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Chris Boivin, Vice President, Investments, Sustainable Development Technology Canada

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Sustainable Development Canada's role in driving clean innovation in Canada

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Chris Boivin, Vice President, Investments, Sustainable Development Technology Canada

  1. 1. Sustainable Development Technology CanadaSustainable Development Technology Canada1 Sustainable Development Technology Canada North American Climate Policy Forum, June 2016
  2. 2. Sustainable Development Technology Canada2 Sustainable Development Technology Canada2 Presentation Outline • SDTC’s Role • SDTC Funds • Approach Taken and Results to Date • Lessons Learned
  3. 3. Sustainable Development Technology Canada Mandate Sustainable Development Technology Canada3 • SDTC is a policy instrument of the Government of Canada to deliver environmental and economic benefits to Canadians. • As a delivery agent, we foster the development and demonstration of technological solutions that address: • Clean Air; • Climate Change; • Clean Water; • Clean Land. • Forge innovative partnerships and build a SD technology infrastructure. • Ensure timely diffusion - increase number and rate of uptake of technologies into the marketplace across Canada, providing national benefits.
  4. 4. Sustainable Development Technology Canada At a Glance Sustainable Development Technology Canada4 • SDTC funds Canadian cleantech projects and builds capacity in the companies that lead them as they move their ground-breaking technologies to market • SDTC began operations in November of 2001 • Registered as a not-for-profit • Operates as an arm’s length independent organization • Funding allocation of more than $1 billion from Government of Canada (>$900M committed to projects to date) • Accountable to Parliament through the Minister of Innovation Science and Economic Development
  5. 5. Sustainable Development Technology CanadaSustainable Development Technology Canada5 The SD Tech Fund™ supports development and demonstration projects that address climate change, air quality, clean water and clean soil. The Government of Canada has allocated a total of $965 million for the fund. SDTC has Two Funds that Support Canadian Cleantech SDTC’s NextGen Biofuels Fund™ supports the establishment of first-of-kind large commercial-scale facilities for the production of next-generation renewable fuels. Has Allocated Roughly $80M to projects. It is no longer accepting applications.
  6. 6. Sustainable Development Technology Canada6 Sustainable Development Technology Canada6 Commercializing Innovation SDTC’s funds are positioned to address funding gaps in commercializing technology.
  7. 7. Sustainable Development Technology CanadaSustainable Development Technology Canada7 Approach since 2001 State of affairs when we started in 2001 – Sustainable Technology was a very nascent industry, little capacity, supporting infrastructure, established markets, financial support etc. What was our focus: • Cast the net wide across sectors and ensure private sector participation; • Take risks in many technology areas, identify failure modes, learn, capacity build; • Establish a critical mass of companies in key SD Tech verticals (Power Gen, Transportation, Energy Production, Waste Management, Water Treatment, Energy Storage etc.); • Foster the establishment supporting capacity infrastructure (financial, policy, education, supporting expertise and services etc.); and • Become the central point of understanding and support for the SD Tech space in Canada.
  8. 8. Sustainable Development Technology CanadaSustainable Development Technology Canada8 SD Tech Fund Investments >80% of leveraged investment is from private sector $928 Million from SDTC $2.45 Billion Leveraged from Public and Private Sources 320 Projects $3.3 Billion = = Total Portfolio Project Value Leveraging our investments
  9. 9. Sustainable Development Technology CanadaSustainable Development Technology Canada9 Portfolio by Cleantech Segment 9 $34.8 $143.5 $89.5 $54.6 $38.8 $149.9 $134.7 $33.6 $4.0 $125.9 $32.4 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 Agriculture Biorefinery Products Cleaner Fossil Fuels Energy Efficiency Energy Infrastructure/Smart Grid Industrial Processes & Products Power Generation Recycling & Recovery Remediation and Soil Treatment Transportation Water & Wastewater SDTC Funding SDTC Funding ($842M) by Analytica Advisor Sector as of March 31st, 2016
  10. 10. Sustainable Development Technology CanadaSustainable Development Technology Canada10 The Challenge Markets changed dramatically over the last 15 years…. • Expectation of a carbon regime, no expectation of a carbon regime, small regional carbon incentives; • Biofuel subsidies, no biofuels subsidies; • Major economic downturn 2008; • $12/mmbtu NG, $3/mmbtu NG; • Solar industry correction; and • $140 oil, $29 oil. Making it very difficult to pick winners
  11. 11. Sustainable Development Technology CanadaSustainable Development Technology Canada11 Lots of Patience and Diversity is Key ……..long runway and diversity of the portfolio and risks taken allowed some things to stick and for critical mass to emerge ….from 5 to 10 technologies in the market in 2007 ……….to 25 in the market in 2010 …………to >70 technologies in the market in 2016 …..and another >170 in progress and on a trajectory to get there
  12. 12. Sustainable Development Technology CanadaSustainable Development Technology Canada12 Results since inception Steady growth over the past 5 years as a result of technology adoption and diffusion in the global market.
