Alternative Energy: How Soon Is Too Soon?

May 21, 2009



Tyler Hamilton

Senior Energy Reporter and Columnist, The Toronto Star



Tom Heintzman

President, Bullfrog Power Inc.



Kerry Adler

CEO, SkyPower Corp.



John C. Thomson

CEO, Yield Energy



Alternative Energy: How Much, How Soon?



Chairman: Jo-Ann McArthur, President, The Empire Club of Canada



Head Table Guests



John Walker: President and CEO, Transition Plus Sustainability Solutions Inc., and Director, The Empire Club of Canada

Rev. Michael Clarke: Associate Priest, Christ Church, Brampton

Jonathan Lippett: Grade 11 Student, Danforth Collegiate and Technical Institute

Elizabeth Bronson: Assistant Vice-President, Information and Business Analysis, The Dominion of Canada General Insurance Company.



Introduction by Jo-Ann McArthur



How many times have you heard the phrase, “Canada needs to get with it,” uttered in the context of alternative energy? Germany leads the world, perhaps because it doesn’t have Canada’s natural resources. That seems to hold us back in the past rather than creating the future. To guide us through how to balance present economic realities with future imperatives we have Tyler Hamilton as our moderator.



Tyler is senior energy reporter and columnist for the Toronto Star. For the past four years he has also been writing a personal blog called Clean Break that discusses trends, happenings and innovators in the clean-tech market. Tyler is the pre-eminent journalist in this space in Canada.



Please join me in welcoming Tyler and his panel to our stage.



Tyler Hamilton



Thank you Jo-Ann. It is a pleasure to be here today and I must say that I’d rather, I think we all would rather, be out sitting on the patio. It is a beautiful day out there and the sun shining today is kind of fitting because we are going to be talking about renewable energies or alternative energies in this session.



What is alternative energy? It is a good question to ask because we hear all sorts of different phrases.



Is alternative energy emission-free energy? Well not really because we’ve got nuclear power which is emission-free and we wouldn’t consider that alternative energy. Would we consider alternative energy renewable energy? Well we’ve got the Adam Beck plant at Niagara Falls, which has been there for 100 years and it’s been providing us with renewable energy and we wouldn’t consider that alternative energy.



Would we consider alternative energy green energy? Well maybe if you’re from Calgary you’ll think of a coal plant that gasifies coal and captures the carbon dioxide and puts it underground as green energy, but I really don’t think that’s green energy either.



So for the purpose of today’s discussion, I’m going to narrow the focus down to alternative green energy, just because if you use the term “alternative” broadly you can get into a whole suite of different things. But I think the focus should be on green energy—wind, solar, biomass, biogas, geothermal. It may seem silly to call this alternative energy, given all the recent media attention from people like myself. But the sad truth is that these forms of energy, despite all of their hype and hope, only account for a small percentage of Canada’s electricity and thermal energy production. And that’s why we keep calling it alternative.



But things are changing. Ontario has just passed its Green Energy Act, an ambitious piece of legislation that we will talk about today. This gives renewables and conservation top consideration in the design of our electricity system. On a global scale, 75 countries around the world signed a statute recently to create the International Renewable Energy Agency, which is kind of a counter-balancing agency to the fossil-fuel-focused International Energy Agency and the nuclear-focused International Atomic Energy Agency. It is worth noting that Canada is one of the only developing or developed countries, that has refused to join this renewables agency.



If there is one thing our three panelists have in common it is their unwavering commitment to green energy and I presume it is also their goal in life to lose that alternative label so that we are not talking about what they do as alternative. We want it to become a core part of Canada’s energy mix.



Tom Heintzman is President and Co-Founder of Bullfrog Power, a Toronto-based green electricity retailer, that was launched in 2005 on the belief that some people would be willing to pay a premium for electricity that doesn’t come from fossil fuels and nuclear. And it turns out that they were right. They have got more than 8,000 households that are Bullfrog-powered and they have since expanded into Alberta and British Columbia.



Kerry Adler is Co-Founder, President and Chief Executive Officer for Toronto-based SkyPower Corp., a leading wind and solar-power developer in Ontario. SkyPower, in fact, has several large solar farms under various stages of development in the province and was recently awarded a large wind power supply contract by the Ontario Power Authority.



And representing the biogas side of renewables is John Thomson, President and CEO and founding partner of Toronto-based Yield Energy. Yield uses anaerobic digestion technologies to convert organic waste into biogas, which can then be used to generate electricity or provide heat for homes and industrial applications. John is also the founder of Energen, which brings together large industrial, commercial and institutional power users wishing to take part in demand-response programs in Ontario.



