Doing well by doing good

Private sector can act to cut energy use without waiting for government

thestar.com

Published on Monday December 03, 2012

The full story is here.

Mike Pedersen 

Moving toward a low-carbon economy was high on the agenda of policy-makers prior to the financial crisis and ensuing global recession. Priorities shifted with these events, but a series of announcements this fall suggest this shift may have been temporary.

Ottawa announced it is making progress in meeting the carbon emission targets set out by the Copenhagen accord. The British government launched the world’s first investment bank with the sole purpose of “greening the U.K. economy.” And in his victory speech, U.S. President Barack Obama spoke about the “destructive power of a warming planet.” The mention was brief, but for a nation still reeling from the extreme force of Superstorm Sandy — something the mayor of New York City directly linked to climate change — the message was clear.

More pronouncements and policy discussions will follow the UN Climate Change Conference being held in Doha. Yet in the immediate term market forces continue to influence energy use. High energy costs and the slow-growth economy are motivating Canadian companies to become more energy efficient. Indeed, the Carbon Disclosure Project, which asks the country’s top 200 publicly traded companies to provide information on their emission reduction strategies, reported on 140 initiatives that generated annual savings this year — an increase of 32 per cent from the previous year. By serving their private interests, companies are also advancing the public good.

That’s been our experience at TD. Becoming the first North American-based carbon-neutral bank imposed a discipline on us to do more with less — in effect, boost our productivity. At the same time, we have reduced the amount of greenhouse gases we add to the Earth’s atmosphere.

Three strategies underpin our initiative: use less energy, use “greener” energy, and “offset” the remaining emissions with high quality carbon credits.

The second and third strategies proved to be catalysts for a number productivity gains. Simply put, the additional cost required to use greener energy or offset our emissions made the status quo too expensive. In turn the business case for achieving greater energy efficiency became more compelling.

This has led us to create “net zero” energy branches in both the U.S. and Canada that are designed to produce at least as much energy as they use. We have also implemented energy efficiency projects across our operations, including construction of a more energy-efficient data centre for our North American operations.

Overall, we have reduced our North American greenhouse gas emissions associated with energy usage by 4 per cent, even though we have increased our real estate footprint by 24 per cent. We are on target to reduce carbon by one tonne per employee by 2015 — a 28-per cent reduction from our 2008 baseline. This represents substantial cost savings.

Additionally, new revenue streams have been tapped — partly due to the expertise we have gained in reducing energy consumption and purchasing offsets.

For instance, renewable energy financing now stands at over $2 billion, and we have been able to introduce innovative small-scale renewables financing products in the retail market.

Ironically, back in 2008, our motivation to become carbon neutral was based in part on the assumption that widespread carbon pricing was imminent. Our timing was wrong, but we fortunately stuck with our conviction that the dynamic between energy and environment would eventually change the way our customers live, work and play.

Given the re-emerging interest in creating low-carbon economies, are we now in a better position to adapt to some form of carbon pricing? To be sure, we are far more familiar with both the principle and practice.

However, in Canada, policy clarity is still evolving. For example, the different provincial systems already in place can create conflicting obligations for companies.

This could impede investments in technologies critical to emission reduction, according to a paper recently produced by the Canadian Council of Chief Executives — a long-time proponent for consistent carbon pricing across the country. Echoing this position, more than 100 global corporations, including some of the world’s leading energy companies, have called on policy-makers to develop an “unambiguous global carbon price.” It’s also important to take into full account the economic impact any pricing system would have on any given region or industry, so not to place inappropriate burdens on them. Economic and environmental goals are not mutually exclusive. Indeed, they are integral to each other.

Yet Canadian businesses need not wait for any national plan. Nor are they. An overwhelming majority of respondents to the Climate Disclosure Project have integrated emission reduction initiatives into their business strategy. Companies can advance the public good while serving their private interests. This prolonged period of slow growth requires organizations to maximize savings to reinvest and grow. They must also find new revenue streams to offset the economic headwinds. Going carbon neutral has helped us achieve both goals through lower energy usage and operating costs, product innovation and fewer greenhouse gas emissions.

