CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY An Economy in Transition March 2011 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.
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY Private & Confidential
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY CO 2 EMISSIONS FROM ENERGY BASE AND 2020 PEAK SCENARIOS, GTONNES 37 35 33 31 29 27 25 2006 2010 2014 2018 2022 2026 2030 Base Scenario 2020 Peak Scenario Source: New Energy Finance, GE2M
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY Demographics Resource Scarcity Environmental Challenges
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY CAPITAL’S NEXT HOME Environmental sectors will catch the next investment wave 2010 70s 80s 90s 00s Big Oil Japan Technology Real Environment Estate Resource efficiency Renewable energy Energy efficiency
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY 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
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY GLOBAL ENERGY SUPPLY - CURRENT Total Primary Energy Supply by Fuel (2008) 12,267 Mtoe Other* Hydro 1% 2% Gas Oil 21% 33% Combustible & Waste 10% Coal Nuclear 27% 6% * Other; includes wind, geothermal, solar, etc. Source: IEA
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY GLOBAL ENERGY SUPPLY - 2060 50 Year 2060 Energy Mix - 450 ppm CO2e Transition: Renewables 1-18% Non-biomass renewables Oil 18% Biomass 10- 13% 25% Gas Coal Nuclear 6-14% 9% 21% Oil 33-13% Biomass Nuclear 25% 14% Coal 27-21% * Other; includes wind, geothermal, solar, etc. Source: World Bank
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY Average Annual Global Energy Supply Growth Rates (2000 - 2007) 35% 29% 30% 26% 25% 20% 17% 15% 10% 4% 3% 5% 2% 0.50% 0% PV Wind Biofuels Coal Natural Gas Oil Nuclear Source: Investeco’s internal research
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY EXISTING GRID NEEDS REPLACEMENT NOW IS THE RIGHT TIME TO MAKE IT SMARTER U.S. Transmission Investment Hydro One capital spending (U.S. $bil. - inflation adjusted) (Millions/Cnd$) $6.0 $1,000 $5.5 $900 $5.0 $800 $4.5 $700 $4.0 $600 $3.5 $500 $3.0 $400 $2.5 $300 $2.0 $200 $1.5 $100 $1.0 $0 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Hydro One Source: Dundee Securities
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY DEMAND MANAGEMENT: SMART METERS 2.65 Billion Meters Worldwide • 1,275 1400 1200 975 Only 9% Automated • 1000 800 Billions $400-600 Billion Opportunity • 600 400 Ontario is the global leader: 400 • will have 3.6 million 200 households on time-of-use 0 metering by summer 2011 Electric Gas Water Automated Unautomated Source: Itron
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY COMBINING TO FORM A SMART GRID Investments in smarter utilities will improve efficiency Source: Bullfrog Power
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY NEXT WAVE – INVESTMENT AND SAVINGS .
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY “Going green is the largest economic opportunity of the 21st Century” John Doerr Kleiner Perkins Caufield & Beyers
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY WHAT DOES IT MEAN FOR CANADA?
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY ECONOMIC TRANSITION Staples Economy: Where wealth is based on exploiting raw natural capital Innovation Economy: Where wealth is created from innovation
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY Underwater Logging: potential $50 billion market worldwide
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY Biofuels: $247 billion market by 2020 * * source: Pike Research
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY SALTWORKS Desalination: $95 billion market worldwide from 2010 – 2015 * * Source: Water Industry News
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY ECONOMY IN TRANSITION Staples Economy Innovation Economy Forestry – Logging, Dimensional Fast pyrolisis, gasification, lumber cellulosic ethanol, torrefaction Water – no treatment, bleach Desalination, membrane technology, recycling and reuse, UV Oil Sands – Open pit mines Process efficiency, carbon sequestration, tailing ponds remediation Power – large hydro, coal Renewable energy, distributed energy, smart grid, demand management
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY KEY ENTREPRENEURIAL INSIGHT 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.
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY TO DEVELOP AN INNOVATION ECONOMY 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
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY HOW TO GET THERE: EMBRACE THE PORTER HYPOTHESIS 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
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY TO BUILD A GREEN ECONOMY 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
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY “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
CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY Thank you! 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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