Can we please welcome our three panelists.



I’m going to throw out a broad question. In the brochure this session is described as: “Alternative energies. Why has it taken so long? When is it really going to come?” In your view, being on the leading edge of what’s happening in this province and in Canada, how would you answer that question? Are you convinced that we are reaching the tipping point where alternative energy is not really going to become an alternative or the alternative?



Kerry Adler



I think we are here. Six years ago I think we had 150 megawatts of renewable energy in Canada. The legislation has been put in place by the ministry here in Ontario. It is the leading example of governments that are forward thinking, that listen to development companies, and that listen to what is needed in this country. We all know that the federal government of Canada is quite absent from renewable energies. Stephen has really left it to the provincial governments and I think we are at the tipping point where all those investments made to date are about to become realized and those jobs that we’ve all been talking and hearing about are going to become a reality. We are here now.



Tyler Hamilton



Tom, you’ve got 8,000 customers at Bullfrog, but obviously there are millions of customers throughout the jurisdictions that you provide service in. People, kind of first movers, are signing up. When is it going to become the standard thing that we get?



Tom Heintzman



I would be a little less sanguine than Kerry. I don’t think we’re quite at the tipping point yet and I think it has to become more cost-competitive in order for the mainstream population to sign on. That will be partly a result of technology progress and certainly all sectors of alternative energy are becoming more efficient and prices are coming down. It is also in how we manage our systems and how we think of electricity systems. There’s a lot being done there and I think we’ll get into that in the discussion, but I think that’s really going to unlock a lot of opportunity for renewable power. Then lastly it’s how we think of energy. The way people think about energy will change over the next 20, 25 years, so I think the snowball is growing but I wouldn’t describe us as being at the tipping point yet.



Tyler Hamilton



John.



John Thomson



Well I guess I’m in agreement with Tom. Fundamental change has to come from society itself. We as a society must recognize that we have to have these different technologies, we have to generate our energy differently, and we have to manage it differently. We, in our previous company, looked at how energy was managed. We are now looking at how energy is generated. What we have found is that there is a lot of education that has to go on. We’ve had the luxury in North America of a huge natural resource pool. We have been able to tap into energy sources and have a way of getting rid of the waste that’s produced and a seemingly endless place to put it. And the reality is in places like Europe they faced these challenges years ago and society made the change happen. It resulted in regulatory changes that then resulted in the financial markets responding to make these things possible. Until we as a society make that attitudinal change and accept that energy can’t be had at a bare-bones price and that there is a cost of producing it and a cost of using it, we as a society will still remain stuck but I actually do see it changing. Ontario obviously is taking a leadership role here. We are seeing the price of energy starting to become reflective of the reality and you are starting to see a growing movement, as illustrated in Bullfrog’s customers, of people out there who are willing to take that leadership step and make the change happen. So we are not quite at the tipping point but we are getting darn close.



Tyler Hamilton



Is part of the problem trying to shoehorn renewables and green energy into an electricity system that was designed for large-scale generation nuclear plants, large coal plants, instead of as you mentioned rethinking the whole system? The reason why Hermann Scheer started this International Renewable Energy Agency is because he didn’t want to play within the club that was set up by the fossil fuel and nuclear industry. He wanted his own club because he believes that the structure of the whole industry has to change to enable these other technologies. Do you agree that this is a problem?



Tom Heintzman



I would agree and I would even take it up a level. I’d say not just the energy industry but the economy is built on a way of perceiving and treating electricity. Up until the end of the 1950s, up until 1960, Ontario ran 99 per cent on water power. It was cheap and it was plentiful and as a result, with a richness in primary resources, a heavy manufacturing-based industry grew up in Ontario on cheap power. That hasn’t been the case since 1960, but we have been artificially subsidizing ratepayers for the last 40, 50 years. Our economy is built and predicated on that in great measure so I would agree that the electricity system is old but it really requires a real rethinking of how is Canada or Ontario going to succeed once we start pricing in carbon, once low carbon fuel standards start emerging? All these things are going to force us to rethink not just our electricity industry, but the way our economy operates.



