Remote Control Farming Is Coming to a Prairie Near You

MaRS A Quarterly Publication

Future of Energy & Environment

REMOTE CONTROL FARMING

IS COMING TO A PRAIRIE NEAR YOU POWERED BY: MaRS Jerry Johnson John Barber, Tyler Hamilton, ways ofdoing things,from scientific research to technological advancements, always with Glenn Lowson, MichaelRafelson, David Stobbe Karen Mazurkewich David Paterson, ChrisTurner Marjo Johne, JasonMoody, EmilyNicoll, Kara Collins MaRS mapsinnovation andhighlightshow MaRS isajournalconceived to reflect the it touches ourlives. is based.The mission ofthemagazineisto of Toronto, thesingularcityinwhichMaRS creative spiritofoururbaninnovation hub, a view to improving thehumancondition. as well asthecultural andeconomicdiversity Contributors examine bothnew ways ofthinkingand new Managing Editor Editor Publisher Photographers

Issue 3 TABLE OFCONTENTS 21 09 03 y Tyler Hamilton y David Paterson 18 y JohnBarber 13

by Tyler Hamilton

Future ofEnergy &Environment coming to aprairie nearyou Remote control farming is transportation sector Greening theFleet:Driving efficiency intheheavy on anenergy diet theInternetPutting b b b b Can technology in plastic waste. We are drowning the-future moment save us? Cleantech’s back-to- y ChrisTurner 38 33 28 25 41 y MaRS staff y Marjo Johne y JohnBarber y David Paterson

MaRS Metrics the ‘Valley ofDeath’ Startups may face new risks after crossing b b b b Trump dividend women incleantech Why there aren’t more Edison-era electricity grid into thefuture New technologies lead Canadian cleantech’s 2 MaRS Issue 3 Future of Energy & Environment 3

REMOTE CONTROL FARMING IS COMING TO A PRAIRIE NEAR YOU

BY CHRIS TURNER

Saskatchewan farmer Trevor Scherman with Farmers Edge weather station MaRS Issue 3 Future of Energy & Environment 4

If you haven’t visited a farm of his farm, combining precise “I’ve been able to wake up in the on the Canadian prairie lately, information drawn from satellite morning,” he says, “and, with the scale of 21st-century imagery with soil samples taken the weather stations Farmers Edge agriculture can seem staggering. from each square on the grid. has installed on my land, I know Take Trevor Scherman’s spread: if I’m going spraying at four in All this information is fed into 4,400 acres south of Battleford the morning or if I’m going to a predictive model built on data in central Saskatchewan. That’s my son’s ball game that day. gathered from the 50 million acres more than four times the area of worked by Farmers Edge clients “Before, you used to wake up Vancouver’s Stanley Park, so if across western Canada. It then tells and drive all around the country he needs to stop his tractor and Scherman’s self-steering tractor and check rain gauges to see how wait for a hired hand to bring him how much seed and fertilizer is much rain we got, so you could more seed, it can take a while. needed, grid square by grid square. make your decisions. Well, it was Managing a farm of such size is The app also schedules his hired noon before you figured out what all about efficiency. On Scherman’s hands and tracks his finances. you were doing.” smartphone is a single app created Farmers Edge has replaced multiple by a company called Farmers Edge, weather apps on Scherman’s which gives him access to a range WITH THE phone and any number of websites, of data and management tools spreadsheets and downloaded unimaginable even 10 years ago. files on his computer back at the WEATHER Farmers Edge gathers data from farmhouse. In the seven years three weather stations right on Scherman has been the company’s STATIONS Scherman’s property and five others client, he has watched inputs drop FARMERS EDGE HAS INSTALLED on neighbouring farms, and crunches and yields climb. He now spends the ON MY LAND, I KNOW IF I’M the numbers to let him know if same amount of money to produce there’s a wind headed his way that more — and saves time and many GOING SPRAYING AT FOUR IN might disrupt pesticide spraying. headaches along the way. THE MORNING OR IF I’M GOING TO The app contains a gridded map MY SON’S BALL GAME THAT DAY. MaRS Issue 3 Future of Energy & Environment 5

BIG DATA TAKING market penetration in western ROOT ON THE FARM Canada — nearly one-tenth This is what Big Data looks like of all land in cultivation on the down on the farm — and it’s prairie is now managed by Farmers spreading fast across the entire Edge clients — and new growth in cultivated world. Farmers Edge, Australia, Brazil and eastern Europe. founded by a pair of Manitoba “We’re collecting the right data to agronomists in 2005 and based help make better decisions on the in Winnipeg, is growing at Silicon farm,” says Bruce Ringrose, the Valley speed — and with some company’s head of sustainability. of its money. “The result for the farmer is economic The legendary Silicon Valley benefit while also reducing the venture-capital firm Kleiner environmental impact.” Perkins Caufield Byers was an FARMERS IN GENERAL early investor back in 2014, later REALLY HOLD SCIENTISTS AT joined by a Japanese commodity trading firm in a $58-million HIGH VALUE… THEY BELIEVE financing round. They were bought out late last year by Canadian SCIENCE investment giant Fairfax Financial CAN SOLVE A LOT OF THEIR RISKS. (a major investor in BlackBerry), signalling a pivot from startup to going concern. Two years ago, the company’s app and data– crunching tools were in use on 600,000 acres of farmland. Today, the number is six million, with substantial MaRS Issue 3 Future of Energy & Environment 6

FARMERS: THE In commercial orchards, highly EARLY ADOPTERS lucrative tree crops such as cherries OF THE PRAIRIES and almonds have long relied on Farmers Edge joins a fresh crop regular physical inspection to alert of ambitious high-tech companies growers to insects, disease and other taking root in the agricultural sector. threats. A class of bio-pesticides Whereas it has developed tools called “pheromones” has long been for managing a whole farm, other known to be very effective, but companies are using Big Data and needs to be applied repeatedly each digital communications to solve day to be effective. much more specific problems. What’s more, wireless communications Contrary to stereotype, farmers are can’t be used to trigger the application open to change when they encounter devices because the high volume of the right kind of technology — after water in fruit trees’ leaves soaks up all, their GPS-guided tractors made the signals. To solve this problem, them very early customers for Semios developed its own sensors autonomous transport. and wireless network, which it then paired with its pheromone-delivery “Farmers in general really hold system. Knowing its customers don’t scientists at high value…,” says want a pile of new electronic gear Michael Gilbert, founder and to maintain, the company packages chief executive officer of Semios, it all as a subscription service. a Vancouver-based company that provides pest control to the “We own the hardware and we own lucrative global orchard market. the network and we manage it all “They believe science can solve for the customer,” Gilbert explains. a lot of their risks.” “And all we sell them is the science.” MaRS Issue 3 Future of Energy & Environment 7

