It’s generally accepted that 2009 will also be a rough year, but there’s also hope it will end on a more positive note. And what about the world of cleantech?
Here’s what will likely to make headlines in 2009:
1– Obama’s "green stimulus" plan.
All evidence heading toward President-elect Barack Obama’s inauguration in January is that the new president is not only serious about tackling climate change, he’s intent on using investment in clean energy and infrastructure as a way to kick-start the economy, create millions of green-collar jobs, and make the United States less dependent on foreign oil.
The fact that he picked Nobel Prize-winning physicist Steven Chu (photo) as his energy secretary and Harvard physicist John Holdren as his science adviser speaks volumes. Both scientists are big advocates of clean technologies and the role that energy efficiency can play to rein in climate change.
"After eight years of Bush spreading disinformation and muzzling scientists, putting Holdren in charge of the `bully pulpit of science’ is just what the nation and the planet need if we are to have any chance of avoiding catastrophic warming," wrote energy expert Joseph Romm on his popular blog ClimateProgress.org.
Obama’s choice of Chu, a Chinese-American, is also expected to smooth U.S. relations with China on the climate-change file.
2- Will greentech buck VC trend?
The U.S. National Venture Capital Association recently surveyed 400 venture capitalists and nearly half believe that investments in clean technologies will grow in 2009 even as overall VC spending falls. Part of this belief relates to the Obama effect mentioned above, though much will depend on whether the first half of the year gets considerably worse or shows signs of recovery.
3- Talk of peak oil goes mainstream.
Earlier this month Fatih Birol, chief economist of the International Energy Agency, told British journalist George Monbiot that conventional oil production will plateau – that is, peak – in 2020 and that it’s "not good news from a global oil-supply point of view." It was an unprecedented statement coming from a conservative organization that has traditionally sugar coated the long-term oil outlook.
It seems odd, when you consider that members of the Organization for Petroleum Exporting Countries are making unprecedented curtailments of supply.
But that’s a reaction to a short-term fall in demand. More dangerous is that unconventional oil projects that represent future supply, such as those in the oil sands, have been put on hold because of tight credit markets and low oil prices. When demand picks back up, and it will happen fast, supply just won’t be able to keep up. Given this scenario, expect more talk of "peak oil" next year, and not just from fringe groups shouting from the sidelines.
4- A Green Energy Act for Ontario.
I’ve written about this before, but to recap, the Ontario government is apparently working on a piece of legislation aimed at dramatically boosting local investment in renewable-energy projects by giving green power priority on the grid. Ideally, the Ontario act would mirror a similar piece of legislation that Germany introduced in 2001 and that turned the European country into a wind and solar powerhouse.
The impetus this time around is job creation. Ontario’s manufacturing sector is getting pummelled, and one need look no further than the struggling automotive sector. Presumably, the goal of a green energy act would be to stimulate investment, not just in renewable-energy projects, but local manufacturing needed to supply product to those projects. The question is how far Premier Dalton McGuinty is willing to go? If he’s bold, he’ll get ahead in a race that an Obama administration is determined to run. Alternatively, he could stumble with another half measure. We’ll find out this spring.
5- Offshore wind on the Great Lakes.
The content of an Ontario green energy act will likely determine whether the province is the first jurisdiction in the world to build an offshore wind farm on a lake. Several developers, in Ontario and neighbouring jurisdictions, are eyeing the Great Lakes for offshore projects.
Ohio, Michigan and Wisconsin are dead serious about getting there first, but Toronto-based Trillium Power has a commanding lead – if only it could convince Ontario to buy its power.
This isn’t just about tapping more wind power; it’s also about staking a claim on future jobs.
Multibrid, the German maker of offshore turbines, says it wants to locate manufacturing in Ontario because of the province’s skills base, manufacturing capacity and potential for offshore wind. But it won’t come here if we’re not prepared to build the projects. An earlier move by a Great Lakes state could lure Multibrid from Ontario, essentially stealing an anchor tenant that could lay the foundation for thousands of new jobs. Time’s a wasting, Ontario.
6- Plug-in vehicles justify auto bailout.
