6 clean energy plays, from hydrogen to lithium
A closer look at six startups and ventures on the leading edge of alternative energy
New oil and gas pipelines are winning approval in B.C. and across the country, but the world is also shifting in new directions. Global investment in green energy hit a record of almost US$286 billion last year, according to the United Nations Environment Programme, up five per cent from 2015. A recent survey by the BC Cleantech CEO Alliance identified more than 275 cleantech companies in the province, many of them in energy, including darlings like Nexterra Systems Corp. (with five waste-to-energy projects in North America and two in development in the U.K.) and hydrogen fuel cell pioneer Ballard Power Systems Inc., plus a host of lesser-known players. As renewables gain traction, B.C. entrepreneurs are stepping up to help reshape the way we produce, store and consume power.
X Marks the Spot Lithium X Energy, a well-backed mining venture led by Brian Paes-braga, aims to cash in on the electric vehicle trend
Last summer, after Elon Musk unveiled the Model 3, Tesla Inc.'s most affordable car to date, the rush of almost 350,000 pre-orders got Brian Paes-braga's attention. The kicker: an expected surge in demand for lithium ion batteries. Global sales of plug-in electric automobiles hit more than 770,000 units last year, according to the Electric Vehicle World Sales Database. Although such vehicles still only account for about one percent of the market, that's a 42 per cent jump over 2015.
Paes-braga, the 29-year-old president and CEO of Lithium X Energy Corp., sits at a spotless glass-top coffee table on the 31st floor of Vancouver's Bentall III tower. A confusing array of arrows, charts and seven-figure numbers are scribbled in blue ink on a whiteboard behind his oak desk. In the corner sits a full bottle of premium whiskey surrounded by three tumblers awaiting a celebratory pour once his mining startup begins lithium production next year.
North Vancouver–raised Paes-braga has the panache of a seasoned promoter. After dropping out of the University of Calgary at age 20, he starting working as a stockbroker trading shares in biotech, medical, real estate and junior mining companies. The latter often tainted the now-defunct Vancouver Stock Exchange's reputation, Paes-braga admits. But “capital is gathering around credible ventures,” he says, claiming he has a winner with Lithium X, even if some analysts ask whether the lithium boom is largely hype.
Besides car batteries, the lightweight metal is used in a wide range of products, from glass to polymers to antidepressants. Demand for lithium could outstrip supply by 25 per cent in 2020, Credit Suisse Group projects, largely thanks to the shift to hybrid fossil fuel–electric and fully electric car engines.
Paes-braga moved quickly in 2016, launching Lithium X with a pair of heavyweights, Vancouver mining and film industry tycoon Frank Giustra and resource financier Paul Matysek, who has several multi-hundred-million-dollar exits to his name. The team headhunted New Jersey–based stock promoter Timothy Mckenna, a veteran of the U.S. lithium mining sector who previously worked with Rockwood Holdings Inc., America's only lithium producer.
With a crew of 11, Lithium X joins several other Canadian juniors hoping to get rich off the mineral. “It's a race to production right now,” Paes-braga says. “The price of lithium has gone from $5,000 per tonne in 2015 to north of $15,000 for batterygrade lithium.”
By industry standards, mining lithium has a relatively small environmental footprint, according to Paes-braga. The mineral, found in a brine, is air-dried in pools once it's pumped from the ground. But separating it from the remaining ore requires energyintensive electrolysis, and making lithium ion batteries yields ecologically toxic byproducts.
Still, investors are intrigued. Lithium X shares traded on the TSX Venture Exchange at a high of about $2.35 in late 2016 but had dipped to roughly $1.60 by March 31. The previous month the company took a big step toward production by winning regulatory approval to build its first ponding facility at its Sal de los Angeles property in Argentina, in the so-called lithium triangle straddling that country, southern Bolivia and northern Chile. Lithium X has a 50 per cent stake in the land, with an option to acquire up to 80 per cent. The pond is designed to produce 2,500 tonnes a year of lithium carbonate equivalent, the mineral's standard measurement unit. That volume could be worth more than $US25 million, Paes-braga reckons, but he warns that these are early days. “That's just the first of several ponds we hope to build at Sal de los Angeles,” he says, adding that the company is exploring other properties in Argentina and Nevada.
Burning Ambition Is hydrogen the clean fuel of tomorrow? Simon Pickup's Hydra Energy hopes to make that longsimmering dream a reality
For his Grade 4 science fair project, Simon Pickup wanted to “blow something up.” His father, a selftaught engineer, urged him to build a hydrogen electrolyzer instead. Born and raised in North Vancouver, Pickup eventually dropped out of high school to dive into creating hydrogen energy technology. In his early 20s, he returned to academia, studying economics through Harvard Extension School because he saw the hydrogen challenge as more financial than technical. “Historically it's been kind of a chickenand-egg problem,” says the 28-year-old co-founder of Hydra Energy Corp. at the startup's headquarters in a drab industrial subdivision on Annacis Island near Vancouver. “The technology works, but the economics haven't.”