THE FUTURE OF Frontier also intends to use a “pay of data feed autonomous machines FARMS ARE FERTILE FARMING: LESS WASTE, as you grow” model — a sort of that gather yet more data to figure GROUND FOR FEWER CHEMICALS royalty based on annual yields. This out solutions as they operate. REMOTE CONTROL approach is a rebuke to the global Next-generation science is even It also raises the previously Consider how Farmers Edge agribusiness model often employed changing the future of farming inconceivable possibility of has begun to use its staff by conglomerates such as Monsanto. at the molecular level. farm production being halted agronomists — those old-school They sell seeds that don’t reproduce, experts who gather and analyze Frontier Agri-Science, a startup by cyberattack. There have meaning farmers can’t save some soil samples and figure out what that emerged from the University been few incidents to date, but of their harvest for the next planting. farmers need to do to boost of Toronto, is developing new strains security agencies, including “I don’t know if I ethically agree their yields. The data collected of drought-tolerant grain based the FBI, worry the risk is growing with that,” Northey says. to feed the company’s soil-nutrient on a protein identified by company as farmers rely increasingly modelling has reduced the need founder Julian Northey that on connected technologies. for gathering soil samples from determines a plant’s ability to MACHINE “Farmers now need to consider every field each year. This allows handle stress. carefully who they’re partnering the company to focus its human Frontier hopes to boost tolerance LEARNING with to protect and back up expertise on new clients and their data — their business to drought, pests and other stresses LOOKS LIKE THE DAWN OF A BRIGHT new markets where it has less depends on it,” says Tanya data on hand. by selectively breeding plants to FUTURE, WHERE LESS MONEY AND be high in the protein, but without Rosemarin, a vice president SEED ARE WASTED, FEWER CHEMICALS Back in the fields, where is all this genetically modifying them. Its first at Chubb Insurance, a global ARE NEEDED, AND HIGH-PRICED automation and data crunching field trial — a variety of durum wheat leader in technology insurance. EXPERTISE CAN BE APPLIED WHERE going to lead? “I think remote- the company hopes could increase But to the industry’s pioneers, control farming is coming,” says yields by up to 20 per cent in drought IT’S MOST VALUABLE. this “machine learning” looks like Bruce Ringrose of Farmers Edge. conditions — began in the United the dawn of a bright future, where States this spring. If it’s successful, The future of commercial-scale less money and seed are wasted, Strange as it may seem, there are the new wheat could be planted farming can seem daunting — larger fewer chemicals are needed, now few places better prepared commercially in western Canada and larger farms run by fewer and and high-priced expertise can be for remote control than the farm. within five years. fewer people, a world in which reams applied where it’s most valuable. MaRS Issue 3 Future of Energy & Environment 8

SCIENTISTS ARE BREEDING NEW STRAINS OF PLANTS HIGH TECH TAKING resistant to stresses like drought and pests without genetically modifying them

ROOT ON THE FARM WEATHER STATIONS throughout the farm provide current conditions, 10-day forecasts, TO PROTECT VULNERABLE historical weather data and more FRUIT TREES farmers use automated pheromone dispensers and pest traps, soil moisture and leaf-wetness metres

FARMERS USE MOBILE DEVICES SELF-STEERING TRACTORS to track weather, schedule hired can be programmed remotely to precisely hands, manage finances, and more sow seed and fertilize at the optimum time MaRS Issue 3 Future of Energy & Environment 9

GREENING THE FLEET: Driving efficiency in the heavy transportation sector

BY JOHN BARBER

Jack MacDonnell, CEO of EnerMotion MaRS Issue 3 Future of Energy & Environment 10

Heavy trucks rule the roads DIESEL-POWERED TRUCKS boxes are now rolling off of the industrial suburbs north NOW CAUSE MORE an assembly line at auto-parts of Toronto’s Pearson airport — giant Linamar in Guelph, Ont., jamming traffic, fouling the air and and undergoing final testing in shattering whatever peace may POLLUTION some of the largest trucking once have existed here in the engine THAN COAL-FIRED fleets in North America. room of the Canadian economy. POWER GENERATION EnerMotion’s biggest challenge This is not a place for the eco- But not everybody is waiting for in attracting investors was its conscious. But it serves as a useful Ottawa to act. Here in the midst ambition to build “a box, a physical dose of modern reality, a reminder of the din, one bold startup is product,” rather than software, of facts that many people — perfecting technology that promises according to MacDonnell. In a including government regulators major gains in the efficiency of long- world where new apps from — have long preferred to ignore. haul trucks. Using heat energy from Silicon Valley can make instant Greenhouse-gas emissions the exhaust of diesel engines that millionaires, manufacturing from Canada’s transportation otherwise goes to waste, EnerMotion in Ontario is not the sexiest sector rival those of the Alberta Inc.’s “Hyper” unit is able to supply proposition for investors. But oil sands — the country’s single emission-free cooling and heating with an advanced industrial greatest source. Between 1990 to the trucks’ cabs. Hyper improves infrastructure and abundant and 2015, emissions from the fuel efficiency and eliminates the technical support available for freight truck fleet tripled. In fact, need for constant engine idling the project — and despite the boss diesel-powered trucks now during rest stops. working without pay for five years— IN A WORLD WHERE NEW APPS FROM SILICON VALLEY CAN cause more pollution than Had he known it would take nine Toronto served the unorthodox MAKE INSTANT MILLIONAIRES, coal-fired power generation, years to bring the product to startup well. “Because of our and yet the federal government market, “I probably wouldn’t have focus on clean energy, this has MANUFACTURING IN ONTARIO IS still has not announced the done it,” admits Jack MacDonnell, been the right location to be in,” NOT THE SEXIEST PROPOSITION tighter regulations promised. EnerMotion’s chief executive officer. MacDonnell says. FOR INVESTORS. But the first factory-made Hyper MaRS Issue 3 Future of Energy & Environment 11

TORONTO IS DRIVING • And at an airfield near Brantford, FINDING SUCCESS EnerMotion has chosen the former: INNOVATION IN just over an hour outside of BY REFINING EXISTING “There’s always emerging technology,” HEAVY TRANSPORTATION Toronto, Solar Ship Inc. is testing PRODUCTS OR Jack MacDonnell says, “but you can’t EnerMotion is not alone. The Toronto a hybrid aircraft — part blimp, DISRUPTING OTHERS replace infrastructure overnight.” Cleantech visionaries describe area has become a hotbed of part plane — designed to lower With international connections a future of electric-powered trucks innovation in the often-overlooked the cost of delivering heavy cargo, built into their DNA, the companies that drive themselves. “But what but critical effort to bring clean such as emergency supplies, to are finding new ways to make the do you do during the transition technology to heavy transportation: the world’s most isolated regions. perilous journey from inspiration period of 20 to 30 years?” he asks. to commercial success, a road • In Mississauga, Hydrogenics All located in Toronto and the “You have to do something now, and Canadian entrepreneurs have Corp. has become a world leader surrounding area, these companies this technology does something often found blocked in the past. in the development of propulsion are also united when it comes right now. That’s what’s important.” and storage systems for hydrogen to global reach. To test its new The projects are as diverse as fuel cells. transmission, inMotive has teamed they are far-reaching, ranging At the other extreme, replacing up with a major South Asian from targeted refinements of infrastructure overnight — to In Don Mills, startup manufacturer • automaker. TransPod received its existing technologies to plans “disrupt and redefine” commercial inMotive is developing an automatic first round of funding — $15 million for revolutionary disruption. transportation in general — is transmission that promises to make — from Italian high-tech holding exactly what Sebastien Gendron, electric vehicles significantly more company Angelo Investments. THE TORONTO AREA HAS BECOME the young founder and chief efficient than they already are. Hydrogenics fuel cells are powering A HOTBED OF INNOVATION executive officer of TransPod, • Downtown at innovation hub MaRS a new zero-emissions train that IN THE OFTEN–OVERLOOKED plans to do. is built by Alstom in France and BUT CRITICAL EFFORT TO BRING Discovery District, startup TransPod “The bigger it is, the better chance operating in Germany. And Solar CLEAN TECHNOLOGY TO HEAVY is planning a Canadian entry into we have to bring it to fruition,” he Ship is working with a freight hauler TRANSPORTATION. the race begun by pioneering says. “The stars are aligned at the in central Africa to provide that entrepreneur Elon Musk to develop moment, especially in Canada. region with disaster relief. a high-speed vacuum-tube train So we are pushing forward.” — the so–called Hyperloop. MaRS Issue 3 Future of Energy & Environment 12