Kerry Adler



I guess it comes back to what you mean by a tipping point. His business is very different because he is trying to get consumers (I call them hydro junkies), who are used to four or five or six cents per kilowatt power, to pay 11, 12, 13 cents. We are not there. We are not there. I think governments around the world today, in particular in Canada, are subsidizing electricity because getting people off the bottle is very hard to do. I think that if you really want to drive them in conservation you have to force people to realize when they leave the lights on what the real cost of that is. I think moving to time-of-day pricing will change it. We are at the tipping point because we finally have a government here in Ontario and in other parts of Canada, Quebec is another area pro-active on renewable energy, that is realizing that renewable energy has to be part of the mix. They are prepared to pay a fair market price for it and they are prepared to put in place, as evident in the Green Energy Act, the necessary legislation to ensure that these projects get built and jobs get created. I think that is where we are today. That is what I mean by the tipping point.



John Thomson



I think we are sharing a common opinion here in that those fundamentals need to change and I think you are recognizing that certain jurisdictions such as Ontario and Quebec are taking a leadership role in that. The challenge is that Ontario and Quebec are just part of a very broad mixture in North America. I’m really excited at what’s happening here and I think what you guys are achieving with solar and the support you are getting for it is fabulous. As you look at all the other sectors of renewables and the challenges you face, you’re talking about how energy is built and distributed. There’s no question we built on a centralized model—big plants in rural areas with large transmission lines feeding the urban centres. We have to change that model. We have to change from large industrial centres to a more distributed nimble company that can react better. I think that is the larger tipping point I guess I’m referring to. I look at our business in biogas. One of the challenges we have is that we are not simply tapping into an existing source of energy such as the sun or the wind. We have to help mobilize change in other areas as well. We have to change the waste management industry, we have to change the way people fertilize their land, and that all interconnects. You start seeing the broader picture of how the world, society as a whole, has to move to a different way of thinking. And so, as we see that happening, I’m thrilled to see wind and solar starting to get much bigger play, but now we want to see the rest of the changes happen. Regulatory environments are key for our industry. If we don’t have the support of governments, we don’t have the support of the regulatory environment to make it happen. How do you get that change? Society changes. People think differently, react differently and participate. I’m quite excited that the Green Energy Act reflects on that too.



Tyler Hamilton



On the issue of pricing, our prices have been low. It is a strange thing when you see gasoline prices double and there’s a protest but really there is this kind of acceptance that we can’t do anything about it. Yet, because electricity has been regulated, when it goes up 5 per cent people go crazy. I know I get the e-mails at the Toronto Star. So we have definitely become addicted to these lower energy prices. Do you think that we’ve done a bad job of telling the average person that electricity no matter how you are going to get it is going to cost more? When you think about it, building Niagara Falls hydroelectric generation 100 years ago must have cost a lot for the generation that was doing it and we’re benefiting from that investment. You could conceivably say wind and solar might cost more today but that’s an investment for future generations that will benefit from what will become cheaper power.



Kerry Adler



If you pull up at any gas station here in Canada and fill up your car, you’ll see a sticker on the gas pump that will say exactly where the proceeds of that price per litre go. If any of you have ever looked at it, you’ll see that the vast majority goes to taxes. Can we do a better job of educating consumers and businesses to look at the real cost of energy? I don’t know today what the real cost of energy is. I don’t know what percentage of my bill is actually subsidized. If I did know that, maybe I would react differently. Legislation must be put in place to not only encourage renewables but also encourage conservation, and the only way people actually conserve is when they feel it in the wallet.



John Thomson



Absolutely. Feeling the pinch in the wallet is what seems to drive change in our economies. Until people feel it, it becomes something they don’t think about. And even when you have good promotional efforts to make change you get a subset of the population that are willing to make the step, but to get it overall it has to hit the wallet. It has to change the way people behave.



Tyler Hamilton



Well Tom how does that affect you because your business is basically based on people who are into self-punishment by voluntarily paying premiums for their power, right? If the government starts to move in that direction and starts to recognize we have to reflect carbon prices and other things and the price rises, then suddenly that changes the game for Bullfrog. So where does Bullfrog see the long-term plan?



Tom Heintzman



If you compare the cost of renewable electricity with the cost of conventional electricity there’s a reasonably big gap today. I wouldn’t call it self-inflicting punishment, but the virtuous and the foresighted are signing on for Bullfrog power. But we do see that gap closing over time. I think you’re going to see over time the proper, at least closer to the proper, price of electricity. There are many arcane rules in the market system about how it operates that artificially suppress the price and those will take a long time to weed out, but you will see the price of conventional power rise over time. I think you’ll also see carbon pricing come in in some shape or form, whether it is through a cap and trade or whether it is through a carbon tax, and you’ll see continued improvements pushing down the prices of renewables. So you are going to see that price gap close over time and certainly my hope and belief is that in the course of our lifetimes it will get very close to parity, if not lower. In Colorado, you can get a wind power package that is less expensive than conventional electricity so it’s definitely doable. For me the real question is, “Is Canada going to be a leader or a follower?” And we always view this as a debate about the cost of an input as opposed to the jobs and the GDP that can result from this and we really have to change that paradigm. The United States are changing it right now as we speak. If we don’t we are going to lose out on that huge economic opportunity that it will represent.