  13. 13. Sustainable Development Technology CanadaSustainable Development Technology Canada13 SDTC Portfolio Companies
  14. 14. Sustainable Development Technology CanadaSustainable Development Technology Canada14 SDTC Portfolio Companies
  15. 15. Sustainable Development Technology CanadaSustainable Development Technology Canada15 Lessons Learned 15 Sustainable Development Technology Canada15 • Need to ensure resilience of business and ability to survive highs and lows in major market baselines. • The higher the technology performance advantage over incumbents the better. • Carbon regimes can help with resilience of business case, but most resilient opportunities have strong economic value propositions/cost savings to end users that drive adoption with low to no dependence on carbon policy. • Setting a carbon incentive too high can distort competitiveness indicators and temporarily unlock opportunities that are vulnerable to policy change driven by eventual unwillingness to pay – this can delay more economically competitive opportunities. • If setting a high $/ton CO2 threshold, need to see a cost curve trajectory for technology that drives towards cost parity in a timely manner. • Regional incentive instruments favoring regional advantages can help but opportunities are global and scalability is limited by replicability of competitiveness (inconsistency of frameworks challenges adoption). Our highest performing projects have not relied heavily on policy instruments to drive adoption. they have relied on strong value propositions - accelerating the commercialization pathway for these opportunities may be advisable.
  16. 16. Sustainable Development Technology CanadaSustainable Development Technology Canada16 Commercialization Success Factors Our experience has shown that 4 key factors contribute to achieving commercialization of technologies: 1. Management capacity and strength 2. Strength of the Innovation and Freedom to Operate (Intellectual Property protection) and associated value proposition 3. Strong path to market partner participation 4. Time to commercial-ready technology – the earlier the technology, the greater the risk that the value proposition will erode by the time it reaches market
  17. 17. Sustainable Development Technology CanadaSustainable Development Technology Canada17 SDTC Funding Model Ensures Market Pull and Private Sector Participation Criteria for Funding: 1. Pre-commercial 2. Consortium 3. Innovation (e.g. IP; know/show how) 4. Marketing Plan (tech replication in CDA/Int’l) 5. Business Plan (Management, Financing) 6. Environmental Benefits over status quo tech SME Applicant + Technology Consortium partners Customer (Demonstration Host) Key Hardware Supplier Key Services Supplier Government (Other) Value- Added Sales Channel 2/3 $ (cash and in- kind) 1/3 $ (cash) Project Funding
  18. 18. Sustainable Development Technology CanadaSustainable Development Technology Canada18 Additional Information
  19. 19. Sustainable Development Technology CanadaSustainable Development Technology Canada19 SD Tech FundTM: Priority Areas 19 Sustainable Development Technology Canada19 Responsible Natural Resource Development • Technologies that reduce the environmental impact of oil and gas exploration, development and production • Technologies for the sustainable development of mineral resources
  20. 20. Sustainable Development Technology CanadaSustainable Development Technology Canada20 SD Tech FundTM: Priority Areas 20 Sustainable Development Technology Canada20 Carbon-Free Power Generation and Distribution • Innovations that lower the cost of renewable power generation and enhance its deployment • Technologies that convert primary energy sources to carbon-free energy carriers such as steam, electricity or hydrogen without combustion
  21. 21. Sustainable Development Technology CanadaSustainable Development Technology Canada21 SD Tech FundTM: Priority Areas 21 Sustainable Development Technology Canada21 Remote and Northern Community Utility Systems • Adaptation and demonstration of renewable energy technologies, waste and waste water systems for remote communities
  22. 22. Sustainable Development Technology CanadaSustainable Development Technology Canada22 SD Tech FundTM: Priority Areas 22 Sustainable Development Technology Canada22 Energy Efficiency for Industry and Communities • Technologies related to next generation transportation with a special focus on freight and heavy-duty vehicles. • Technologies that increase resource use efficiency in industrial processes.