HIGH-SPEED, LEVITATING Bottero says. “In our sector, blimp that can manoeuvre like And the message for local TRAINS BY 2025 there’s a lot of technical knowledge an airplane. Being powered by investors is that perhaps it’s time With 30 employees in Canada here, a lot of support in terms hydrogen fuel cells and the sun to recognize what the rest of and Europe, the company expects of fabrication, testing and so on. allows it to be fully autonomous, the world already seems to know: to have its first line — a magnetically But the commercialization piece operating far from roads or runways. You have to start somewhere, levitated and propelled tube train happens elsewhere.” and the Toronto region’s growing “The biggest hurdle is not so much that can travel between Montreal and expertise, established industrial In his case, Bottero adds, the money as doubt,” he says. “Your Toronto in 30 minutes — built and base and advanced skills in new reason is simple: “There are greatest drag coefficient on your running as early as 2025. technology have made it one of the no car companies headquartered business is being around a bunch world’s best places to do just that. “Many people are telling me that in Canada,” he explains, “and the of people who don’t believe you can Canadians are risk-averse,” Gendron major decisions around something do it, even if you show them all the says. “I disagree with that. I still think as important as a powertrain things you can do.” there is room for innovation — more typically happen where the centres Canada is “a great place to come than we think here.” of power are.” For inMotive, that up with ideas,” he adds. “The means India, where its transmission universities are stacked full of What’s missing in Canada, he is now being tested in electric fabulous people and, once you’re adds, are investors willing to vehicles made by one of Asia’s up and running, this is a fantastic finance home-grown innovations. largest auto manufacturers. “I think we can change that.” place to own and operate a business. ROADBLOCKS ON THE But it’s a really terrible place for Paul Bottero, co-founder and CEO WAY TO LAUNCHING support of its own innovations.” of inMotive, is not so sure. Innovation, THE “FLYING TESLA” he says, is plentiful. But his firm While Godsall says local investment Solar Ship founder Jay Godsall is a “textbook example” of Canada’s remains sparse, he adds, “global has run into more complicated failure to commercialize its own money likes Canada, so I think the roadblocks on his decades-long inventions. “We can’t say enough clear message for innovators today quest to build what he calls a about how well the Canadian is, ‘Do not stick to home.’” “flying Tesla” — a helium-filled ecosystem supports innovators,”

Rendering of TransPod train MaRS Issue 3 Future of Energy & Environment 13

WE ARE DROWNING IN PLASTIC WASTE. CAN TECHNOLOGY SAVE US?

BY DAVID PATERSON

MaRS Issue 3 Future of Energy & Environment 14

In the three decades since Canada 12 million metric tons of plastic RECYCLING CAN BE So, for many plastics, recycling pioneered blue box recycling, similar is swept into oceans every year, LIKE A SPIRAL OF is more like a spiral of declining value. systems have become familiar sights a problem highlighted by the recent DECLINING VALUE The complexity, combined with high in cities throughout the developed discovery of two vast garbage costs for collecting, transporting and Recycling programs are picky world. But the rise of recycling patches in the once-pristine Arctic sorting, would seem to create little because not all plastics can disguises an awkward truth: only Ocean to go along with those incentive for investment. be treated the same. While some, 10 per cent of the plastic produced already polluting the Pacific. such as water bottles made globally is put back into use. The recycling of plastic is of polyethylene terephthalate, Even in a rich nation like Canada, THE RISE OF improving so slowly in part or PET, are relatively easy to recycle, where all but the most isolated “because there isn’t an easy rule others, such as ketchup bottles, communities can recycle, plastics for people to follow,” says Ashley contain multiple layers of plastic RECYCLING are recovered at a much lower rate Wallis, a program manager with that are much more difficult DISGUISES AN AWKWARD TRUTH: than materials like paper and metal. Environmental Defence, a to process. ONLY 10 PER CENT OF THE PLASTIC Now technology is rising to Canadian non-profit agency. In many cases, instead of material PRODUCED GLOBALLY IS PUT BACK meet the challenge posed by INTO USE. One problem is that so many fit for new products, recyclers the enormous heap of plastic varieties of plastic are in use; end up with a gloop containing discarded into the environment another is the fact that municipalities contaminants that affect its colour, every year, as well as materials have different rules. For example, clarity and other physical properties. that are collected but end up Toronto residents can recycle Cleanliness can also be an issue. in landfill because they can’t white plastic forks but not black For example, very few Ziploc bags be recycled economically. ones, while in neighbouring are recycled. Those that are — just 0.2 FISH SWIMMING THROUGH Mississauga, both types go in the per cent — are collected via grocery- OCEANS OF PLASTIC trash because they’re too small store drop-off boxes because those found in curbside bins are generally How big a predicament is plastic? for that city’s sorting machinery. too dirty to make a valuable product. Scientists estimate that up to MaRS Issue 3 Future of Energy & Environment 15

THE KEY TO an asphalt surface for roads down plastics placed in it, and then Plastics Industry Association RECYCLING MORE that incorporates its waxes. creating waxes, oils and monomers, (and one of those responsible which are small molecules that can for creating the blue box program PLASTIC? UPCYCLING But the company has even bigger be turned into new products. in Ontario), but it’s no magic bullet. Yet new technology may soon plans, says chief executive officer fill the gap by launching a wave Kousay Said. “Now that we have Then, once it has collected and He feels the best results come of “upcycling” that takes plastics successfully commercialized the sold the output to manufacturers, from an approach that emphasizes now considered hard to recycle wax platform, we are moving Pyrowave shares the proceeds responsible consumption and the economically and turns them into into polystyrene,” which he says with the clients that rent its reuse of plastic, as well as recovering something much more valuable. is not currently recycled “at any machines, creating an added it from the waste stream. significant rate.” incentive to recycle. GreenMantra Technologies, Still, with some skeptics suggesting based in Brantford, Ont., is perfecting RECYCLING MORE Jocelyn Doucet, chief executive there will be more plastic in the a process that breaks down waste PLASTICS ON-SITE of the company, which has offices oceans than fish within 30 years, plastics — including hard-to-recycle Whereas GreenMantra buys waste in Montreal and Oakville, says the alchemists who can turn it into grocery bags and plastic film — plastic that has already been sorted market is hungry for solutions that something worthwhile are bound into small molecules. Instead and turned into pellets, another derive value from waste, especially to give recycling a healthy boost. of being reassembled as they Canadian company is working if they are convenient: “Our tech were, the components become to recycle mixed plastics wherever is very robust, it can take very entirely new products, such as they are. contaminated plastic material, SOME SKEPTICS SUGGEST waxes and lubricants, that are mixed plastic material, it doesn’t THERE WILL BE MORE up to five times more valuable. Pyrowave has created a portable matter — you’ll get the output.” system that can be installed GreenMantra already produces anywhere there is a lot of plastic BUT UPCYCLING ISN’T PLASTIC IN about 5,000 tonnes a year waste — from auto-assembly plants THE ANSWER TO ALL of ingredients used in coatings, to grocery stores and plastic sorting PLASTIC WOES roofing shingles and adhesives THE OCEAN facilities. The device works like Upcycling shows great promise, for packaging. It has also worked THAN FISH WITHIN 30 YEARS a reverse vending machine, using says Joe Hruska, vice-president with the City of Vancouver to create microwave technology to break of sustainability with the Canadian MaRS Issue 3 Future of Energy & Environment 16 THE RECYCLER’S PLASTIC LID If white, it can be recycled; if black, DILEMMA probably not. EVEN SOMETHING AS HUMBLE AS A DISPOSABLE COFFEE CUP CAN COMPLICATE LIFE FOR THE CONSCIENTIOUS CONSUMER.

CARDBOARD SLEEVE PAPER CUP Can almost always Special equipment is required to remove be recycled. the plastic wax coating, so cups may or may not be recycled, depending on whether your community has it.

STIR STICK If wood, it either goes in the compost or garbage, depending on your community’s guidelines; if plastic, it probably goes in the garbage. MaRS Issue 3 Future of Energy & Environment 17 FEEDING THE IMAGINATION WITH WASTE PLASTIC Startup ReDeTec keeps 3D printers device called the ProtoCycler, humming with recycled plastic which grinds up waste plastic, and melts it, before extruding 3D printing is revolutionizing it as a filament ready for reuse. the way some professionals work, enabling designers and architects So far, the ProtoCycler can handle to create prototypes and working only PLA and ABS, the two most models much more rapidly than in common types of printer plastic. the past. The downside: It can be But new printers coming on the incredibly wasteful. Not only do market can use PET, the plastic 3D printers use an excess of plastic commonly used in water containers, during production, even the final so ReDeTec is now researching product often ends up in the trash. ways to adapt its technology.

