Ontario Investment And International Trade Ryan Little, Storm Fisher Presentation


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Ontario Investment And International Trade Ryan Little, Storm Fisher Presentation

  1. 1. Putting Ontario Out Front: What the Green Energy Act and the State of the Economy Mean to Renewable Energy Development Ontario Investment and Trade Centre Collaboration Speaker Series 2009
  2. 2. Agenda Who We Are and Where We Came From Building Biogas in Ontario Trends in Renewable Energy Ontario: Opportunity & Challenges How Ontario Investment and Trade Can Help
  3. 3. Who We Are • A Toronto-based renewable energy company specialized in biogas • Utilizes agricultural and food processing by-products in order to create baseload renewable energy and organic fertilizer • Developing a pipeline of projects, which will be owned and operated by the company • Targeted to have five industrial biogas installations closed and under construction by end of 2009 • High calibre team with over 20 years of biogas commissioning and operating experience • Working with Krieg & Fischer, the world’s top biogas engineering firm with over with 120 plants in operation • Developed strategic relationships with government agencies and academic organizations within Canada and several US States • Backed by a Boston-based private equity firm with over US$4 billion of invested and committed capital
  4. 4. The Early Days of StormFisher • Started by three entrepreneurs from the Ivey MBA in 2006 • Began market research phase in summer 2006: RESOP was in draft and we saw this as an opportunity for entrepreneurs to get in • Landed on biogas as best opportunity through a research report we developed for Ivey & Ontario Centres of Excellence The Silver Bucket • Bootstrapped through to early 2008 • In February 2008, closed a $350 million funding partnership with a Boston-based private equity company Bas van Berkel Chris Guillon Ryan Little President VP Finance VP Business Development • Finance, Engineering • Finance, Biology • New Venture Creation • Stubborn • Cheap •“Big Picture” (i.e. can’t add)
  5. 5. StormFisher Today Key Facts • Projects in Active Development: 5 • Projects in Development Pipeline: 36 • Total Megawatts in Development Pipeline: 120 MW Renewable Electricity Fertilizer Green Natural Gas Carbon Credits Organic Diversion • Pipeline of over • Utilize Ag by- • Produce biogenic • Offset 15,000 • Divert over 120 MW of products to natural gas, tonnes of carbon 50,000 tonnes clean, renewable produce high- reducing reliance dioxide per year per year of electricity grade organic on fossil fuels at each facility organics from fertilizer landfills at each facility
  6. 6. StormFisher’s Biogas Process
  7. 7. Benefits of Biogas Production
  8. 8. Environmental Stewardship • Substantially reduce transportation distances as biogas installations are strategically located in food processing clusters • Support the production of clean, renewable energy and, in so doing, improve air and water quality • Recycle valuable nutrients which will be returned to agricultural producers • Decrease emissions of methane gas, one of the most potent Biogas is the highest-yielding form of energy production there is in greenhouse gases, through the terms of carbon offsetting. This figure shows the full carbon reduction of land filling and land lifecycle of biogas from digestion of by-products —the only form of energy production that is actually net carbon reducing application of organic by-products
  9. 9. Energy and Nutrient Cycle Organic By-Product Diversion Divert high nutrient organic by-products from landfills and provide an end-to-end solution for manure management Organic Fertilizer Anaerobic Digestion Distribution Use anaerobic digestion to capture Return nutrients to land from distribution biogas (~60% methane) as high-grade organic fertilizer Nutrient Pelletizing Methane Capture Reduce greenhouse gas emissions from Create organic fertilizer from nutrient capturing methane from animal manure rich digestate and degrading of organic by-products Clean Electricity and Renewable Energy Credits Natural Gas Reduce greenhouse gases by reducing reliance on fossil-fuelled energy Combust the biogas to create clean production electricity or upgrade to pipeline grade natural gas Energy Distribution Distribute electricity and/or natural gas into the local supply grid
  10. 10. Agenda Who We Are and Where We Came From Building Biogas in Ontario Trends in Renewable Energy Ontario: Opportunity & Challenges How Ontario Investment and Trade Can Help