A number of U.S. and foreign auto makers have already announced plans to introduce plug-in hybrid and even all-electric cars starting in 2010. But with the Detroit Three asking for tens of billions of dollars in bailout money (sorry, "investment" and "loan guarantees"), the commitment to plug-in vehicles appears to be getting stronger. Clearly, politicians have made it clear that they won’t accept business as usual, and electrification of vehicles is certainly anything but usual.
How serious are they? General Motors says even during its current struggles and talk of bankruptcy it is committed to launching its Volt extended-range electric car in 2010.
Chrysler and Ford have made similar commitments. It didn’t get much mainstream coverage, but earlier this month during an interview with CNN the president of Chrysler’s electric-vehicle division said the company plans to make several low-cost vehicle models in both gas-powered and electric-powered mode.
The strategy, of course, hinges on big bucks coming in from Washington and Ottawa. Some question whether Chrysler, even with a bailout, could pull it off. Then again, Chinese auto maker BYD is already there: this month it launched the world’s first commercial plug-in electric hybrid, called the F3DM. American multi-billionaire Warren Buffett owns about 10 per cent of BYD.
7- Smart grid and smart storage.
Expect 2009 to be a year that focuses heavily on the need to upgrade the electricity grid and commercialize utility-scale energy storage. Obama, former U.S. vice-president Al Gore, venture capitalist Vinod Khosla, oil tycoon T. Boone Pickens, Google and General Electric are among the high-profile voices calling on substantial investment in smart-grid technologies that would "enable" the wide-scale deployment of renewable energy.
Once an afterthought, electricity transmission and distribution – an area suffering from neglect and underinvestment – is finally moving to the mainstream as a priority. Meanwhile, a group of utility executives and energy experts in Ontario have formed a "Smart Grid Forum" and expect to release next year a comprehensive report on how the province should modernize its grid.
Recommendations from this report will guide government spending in this area and, if taken seriously, would ideally become part of stimulus spending.
Included in this discussion is the value and need for utility-scale storage, whether in the form of compressed-air storage, advanced battery technology, hydro pump storage, or ultracapacitors.
It’s widely recognized that affordable energy storage is necessary for the grid to accommodate a larger percentage of renewable power. The good news is that in 2009 we’ll likely see some encouraging progress in this area.
8- Demand down, nuke costs up.
Electricity consumption across North America is falling, a combination of conservation, energy-efficiency and an economic downturn that’s causing a decline in industrial activity.
In Ontario, consumption has declined for the past three years, calling into question a long-term load forecast that has predicted year-over-year growth in the province.
The Ontario Power Authority has agreed to reassess its load forecast and next year we’ll find out if trends over the past three years will influence its long-term outlook.
Around the same time, we’ll find out who the government has picked to build Ontario’s first new nuclear plant in two decades, as well as what it’s likely to cost. Estimates from U.S. utilities show that costs have doubled or tripled initial expectations, and some jurisdictions – such as South Africa – have cancelled plans to build new reactors because of high cost.
The question next year is: If Ontario’s load forecast shows declining electricity consumption and if the cost of a new 2,000-megawatt nuclear plant is much higher than first hoped, will the government still move forward on the new nuke? If so, how will it justify the decision to electricity ratepayers?
9- Time-of-use test drive.
Toronto Hydro chief executive Dave O’Brien has called 2009 "the big start" when it comes to time-of-use pricing in the province. Most homes in Toronto and surrounding areas have smart meters installed and this, for the first time, allows utilities to offer different prices for electricity depending on the time of day – that is, discounted prices during off-peak hours and premium prices during peak hours, with the idea being that consumers will shift their electricity use.
The year will start with a 10,000-home pilot project and expand from there.
Why is this important? It gives homeowners a chance to lower their electricity bill by adjusting their electricity consumption, and it gives utilities a valuable way of managing – and smoothing out – how electricity flows through their system. It will also improve customer service, by allowing utilities to be more responsive to system glitches or outages.
10- Conserve, react, and get efficient.
The power authority’s conservation bureau has spent the past three years putting together a comprehensive program for reducing power consumption in the province, particularly when electricity is in highest demand. It ranges from light-bulb replacement and the recycling of old refrigerators to demand-response programs that help us cut back on consumption during peak times.
Next year – particularly if we have a hot summer – we’ll get to see this army of programs operating in full force, and we’ll be able to evaluate how effective they truly are.
di Tyler Hamilton TheStar.com