John Thomson



I listened to Kerry talk about the real cost of energy and I looked at you as you stacked up the differences and the things we have got to change to get to a parity point. I think it is absolutely right. What we fail to recognize in North America is the cost of the waste. If I put up a coal plant, there’s a waste product and it goes into the atmosphere and there’s a cost to that. There’s a health cost; there’s an atmospheric and environmental cost. We are not factoring that into our energy. We talk about nuclear being clean. The reality is we don’t talk about what to do with the waste product. How do we get rid of it? How do we manage it? How do we store it for 50,000 years? Until those components get back into the cost of energy, renewables will have a tough time. But once you start seeing those elements come into the game and we’re seeing it already with the carbon elements, suddenly we can compete and that’s where the price parity comes in. Whether it is the guy who is burning the coal, paying a fee to get his offsets made, or the renewable being able to gain something from the fact that they actually reduce the emissions, when we start dealing with the waste component of energy generation then I think we will see the parity come.



Kerry Adler



It is testing the laws of economic parity. It is clear that as we start paying more for energy and as the government takes us off the bottle and actually starts charging us more, we will conserve more. That will actually be a boost for renewable and alternative, what you call alternative energies, because today you can operate and bill wind power for 13, 14, 15 cents depending on the wind regime and solar for 45, 50 cents. But that is going to change with technology and it’s also going to change with people’s mindset. I was in Israel about six months ago and as I flew into Tel Aviv airport and looked out my window all I saw were solar panels or hot water heating on every single roof in Israel. And a month ago I was flying back from overseas and I was landing in Amsterdam and every single rooftop near the airport was covered with solar panels. How can they be smarter than us?



John Thomson



They say in Germany you can drive through the countryside and there’s a biogas plant, with solar panels on a rooftop behind, and a windmill spinning beyond that. They have really figured out how to integrate this on a decentralized interconnected model. We have just got to catch up and then we can lead.



Tyler Hamilton



Kerry mentioned solar thermal and maybe both of you can talk about the opportunities. I guess the biogas also could contribute to the thermal side as well. We often talk in Ontario about electricity and what is often forgotten is the impact of renewable energies on the thermal side. Bullfrog recently announced a partnership with Enbridge to put solar thermal panels on homes for domestic hot water heating. Can you explain that?



Tom Heintzman



Sure. It goes back to your question about the tipping point. In my response and Kerry’s I think we bundled all alternative energies into one bucket, but the truth is there are many and they are all at different stages of being economic and solar thermal would be one of those ones that are here today. With solar thermal and geothermal, I think you can make a strong case that they are economic today. The solar thermal panel works by taking the sun’s heat, but instead of converting it into electricity you convert it into heat for use with hot water tanks or radiant heating, that kind of thing. And the payback period is, depending on what facility you get and what the surface of your house is, in the seven to 10-year range. And then after that it is making money for you. With a seven-to-10 year payback, businesses make that kind of investment quite frequently so solar thermal is here today and will only get better. The third company in our partnership of Enbridge and Bullfrog Power is EnerWorks, a neat Goderich, Ontario-based, manufacturer. That for me is a great example of how jobs and economic opportunity can come to Ontario by moving quickly into this area. Those are fully exportable. We could be setting those up around the world. I hope we get into how the system works but the software requirements to run a smart system and the potential for exporting that worldwide is enormous as well. When I look at Ontario, historically a leader in renewable electricity, a real leader in information and communication technologies, and also the automotive sector, those three things converge on a smart electricity system. We should be a champion. I fear it will be our bureaucracy and our structure for lack of a better word, our bureaucratic structure, that will hold us back.



Tyler Hamilton



There’s a lot of investment south of the border in smart-grid technologies. There’s talk about electric cars being a way to wean ourselves off oil-based fuels. Do you see the hype that’s around the smart grid happening? Do you see all that investment changing the whole way we do things and getting back to that question about not shoe-horning in alternative energy technologies but making it much easier to integrate into the electricity system we have today?