  11. 11. Europe’s Success • Over 4,000 facilities in operation, predicted to exceed 20,000 by 2015 • 400 companies involved in biogas development in Germany alone • Biogas will account for 17% of Germany’s electricity mix by 2020 • Well developed renewable energy purchase programs throughout Europe • The model for Ontario’s Renewable Energy Standard Offer Program (RESOP) and proposed Feed In Tariff (FIT) “Three years ago in Germany companies like StormFisher were less developed than you already are, and today they are on the stock exchange and have 300 employees.” -Gerhard Klammer, GE Energy
  12. 12. Biogas in Denmark • Denmark is where biogas in Europe began • Snertinge, Denmark • Fewer, larger plants than Germany and • Heats three nearby villages Austria; less focus on energy crops • Pig and cattle farm sludge, food and • Started as a way to handle large amounts medicinal industry waste, municipal of pig manure sewage waste • We build larger, centralized plants along • Built in 1996 the Danish model Map: Jens-Bo Holm-Nielsen, University of South Denmark
  13. 13. Model Plant • Our plants follow a design philosophy based on the Werlte plant in Germany, a similarly-sized plant to the ones StormFisher is designing for North America StormFisher’s plants are closely modelled on this facility in Germany. Our plants will process the same feedstock and output, and the same quantity of energy. StormFisher has also retained the same biogas development firm to build its North American plants. • Location: Werlte, Germany • Developer: Krieg & Fischer Ingenieure GmbH • Construction: 2002-2003 • Energy Output: 2.6 MW electricity
  14. 14. Our Plants in Development: London Cogeneration Facility Output 2.85 MW electrical Feedstock 140,000 tonnes manure and food processing by-products Technology Proven anaerobic digestion; GE Jenbacher for reciprocating engines Commercial Operation 2010
  15. 15. Our Plants in Development: Listowel Natural Gas Facility Output 205,000 mmBTU – natural gas Feedstock 140,000 tonnes manure and food processing by-products Membrane filtration, solid/liquid separation, gas upgrading, pelleting, AD Technology facility Commercial Operation 2010
  16. 16. Agenda Who We Are and Where We Came From Building Biogas in Ontario Trends in Renewable Energy Ontario: The Opportunity Ontario: The Challenges
  17. 17. Public Appeal of “Green” Increasing: Energy, Food, Waste Consumers are becoming increasingly concerned about the carbon footprint of the food they buy, as evidenced by this article in the Financial Times about Schweppes’ efforts in the UK StormFisher’s partnership with Inniskillin Wines was covered by over 180 news agencies in 15 countries and 12 languages. Sales of Inniskillin products spiked following the announcement and emails of support poured in.
  18. 18. Renewable Energy Investment: Global • Insights about renewable energy investment are becoming clichés about renewable energy investment: – It will be one of, if not the most, important new industries of the century – Energy and the environment are two of the world’s most important challenges and are directly related – Canada can be a big player in renewable energy Source: Renewable Energy Policy Network for the 21st Century
  19. 19. Legislators Are Rallying Behind Renewables • Green Energy Act (Ontario) and Stimulus Bill (US) are indicators of new priorities and opportunities for business • Will the effects trickle down to business in time to make a difference in a failing economy? • Trends in capital-intensive businesses today “This field of greentech could be the largest economic opportunity of the 21st century. There’s never been a better time than now to start or accelerate a greentech venture.” - John Doerr, Venture Capitalist, KPCB
  20. 20. We Are Not Alone in Our Desire Build a Green Economy • We are in a competitive landscape – many parts of North America are moving in the same direction • How do we stack up against our neighbours? • How do we translate lofty goals into streamlined regulation? • What are our advantages and disadvantages relative to other jurisdictions? – Workforce profile – Incentives at the provincial/state and federal level – The rules of the game are different particularly relative to individual states – Strategic location vis-à-vis markets – where to manufacture? US - Federal Michigan
  21. 21. Agenda Who We Are and Where We Came From Building Biogas in Ontario Trends in Renewable Energy Ontario: Opportunity & Challenges How Ontario Investment and Trade Can Help
  22. 22. What the Biogas Industry Could Mean to Ontario • The biogas industry is not just about electricity: – Reduced costs and safer disposal for food processing companies’ organic by-products improves competitiveness – Solves a nutrient management problem for dairy farmers – Increases supply of non-chemical fertilizer; a new high-value, niche product for the fertilizer industry – Creates major opportunities in academia, laboratory services and biotechnology