The plastic filament used in This raises the possibility that 3D printing costs more than $30 soon even your old water bottle a roll, so Toronto-based startup could be converted into futuristic ReDeTec sees a substantial upside prototypes that could change in the recycling market. It has the world. created a compact desktop

Dennon Oosterman, co-founder and CEO, ReDeTec MaRS Issue 3 Future of Energy & Environment 18

CLEANTECH’S BACK-TO-THE- FUTURE MOMENT Canada’s golden age of telecom pays dividends to entrepreneurs decades later

BY TYLER HAMILTON

John Paul Morgan, co-founder and CTO of Morgan Solar, holds the company’s new transparent solar panel, which fits on the outside of glass buildings, converting harsh glare into clean energy while letting most daylight through. MaRS Issue 3 Future of Energy & Environment 19

John Paul Morgan shines a green networking pioneer that at the The result is a new generation penlight on a prototype that time was a giant of Canada’s of companies building on the he created — a solar optic that world-leading telecom scene. intellectual property of an earlier YEARS OF EXPERTISE converts light into electricity. era, when companies such as JDS, AND EXPERIENCE FROM It was there, in the JDS lab, As he does, the beam strikes the Newbridge Networks and especially CANADA’S GOLDEN AGE that he got to tinker with optical device’s acrylic surface, then bends Nortel Networks were hotbeds OF TELECOM ARE TODAY components and equipment, solve abruptly at a right angle toward of optical networking innovation. BEING REAPPLIED TO problems and learn the language the centre, where it elegantly Ventures such as Morgan Solar SOLVE MAJOR CHALLENGES of light. “That experience prepared converges on a thumbnail-sized are now leveraging this know-how AROUND ENERGY AND me for Morgan Solar,” recalls Morgan, solar cell that produces the power. to generate cleaner electricity, one of JDS’s more prolific young THE ENVIRONMENT. eliminate waste from industrial It has been nearly a decade since inventors. “I certainly could not have processes, put energy-hungry he developed this device, and done what I’m doing now without data centres on diets, and enable his technology has improved it. JDS basically taught me to be the 21st-century smart grid. dramatically since then. Now fearless when it came to optics.” “When you look at my notebook significantly more affordable, during the initial invention phase it is also lighter, better designed, TELECOM TECH for Morgan Solar, you see 20 years and arguably one of the more BOOSTS CLEANTECH of patent history standing on efficient ways to produce solar Although Morgan’s mission now the shoulders of these giants,” electricity on the planet. is to make solar energy cheaper Morgan says. and more widely available, his Looking back on the source story illustrates a common but of inspiration for his unique design, little-noticed theme in Canadian JDS BASICALLY TAUGHT ME TO BE Morgan, co-founder and chief cleantech: Years of expertise and technology officer of Toronto-based experience from Canada’s golden age FEARLESS Morgan Solar, points to the early of telecom are today being reapplied WHEN IT CAME TO OPTICS 2000s when he worked in Ottawa to solve major challenges around for JDS Uniphase, the optical- energy and the environment. MaRS Issue 3 Future of Energy & Environment 20

OTTAWA’S SILICON than half a trillion dollars — greater Hill in 1978, the concept was a reliably in a volatile environment, VALLEY NORTH BUILT than the combined value of Canada’s significant advancement for optical such as an oil refinery, where THE BACKBONE OF Big Five banks. Then, between communications because it created temperatures often rise above THE INTERNET 2000 and 2002, it all came crashing the ability to distribute telecom 1,000 degrees celsius. Because down. The telecom market collapsed, channels in a new way. they transmit light — not electrons Before Google became a household orders dried up and massive job — there’s no risk that a spark will name and Netflix began serving “This was a big Canadian invention, cuts followed. Nortel later declared cause an explosion. up online videos, and well before and the list of people who could bankruptcy and its various parts social-media fixtures such as make FBGs in the 1990s was very As a result, optical sensors make were sold off. JDS, a shadow of Facebook and Twitter captured short,” says Nicholas Burgwin, it possible to improve the efficiency itself, relocated its headquarters to our collective attention spans, co-founder and chief executive of industrial processes in a range California and eventually broke up Ottawa’s high-tech scene — the officer of FIBOS. “Nortel and JDS of new settings, from chemical into two smaller companies, Viavi original Silicon Valley North — invested heavily into it, and this plants to sawmills. Solutions and Lumentum Holdings was building the backbone of gave them a competitive edge.” Inc., in 2015. the Internet these popular Burgwin, much like John Paul Some of that investment made Morgan, is well aware of what services depend on. Yet the roots of their innovation its way to Toronto when Ryerson his firm’s future owes to the past. remain intact, and new shoots are The cutting-edge lasers, optical University took advantage of the sprouting — many of them green. “We’ve made slight changes, components and fibre-optic gear JDS downsizing to purchase some Toronto-based FIBOS, an optical- but what we’re doing is essentially it developed now carry, analyze of its equipment in a fire sale. It was sensor developer, says its business what the telecom industry has and guide much of the data at Ryerson, with this equipment, has been heavily influenced by work been pushing out for years now generated today — from online that Burgwin first developed his done by Nortel and JDS during in high volume,” he says. “They’ve transactions and machine-to- FBG-based sensor technology the 1990s involving “fiber Bragg given us the confidence and ability machine communications to to monitor strain and temperature gratings.” FBGs alter the core of to do what we do.” the seemingly limitless number in rugged industrial settings. an optical fibre using ultraviolet of cat videos that spread virally lasers, enabling the fibre to transmit through YouTube. It turns out, optical sensors have some wavelengths and block a huge advantage over traditional At their peak, Canada’s giants of others. When first demonstrated electronic sensors. They can be used networking were valued at more by federal scientist Kenneth MaRS Issue 3 Future of Energy & Environment 21

PUTTING THE INTERNET ON AN ENERGY DIET RANOVUS manages today’s data tsunami using less power

BY TYLER HAMILTON

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There are two indisputable facts “Arguably we’re only at the tip about the Internet — it never stops of the iceberg,” says Chris Boivin, growing and it needs increasing until recently vice-president amounts of energy to survive. of investments at Sustainable Development Technology Canada Netflix subscribers alone streamed (SDTC), which supports cleantech 42.5 billion hours of video in 2015, demonstration projects across and by one estimate consumed the country. enough energy to power more than 2 million households. Depending on According to Boivin, the carbon how that energy is generated — coal footprint of data centres, those versus renewables, for instance — 24/7 workhorses of the Internet, the impact on our climate can’t is already on par with that of the be ignored. global airline industry, so reducing their energy intensity has become INTERNET TRAFFIC a priority for government and EXPECTED TO TRIPLE entrepreneurs alike. BY 2020 But hold on to your hats, we’re just getting started. Global Internet traffic is expected to grow threefold from 2015 to 2020, two-thirds of it THE CARBON FOOTPRINT OF related to video. By then, there will be an estimated 26 billion devices exchanging data across this global DATA CENTRES, THOSE 24/7 WORKHORSES OF THE INTERNET, network of networks, according to IS ALREADY ON PAR WITH THAT OF THE GLOBAL market forecasts from Cisco. AIRLINE INDUSTRY MaRS Issue 3 Future of Energy & Environment 23

