Guest Post: Koenig & Consultants Inc. Busting Renewable Energy Myths

Koenig & Consultants is a boutique management consulting company based in Toronto and Hamburg with special expertise in the area of Renewable Energy. Their work includes traditional consulting around strategy, marketing and communication for renewable energy companies. Each month they provide a "Chart of the Month" for interested clients, colleagues and friends. This is their May 2011 version. You can reach them at info@koenigconsultants.ca.

CHART OF THE MONTH - May 2011
Nuclear vs. Renewable Energy – Two Myths and the Reality

After the disaster at the Fukushima I plant in Japan a heated discussion over nuclear power and renewable energy has resumed. Before the accident, nuclear power was almost “green” due to being a non-GHG emitting form of energy – and it probably still is at least in comparison to fossil fuels. Nevertheless, the two most significant pro-nuclear power arguments in comparison to renewable energy have usually been that:

1. it is more reliable; and
2. it is cheaper,

With this Double Chart of the Month we would like to bust these two myths.

Source:  Paul Gipe at http://www.wind-works.org/

Chart #1 (reprinted with permission from Paul Gipe (wind-works.org)) compares Fukushima I with the wind energy production of Germany, Spain and Denmark over the last twenty years. Clearly, wind turns out to be more reliable than the nuclear. When taking a closer look at the individual reactor blocks at Fukushima I (there are six), it gets even worse. If one wind turbine needs to be shut down for maintenance … who cares? If a nuclear power plant goes out, an entire region can be in trouble.

Chart #2 addresses the price myth. Comparing the different energy forms on a fully costed basis including all costs (generation costs, government subsidies, and also external costs) as a recent study has done, reveals that nuclear power is almost twice as expensive as hydro or wind power. Solar power is still more expensive but that is rapidly changing.

The situation in Chart #2 is somewhat special to Germany with its high subsidies for nuclear and high productivity of wind. However it is clear that a similar picture will develop in other economies in the near future: There is only one direction for the development costs of traditional forms of energy encompassing longer approvals, higher fuel prices, more safety requirements and leveling off of productivity – up, up, up. For renewable energy, the opposite is true. There are huge gains to be found in the efficiency and productivity of production, approvals and free, unlimited fuel. These costs also have only one direction – down, down, down.

A small example from Ontario should illustrate this: 18 months ago, when the Green Energy and Green Economy Act was introduced, a 1kW solar PV installation on a residential house was quoted for ~$12,000. Now, anybody paying more than $ 6,500 is certainly overpaying.

Thanks Ingo, Christine and the KCI Energy Team!
~ Rob 

Strong, Silent Commitment to BC's Green Economy

BC Premier Christy Clark

A little noticed affirmation of the Government of British Columbia's commitment to its revenue-neutral carbon tax and participation in the Western Climate Initiative has recently popped up in the blogosphere. Both James Glave and Professor George Hoberg have posted copies of an open letter from Premier Christy Clark to British Columbians in which she provides significant policy signals to investors and business that the province is serious about a clean-energy economy. This continues the climate leadership initiated under former Premier Gordon Campbell.

 Having been rejected once at the federal level (Stephane Dion's Green Shift), it will be interesting to watch the development in British Columbia and see if a carbon tax re-emerges as a viable federal option. Even otherwise stalwart climate change skeptics have endorsed a carbon tax as the most honest way of pricing greenhouse gas emissions.

Guest Post: Daniel Bida and Ontario's Biogas Market

Daniel Bida is the founder of ReGenerate Biogas, a company created in in early 2009 to foster the development of community-owned anaerobic digestion for agriculture around Ontario. Daniel has kindly shared his thoughts on the progress of the Ontario biogas market with this post.

I’m currently reading Roger Martin’s The Design of Business – a business book examining the way organizations make use of and organize knowledge to drive growth and longevity.

Moving Down the Funnel

Knowledge, it says, moves through three phases as it goes down the funnel, from the general to the specific: Mystery –> Heuristic –> Algorithm. This got me thinking about what stage the Ontario biogas industry is in, and what stage I myself am in developing community-owned biogas plants.

Biogas Plant, Pucking, Upper Austria

At the mystery phase (which Ontario was in around 2005), there are lots of facts available, but making sense of the right ones to create value is more of a challenge.  Biogas companies at this time were mostly traveling to Europe to learn from companies and communities there, and trying to figure out the best sources and combinations of feedstock in the Ontario market. They were able to come away with some inspiring examples of success such as the pilot project in Pucking, Upper Austria, which supplies the existing natural gas grid with biogas upgraded to natural gas quality. Unfortunately, the myriad of government support programs offered in Europe for these innovations did not exist in Ontario at the time. Greatly adding to local mystery was (and is) the ever-changing regulatory market, which has caused many of us to re-examine our original assumptions and attack the market in a different way.

At the heuristic phase (which Ontario has been in since about 2007), some rules of thumb have been developed – helping the industry narrow down which farms are most suitable, which feedstocks and recipes are ideal, which digester technologies work best, what size plants are most suitable, how to handle complex feedstocks (curbside organics), how to work with local stakeholders, how to speed up permitting and approvals, and how to turn a profit (sometimes). We are relying on these early rules of thumb in an effort to increase efficiency, thereby growing our businesses and the industry.

At the algorithm phase, a highly scalable formula is established and replicated hundreds or thousands of times over, greatly increasing efficiency and the total number of biogas plants from the current number (less than 50) to its full potential (between 500 and 1,500). No firms have yet entered this phase I believe, but we are very close.  Knowledge and understanding of the technology is up. Investors and lenders are taking notice. Numerous projects are up and running, some successfully, some not – providing valuable lessons to developers. (can we highlight the Niagara project?)

Stopping the Flow

The major obstacle at this point is largely political.  We are faced with continued long-term uncertainty – even short-term certainty isn’t a given at this point. The best thing the provincial government can do in the Fall of 2011l (whoever they happen to be after the election), is to establish strong protocols and practices that can stand the test of time – and then sit back and watch as the Ontario biogas industry diverts organics from landfills, reduces greenhouse gas emissions, produces better than commercial grade fertilizer, generates  readily dispatchable renewable power, and provides direct financial support to farmers.

Resources

In addition to the services of ReGenerate, parties interested in learning more about biogas opportunities in Ontario can check with these organizations:

• Ontario Ministry of Agriculture, Food and Rural Affairs;
• Ontario Power Authority Feed-In Tariff Program;
• Canada-Ontario Farm Stewardship Program; 
• Agrienergy Producers' Association of Ontario; and
• ManureNet

Thanks, Daniel!
~ Rob