Mike Pedersen, Group Head Wealth Management, Insurance, & Corporate Shared Services, TD Bank Group

Is Fedeli writing Christina Blizzard's column?

On March 8, 2012, Christina Blizzard wrote a column in the Toronto Sun claiming that the Province's green energy policy is putting at least one company at risk.

In the article, Blizzard cites the case of Fabrene, a North Bay company that makes industrial fabrics.  She claims that "The Liberal government's green energy plan has added $1 million a year to his hydro bill - an amount he says will eventually force his company out of this province."  She goes on to claim that the Global Adjustment is the culprit.

The Global Adjustment (GA) is the charge electricity consumers pay for power above and beyond the price charged for Ontario's legacy fossil fuel sources.  The Hourly Ontario Energy Price (HOEP) is the spot market price for those fossil fuels and tends to run in the 2.5 to 3.7¢/kWh range in the last year.  The GA ran in a range of 3.1 to 5 ¢/kWh in 2011.  The sum of the two is what you pay before transmission, distribution and debt recovery charges are added.

The GA includes:

•Non-utility generation (NUG) contracts established by the former Ontario Hydro and now administered by the Ontario Electricity Financing Corporation (OEFC); 

•Nuclear generation operated by Ontario Power Generation (OPG); 

•Certain “prescribed” hydroelectric generation owned by the OPG (plants in Niagara Falls, St. Catharines and Cornwall); 

•Generators (including natural gas, renewable energy and Bruce Power nuclear) and suppliers of conservation services contracted to the OPA. 

The OPA portion of the GA was 54% in 2011 on a cash flow basis.  Renewable energy represents 30% of the OPA capacity under contract in commercial operation.   Wind represents a little less than 50% of that portion (the rest is hydro and solar). So, if you do the math, wind represents .54x.3x.5=8% of the GA.  Obviously, if you add hydro and solar, the number doubles.  We don't know the specific capacity factors and prices within the OPA portfolio, so this is an approximation.

So, while Fabrene may be blaming the GA for it's problems, renewable energy at 5% of the GA is clearly not the issue.   It's possible that they may be complaining that they now have to pay their fair share of the GA.  New rules introduced early in 2011re-allocates GA amongst industrial users.  Prior to that, consumers carried most of the burden of the GA.

More fundamentally, though, we need to take a look at Fabrene itself.

Based on Fabrene's website, its North Bay plant is 40 years old and their other plant is in Portland, Oregon. Fabrene is a trademark for woven polyethylene fabric.  It's the material that you see covering shipments of wood, construction sites, etc.

My experience with situations like this is that if there is one plant in Canada and any less than five in the US, then you have to question what's going on.  If there's no obvious unique source of competitive advantage in Canada (e.g. a potash mine) then you ask whether the location was just a historical accident.  

And why would you put a plant in North Bay fifty years ago?  It might have been because their parent at the time, Dupont, already had an explosives plant there.  It was probably because the woven poly wrap was used for the lumber industry.  Nowadays, there is low demand in the lumber industry, a high Canadian dollar, and competition from non-woven fabric.  Perhaps the Canadian plant has old technology.  Maybe that's why they use the words "both the capacity to fill long run orders and the flexibility to engineer and produce specialized shorter runs" in their marketing pitch.  Specialty short runs is frequently code for subscale equipment.

You could give them the power for free and it might not make a difference.  If power was the issue, all the Canadian poly plants would be in Manitoba, BC and Quebec.

Fabrene is used to calling on government for help.  Fabrene appealed to North Bay for tax relief over ten years ago - long before the Green Energy Act.   Then again for government funding for water service three years ago.  In 2010, North Bay paid for a power transformer near their plant.  

And who was the mayor of North Bay at the time?  Vic Fedeli.  Vic Fedeli is now the energy critic for the Progressive Conservatives.   Makes you wonder where Christina Blizzard got her story.