Kerry Adler



If you look back a couple of years ago in Ontario they launched a standard offer for anyone with a solar panel on the roof or in the field or a wind turbine to get themselves a contract. That was burdened with a lot of bureaucracy. I think the government with the Green Energy Act, and the speed at which they have implemented it as well as a change in the tariff, has signaled that they are serious. They are here, they are serious and they want it. Will you have bureaucracy? Sure. Will you be able to work through it? Yes. But are we going to have to wait 18 months to get a permit for solar or windpower for biomass, for biogas? No. I think the ministry has promised a six-month service guarantee and I don’t see any reason not to believe them. They need the jobs. We have lost them in the auto sector. They are not coming back unless they figure out a way to come up with water power in the next two years. We are at a tough crossroads here in Ontario and I think you have really got to applaud a government that’s said, “We are not just going to sit back and watch these jobs go and we are not going to let this opportunity waste away. We have good sun here.” Most people don’t realize you have better installations here in south-western Ontario than in Miami, Florida, the only reason being that we have less cloud cover. We have some wind here. It is not the greatest wind in the world, but it’s good enough to make the economics work and I think we have got a bright and windy future ahead of us for some real jobs and real growth in renewables here in Ontario.



Tom Heintzman



Tyler, your question is about the smart grid and Kerry’s focusing mostly on generation. Transmission, distribution, conservation, consumption, storage, and electric vehicles make up a whole chain and we tend to at every level of government fragment it and try to solve different pieces of the puzzle, but it is one big system that has to be optimized. Your question I think was, “Is this a big thing? Is the smart grid hype for real?” For me it is like sitting in the late eighties and saying, “Do you think this Internet is going to change anything?” This is huge. Energy is the currency of our economies and will fundamentally transform how we all and everything runs on energy. And that’s going to be an enormous driver over the next 25 years.



Tyler Hamilton



Someone forwarded me an e-mail the other day about how Cisco, the heart of the Internet, is now focusing its attention on the smart grid as the big revenue opportunity for them. And they have an entire strategy around smart grid development.



Tom Heintzman



Everything that uses electricity is using it in a dumb fashion, not an intelligent fashion, and everything you see that uses electricity will have an IT address in the not-too-distant future and that’s basically what the Cisco announcement is about. We’ll be using it in a much more sophisticated, efficient manner. There will be lots of conservation benefits and lots of job benefits and it will really help benefit renewable technology as well. Not just in storage because that is a bit of a holy grail for renewable technology, but also being able to shape load. We are so focused on trying to shape load meaning more new plants in order to conform to society; it is kind of a crazy, knee-jerk. We need it at 9 a.m., we need it at 6 p.m., because that’s when we are coming home. This turns the paradigm on its head. It says there’s a heck of a lot of demand that we can shape to fit the renewables so you can really maximize renewables. I think the smart grid is going to be revolutionary but I think it will be a great boom to renewable power as well.



Tyler Hamilton



With the smart grid it is not only about generation but it’s also about controlling the flow of power more where you want it to go rather than the one-way kind of push. It is two-way.



John Thomson



I think the big part is to get the consumer, the user, engaged. I do see changes and again I think Ontario is a bit of a leader in the North American climate with the introduction of the smart metre program. I’m a little disenfranchised by the fact that we seem to be putting still more dollars into the old grid—bigger transmission lines, refurbishing nuclears—but I’m seeing a shift. What I saw in the demand-response business is that you have a huge opportunity to change what we build and how we build it and where we build it. I’m not sure of the exact statistics. Something like 20 per cent of our generation capacity is built to deal with 2 per cent of the requirement. It is a massive overkill to deal with a very small problem and behavioural changes can come through the smart grid. We can have better actionable signals where the user is prepared to be shaved off a bit and where the industrial load can be shaved off a bit in response to a growing demand in the overall market. This is a huge market and a huge opportunity. We just haven’t seen the full investment happening yet. I’ve seen some of it. We had a great start with Peter Love and the Conservation Bureau. We need to see more investment, more regulatory support to that.



Kerry Adler



It’s coming. I think the focus today is to mix up the generation a little bit. Get that generation mix fixed, get the smart metres in every Ontario home. The smartest grid in the world I just learnt recently is, believe it or not, in Russia. NL over a period of two years put every single home in Italy on a smart grid. I don’t think Canadians are going to be running out at negative 30 degrees with the winds blowing and checking their metres to see how much they are actually spending, but with Tom’s plan they may be able to log onto the computer and see what their consumption is during the month.