PUTTING DATA ON up of millions of nanoparticles FROM COOL electronics and silicon-photonic A STRICT ENERGY DIET of different sizes, with like-sized SCIENCE PROJECT TO components required to make “The power consumption of these dots emitting their own wavelength MARKET-READY PRODUCT the laser operate reliably in a things has become enormous,” says of laser light. “What you end up Arabzadeh, who had spent seven data-centre environment. Hamid Arabzadeh, co-founder and with is many wavelengths coming years at Nortel running parts “It’s gone through its next phase chief executive officer of Ottawa- from a single laser source,” he adds. of its optical networking business of evolution with RANOVUS,” based RANOVUS, which has come The upshot: A single laser can and another seven years as CEO Arabzadeh says. “The laser would up with a way to accommodate do the job of many. of Nortel technology competitor not work if deployed today on its this rapidly expanding appetite CoreOptics (acquired by Cisco in own. What we have had to include for data while putting it on a strict But Nortel didn’t have the chance 2010), grew increasingly aware of is all the other things around it energy diet. to fully develop and commercialize the cutting-edge laser research to make it work.” the laser technology. Sadly, and saw tremendous potential. The core of the company’s it became another orphan of the innovation is quantum-dot laser telecom giant’s stunning collapse Looking for a new project, technology that can transmit during the early 2000s. he negotiated an agreement more data at lower cost, using with the NRC to commercialize significantly less power. First The federal government, to its credit, the technology. This resulted conceived at Bell-Northern Research had enough foresight to find it a in the creation in 2012 of (predecessor to Nortel Networks), stable home in Canada, negotiating RANOVUS, which has spent quantum-dot lasers are designed a deal that would see the intellectual the past five years — and $40 using self-assembling nanomaterials property — and the world-class lab million in investment — turning that, because they are so small, built to develop it — transferred to a lab experiment into a market- exhibit unique behaviours referred the National Research Council (NRC). ready product. to as “quantum effects.” Good news, yes, but it also meant the technology became little more A big part of this work, in “Usually, lasers can generate only than a cool science project for collaboration with researchers one wavelength,” Arabzadeh federal researchers. at McMaster University in Hamilton explains. Quantum-dot lasers, and partners in Germany, has on the other hand, are made been developing the high-speed MaRS Issue 3 Future of Energy & Environment 24

MANAGING MOUNTAINS Trends related to cloud computing, OF DATA ONE LASER artificial intelligence and the Internet AT A TIME of Things are expected to drive The result of this tremendous traffic significantly higher, and effort is a laser product that more traffic means more energy could potentially replace up to to power the data centres that 100 conventional lasers in a data- process, store and carry it. centre setting, at one-quarter This is why SDTC has so far provided the cost and using one-fifth $7.9 million to help RANOVUS the power. As Arabzadeh develop and demonstrate its explains, “To be able to do what technology, which is capturing we’re doing overcomes many the attention of some big Internet challenges in physics, engineering players, among them Facebook, and manufacturing.” Amazon and Microsoft.

Such an innovation couldn’t come “They basically said this is Star at a better time, given the data Trek-like stuff,” Arabzadeh says. tsunami we face as a society. “It’s going to change the optical TO BE ABLE TO DO networking world.” WHAT WE’RE DOING OVERCOMES MANY THEY BASICALLY SAID THIS IS CHALLENGES STAR TREK-LIKE STUFF, IN PHYSICS, ENGINEERING ARABZADEH SAYS. “IT’S GOING TO CHANGE THE OPTICAL AND MANUFACTURING. NETWORKING WORLD.” MaRS Issue 3 Future of Energy & Environment 25

WHY THERE AREN’T MORE WOMEN IN CLEANTECH

BY DAVID PATERSON

MaRS Issue 3 Future of Energy & Environment 26

Women are more likely than men tech giants like Uber, large to consider climate change a serious VC firms and incubators alike. threat, they recycle more diligently and are more likely to make eco- Q: SO, WHY AREN’T friendly consumer choices. Yet THERE MORE WOMEN? only about five per cent of clean A: Most cleantech startups are technology companies in the MaRS based on deep science — physics, portfolio have female founders. Why chemistry, engineering. Very is cleantech still a man’s world? And often they spring from university what will change that? Jane Kearns, research departments or are senior advisor at MaRS Cleantech, built by technical people who offers her insight. have spent years at industrial, mining or utility companies, Q: DOES CLEANTECH and have seen a business HAVE A PROBLEM opportunity. Engineering is WITH WOMEN? still heavily male-dominated, A: Having worked in cleantech for and industrial conglomerates over 20 years, I don’t think so. It’s also skew heavily male. So, actually a very welcoming industry the pipeline of women who for the women who work in it. want to found cleantech Despite being relatively small, the companies and have the sector is growing mightily and technical skills and experience there is a real sense of banding to succeed is quite narrow. together to build exceptional Add to that the well-documented companies that will change the fact that women entrepreneurs world. I’ve experienced virtually face an uphill battle when none of the deep-seated misogyny securing funding, and you have that has spawned Silicon Valley’s some significant hurdles to toxic bro culture, made public in creating successful female-led the wake of recent scandals at cleantech startups. MaRS Issue 3 Future of Energy & Environment 27

Q: ANY SIGNS OF CHANGE? like these give me great hope The StandUp Ventures Fund, A: We have seen some really smart that the tide is turning and we founded last year by the young women starting cleantech will see more women solving Business Development Bank companies lately, and some of deep technical challenges that of Canada and MaRS Investment our serial female entrepreneurs benefit both our environment Accelerator Fund to support are also getting great traction and our economy. women entrepreneurs, is also with their new ventures. I work an encouraging step. It will help with one young founder, Daniela Q: WHAT MORE NEEDS to address the unfair funding Roeper, who started Borealis TO BE DONE? landscape that women face, Wind, a company dedicated to A: We need to grow the pool of and demonstrate clearly what keeping wind turbines ice-free in potential female entrepreneurs. research has already shown: winter, straight out of university, Women make up fewer than 40 that female-led startups perform and says anxiety over climate per cent of graduates in science just as well, if not better, than change is sparking more interest and technology subjects — in those founded by men. in cleantech among women her engineering, a class is considered age. Another female entrepreneur, gender diverse if one student in Emily Hicks, is the co-founder and four is female. Research shows president of FREDsense, which that, if a girl is put off science makes a portable platform that and math by Grade 4, she simply senses water-borne contaminants thinks she can’t do it and gives in virtually any industrial up forever. We need to make application. She and her company a concerted effort to create keep winning technical and science and math programs that business competitions, and she are interesting and accessible to was recently named to Canada’s girls, and expose them to female Top 30 Under 30 in Sustainability. role models. For example, groups So, while the percentage of like Women in Renewable Energy female founders in cleantech are helping to raise the visibility seems low, young women of women in the sector. MaRS Issue 3 Future of Energy & Environment 28

NEW TECHNOLOGIES LEAD EDISON-ERA ELECTRICITY GRID INTO THE FUTURE

BY JOHN BARBER

MaRS Issue 3 Future of Energy & Environment 29

It’s not as though Calgary But full production of the unit THE PROMISE: AN entrepreneur Brent Harris set still awaits the completion of a AFFORDABLE SYSTEM RUN out to take on Elon Musk and Tesla “Gigafactory” in California, ON RENEWABLE ENERGY beat the legendary innovator at so in the meantime, thousands Even without Tesla leading it, the his own game. “That’s not our of consumers in Europe and the revolution the company promised mission,” Harris says of Eguana United States have snapped up is well under way. A virtual mob of Technologies, the company he competing battery systems new technologies is storming the founded 15 years ago to bring controlled by Eguana Technologies. rigid architecture of the Edison- green energy systems to remote, The company’s biggest customer era electric grid, promising radical off-grid locations. “But,” he adds, base is Germany, where the improvements in its efficiency sounding more surprised than high cost of power has inspired and usefulness. For consumers proud, “it certainly is the situation a world-leading shift to rooftop struggling with the steadily rising at this time.” solar generation — and where being cost of power, the revolution Musk’s Tesla Inc. first announced able to store that power for when promises greater control, allowing its Powerwall home battery system you need it most can cut reliance on them to determine when, where in 2015 amid heady expectations. the grid by 80 per cent. Eguana is also and what kind of power to use. Energy storage promised to take focusing on another solar hotspot, It will also turn utilities from one-way home solar systems mainstream, Hawaii, where it has partnered with pipelines into complex webs where to save householders money, if the state’s largest solar installer to energy is produced and traded in not make them independent of supply the batteries all new systems multiple directions with the speed the conventional grid altogether. now require. and efficiency of a stock exchange. According to the hype, what And for society at large, it holds the Tesla electric car did to the A VIRTUAL MOB OF NEW the tantalizing promise of an automotive industry, the Tesla TECHNOLOGIES IS STORMING affordable system fully run on Powerwall would do to the THE RIGID ARCHITECTURE OF THE renewable energy. electrical system. EDISON-ERA ELECTRIC GRID, PROMISING RADICAL IMPROVEMENTS IN ITS EFFICIENCY AND USEFULNESS. MaRS Issue 3 Future of Energy & Environment 30

