Well, it starts off with someone very near and dear to me venturing off to Arusha, Tanzania to assist with the prosecution of alleged genocidaires at the United Nation's International Criminal Tribunal for Rwanda during a five-week internship. As I am easily persuaded to venture to far off places, I enthusiastically jumped at the opportunity to spend a few weeks in East Africa at the tail end of this internship.

The journey had an auspicious start as I found myself staying at the serene and friendly Wildebeest Camp in Nairobi. The camp's use of miniature solar panels to power both their indoor and outdoor lighting fit nicely with the camp's overall approach to reduce, recycle, and reuse their local resources.

Wildebeest Camp - Indoor Solar Lighting
Following a restful start to the trip, I took the overland 6-hour bus ride to Arusha, enjoyed my first African border crossing and arrived just as the nighttime ban on bus transport descended on Tanzania. Over the next few days, I took in a couple of trials at the ICTR, including one of a prominent member of the National Republican Movement for Democracy and Development which was the ruling political party of Rwanda from 1975 to 1994. Sobering stuff but heartening to see the international community working towards justice for the victims.

The fruits of deep-sea fishing adventure: calamari!
After a botched attempt at a Rwandan trip, due to the recently implemented visa requirements for Canadians in late 2010, it was decided that attacking the Indian Ocean coast with vim and vigour would be the new itinerary. Snorkeling, medium-sea fishing and general beach merriment was enjoyed thanks to the hospitality of the Peponi Beach Resort (for sale, fyi) and their neighbours. Having enjoyed the ocean so much, it was only natural that instead of heading for Dar and its modern docks and ferries, an attempt would be made to take a 15-foot wooden boat from Pangani to northern Zanzibar.  Gilligan had nothing on this 4-hour-ish tour. How our crew of two navigated sans GPS, compass, sextent or shorelines is beyond me. 

Cafe in Stone Town
Somehow despite getting down to the emergency 15 hp emergency outboard for the last 40 minutes of the voyage, we arrived with our wobbly sea legs on Nungwi's beaches. The extensive resort development was in stark contrast to the minimally-intrusive development on the mainland. Happily, great care is taken by the scuba outfits at Mnemba Atoll to minimize human impacts. The highlight of Zanzibar was a spiced cuppa in Stone Town. The first cafe in Toronto to put Zanzibar-spiced on their menu will have a customer for life!

Finally, it was time for the main invent: a seven-day Kilimanjaro trek! An incredible team of 17 (guides, cooks and porters) accompanied four wide-eyed muzungu up Machame Route. We enjoyed an incredible stretch of gorgeous weather spoiled by about 15 minutes of rain/hail on Day 3. Otherwise the main challenges were acclimatizing to the altitude and protecting the knees of some steep descents. The former won the battle on summit night (departure from base camp at midnight) somewhere above 5400 m. At 3:00 a.m. with no end in sight to a pounding headache, I pulled the chute and made for base camp. Fifty percent of our party made Kibo peak but had to turn around as quick as they came.  The wind, cold and constant sand in the nostrils did little to make that part of the trek enjoyable. Nevertheless, I wouldn't trade the experience for anything.

Kilimanjaro, Kibo Peak
Having slowly readjusted to home life and catching up with local energy news, you can expect me to start blogging with a little more spring in my step. Thanks for your patience and indulgence, everyone! I look forward to reconnecting soon.


Kili Breakfast
Peponi Beach Resort