Alberta Clean-Tech Industry Conference, Red-Deer Tom Rand, P.Eng. Ph.D. Cleantech Practice Lead, MaRS Discovery District Saturday, Sept 18, 2010.

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?

www.kickthefossilfuelhabit.com

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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

www.kickthefossilfuelhabit.com

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Planet Traveler – North America’sLowest-Carbon Hotel

75% reduction in C02, With positive cash flow.

Bio-fuels or Electrons ?

www.kickthefossilfuelhabit.com

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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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