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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
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
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
Who We Are
• A Toronto-based renewable energy company specialized in biogas
• Utilizes agricultural and food processing by-products in order to create baseloadrenewable 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
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
• Bootstrapped through to early 2008
• In February 2008, closed a $350 million funding partnership with a Boston-based private equity company
Bas van Berkel
President
Chris Guillon
VP Finance
Ryan Little
VP Business
Development
• Finance, Engineering
• Stubborn
• Finance, Biology
• Cheap
• New Venture Creation
•“Big Picture” (i.e. can’t add)
The Silver Bucket
StormFisher Today
Key Facts• Projects in Active Development: 5• Projects in Development Pipeline: 36• Total Megawatts in Development Pipeline: 120 MW
Renewable Electricity Fertilizer Organic DiversionGreen Natural Gas Carbon Credits
• Pipeline of over 120 MW of clean, renewable electricity
• Utilize Ag by-products to produce high-grade organic fertilizer
• Produce biogenic natural gas, reducing reliance on fossil fuels
• Offset 15,000 tonnes of carbon dioxide per year at each facility
• Divert over 50,000 tonnes per year of organics from landfills at each facility
StormFisher’s Biogas Process
Benefits of Biogas Production
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 greenhouse gases, through the reduction of land filling and land application of organic by-products
Biogas is the highest-yielding form of energy production there is in terms of carbon offsetting. This figure shows the full carbon lifecycle of biogas from digestion of by-products —the only form of energy production that is actually net carbon reducing
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
Anaerobic DigestionUse anaerobic digestion to capture
biogas (~60% methane)
Methane CaptureReduce greenhouse gas emissions from capturing methane from animal manure
and degrading of organic by-products
Clean Electricity and Natural Gas
Combust the biogas to create clean electricity or upgrade to pipeline grade
natural gas
Energy Distribution
Distribute electricity and/or natural gas into the local supply grid
Renewable Energy Credits
Reduce greenhouse gases by reducing reliance on fossil-fuelled energy
production
Nutrient PelletizingCreate organic fertilizer from nutrient
rich digestate
Organic Fertilizer Distribution
Return nutrients to land from distribution as high-grade organic fertilizer
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
Europe’s Success
“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
• 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)
Map: Jens-Bo Holm-Nielsen, University of South Denmark
Biogas in Denmark
• Denmark is where biogas in Europe began
• Fewer, larger plants than Germany and Austria; less focus on energy crops
• Started as a way to handle large amounts of pig manure
• We build larger, centralized plants along the Danish model
• Snertinge, Denmark
• Heats three nearby villages
• Pig and cattle farm sludge, food and medicinal industry waste, municipal sewage waste
• Built in 1996
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
• Location: Werlte, Germany
• Developer: Krieg & Fischer Ingenieure GmbH
• Construction: 2002-2003
• Energy Output: 2.6 MW electricity
StormFisher’s plants areclosely modelled on thisfacility in Germany. Ourplants will process thesame feedstock and output,and the same quantity ofenergy. StormFisher hasalso retained the samebiogas development firm tobuild its North Americanplants.
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
Output 205,000 mmBTU – natural gas
Feedstock 140,000 tonnes manure and food processing by-products
Technology Membrane filtration, solid/liquid separation, gas upgrading, pelleting, AD facility
Commercial Operation 2010
Our Plants in Development: Listowel Natural Gas Facility
Agenda
Who We Are and Where We Came From
Building Biogas in Ontario
Trends in Renewable Energy
Ontario: The Opportunity
Ontario: The Challenges
Public Appeal of “Green” Increasing: Energy, Food, Waste
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.
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
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
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-intensivebusinesses 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
We Are Not Alone in Our Desire Build a Green Economy
Michigan
• 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
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
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
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 spans
– Will the regulations be investment friendly and take into account a developer’s investment process?
– 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?
Project Risk
Project Spend
Source of solar data: Ontario Power Authority, Proposed Feed In Tariff
The Competitive Landscape
• We’re not the only ones driving green energy...
Source: DSIRE: www.dsireusa.org July 2008
☼ PA: 18%** by 2020
☼ NJ: 22.5% by 2021
CT: 23% by 2020
MA: 4% by 2009 +1% annual increase
WI: requirement varies by
utility; 10% by 2015 goal
IA: 105 MW
MN: 25% by 2025(Xcel: 30% by 2020)
TX: 5,880 MW by 2015
☼ AZ: 15% by 2025
CA: 20% by 2010
☼ *NV: 20% by 2015
ME: 30% by 200010% by 2017 - new RE
☼ Minimum solar or customer-sited RE requirement
* Increased credit for solar or customer-sited RE
**Includes separate tier of non-renewable “alternative” energy resources
HI: 20% by 2020
RI: 16% by 2020
☼ CO: 20% by 2020 (IOUs)
*10% by 2020 (co-ops & large munis)
☼ DC: 11% by 2022
☼ NY: 24% by 2013
MT: 15% by 2015
IL: 25% by 2025
VT: (1) RE meets any
increase in retail sales by
2012; (2) 20% by 2017*WA: 15% by 2020
☼ MD: 20% by 2022
☼ NH: 23.8% in 2025
OR: 25% by 2025 (large utilities)5% - 10% by 2025 (smaller utilities)
*VA: 12% by 2022
MO: 11% by 2020
☼ *DE: 20% by 2019
☼ NM: 20% by 2020 (IOUs)
10% by 2020 (co-ops)
☼ NC: 12.5% by 2021 (IOUs)
10% by 2018 (co-ops & munis)
ND: 10% by 2015
SD: 10% by 2015
*UT: 20% by 2025
☼ OH: 25%** by 2025
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
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
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
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
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
Contact Information
Ryan LittleCo-Founder and Vice President, Business Development
411 Richmond Street East, Suite 200 Toronto, ON M5A 3S5
Toll-Free: 1.877.850.7680 x203Fax: 1.866.575.4544
Email: [email protected]: www.stormfisher.com