  23. 23. Sustainable Development Technology CanadaSustainable Development Technology Canada23 SD Tech FundTM: Priority Areas 23 Sustainable Development Technology Canada23 Next Generation Technologies with Longer-term Benefits for Canada • Biofuels and Biorefineries: Technologies using biomass to produce chemicals or fuels replacing those made today using fossil fuel sources • Sustainable Agriculture and Food Security: Technologies that reduce the usage of water, increase yield and improve drought resistance of agricultural crops
  24. 24. Sustainable Development Technology CanadaSustainable Development Technology Canada24 CarbonCure Technologies Inc. Typically, the process of producing precast concrete blocks uses both energy-and-cost- intensive steamcuring and cement to achieve quality benchmarks. In response, Halifax-based CarbonCure Technologies has developed a universal retrofit equipment component that uses waste CO2 to reduce steam curing energy by 38%, cement content by 10% and defect rates by 20% while maintaining or exceeding quality standards. The CO2 is permanently stored in the block as solid limestone attributing to a reduction in lifecycle greenhouse gas intensity of 17% for every block produced. The project aims to validate the performance of the technology through two full-scale industrial demonstrations.
  25. 25. Sustainable Development Technology CanadaSustainable Development Technology Canada25 Minesense Technologies Ltd. Canadian mining operations produce 2 million tonnes of waste rock a day. In order to get at the “pay” rock or “ore”, a mining operation must move and dispose of a large amount of waste rock that, using conventional sorting methods, does not have an economic concentration of minerals. MineSense will develop their High-Frequency Electromagnetic Spectrometry (HFEMS) technology to measure the amount of a given mineral at the point of extraction, allowing operators to better sort the rock based on mineral content prior to processing, thus saving costs and requiring less energy to process it. Thanks to increased metal recovery, longer life of mine and decreased environmental impact, the technology could increase the total value of a mining operation by as much as 50 percent, as well as revive mines considered “end of life” with a more accurate assessment and classification of mined mineral content. Once widely used, this technology could save a typical base metal operation mining 10,000 tonnes of ore per day as much as 15 GWh/yr or 8.16 Mt CO2e/yr.
  26. 26. Sustainable Development Technology CanadaSustainable Development Technology Canada26 Temporal Power Ltd. Fast changes in power output from a wind farm can add megawatts of power in a matter of seconds and induce significant voltage spikes and sags. These rapid fluctuations lead to challenges in regulating voltage and power quality on distribution lines. Temporal Power Ltd. and Hydro One Networks are working to demonstrate how an innovative Canadian flywheel electricity storage technology can improve the way wind power is connected to the electricity grid. The flywheel based storage solution developed by Temporal Power will be located on the Hydro One distribution network to mitigate challenges caused by the intermittent output of power from wind farms and to support the grid during faults. Temporal will use a novel low loss flywheel generator combination to deliver a 500kW power rating per unit in an array of up to 10 flywheels (i.e., +/- 5 MW) that has the capacity to absorb real power for up to six minutes, and release it back to the Hydro One distribution network for the same duration. The demonstration represents one of the world’s largest wind integration projects utilizing flywheel storage technology.
  27. 27. Sustainable Development Technology CanadaSustainable Development Technology Canada27 Morgan Solar Inc. High Concentrating Photovoltaic (CPV) is recognized as being a substantially more efficient way to collect solar energy in comparison to conventional photovoltaic (PV) approaches. To date, virtually all CPV companies concentrate the sunlight using bulky and expensive optics such as Fresnel lenses or curved mirrors. As a result, CPV systems have struggled to compete with PV systems on installed cost ($/W and $/kWh). Morgan Solar has developed a patented Light-Guide Solar Optic (LSO) technology which concentrates solar energy in a fraction of the volume of competing CPV solutions. The use of thin, lightweight, and fully sealed acrylic optics enables system wide cost reductions. A 50% reduction in $/W of installed costs can potentially shorten the economic payback period for large-scale solar farms by several years.
  28. 28. Sustainable Development Technology CanadaSustainable Development Technology Canada28 @SDTC_TDDC sdtc.ca Sustainable Development Technology Canada Chris Boivin – VP Investments (613)234-6313 ext 293 c.boivin@sdtc.ca www.sdtc.ca

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