Addressing Climate Change through Innovation A … · Addressing Climate Change through Innovation A Canadian Perspective Milena Sejnoha Natural Resources Canada November 8, 2011

Addressing Climate Change through Innovation A Canadian Perspective

Milena Sejnoha Natural Resources Canada

November 8, 2011

Trabajo de Ingreso a la Academia de Ingeniería

Academia de Ingeniería Mexico City

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RD&D is key to addressing Canada’s climate change and economic sustainability

With a global shift towards a low carbon economy great opportunities exist to capitalize on the environmental and economic benefits

To address the necessary transformation, research, development and demonstration are key in generating the necessary inventions that support other policy measures that together lead to market transformation

Is the transformation of innovation into useful products as effective as it should be?

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Context

The shift to a low-carbon economy is underway – a driver of competitiveness and social change of enduring global significance Represents a $ 9 Billion/year market

Defined as a decoupling of GHGs from economic activity to create stronger, more sustainable growth

Investments Required to Cut Global GHG Emissions by 50% by 2050 (Total: $316 USD trillion)

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Canadian Context

Canada is one of the world’s biggest energy producers and has a diversified portfolio of energy resources… Oil - Resource base third only to Saudi Arabia’s

Natural gas - World’s 3rd largest producer and second largest exporter, huge reserves of methane hydrates, shale

Coal - Proven reserves sufficient to sustain about 100 years of current production

Uranium - 2nd largest producer in the world

Hydroelectricity - 3rd largest producer in the world

Renewable energy - Large potential for sources such as biomass, wind, solar and ocean energy

… but is also one of the most energy-intensive industrialized countries

Energy use largely reflects climate, long distances, energy-intensive

industrial structure and living standards

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RD&D Expenditures – International Ranking

Canada has a long history of investing in RD&D

Ranks 5th among OECD countries

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Historical investments in Energy RD&D

Canadian government investments have doubled in the

past 5 years!

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Innovation Performance

Despite a decade of innovation agendas and prosperity reports, Canada remains near the bottom of its peer group on innovation, ranking 14th among the 17 peer countries.

Canada’s low relative ranking means that, as a proportion of its overall economic activity, Canada does not rely on innovation as much as some of its peers.

Countries that are more innovative are passing Canada on measures such as income per capita, productivity, and the quality of social programs.

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Innovation Report Card

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An emerging sector in Canada

Canadian cleantech is dominated by Small and Medium Enterprises (SMEs), with over 1,200 companies

Over 460 cleantech with proprietary technology SMEs (SDTC Report)

More than 300 with commercialized products and services

$2 B industry with high growth potential

Generates more than 20,000 jobs

Strong source of private intellectual property ~ 74%

SMEs are significant R&D investors (in absolute terms equivalent to large cleantech companies)

Export driven at 9 times the average for Canadian SMEs, primarily to the US, EU and BRIC

…but facing some challenges

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Challenges

A major challenge for industry is to manage the risk associated with the development, application and commercialization of new technologies. • The high cost of research

• The long time-lines for development

• Synchronization of new technology introduction with capital stock turnover

• Uncertain market-uptake

• Commercialization capacity

• Early adapter reluctance (Cost and risk of the first adaptation)

This provides an opportunity for industry, government and academia to help de-risk new technology solutions by collaborating in strategic policy and RD&D areas

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Government plays a critical role in RD&D…

Leads in setting the national agenda

Accelerates deployment through codes and standards, fiscal measures and other incentives

De-risks new technologies by performing and funding research, development, and demonstration

“The role of the federal government is not only to provide

funding but also to act as a leader, coordinator and facilitator of

R&D with all stakeholders” IEA 2010

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Government role (Market forces are not enough)

Incentives to reduce risk of

development and

demonstration Regulations and policies to enable

adoption

Adapted from: McKinsey and Co. Global GHG Abatement Assessment, 2009

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Risks along the Innovation Chain -roles of stakeholders-

Government laboratories

Universities

Industry

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New Investments in Energy RD&D

These concepts were put into practice in designing Canada’s new $ 281 million RD&D program announced in 2011 ecoEnergy Innovation Initiative:

Technologies to achieve maximum GHG reductions and economic competitiveness

Building on Canadian strengths and competitive advantage

Supporting next generation technologies targeted to our energy profile and needs

• RD&D objectives based on consultations with Canadian leaders in energy

Acting where government intervention is critical

Fostering collaboration between industry, academia and government labs

• Introducing a new virtual collaboration tool

• Promoting through WebEx sessions and at 5 major Canadian cities

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R&D Priorities Energy Efficiency

Buildings and Communities

• heating, ventilation and air conditioning (HVAC)

• storage

• on site power system concepts and building electrical loads that can communicate both internally well as externally to utility systems.