  23. 23. The Green Energy Act • Best news for our industry in a long time • Minister Smitherman clearly the right leader for the job: bold, willing to ruffle feathers • Devil is in the details: – Timing? Political process versus investors’ attention Project Risk spans – Will the regulations be investment friendly and take into account a developer’s investment process? Project Spend – If I was in solar, I would be mad! – How will disparate features of the Act like manufacturing, renewable energy generation and conservation efforts line up to greatest benefit? Source of solar data: Ontario Power Authority, Proposed Feed In Tariff
  24. 24. The Competitive Landscape • We’re not the only ones driving green energy... VT: (1) RE meets any ME: 30% by 2000 MN: 25% by 2025 10% by 2017 - new RE increase in retail sales by (Xcel: 30% by 2020) *WA: 15% by 2020 2012; (2) 20% by 2017 ☼ NH: 23.8% in 2025 ND: 10% by 2015 WI: requirement varies by MA: 4% by 2009 + utility; 10% by 2015 goal MT: 15% by 2015 1% annual increase OR: 25% by 2025 (large utilities) 5% - 10% by 2025 (smaller utilities) RI: 16% by 2020 SD: 10% by 2015 CT: 23% by 2020 ☼ *NV: 20% by 2015 ☼ OH: 25%** by 2025 *UT: 20% by 2025 IA: 105 MW ☼ NY: 24% by 2013 IL: 25% by 2025 ☼ NJ: 22.5% by 2021 ☼ CO: 20% by 2020 (IOUs) CA: 20% by 2010 *10% by 2020 (co-ops & large munis) ☼ PA: 18%** by 2020 MO: 11% by 2020 ☼ MD: 20% by 2022 ☼ NC: 12.5% by 2021 (IOUs) ☼ AZ: 15% by 2025 10% by 2018 (co-ops & munis) ☼ *DE: 20% by 2019 ☼ DC: 11% by 2022 ☼ NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) *VA: 12% by 2022 TX: 5,880 MW by 2015 HI: 20% by 2020 ☼ Minimum solar or customer-sited RE requirement * Increased credit for solar or customer-sited RE **Includes separate tier of non-renewable “alternative” energy resources Source: DSIRE: www.dsireusa.org July 2008
  25. 25. Agenda Who We Are and Where We Came From Building Biogas in Ontario Trends in Renewable Energy Ontario: Opportunity & Challenges How Ontario Investment and Trade Can Help
  26. 26. What Works for Trade? • Waterloo-based solar company, Arise Technologies • Developed solar PV cells • Received $6.5 Million from Sustainable Development Technology Canada • Courted by Invest in Germany to join the 55 other solar companies operating in Germany • Offer included €25 Million grant including €9.5 Million for the construction of a plant • Streamlined, grant championed by Invest in Germany, funds approved in seven months
  27. 27. What Works for International Trade? My takeaways from the Arise story: • This is a well-known story in renewable energy worldwide and gave lots of profile to Invest in Germany – Big moves like this make international headlines and tell investors and businesses which countries are aggressive • Choose niches of excellence rather than a scattergun approach – Germany is focused heavily on solar now – Canada has (had?) an advantage in hydrogen – perhaps an area of focus • Know your competition – particularly individual states – What are our strengths compared with them, but also our limitations? • Government granting agencies must act like investment companies – The best companies out there are too busy to be looking at foreign government incentives – Most companies don’t know what is possible – package it for them, make it specific to their companies
  28. 28. Our Activities with Your Federal Counterparts • We are working with DFAIT currently to find buyers of our natural fertilizer in the Middle East and for distressed or undervalued biogas assets in Europe
  29. 29. Our Activities with Your Federal Counterparts • Key (though limited) takeaways so far: – Trade reps were most effective when they spent a lot of time up front with us to zero in on criteria – ‘Inter-agency’ efforts worked well – e.g. established contact between Invest in Germany and the Commercial Affairs at the Canadian Embassy in Germany – For us—and probably for companies like us— DFAIT was our only window into the Federal government. Are there any companies you deal with who might be in the same situation provincially? – Help companies like us navigate domestic policy by making intros – especially in this economy, strong companies at home will be strong companies abroad
  30. 30. Contact Information Ryan Little Co-Founder and Vice President, Business Development 411 Richmond Street East, Suite 200 Toronto, ON M5A 3S5 Toll-Free: 1.877.850.7680 x203 Fax: 1.866.575.4544 Email: rlittle@stormfisher.com Web: www.stormfisher.com