Eguana, which takes its name SMART TECHNOLOGIES smart. “It’s a huge challenge,” says and place a value on power from from the sun-loving reptile, initially REPLACING DUMB Opus One chief commercial officer renewable sources and storage developed its “smart inverter” TRANSFORMERS Keyvan Cohanim. batteries. This will eventually lead to technology to deliver power from a market, Cohanim says. “So that, in For utilities, this offers a compelling More than 60 per cent of the North fuel cells in remote locations. But the future, market mechanisms can alternative to installing more and American grid “runs blind,” he says, battery-backed solar energy held determine who’s selling power onto more of what Harris calls “dumb and the first job of GridOS is to map such promise that it quickly became the grid versus who’s using it, and it transformers.” The old way where the power is flowing in real the company’s main business. becomes a self-balancing operational amounts to “building a 16-lane time. Only then, he says, can a utility model — just like the stock market.” “We basically make the battery freeway that’s going to be busy manage its resources properly — do interesting things on the grid,” for an hour a day,” he explains. Harris explains. “It will let you store The vision is fast becoming real your solar energy during the day in Hawaii, where rooftops on the for use at night. Or, if you’re in populated island of Oahu already a place that has time-of-use rates, produce 500 megawatts of solar IN THE FUTURE, MARKET MECHANISMS it will charge the battery at a low- energy, and the state has mandated CAN DETERMINE WHO’S SELLING POWER cost time to offset buying power that the grid be powered entirely at a high-cost time.” from renewable sources by 2045. ONTO THE GRID VERSUS WHO’S USING IT, AND IT BECOMES A But self-generation is only the There is now so much “uncontrolled beginning. The bigger changes solar” that Hawaii has made storage occur as buildings are networked. batteries compulsory for all new SELF-BALANCING “When you’re talking about a installations because the state can’t half-dozen batteries, it’s not really handle all the power being generated. OPERATIONAL MODEL a big deal,” Harris says. “But Solving such a problem is the JUST LIKE THE STOCK MARKET when you start to get hundreds business of Toronto startup Opus One of thousands of these things, and Solutions, whose software platform, you can call on them all at once, GridOS, provides the computing now you have megawatts of power power needed to make the smart grid at your disposal.” MaRS Issue 3 Future of Energy & Environment 31

THE SMART GRID resilient. In the process, Cohanim The challenge is to devise incentives is being built on former industrial WILL SPARK CHANGE says, “the role of the utility evolves” that encourage the adoption of new lands bordering the Ottawa River, FOR CONSUMERS from being a reliable supplier of technology that meets everyone’s will see its energy use managed AND PRODUCERS ALIKE power to “also helping customers needs. Because the problems are by a subsidiary (jointly owned by be more independent.” universal, the solution itself may Hydro Ottawa and the developer) The self-balancing smart grid will become an exportable opportunity. that operates outside the normal allow those who are sufficiently And that could be the toughest regulatory framework, allowing motivated unprecedented control, change of all, according to Ron Dizy, Take the experiment in Ontario when the public/private group to whether as energy consumers or managing director of the Advanced the government at the time agreed innovate in ways that wouldn’t producers. Others will be content to Energy Centre at MaRS Discovery to pay for solar energy through be possible otherwise. relax with a good book while their District in Toronto. It’s not the lack its original Feed-In Tariff (FIT) electrical panels automatically “play of new technology that impedes program. The initiative, says Dizy, the market” to their best advantage. innovation, he says: “We think it’s was overly generous and served to much more an adoption problem stifle innovation: “We deployed lots Opus is currently putting GridOS than an invention problem.” of solar, but we certainly did it at a to the test in New York State, higher cost than we needed to.” As a joining utility National Grid in a Established in the Edison era, the result, the companies created in the project to manage the energy traditional ways of generating and province were unable to compete profile of the 120-acre Buffalo distributing electricity suffer from internationally because their costs Niagara Medical Campus. tremendous inertia. “But it’s not that were too high, he adds. the government is slow, and utilities Spurred by widespread grid failure are dumb, and the regulator doesn’t One positive example of regulatory following Hurricane Sandy in 2012, get it,” Dizy adds. “The incentive reform was the deal struck New York is among the handful of system is set up in such a way that between Hydro Ottawa and the jurisdictions leading the march to we get the results we get. People are Windmill Development Group to develop all manner of “non-wire acting completely rationally, in ways create a self-sufficient micro-grid alternatives” to the status quo, both counter to what we all agree should for what Windmill calls “the world’s to optimize existing infrastructure be done in the long run.” most sustainable community.” and to make the system more The 15-hectare development, which MaRS Issue 3 Future of Energy & Environment 32

UTILITIES THAT FAIL TO However, opportunity doesn’t the grid as a giant free battery,” a certain portion of their INNOVATE RISK BEING always translate into sales. While Harris says, which kills any incentive consumption to off-peak times. DISINTERMEDIATED Eguana is helping to lead the to store the energy themselves, “That’s creating opportunity,” “Back [in the early 1980s], solar revolution around the given that his battery installations he says, and his company now if the lights were on everyone world, it has only a handful of cost between $12,000 and has a product able to store up to was happy, and the rates didn’t customers in its own country. $20,000 (U.S.). 15 kilowatts when the cost is low for use when the cost is high. matter,” says utility veteran According to Brent Harris, the In Germany, he says, utilities Glenn Magill, who began his promise of energy storage is hobbled buy solar power at realistic Canada needs a lot more such career with Hydro Ottawa in in Canada by the widespread use wholesale prices, about one-third tactics, according to Dizy. “I think 1982. Today, Magill is general of “net metering” policies, so called what they charge, so it pays to our head’s in the right place, I just manager of infrastructure because a customer’s meter turns generate and store your own think our policies could drive development for Energy Ottawa, in one direction when it is consuming supply. As a result, Eguana has things better and faster,” he says. a non-regulated subsidiary grid-produced electricity, and then sold 5,000 battery systems for “But we are a place that gets it.” set up by the utility to market backwards when the household is rooftop solar installations there. And every small step forward makes innovative technologies, beginning producing more renewable energy Harris sees hope in Ontario’s latest the ultimate goal — a sustainable, with a new method to test the than it can consume. Thus, utilities industrial conservation initiative, carbon-free energy system — that performance of buried cables. pay solar producers the same retail which rewards medium-sized much more attainable. “It’s a much more challenging price that they charge for power. commercial customers who shift industry from an operator In effect, the producers “get to use perspective,” he says. “But there’s lots opportunity for innovation.” MaRS Issue 3 Future of Energy & Environment 33

