Ontario, Canada, companies transform wind, sunshine and even sawdust into green power
The Clean Energy Alchemists
The intriguingly malleable future of energy came into sharp relief last August in the picturesque East German town of Falkenhagen, when local officials flipped the switch on a state-of-the-art plant capable of transferring wind power to Germany’s national natural gas grid. For two decades, Germany has made huge investments in wind and solar power. But the wind blows at night when the energy is needed least, while the sun’s potential in northern Germany varies drastically by season. The new industrial-scale “power to gas” facility, a joint venture between the German utility giant E.ON and Hydrogenics Corp., adds the electricity generated by wind and solar farms to water, and the chemical by-product, hydrogen, is then added to the local natural gas grid. A second such facility will come on line near Hamburg next year.
Such deals mark the latest development in a 24-month run of dramatic change for Hydrogenics, the hydrogen-fuel company founded in 1995 by a pair of University of Toronto graduates. After working for years on stationary and automotive hydrogen fuel cell applications such as generators and forklifts, the company acquired a Belgium-based electrolyzer manufacturer, giving it a 30-percent share in the world market for such equipment.
Since 2010, Hydrogenics, which generated gross profits of $5.2 million in 2012 on revenues of almost $32 million, has also attracted large new equity investments from Enbridge, the Canadian energy giant, as well as CommScope, a $3 billion-a-year cellular tower equipment manufacturer that acquired a 25 per cent stake. CommScope made the investment because its customers were looking for higher reliability, and lower operating-cost alternatives to diesel generators and batteries for cell towers.
“We spent four years with CommScope, orienting our products to work within their back-up power cabinets, which they provide to some of the largest telecom players in the world,” says Wido Westbroek, Hydrogenics’ Vice-President, Sales and Marketing.
It’s no accident that Hydrogenics took root where it did. In recent years, Ontario has emerged as a global green energy cluster because of the potent combination of university-level research, local talent pools and ambitious renewable energy procurement goals. Since the 2009 introduction of North America’s first feed-in-tariff program, the province has seen a surge in foreign direct investment by green energy equipment suppliers, as well as increased R&D activity by local firms. At the same time, Ontario-based tech companies like Hydrogenics have tapped into fast-growing international markets for cutting-edge clean energy technology.
At Hydrogenics, the upshot is that the firm has attracted the technical savvy and the capital to position itself at the cutting edge in sectors such as the automotive industry, where giants like Daimler are actively developing hybrid hydrogen-electric vehicles.
“Hydrogenics helps accelerate a global power shift that is already underway -- from large central generation of energy to decentralized renewable energy, from high carbon energy sources to low or even zero carbon energy,” says Westbroek. “Given the announcements by the major automotive OEMs and by other major corporations in countries such as Germany to start the mass build-up of hydrogen stations and deploy zero-emission vehicles in the thousands, it’s clear that this shift is now accelerating for mass transportation. For the corporations that work with us ---it’s not about green-washing. It’s about being able to meet what their customers need and want.”
Moreover, the Ontario provincial government’s decision to phase-out coal-fired generation by 2014 has spurred a wave of private investment in the construction of thousands of megawatts of new wind and solar facilities that are helping to replace the lost generating capacity.
Far from southern Ontario’s dense population centers, the transition away from coal has also given rise to an innovative $170-million biomass conversion project at the Atikokan Generating Station -- a 200-megawatt coal plant in northwestern Ontario that was originally built in 1985 to serve the region’s lumber and mining sectors.
After several years of extensive testing, the converted plant is going into service, and will burn about 90,000 ton of pelletized wood waste sourced from a pair of regional wood pellet plants each year. The steam generated in the plant’s burners is expected to generate 150-million kilowatt hours of power annually. The plant will help provide energy to mining sites, according to Darcey Bailey, the engineer in charge of the Atikokan biomass conversion project.
The sheer size of the undertaking has drawn the interest of researchers at Thunder Bay’s Lakehead University, the University of Toronto and other post-secondary institutions. They have collaborated on process testing, safety procedures and lifecycle analyses, and will continue to monitor the plant’s environmental performance.
“The project, has garnered international attention from biomass proponents,” adds Bailey. “We’ve chosen existing technologies because they’re well proven to be effective.” But what distinguishes Atikokan is that the various biomass technologies being deployed at the plant have never before been combined on such a large facility that relies exclusively on wood pellets.
Another company pushing the potential of proven technologies is ENERCON Canada Inc., the Canadian subsidiary of a German-based manufacturer of wind turbines, which has opened up a facility in Beamsville, Ontario, a town better known for fruit orchards than industrial facilities. ENERCON focuses on both large and small projects, helping municipalities, farmers, remote and Aboriginal communities, as well as independent power producers, to satisfy their energy needs through wind power. But at its Beamsville facility, ENERCON’s engineers are also honing the company’s turbines by developing grid integration equipment for its more efficient gearless models, which use extensive amounts of recycled materials. The German multi-national chose to establish a foothold in Ontario because of the province’s feed-in tariff program, which provides long-term pricing stability for producers.
“We saw lots of opportunity in Ontario,” says Adrienne Downey, ENERCON’s operations and business development manager. "There is an excellent labour pool with many qualified workers in the skilled trades as well as youth looking for apprenticeship opportunities. With a market that is closing down coal and similarly evaluating its nuclear dependencies, we believe the long-term prospects in Ontario, coupled with the quality of manufacturing that we can achieve in Beamsville, present a good opportunity to support our national and international supply chains, including our long-term OEM contracts.”
Hydrogenics, ENERCON and a growing contingent of other Ontario clean tech firms now operate in a highly networked global ecosystem that includes domestic university research teams as well as multi-national firms looking to invest in 21st century technologies for their own supply chains. Provincial clean energy policies and funding programs have rounded out the picture by providing commercialization grants as well as predictable revenue streams for investors.
About Ontario’s Ministry of Economic Development, Employment and Infrastructure
The Ministry of Economic Development, Employment and Infrastructure supports a strong, innovative economy that can provide jobs, opportunities and prosperity for all Ontarians. The ministry delivers a range of programs, services and tools to help businesses innovate and compete in today’s fast-changing global economy, including business support and youth entrepreneurship programs, strategic investments and international trade and export expertise. Through the government’s Open for Business initiative, the ministry helps make investing in Ontario more attractive for businesses, while protecting the public interest.
Through the Accessibility Directorate of Ontario, the ministry works with the disability, private and public sectors in the interest of promoting accessibility for all.
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