Tom Heintzman



Or it will be done automatically. To me one of the clarion calls happened two weeks ago when the FERC commissioner, the guy who runs the electricity system in the United States, said we may never need another nuclear plant or coal plant because the smart grid is going to revolutionize how we use electricity. When you get someone in that position of power with the bucks that the Obama administration is throwing at it things are going to change.



Tyler Hamilton



Just to explain, FERC is the Federal Energy Regulatory Commission or the regulator for the U.S.



Tom Heintzman



They effectively have national control over their electricity system rather than provincial control or even municipal control.



Kerry Adler



The error in that statement I believe is that they are banking on mankind to actually react to the price and the cost of the impact of using electricity. You go home every night, you plug the BlackBerry in, around nine o’clock you call it a night and at 10 o’clock you are in bed sleeping and you start seeing the power price of usage go down and prices go down. There has to be a smarter way to do it. Maybe BlackBerry for instance puts a triple charge on it. Instead of charging in 20 minutes or 30 minutes it actually charges over a period of time. There are lots we can do but we are really depending on people to change their behaviour in order for this conservation to be managed and take hold. That’s the challenge.



Tom Heintzman



To be fair that’s what the Ciscos of the world are trying to do. They are automating. You plug your BlackBerry in and it doesn’t take anything until 3 a.m. This will be built so that it’s intelligent and human beings don’t have to interface. It will be managed by default and then you can override it if you need to.



John Thomson



You can look at Europe as the example. Italy did a smart metering program and one of the things they were able to do is put a device in the home, essentially a thermostat. In Europe the lights switch on when you go into the hallway and they go off when you go out of the hallway. You see people turning timers on their wash machines so that it washes overnight instead of during the day. Why do they change? Because it costs so darn much. When you actually have to pay for what you’re using and you know it’s more at 7 p.m. than it is at 3 a.m. in the morning you change. It’s not going to come out of the good virtue of people. It is going to come out of the fact that the economy is going to push back and say there is a cost to that. But they need the tools. They need the tools. That is where the smart grid comes in.



Tyler Hamilton



I was listening to Nicholas Stern, the British economist, speaking at Sutton Place a couple of weeks ago and in the large auditorium where he was speaking, a lot larger than this but with the same kind of chandeliers, I think I counted about 780 chandelier light bulbs. They were all on at the same time. I find it interesting because there are a lot of Europeans who come to Canada who do this kind of speech and are just blown away by the waste. They come in and say, “Wow you guys waste a lot of energy.” The lights don’t go off in the rooms when no one is there. They are just left on all day so clearly there’s a lot of behavioural stuff that we need to work on. Google is getting into the energy management space. I recently wrote about this. There are many executives in the energy industry who think that all this kind of fancy electronics is overkill. People aren’t going to use it. People don’t want to bother with their power use. Do you think that that’s just a generational thing? I can’t help but think about the early days of the Internet and online banking and the BlackBerry and even the cell phone. When the cell phone first came out, all the analysts at the time said that it was just a fad. It was never going to stick. Do you think that our children will grow up managing their energy? This is just the thing to do. I’m on Facebook, I’m on Twitter, and I’m also checking my energy use on Google?



Kerry Adler



I believe so. I have four of my own children and it amazes me how much they understand about the planet that I only learnt about six years ago. I think it starts in the educational system providing tours of solar facilities and wind parks and biomass facilities. I think children are our future and I think children are really going to shape our needs and in fact shape the way we use energy. It goes back to education. I think you can start with the educational system. If we can figure out how to get French into every school across Canada we can figure out how to get energy conservation and climate change into the schools and really get the children who are the future focused on saving our future generations.



John Thomson



It is interesting to me that you mentioned children. Blue boxes and grey boxes came in several years ago. What they discovered was that the way to get them to work was to get the kids to walk home from school and tell their parents where to put things. That actually got behavioural change in the house. Just through the children. What I’m hearing in the young people when I talk to my kids is about my impact on the environment. What is my footprint? Energy is a big part of that and there are other things that play into that. I can see that footprint growing or shrinking as they see how their energy plays into that. I think it is translating into something that makes a meaningful change in the world. I see a lot of that in kids of today which is great.



Tyler Hamilton



In fact some of the energy management things that we are talking about can have a social media element to it where people would be able to manage their own carbon footprint and then compare themselves to their neighbour in the community, and their city to another city. Suddenly you get a kind of competitive thing going, no different from when you are driving a hybrid vehicle and trying to beat your efficiency score as you are going. Do you see that being a reality 10 years from now?



