Yesterday, my ICP partner Shidan Gouran and I attended a breakfast seminar here in Toronto focused on the energy storage market. The seminar was hosted by Deloitte (News - Alert) Canada and Ogilvy Renault, and took place at their usual venue, the MaRS facility. Smart grid topics have turned up on their radar recently and I wanted to share the highlights here and showcase some of the thought leadership coming from Canada.

 

The session was moderated by Deloitte’s director of research, Duncan Stewart. Joining him was Sankar Das Gupta, CEO of Toronto-based Electrovaya, Mark Tinkler, principal consultant of Emerging Energy Options, Kirk Washington, general partner at Yaletown Venture Partners, and Ken Rudisuela, president of Mobilogy Inc.

 

A key theme throughout the seminar was the importance of energy storage, not just to make renewable energy more practical, but also to reduce our dependency on carbon-based fuel, especially gasoline. For renewable power, wind and solar are the sources we hear the most about, and given their intermittent nature, storage solutions are critical for mainstream adoption. After all, energy is a capital intensive business, and to attract investment, there has to be more certainty in terms of supply and demand.

 

Energy storage is a much broader topic, and the seminar could really only explore one aspect, which was Lithium Ion batteries for cars. It was a fascinating discussion, and was even more interesting when you consider the range of energy storage options. The following chart was presented, courtesy of the Energy Storage Association, and Mark Tinkler added quite a bit of commentary around it (click image to enlarge):

 

 

Some of the other forms of energy storage on this chart were discussed, but we’d need a full day to really explore the virtues of each option. Most of the conversation centered on why Lithium Ion is emerging as the technology of choice for electric vehicles, not just because it’s smaller and lighter than other battery types, but because it’s easy to manufacture.

 

Electrovaya was the star attraction of the panel since they are a leading Lithium Ion battery player, and their CEO talked about how they have a zero emissions production process, which plays well to the Cleantech crowd. It’s a good success story for a Toronto company (publicly traded), and as luck with have it, they had some major news to announce yesterday, which was quickly picked up here on the portal.

 

Despite its advantages, it was also pointed out that Lithium Ion is still quite expensive relative to alternatives such as Nickel Cadmium, so we still have some barriers to overcome before the plug-in vehicle displaces fossil fuels. Back to the positive side, we will not run out of Lithium Ion any time soon, and that contrasts favorably with our declining oil reserves. Furthermore, it was explained that today’s R&D is only getting about 25 percent efficiency out of Lithium Ion. This level is expected to rise considerably as R&D efforts intensify, which should improve the economics and help make it a mainstream solution.

 

Aside from this, there was lots of practical advice, especially from Kirk and Mark, and anyone looking to enter the smart grid or Cleantech market needs to focus on solving a very specific problem, especially around renewable energy. They also pointed out the realities of the energy marketplace, specifically the idea that utilities have long buying cycles, and they prefer to buy from large partners. In other words, the odds are long for small players and startups to sell into utilities, and they’re better off partnering with proven majors like GE or Siemens (News - Alert).

 

I wanted to touch on one more idea, which ties back to our vision for smart grid. Mark talked about the market opportunity for power storage with utilities. The session was pretty much focused on transportation applications, especially cars. This is really a different conversation, and I see strong parallels with the telecom space. Here’s what I mean. Energy storage for utilities is comparable to what dynamic bandwidth management means for telcos. When broadband networks experience spikes in usage during peak periods or intense usage of video applications, they manage overall allocation to ensure that voice is not compromised.

 

Today, utilities address their spikes by resorting to more expensive backup energy sources. None of these, however, are storable, so this becomes a costly and inefficient solution. Energy storage solutions that could tap reserves from renewable sources would be better across the board. We’re not there yet, but I suspect utilities could take some lessons learned from telco best practices in dynamic bandwidth management, and this is the type of dialog we’re striving for at our next Smart Grid Summit.