   

Steckle supports green energy

This Letter to the Editor of the Goderich Signal Star is from Mr. Paul Steckle, MP for Huron-Bruce from 1993 to 2008.

We need better, cleaner ways of producing power

Goderich Signal Star

February 15, 2012

Paul Steckle  Letter to the Editor

Dear Editor:

All communities will, from time-to-time stumble into an issue that causes division and I think it is fair to say that an issue currently dividing our community is the question of the size and appropriateness of building a sewage treatment plant. Questions of cost and the rate of anticipated growth in our community seem to cause much hand wringing and frustration for everyone. These are difficult questions and, as a result, people on all sides of the issue tend to speak with passion and apparent authority. I agree that expenditures of this magnitude require the utmost of scrutiny but I would also suggest that issues impacting on future ratepayers likewise require strict attention. Accordingly, it is not the treatment plant that has caused me to put pen to paper.

Today I would hope to weigh in on the subject of renewable energy, particularly wind power. For the sake of clarity, I make no claims to be the definitive authority on the subject but, I do believe that we must collectively look at our indiscriminate use of energy. If we continue in this pattern we must find better and cleaner ways of producing the power that we need to run our homes, cars and places of business. Sequestering of carbon is essential over the long term but, in the meantime, the current debate does nothing to bring us closer to understanding the issues at hand. Concerns, real or imagined, become real unless rebutted by reliable sources. I may or may not be that reliable source but, I wanted to take a moment to address a few concerns.

A) Wind turbines kill birds. I have heard this claim thousands of times but, the National Audubon Society tells us that wind turbines are, in all likelihood, responsible for the death of approximately two birds per year. More birds die on my kitchen window than that. When I was in Ottawa, I watched almost daily as birds met their end on the walls and windows of high-rise buildings. Are we to truly believe that windmills are that much of a threat?

B) Strobe light/flicker effect from turbine blades is bothersome. How do people in urban centres live with all the changing variations of light? From street lights and headlights, to neon and flashing signs, light is everywhere. Most reasonable people know that a wind turbine is no more offensive than any other source of light that we already see each day.

C) Turbines are noisy and offensive to the eye. In a word… rubbish. The setback requirement for current turbine construction is 550 metres based on a maximum allowable sound limit of 40 decibels (dB). I have personally visited a number of turbine sites and would concur that nothing close to 40 dB was audible at 550 metres. Aesthetics are a personal matter. I saw this in 1985 with the construction of a new power line from the Bruce Nuclear through Huron County. The plan had many people upset and, as the Warden of the County that year, I listened to every conceivable argument as to why we shouldn’t allow the lines through our backyard. Think for a moment, try and recall the last time someone spoke negatively about power lines in our community. The power lines haven’t changed, only time. Windmills are no different.

D) Turbines diminish land values. In response I would ask, based on what? Probably the best source of data on this would be the real estate people. In the Kincardine and Chatham-Kent areas (areas with a longer history of turbines), realtors will tell you that land values have actually gone up… including the land surrounding towers.

E) Negative health concerns. In October of 2009, Ontario’s Chief Medical Officer of Health issued a memo stating that, while some people may find the noise from turbines annoying, a comprehensive review of the relevant medical science found no evidence of noise induced human or health effects caused by wind turbines.

These are but a few of the arguments I hear regularly but, despite these contrary opinions, wind energy is strongly supported by all respectable polls. In July of 2010, IPSOS found that 80% - 90% of the population in Ontario felt that way. Of the remaining 10%, less than 5% strongly objected to wind turbines.

Empirical or casual knowledge is never the best premise from which to judge any issue, particularly one as complex as renewable energy. Wind power is here to stay and, like the power lines of 1985 which have been all but forgotten, we have choices to make. Let us see wind turbines as a positive step towards a greener future for our children. After all, the best time to plant a tree is 20 years ago but the next best time is right now.

A green energy supporter,

Paul Steckle

(Member of Parliament, Huron-Bruce, 1993-2008)

A Bluewater Taxpayer