CANADIAN CLEANTECH’S TRUMP DIVIDEND

BY MARJO JOHNE

MaRS Issue 3 Future of Energy & Environment 34

Donald Trump makes no secret all of 0.03 per cent of the on global efforts to fight climate he says, adding that at one time, of the fact that he’s anything but world’s emissions.) change? That remains to be seen.” as many as 300 venture funds were an environmentalist. Where his in the sector. “Today there are five.” Since moving into the Oval Office, However, he adds, despite Trump’s regressive policies will lead is the the President has also issued an insistence that oil and “clean coal” According to the Brookings subject of constant debate, but it executive order to roll back the remain vital to America’s economic Institution, a Washington-based stands to reason that they may climate-change policies of his growth, his policy reversals do create public-policy research agency, cloud the future for Canada’s predecessor, Barack Obama, put opportunities for Canadian cleantech venture-capital investment in clean-technology sector. a climate change denier in charge companies. Why? Because Ottawa U.S. cleantech last year was 25 Yet the situation is far from black of the Environmental Protection is doing what Washington is not. per cent below that of 2011, falling and white. Close examination Agency (and cut Its funding from $7 billion U.S. to $5.24 billion. “This is a nascent industry that’s shows that not all the fallout from considerably), loosened restrictions Cleantech’s share of the overall just beginning to grow and, for the “Trump factor” is bad. In fact, on coal-fired power generation, venture-capital pie dropped even any industry to grow, it needs the controversial U.S. President’s and introduced a budget more, from almost 17 per cent in 2011 government support,” Rand says. greatest impact on cleantech may that would defund a popular, to just below eight per cent in 2016. So, with Prime Minister Justin not even come from all the eco- renewable-energy program. Trudeau focusing on a sector that “Returns were better in traditional backtracking he has done. TRUMP’S ECO- Trump is ignoring, “we’ll have a much software,” explains Marty Reed, That backtracking is hard to ignore. BACKTRACKING A healthier cleantech ecosystem in chief executive officer of Vancouver- During the G20’s Hamburg summit BOON FOR CANADIAN Canada. We will take market share.” based cleantech fund Evok in July, he made good on his threat Innovations. “It’s a competitive CLEANTECH COMPANIES Without public programs such as to withdraw from the Paris climate world and, if VCs can invest “What Trump is doing is bad for low-cost debt for early commercial accord. That leaves the United States elsewhere with a much higher the environment — there’s no deployments, American cleantech is as one of just three nations not return than they would get from question about that,” says Tom likely to weaken, if not shrink. Private taking part in the UN-led agreement cleantech, why wouldn’t they?” Rand, managing director of Toronto- investors could fill the void, Rand to combat global warming by based ArcTern Ventures, which admits, but few seem interested reducing greenhouse-gas emissions. invests in climate-focused startups. these days. “Investor interest in (The other two? War-torn Syria “How much impact will this have cleantech has waned over the years,” and Nicaragua, which generates MaRS Issue 3 Future of Energy & Environment 35

CANADIAN COMPANIES One gigaton, or a billion metric SET TO CLEAN UP tons, is equal to a year’s worth IN U.S. MARKET of emissions from no fewer than On a more positive note, says 211 million passenger vehicles. ArcTern’s Rand, a diminished To meet such an ambitious target, U.S. industry will leave a space Walmart plans to reduce its own that Canadian companies can carbon output by 18 per cent while, fill, especially with demand for more importantly, asking its major clean technologies growing in suppliers to make up the rest. Europe and the developing world. The move is “being driven Also, despite the Trump purely by economics,” Reed says. administration’s stance, the U.S. “The average Walmart shopper likely will remain a solid market. may not be environmentally Not only is there state-level focused, but Walmart is dedicated green legislation in places such to delivering value goods, and as California, Colorado and achieving efficiencies with clean New York, Reed says he also technology can help them with expects U.S. corporations to this goal.” make significant cleantech investments in the near future.

“Walmart, for one, is committed to reducing their greenhouse-gas emissions by a gigaton by 2030,” he explains. MaRS Issue 3 Future of Energy & Environment 36

OTTAWA FILLS THE Both BDC and EDC are still governments to try new technologies. VOID LEFT BEHIND working to finalize the scope Another challenge is money. BY WASHINGTON of this investment project. EDC Even with the new funding, when The Canadian government is also spokesperson Phil Taylor notes compared to the U.S., there aren’t very focused on the environment, that the 2017 budget stipulates as many funds available here for and offers innovative cleantech the money should go to enabling early-stage companies trying to get companies an array of grants, “first-of-its-kind, capital-intensive, commercial projects off the ground. early-commercial-scale clean tax credits and other financial This can have a dangerous ripple technology deployment.” aid. The 2017 federal budget has effect, he explains. “What you’ll committed $430 million to research As well, the feds have earmarked see with the majority of cleantech and development for clean energy, $400 million for Sustainable companies is their first customer transportation and natural-resource Development Technology is in the U.S., so they set up their innovation, with an additional Canada, an arm’s-length federal sales and marketing firms over there, $14.5 million set aside for a national government foundation that then hire a CEO from the U.S. and, cleantech-data strategy. funds innovation and cleantech the next thing you know, the whole The budget will also channel close demonstration projects. company is there.” to $1.4 billion over three years to HURDLES REMAIN FOR “If we don’t get more aggressive,” the Business Development Bank CANADIAN CLEANTECH Reed argues, “we’ll produce great of Canada (BDC) and Export ENTREPRENEURS science and a decent number of Development Canada (EDC) in But even with such a small companies — funded largely a bid to leverage private-sector supportive ecosystem, there by Canadian taxpayers — and, investment and give cleantech firms are still obstacles for Canadian when they reach a certain level, more access to equity financing, cleantech entrepreneurs. U.S. companies will acquire them.” working capital and project financing. One big challenge, says Evok’s Reed, is the general reluctance of Canadian businesses and MaRS Issue 3 Future of Energy & Environment 37

COULD TRUMP SPARK A is 28 to 39 per cent, “in the long BRAIN DRAIN TO THE U.S.? term, I think we will have leakage One of Trump’s election promises to the U.S., where there isn’t that could accelerate this potential kind of tax burden.” migration despite the fact it has little But there is also an upside. Slusarchuk to do with the environment — and said that even if companies resist despite reports that his strict, new the siren’s cross-border call, they immigration policies may enrich will still likely cash in on the plan Canada with global tech talent to drop U.S. corporate taxes as low otherwise bound for Silicon Valley. as 16 per cent. For those that have This X factor, says Vancouver their technology ready, she explained, lawyer Cheryl Slusarchuk, is the tax cut “will free up money for Trump’s vow to lower the tax rate capital expenditures.” Which could for U.S. corporations. mean big sales.

A specialist in cross-border mergers Walmart isn’t the only big U.S. and acquisitions, Slusarchuk took firm in the market for tech that’s part, along with Rand and Reed, in clean and green — no matter a recent Globe Series debate on the what Donald Trump has to say Trump factor. She pointed out that, about global warming. because the corporate tax in Canada

IN THE LONG TERM, I THINK WE WILL HAVE LEAKAGE TO THE U.S., WHERE THERE ISN’T THAT KIND OF TAX BURDEN. MaRS Issue 3 Future of Energy & Environment 38

STARTUPS MAY FACE NEW RISKS AFTER CROSSING THE ‘VALLEY OF DEATH’

BY MaRS STAFF

Canada’s clean technology Guercio of Chubb, the world’s disrupt production. The costs from sector generates $13 billion in largest publicly traded property such incidents can radiate beyond sales annually and is increasingly and casualty insurer. As a company repairing expensive equipment seen as a future engine of the grows so too does the range of and recovering data to include economy. These companies invest risks it is exposed to, particularly lost customers, forensic investigation heavily in assets like high-precision as it ventures into far-flung markets fees and even the cancellation manufacturing equipment and where labour laws, product standards of research grants. attract skilled workers with well- and intellectual property protections Another potential outcome is paid jobs. The federal government differ. Many early-stage companies the disruption of supply chains. has recognized the sector’s potential, focus on surviving the “valley A 2015 survey by Chubb and and significantly stepped up its of death” and often push risk Cleantech Group found that support, including more funding management to the back seat, nearly two-thirds of global for research and help for ventures she says. clean-technology companies to expand into foreign markets. FROM WATER DAMAGE TO had suffered such disruption in More than 80 per cent of Canadian CYBER-ATTACK, STARTUPS the previous three years, in many clean-technology companies already FACE A RANGE OF RISKS cases with a material impact on think beyond our borders and export “When it comes to insurance, most their businesses. Ironically, climate their products, primarily to the United entrepreneurs think about protecting change will likely exacerbate States, but increasingly to Europe, physical assets, but often overlook the problem by increasing the China, India and South America. the impact that certain kinds of frequency of extreme events As they win customers, these incidents can have on their net like floods and wildfires that companies are creating global income,” says Guercio. For example, play havoc with transportation. supply chains and investing consider the loss of revenue following in facilities overseas. incidents like water damage, fire This growth will pay dividends for or cyber-attack, whether at the the economy and the environment company’s own premises or at an — but it comes with risks, says Maria overseas supplier, all of which can MaRS Issue 3 Future of Energy & Environment 40