Kerry Adler



I think social networking is self-contagious. You can create any form of contest and you will get a bunch of kids twitting each other and facebooking each other. I think it is part of it. Apple takes a full-page ad in the New York Times for a new Apple iPhone App, and you will get a million kids downloading it before the day’s up. They will be watching their energy footprint. Kids really do get it. They understand that this planet is wasting away and it’s their responsibility to do something about it. I think they get it more than people our age.



Tom Heintzman



I do think that people are going to become more and more cognizant. In the early days of the Prius you would definitely meet another driver who would say, “What’s your lowest?” But I don’t want to minimize the fact that a lot of it will be done for us. Your ice cubes will be made at night. A big chunk of our electricity usage is absolutely wasteful. There will be meaningful behavioural change but we can’t rely on just that to sell this problem and we won’t. All the App makers will be making things to make our lives easier—where your toaster works to how you take a vacation.



Tyler Hamilton



How important do you think the Obama administration and its policy south of the border are going to be in terms of having an impact on Canadian policy? Ontario is doing a great job in staying ahead of the game, but for the rest of Canada such as Alberta do you think that that’s going to basically make them move a lot quicker?



John Thomson



We are already seeing it in the markets. I think the financial markets are a large part of what we all have to contend with. He came and talked about issues that have basically not been talked about before. But in the carbon markets the word is out that when China and the United States start getting their act in gear on the carbon issue, the rest of the world will follow. We just can’t help but be part of that. If they start putting a duty on products coming in that don’t meet the same carbon standards as products that are produced in the States, you are going to see change. We are going to be dragged along whether we like it or not. We do have some things happening at the federal level. We have the potential to be a leader in putting carbon markets in place in Canada. We may in fact see them take shape in Canada earlier than in the United States, but the reality is that what Obama is talking about—the types of changes and schedules that are already in Congress and schedules for implementing them—is going to push the world in this direction and Canada is going to be part of that. I’d love to see us as a leader in that. I think we still have that opportunity. We have done a lot of work at the federal level to make some of this take shape. We need to see it accelerated .



Tom Heintzman



I think the Obama administration will have a huge influence on Canada both in terms of carrots and in terms of sticks. The one thing that most impresses me being in the industry is the amount the Obama administration is thinking about the system. If you look at the $150-billion electoral promise about investment in renewable electricity it’s not just generation, it’s transmission, it’s distribution, it’s smart buildings, it’s the whole chain, the whole management. When we address things in Canada and Ontario, it is piecemeal without understanding the whole system. I think they are going to drive it, there’s going to be huge economic opportunity. I hope that Canadians will be able to participate back and obviously on the stick side—low carbon fuel standards, trade sanctions, cap and trade systems—we are going to have to play ball as well.



Kerry Adler



I know this is televised. We have got to be careful what we say. I think Obama has clearly set a standard in the countries around the world including Canada and Canada quite frankly should do nothing but envy. Imagine using a green energy tool to pull the large consumer in the world out of the recession. It is hard to ignore. Can the federal government in Canada do more? Absolutely. But I think everybody sitting in this room and watching this show should have the opportunity to ask the federal government. I don’t think we ask enough of them. I think we relegate it to the provinces since most of the power utilities are Crown-owned and the premiers of the respective provinces have taken the initiative to figure out on their own how they are going to impact the green economy with new jobs and new investments. I think that our federal government can be doing more, should be doing more. It is really up to us to ask them. I don’t think we have done a good enough job as Canadians to really force them to recognize that this is a critical time. It is a tipping point and we do need to step forward. We do need to do more and not just on a provincial level but also on a federal level.



Tyler Hamilton



You know that fossil fuels are finite. The debate is over as to when we will hit peak or whatever. Some people think we have already hit it for conventional oil production. Other people say it is 20 years from now. Other people say, “Don’t worry about it; we have got technology. We will always have oil.” What is clear is that as we try to find more and more of this stuff it is getting more expensive. So in a way that’s kind of leveling the playing field with renewables. Why do you think traditional energy companies have different approaches? Some just want to keep ploughing more money into what they do even if it’s more expensive and they are relying on higher oil prices. Others are wondering whether they should invest in this area and hedge their bets a little bit more. Is it really that they don’t know any other way of making money so they just keep trying to get more and more oil and natural gas or whatever or do you think that there is some other reason behind it? What’s the rationale?