• integration concepts to connect energy sources and energy requirements at the neighbourhood and community level.

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R&D Priorities

Clean Electricity and Renewables Smart Grid technologies, concepts and

tools,

R&D to accelerate commercialization of renewable energy technologies, including:

• technical issues on performance and reliability, including in cold climates

• reduce the life-cycle costs of renewable energy

• address the needs of rural and remote communities and cold climates

• support the improved integration of renewable onto the grid and into communities

• reduce the environmental impacts of renewable energy technologies

Canadian Wind Energy

Atlas

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R&D Priorities

Clean Coal and Carbon Capture and Storage

Improved overall efficiency of the existing and future fossil-based power plants, including innovative utilization of waste energy

Safe and cost-effective processes for the capture, transport, and long-term storage of CO2 applicable to large point sources in the fossil fuels sector.

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R&D Priorities

Bioenergy

Feedstocks

• Determine realistic biomass inventories, biomass removal rates, efficiency of harvesting, transportation, storage and pre-processing

• Develop improved and new biomass supplies

Advanced Biomass Conversion

• pyrolysis, gasification, fermentation, anaerobic digestion, and catalytic technologies.

• Increase conversion efficiencies, maximize value extracted from biomass, and minimize material and energy requirements

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R&D Priorities

Electrification of Transportation

Electric Vehicle Systems • improve the performance and efficiency,

and reduce the cost of electric vehicles.

Advanced Energy Storage Systems

• address the key technical challenges; cost, performance, cold weather effects, abuse tolerance, materials selection and availability, end of life issues, codes and standards.

Electric Drive Components • improve the performance and reduce

the cost of electric drive components, power electronics and electrical machines for electric vehicles.

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R&D Priorities

Unconventional Oil and Gas

(Oil Sands)

reduction of the environmental footprint of oil sands production

• reduce process water use, increase water recycling/re-use, improve ground-water resource management

reduce air emissions from tailings ponds, bitumen upgrading and large point sources understand, quantify and detect emissions, and investigate requirements for future fuel quality.

• improve tailings management by reducing tailings inventories, and reducing the volume of tailings produced.

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Demonstration Priorities

Renewable Energy and Clean Energy Systems Demonstration Projects

Integration of renewable and clean energy into the “Smart Grid” concept improving overall system operation and reliability.

New concepts by which renewable power and heat can be integrated into housing, buildings, and communities

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Results to Date

Call for proposals to academia, industry and government institution

Strategic selection criteria (above and

beyond the usual quality and originality criteria)

• GHG and other environmental impacts

• Receptor capacity (economic impact)

• Partnerships

• Funding leverage

874 proposals received in R&D 11 % in electrification of transport

13 % in Oils Sands

19 % buildings and communities

23 % in bioenergy

34 % in clean electricity and renewables (including CCS)

247 proposals received in

Demonstration 6 % Geothermal

8 % Marine Hydro

12 % Wind & Energy Storage

14 % Smart Grid

20 % solar/buildings/storage

40 % Biomass

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Conclusions

Innovation plays a critical role in addressing environmental and economic sustainability

In order to more effectively transfer the innovation into the market place and therefore the users, action must occur on several levels:

• Understanding technology value chains and existing gaps • In strategic areas, accelerating development, demonstration

and adoption of technology for the shorter term • Supporting R&D to achieve essential breakthroughs for the

long term • Working in collaboration with academia, governments and

the private sector • Understanding the role of each stakeholder

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Thank you – Gracias

Milena Sejnoha

Director, Energy Science & Technology Programs

Natural Resources Canada

[email protected]