Guercio advises companies to products and services that keep work with insurers that have pace. “Companies can work with expertise in clean technology and their broker and insurer to international insurance coverage understand the breadth of their to protect their businesses. insurance policy coverages prior to a claim,” says Guercio. Imagine “Young companies are particularly the loss of market if your company’s vulnerable to unexpected setbacks,” R&D work is destroyed and you do she says. “Good risk planning could not have the means to recover? be the difference between getting back in business and going out In a recent claim, she says, one of business.” She says that early insured company was supplying engagement with an insurance power to a utility company that company’s risk engineering suffered a windstorm loss. “We services can identify vulnerabilities helped them maintain the same and provide valuable insights — level of net income while they from protecting the business waited for the utility company with adequate fire suppression to get back up and running.” and separation of hazardous materials to data protection GOOD RISK PLANNING COULD and contractual management. BE THE DIFFERENCE BETWEEN GETTING BACK IN BUSINESS AND Clean technology companies are GOING OUT OF BUSINESS. fast paced and continuously evolving. Chubb is committed to staying current with the cleantech industry by continuously learning about new technologies and advanced processes, and developing new MaRS Issue 3 Future of Energy & Environment 41

GLOBAL NUMBER MaRS METRICS (IN MILLIONS) OF SMART

THE NUMBER OF 74 STREET LIGHTS ELECTRIC CARS which save energy and improve traffic 2 (IN MILLIONS) flow by responding automatically 1OO currently in use globally 4 to lighting and traffic conditions — THE GLOBAL forecast to be installed by 2026 7 TARGET (IN MILLIONS) NUMBER OF under the Paris Declaration KILOWATTS for the deployment of PRODUCED electric cars by 20301 12 12 by the world’s first wind turbine 26,OOO THE TOTAL GENERATION in 1888 — not enough to power CAPACITY (IN MILLIONS even one modern home 5 TOTAL (IN MILLIONS) NUMBER OF U.S. PATENTS OF KILOWATTS) related to renewable energy OF ALL JOBS IN THE of Canada’s current issued since 2009 8 7 U.S. AUTO SECTOR 2 wind-energy system 10

NUMBER OF JOBS .7 (IN MILLIONS) 9,5OO 42 5 in the U.S. auto sector devoted NUMBER OF KILOWATTS PERCENTAGE OF ESTIMATED NUMBER OF to increasing fuel economy or PRODUCED BY TODAY’S THOSE PATENTS PLASTIC SCRAPS (IN TRILLIONS) switching to alternate fuels 3 LARGEST WIND TURBINE, THAT INVOLVE afloat in the world’s oceans 11 enough to power 8,300 UK homes6 SOLAR POWER 9

1 https://www.iea.org/publications/freepublications/publication/Global_EV_Outlook_2016.pdf 2 https://www.bls.gov/iag/tgs/iagauto.htm#iag31cessaemp.f.p 3 https://cleantechnica.com/2017/02/01/us-clean-energy-jobs-surpass-fossil-fuel-jobs-5-1/ 4 https://www.theguardian.com/environment/2017/jun/07/electric-cars-sales-2-million-worldwide-global-sales 5 http://www.thirdplanetwind.com/energy/history.aspx 6 http://www.mhivestasoffshore.com/worlds-most-powerful-available-wind-turbine-gets-major-power-boost/ 7 http://navigantresearch.cmail20.com/t/ViewEmail/r/596F1406A8E672812540EF23F30FEDED/19D6FD34FB1A2FF4948D468F162BC46E 8 https://www.cbinsights.com/research/agriculture-tech-market-map-company-list/ 9https://www.cbinsights.com/research/renewable-energy-patents-trends-corporates/ 10 http://canwea.ca/wind-energy/installed-capacity/ 11 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4262196/ MaRS Issue 3 Future of Energy & Environment 42

AMOUNT OF GLOBAL REVENUE HOW MUCH (PER CENT) ELECTRICITY ESTIMATE (BILLIONS MORE FOOD THE WORLD 1,007 70 (IN GIGAWATTS) OF US DOLLARS) 70 WILL HAVE TO PRODUCE ANNUAL WEIGHT (IN KILOS) the Internet alone consumed for the smart home data in 2050 than it did in 2009, of waste produced by in the U.S. in 2015= 15 analytics sector in 2017 according to the UN’s Food and each Albertan, Canada’s (includes data from smart Agriculture Organization 25 12 1.3 home devices such as cast-off leaders THE NUMBER OF CLEANTECH connected thermostats) 20 774 COMPANIES in Canada today. 16 ESTIMATED REVENUE 55,600 386 (BILLIONS OF NUMBER OF CANADIANS who WHERE 11 DOLLARS) BY 2026 worked for Canada’s 774 clean THE COMPARABLE technology companies last year 26 FIGURE FOR NOVA CHINA when more people will know how to use SCOTIANS, the nation’s #1 RANKS such data, and issues involving privacy and 21 least wasteful souls 13 Among greenhouse-gas-emitting personal security have been addressed countries. It alone produces 25 289,200 17 THE NUMBER OF PEOPLE per cent of all global emissions NUMBER OF CANADIANS (IN BILLIONS) THE WORLD WHO STILL WORK IN HAD TO FEED IN 1960 22 3 27 WHERE CANADA AGRICULTURE 52.8 RANKS 18 which a century ago #9 THE NUMBER (IN BILLIONS) employed a million AMOUNT OF ELECTRICITY 23 PERCENTAGE IN 1999 (IN GIGAWATTS, OR BILLIONS 6 people — one in every OF CANADA’S 28 OF KILOWATT HOURS) the U.S. three Canadian workers EMISSIONS HOW MANY BILLIONS 36 PREPARED BY: solar power grid was capable WILL HAVE TO BE of producing in 2016 14 that are now attributed to Jason Moody, Cleantech Market Research Analyst, MaRS Market Intelligence 24 the oil and gas industry 19 9.6 FED IN 2050 Emily Nicoll, Market Research Analyst, MaRS Market Intelligence

12 http://www.conferenceboard.ca/hcp/provincial/environment/waste.aspx 13 https://www.greentechmedia.com/articles/read/us-solar-market-grows-95-in-2016-smashes-records 14 https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_1_01_a 15 https://www.canada.ca/en/services/environment/weather/climatechange/climate-action/clean-technology-innovation-jobs.html 16 http://www.canadianbusiness.com/innovation/canadas-cleantech-industry-is-bigger-than-you-think/ 17 https://www.ec.gc.ca/indicateurs-indicators/default.asp?lang=en&n=54C061B5-1 18 Lux: Analyzing Canada’s Ecosystem for Carbon Emissions Reduction Technologies 19 http://navigantresearch.cmail19.com/t/ViewEmail/r/B5A80DB542361CD82540EF23F30FEDED/19D6FD34FB1A2FF44D402EFBD42943A3 20 http://navigantresearch.cmail19.com/t/ViewEmail/r/B5A80DB542361CD82540EF23F30FEDED/19D6FD34FB1A2FF44D402EFBD42943A3 21 https://www.learner.org/courses/envsci/unit/text.php?unit=5&secNum=4 22 https://www.learner.org/courses/envsci/unit/text.php?unit=5&secNum=4 23 http://www.un.org/en/development/desa/news/population/un-report-world-population-projected-to-reach-9-6-billion-by-2050.html 24 http://www.economist.com/technology-quarterly/2016-06-09/factory-fresh 25 https://www.canada.ca/en/services/environment/weather/climatechange/climate-action/clean-technology-innovation-jobs.html 26 http://www.statcan.gc.ca/pub/11-402-x/2011000/chap/ag/ag-eng.htm 27 http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/econ40-eng.htm 28 http://www.statcan.gc.ca/pub/11-402-x/2011000/chap/ag/ag-eng.htm 43

In late fall 2017, the next issue will examine the gender gap in the innovation economy. What if we left it all up to men? Is Canada actually better at encouraging gender diversity? We’ll feature some of our top female entrepreneurs and offer insights into how we can create a future world of equality for women. [email protected] marsdd.com