Day4 Energy Inc.’s debut last year among the ranks of the province’s biggest public companies was a signal moment for the latest wave of clean-tech companies (it reappears this year, dropping a few spots from 64 to 67). Ballard and older clean-tech companies may have had to shift gears to turn a profit, but the new exemplars seemed to have found a prime opportunity for entering a market keen on green.
This year’s list of biggest public companies saw the number of clean-tech companies rise, with just as many only a few million short of joining the list. Companies such as Western Wind Energy Corp., LGC Skyrota Wind Energy Corp. and Run of River Power Inc. fell just below the cut-off point for public companies of $22 million in revenue.
“The [sector’s] maturation is based, in my opinion, on three things,” says Jeffrey Ciachurski, director and CEO of Vancouver-based Western Wind Energy Corp., which posted revenue of $2.8 million in 2009. The first is the price and quality of generating equipment, which he says have improved substantially, giving more companies an opportunity to enter the market. Then there’s the greater value, both socially and politically, of renewable energy. Ciachurski points to a “widespread political awareness that transcends all philosophies that global warming and the environment are major issues that we have to deal with today.” And there’s an upside to green energy that may not be reflected immediately in the balance sheets, he adds: “The societal benefits of renewable energy [are] on the right-hand side of the ledger compared to the upfront apparent lower costs when burning fossil fuels.”
Working within a free and global market helps: Western Wind’s revenues, like those of its larger counterparts in the sector, Day4 Energy and Westport Innovations Inc., come largely from overseas. Westport, for example, works with engine manufacturers in China, France, Italy and Sweden, while Western Wind is building a wind energy empire in California with 500 mills and expects revenues of $65 million in 2011.
The benefits of working in California, where wind energy is replacing diesel- fuelled power in the open market, outweigh those of B.C., where power providers are limited to supplying one buyer: BC Hydro. “You’re basically hamstrung in B.C. and dealing with the machinations of the only gas station in town, for lack of a better metaphor,” Ciachurski says.
But the sector remains a babe in the arms of venture capitalists, according to Pascal Spothelfer, president and CEO of the B.C. Technology Industry Association. “The clean-tech sector is doing great if you look at it as a rising-tide sector,” he says. For some companies, he says, “the growth will be determined by their growth in the market. But I think for the vast majority of clean-tech companies the growth is being driven by their success in financing.”
Victoria is moving to stake its claim as the clean-tech capital of B.C. The city’s sustainability director, Kim Fowler, says success with projects such as Dockside Green – with its district energy system, waste-water recycling and other measures – is prompting the city to consider establishing a sustainability precinct on the opposite side of Victoria’s harbour on a site owned by BC Hydro.
“It is a green building incentive, but it’s also a very big portion of our economic development strategy that we’re just preparing. Because high-tech in Victoria is our number-one industry,” says Fowler. “We want to attract that industry, keep it and expand it.”
There’s similar thinking going on at the University of Victoria, where discussions regarding the future expansion of the Vancouver Island Technology Park tag clean-tech as a growth sector. “There is that small emerging market group that’s kicking around and making positive noise,” says Dale Gann, president of technology parks for the University of Victoria.
The Vancouver Island Technology Park hopes to give its next building, slated to be 100,000 square feet, a clean-tech focus. It’s consistent with the park’s commitment to maintaining a low-carbon footprint (it rates gold under the Leadership in Energy and Environmental Design certification program) and with the cluster of companies that already exists there, including Carmanah Technologies Corp. and CoolEdge Lighting Inc., led by former Carmanah president and CEO Art Aylesworth.
“We don’t play landlord; we play business development facilitator,” Gann says. “When you get a sectoral focus around it, you can take the fragmentation that exists and bring it together and nurture its growth faster.”