Hydrogen, once touted as the
miracle emission-free fuel of the future, has yet to meet its promise, hobbled by an energy-heavy production process and a lack of distribution infrastructure —not enough fuel pumps—plus lingering stigma around safety. (Think the Hindenburg disaster.) But it isn't going away, and it may be enjoying a resurgence. In 2015, Toyota launched its Mirai hydrogen fuel cell car in California, and last year Ballard Power Systems signed an agreement with China's Zhongshan Broad-ocean Motor Co. Ltd. to develop hydrogen fuel systems for buses and commercial vehicles. That deal could be worth US$168 million for the Burnaby-based company over the next half-decade.
While Ballard fuel cell technology uses hydrogen to generate electricity, Hydra focuses on making it a direct combustible replacement for gas- or diesel-burning engines. As a reminder of what could be, Pickup parks his own converted hydrogen-burning Chrysler 300 next to a prototype hydrogen fuel pump. Printed on the door of the office washroom is the phrase “Ideas can happen in the most unlikely places,” one of many aphorisms scattered throughout Hydra HQ to inspire its 11 employees and contractors.
For its first major commercial play, the company's vertical integration model targets short-haul heavy-duty trucks that return to the yard each day, combining the economic scale benefits of high energy consumption with a centralized fuelling station that solves the distribution problem. Hydra plans to cover the capital costs of converting truck engines to dual hydrogen/diesel fuel units, recovering this outlay by signing customers to multiyear fuel purchase agreements. In exchange, clients will shrink their operating expenses by up to 20 per cent and greatly reduce emissions, explains Pickup.
As part of its scale-up, Hydra is deploying a recent $ 300,000 BC Innovation Council award that will help put $1 million in its R&D coffers. It's also joined forces with UBC mechanical engineering professor Steven Rogak to test the engine performance and emissions of its flagship heavy-duty truck conversion, with a vehicle supplied by Ihaul Freight Ltd., also based on Annacis Island.
But bigger things lie ahead. As of March, Hydra was working with undisclosed partners in northern B.C. to build a $10-millionplus fuel plant that will recover hydrogen released as industrial emissions. Using waste hydrogen is a pillar of the company's business model: Hydra estimates that generating enough hydrogen to replace more than 11 million litres of diesel annually could reduce greenhouse gas by 45,000 tonnes while only yielding a few hundred tonnes of carbon dioxide equivalent. “By 2018, we hope to
have a fleet of 90 trucks converted to hybrid hydrogen-diesel and the plant built,” Pickup says. “The hype around hydrogen has been huge, but we don't want to be a hype play.”
Sea Change With its lithium battery systems, Corvus Energy has established itself as a leader in energy storage for the marine industry
In business, like life, timing can be everything. Late last decade, Corvus Energy co-founder Brent Perry and his partners were designing quiet-running electrical hybrid systems for the luxury yacht market. At the time, lithium battery manufacturers didn't make anything larger than what was needed to power a car, and the global shipping industry was just starting to delve into fully electric and hybrid propulsion systems.
This opportunity prompted a game-changing pivot for the startup. “Three factors came into play,” says president and CEO Andrew Morden, who captained Richmond-based Corvus's commercialization and is stickhandling an ongoing lawsuit against the company's founders, who have since left to start a rival firm. “Our value proposition strengthened, lithium technology had advanced, and there became available incentives and subsidies in regions like Scandinavia to adopt propulsion technology to lower emissions in the marine industry.”
First deployed on tugboats to reduce emissions while idling, Corvus's lithium-ion battery packs are now found in 50 projects worldwide, including ships, offshore drilling platforms and port operations. In 2011, the company used a $580,000 Sustainable Development Technology Canada grant to attract private investment and do a demonstration project in the key Norwegian market. Revenue grew from less than $150,000 that year to $6 million in 2015. Corvus, which has 50 staff and made this year's Global Cleantech 100 list, recently completed its sixth ferry propulsion project for the northern European transportation firm Scandlines. In Norway, progressive policies like the NOX tax—a levy on nitrous oxide emissions that is returned to firms doing upgrades that will lead to reductions—have translated into steady business, prompting the company to open an office there in 2015. Corvus's technology now helps propel two fully electric Norwegian passenger and vehicle ferries.
By comparison, Canada has been a slow adopter, but it's coming around. Corvus recently installed battery packs for two Seaspan ULC cargo ferries sailing between Vancouver Island and the mainland, and the company is in talks with British Columbia Ferry Services Inc. “We're seeing the first groundswell in North America, but the world's shipping fleet is definitely heading toward hybridization,” Morden says.
Sunny Ways Sunpump Solar applies NASA-inspired thermal technology to the North American housing market
Bruce Gray took his first stab at the residential solar panel business back in 2010, but he quickly learned that such systems suffer from a well-deserved reputation for being unreliable energy generators. “Sales were slow, so we surveyed our customers,” says the founder and chief technology officer of Sunpump Solar Inc. from his Qualicum Beach office.
Their wish—more reliability at a lower price—wasn't exactly music to a struggling entrepreneur's ears. So Gray turned to Google's open-source think tank platform, Solve for X, and an old project from the National Aeronautics
SECOND CHANCES With Hydra Energy, Simon Pickup is betting on a resurgence of interest in hydrogen
MAKING WAVES Corvus Energy develops lithium-ion batteries for ships