John Thomson



A lot of people stick to what they know. If you know it and you are doing well at it you keep doing it. Putting money into new alternative energies, as all the guys here sitting at the table will know, is a risky financial game at this point. Some changes will have to support that. At the same time what I’ve seen in some of the traditional petroleum companies is that they have been looking at it hard and heavy for a while. They have tried to figure out if there is a space they can get involved in and how it fits with them. Does it compete with their existing businesses? But a lot of them I think are being forced to look at it more aggressively. Fossil fuels running out is one factor. The other is that they are the companies that are going to be hit amongst the hardest when these carbon regimes come in. They are going to be paying a big price added on to their product and they have got to have ways to mitigate that. We’ve met with one company and they were looking at the biogas state, not because biogas was a complementary product but because it allowed them to mitigate what they are doing on the other side of the business. So I can see them getting more engaged, but there is going to be a variety of reasons why they do that. Stick to what you know seems to be the business model. I know how to do it. I know how to get it out. I know how to sell it so I keep doing it.



Tyler Hamilton



Look at a lot of the pipelines. For example, Yield Energy can make this biogas and inject it into that existing infrastructure and offset some of the fossil fuels. That is kind of complementary.



John Thomson



What is interesting to me is that the people who are taking a more proactive role and looking at biogas as an alternative to fossil fuels and natural gas are actually distributors, because they actually pay the price of getting that gas from point A to point B. By being able to produce the gas locally, it’s green, not fossil fuel, and they can plug it into the pipeline here rather than having to drag it from Alberta. Enbridge, for example, has taken a leadership role in defining the standards on how to implement it and are actually going to invest in the infrastructure to make it happen. It’s very exciting. So the end distributors, the end users, are being more aggressive in getting that in place.



Tyler Hamilton



I don’t have any more questions. We are getting close to the end of our time. Are there any parting words John you wanted to make on this issue?



John Thomson



I guess, just to sum up from my perspective, we have talked about a lot of different things. The development of carbon markets and the regimes that support them are going to be a fundamental change in the way alternative energy is viewed. I think by getting that kind of structure in place for people and recognizing the cost of what fossil fuels actually do to our environment and adding that to the cost of energy is going to make parity for what we currently call alternative energy and helping them become the standard. I think the mood by the Obama government, the mood of the McGuinty government, are steps in the direction of actually seeing these become a fundamental part of the economy. We have a huge opportunity to be leaders in this space. We are one of the leading manufacturers in the world. A lot of technology needs to be made and can be shipped anywhere in the world. We are among the smartest, brightest people. As long as the governments keep heading in the direction they are going, we have got a huge opportunity to see that tipping point come into reality. And finally, I’m encouraged by the fact that I do see the kids seeing a change. I come from a family that is heavy in the educational environment. I have got three kids of my own in grade and high school and what I see in them is a difference in attitude to how this works. When I grew up I didn’t think about turning on a light or turning it off. I didn’t think about what it costs to put gas in the car. These kids do. My kids know the price of gas on any given day. They know what it costs to turn the light on and turn it off. They are thinking differently. They are seeing their impact on the environment and that gives me huge hope for the future that this type of stuff is going to really come into play.



Tom Heintzman



Mine is quite simple. I strongly believe that the smart grid is going to be a huge economic driver and in all businesses. Everybody here should think about their role because it is certainly not just your Telecom players. Telecom will be a big part of it. Software is going to be a big part of it, but there are going to be people, lawyers, people financing and people insuring it. Every industry will have a role in developing it much like the Web was developed and so I would just encourage everybody in the room to look at how they’ll be able to take advantage of that change if it happens in the next 20 years.



Kerry Adler



I would just like to close by saying that first of all I would like to thank everybody for coming here. I think that we really need to just look at ourselves and really take in the fact that we are responsible for the situation. Generations to come are really looking to us and I spend a great deal of time talking to governments about these issues. They need to hear from you. They need to hear from people like you in this room who care. You didn’t come here for the lunch. You came here to perhaps have some wisdom applied on you. This is really about each and every one of you in the room and people who couldn’t make it here and may be watching it on TV and recognizing that we are going to make the difference. Whether we are at a peak or not at a peak or whether there is more gas in the ground or not really doesn’t make a difference. You have children and grandchildren—future generations that are counting on us. We have to all do our part.



Tyler Hamilton



I would like to thank all the panelists. Thank you very much for coming and taking time out of your busy days.



The appreciation of the meeting was expressed by Helen Burstyn, President, The Canadian Club of Toronto, and Chair, Canadian Trillium Foundation.