SLIDE 1 CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
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An Economy in Transition
March 2011
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CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
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Private & Confidential
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CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
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CO2 EMISSIONS FROM ENERGY
BASE AND 2020 PEAK SCENARIOS, GTONNES
25 27 29 31 33 35 37 2006 2010 2014 2018 2022 2026 2030 Base Scenario 2020 Peak Scenario
Source: New Energy Finance, GE2M
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CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
Demographics Resource Scarcity Environmental Challenges
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CAPITAL’S NEXT HOME
70s 80s 90s 00s 2010
Big Oil Japan Technology Real Estate Environment
Resource efficiency Renewable energy Energy efficiency
Environmental sectors will catch the next investment wave
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NEXT WAVE – FROM $300 BILLION TODAY TO $2.5 TRILLION BY 2030
Sources: Government of Canada, IPCC, IEA, IMF, Wharton School Waste-to-Energy.net, Solarbuzz, Vestas Wind, Siemens Inc. Badger Meter
.
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GLOBAL ENERGY SUPPLY - CURRENT
Oil 33% Coal 27% Nuclear 6% Combustible & Waste 10% Gas 21% Other* 1% Hydro 2%
Total Primary Energy Supply by Fuel (2008) 12,267 Mtoe
* Other; includes wind, geothermal, solar, etc.
Source: IEA
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GLOBAL ENERGY SUPPLY - 2060
Oil 13% Coal 21% Nuclear 14% Biomass 25% Gas 9% Non-biomass renewables 18%
2060 Energy Mix - 450 ppm CO2e
* Other; includes wind, geothermal, solar, etc.
Source: World Bank
50 Year Transition: Renewables 1-18% Biomass 10- 25% Nuclear 6-14% Oil 33-13% Coal 27-21%
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Source: Investeco’s internal research
29% 26% 17% 4% 3% 2% 0.50%
0% 5% 10% 15% 20% 25% 30% 35% PV Wind Biofuels Coal Natural Gas Oil Nuclear
Average Annual Global Energy Supply Growth Rates (2000 - 2007)
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EXISTING GRID NEEDS REPLACEMENT
NOW IS THE RIGHT TIME TO MAKE IT SMARTER
$1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 $5.5 $6.0 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003
U.S. Transmission Investment
(U.S. $bil. - inflation adjusted) $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Hydro One capital spending
(Millions/Cnd$)
Source: Hydro One Source: Dundee Securities
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DEMAND MANAGEMENT: SMART METERS
- 2.65 Billion Meters Worldwide
- Only 9% Automated
- $400-600 Billion Opportunity
- Ontario is the global leader:
will have 3.6 million households on time-of-use metering by summer 2011 200 400 600 800 1000 1200 1400 Electric Gas Water
Billions
Automated Unautomated
1,275 400 975
Source: Itron
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COMBINING TO FORM A SMART GRID
Investments in smarter utilities will improve efficiency
Source: Bullfrog Power
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NEXT WAVE – INVESTMENT AND SAVINGS
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“Going green is the largest economic
- pportunity of the 21st Century”
John Doerr
Kleiner Perkins Caufield & Beyers
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CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
WHAT DOES IT MEAN FOR CANADA?
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Staples Economy: Where wealth is based on exploiting raw natural capital Innovation Economy: Where wealth is created from innovation
ECONOMIC TRANSITION
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CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
Underwater Logging: potential $50 billion market worldwide
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Biofuels: $247 billion market by 2020*
* source: Pike Research
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SALTWORKS
Desalination: $95 billion market worldwide from 2010 – 2015*
* Source: Water Industry News
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ECONOMY IN TRANSITION
Staples Economy
Forestry – Logging, Dimensional lumber Water – no treatment, bleach Oil Sands – Open pit mines Power – large hydro, coal
Innovation Economy
Fast pyrolisis, gasification, cellulosic ethanol, torrefaction Desalination, membrane technology, recycling and reuse, UV Process efficiency, carbon sequestration, tailing ponds remediation Renewable energy, distributed energy, smart grid, demand management
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CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
Staples Economy: Natural resources are plentiful – almost limitless. Their only value is to be used as raw materials. Innovation Economy: Natural resources are scarce; preserving them creates value in and of itself; developing the processes to use them most efficiently is the BIGGEST commercial opportunity.
KEY ENTREPRENEURIAL INSIGHT
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CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
A massive mobilization of new ideas and technology and new companies by supporting entrepreneurs Increased R&D investment Increased VC investing National strategies on: renewable energy, smart grid, GHG emissions, high speed rail and smart mobility, energy efficiency
TO DEVELOP AN INNOVATION ECONOMY
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Environmental Regulation Enhances and Encourages Innovation and Competitiveness through a process called the “Innovation Effect” 3 principles to leveraging Innovation Effect:
- Leave approach to industry, not to regulators
- Be technologically agnostic
- Reduce regulatory uncertainty at every stage
HOW TO GET THERE: EMBRACE THE PORTER HYPOTHESIS
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CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
Proposal: A nation-wide price on GHG emissions Called an “innovation charge” Starting at $10/tonne Increasing $5/tonne every year 80% of revenues returned as tax reductions 20% invested in encouraging R&D investment
TO BUILD A GREEN ECONOMY
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“There is only one thing bigger than Mother Nature and that is Father Profit, and we have not even begun to enlist him in this struggle” Thomas Friedman Hot, Flat and Crowded
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All information contained in this document is confidential and may not, without prior explicit approval From Investeco be disclosed or in any other way distributed to third or other parties.
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