A Conservative Business
In the wake of high energy costs and Kyoto, a host of federal, provincial and municipal programs aim to make energy conservation a sound business proposition. The first in line to benefit are energy auditors
by Paul Stastny
Alternative energy and energy conservation are siblings in a family whose fortunes keep improving. In 1996, the restructuring of Alberta’s electric industry allowed independent producers to sell their power through the Power Pool of Alberta. The ruling sprouted wind farms across southern Alberta, various small-scale hydro, biomass and landfill methane projects, while new clean energy innovators like Mariah Energy Corp. and Dynetek Industries Ltd. surfaced to export their products worldwide. More recently, a host of government incentives aimed at helping homeowners, businesses and institutions reduce energy consumption are driving up demand for the services of energy auditors.
“Right now the NRCan programs are the biggies in the marketplace,” says Don Allen, general manager of Excalibur Efficient Buildings Ltd., a Calgary consulting engineering firm that has been saving energy in commercial and public facilities since 1985.
NRCan – Natural Resources Canada – lists all 18 of its programs, incentives and measures for residential through to industrial applications under the Office of Energy Efficiency (OEE). Companies like Excalibur specifically stand to benefit from the energy auditing components of these commercial and industrial incentives that offer customers rebates of up to 50% of audit costs. With a $2,000 to $20,000 price tag for a commercial energy audit, these incentives certainly help.
“The climate is unbelievable,” Allen adds. “It puts the fire under a lot of people who were sitting on the fence.”
The NRCan residential program, EnerGuide for Houses, which came out in 2001, has spurred the rapid growth of a fortunate few companies that make their living from the energy conservation industry. Under Ener-Guide, the homeowner pays $150 for an energy performance evaluation and the federal government chips in another $150 to cover the full cost of the three-hour audit. Delivered in Alberta through ATCO Gas and two other groups, customer requests for energy audits are routed to independent energy advisors such as Green Communities Edmonton Association – a non-profit environmental society servicing metropolitan Edmonton and surrounding municipalities – and VerdaTech Inc. in Calgary.
“Auditing the residential sector is a fairly new area. The government is quite involved in it, but it’s also driven by companies like ours because it’s a niche that needs to be filled,” says Stephen Farrell, who started VerdaTech three years ago as one person armed with a computer program he had written. Today, the company employs 34 auditors and generates over $1 million annually in revenues.
Incentives to turn energy audits into energy efficiency upgrades also abound. OEE grants are typically calculated against realized energy improvements. Commercial and industrial programs rebate up to 50% of the retrofit costs.
Alberta businesses have also benefited from top-ups to certain federal energy efficiency programs. Last November, the federal Commercial Build Incentive Program (CBIP), which is intended to help offset the extra cost of designing energy-efficient buildings, was supersized to CBIP Alberta Plus. Under CBIP Alberta Plus, Climate Change Central, a one-stop source for information and action on energy efficiency and conservation in Alberta, makes available up to $40,000 of extra funding to leverage the up to $60,000 of funding provided by the federal government’s CBIP program.
“We’re also currently managing a new fund called ME First. This is for municipalities to do energy efficiency retrofits on existing municipal infrastructure. It’s $100 million of interest-free loans over the next four years,” says Simon Knight, a director of Climate Change Central.
While new programs do appear to signal a coming boom, those in the business are only cautiously optimistic. Over the decades, energy conservation programs have come and gone with oil embargoes and roller-coaster energy prices. Allen recalls, “I did a whole bunch of work for NRCan about 20 years ago when they were called Energy Mines and Resources. And [this new energy audit rebate program] is the same program as 20 years ago. This is before Kyoto, before Jean Chrétien even. I got a lot of business out of it and then they just ended it one day.” At Excalibur’s peak, Allen had about 10 employees. These days, he operates the company differently. He contracts out additional help as he needs it.
Boom and bust may characterize the fortunes of those businesses riding on the coattails of government programs. Some may even draw a parallel between the Arab oil embargo of 1973 and the volatility of energy prices following the events of 9/11 and are tempted to conclude the current round of government incentives are but another in a similar cycle. Yet other signs indicate that energy conservation is a more permanent fixture in Alberta’s economy.
Jorg Ostrowski, for one, sees a number of factors contributing favourably to the industry’s prospects. “I’m looking at … technical progress, homeowners’ demands, high energy costs, continuing greenhouse problems, dwindling fossil fuel supplies, the recently announced provincial water conservation policy and the enormous opportunities provided by the Kyoto Protocol as an engine of growth, prosperity and diversification – it’s all going in the same direction,” says president and sustainable-design consultant at ASH-Autonomous & Sustainable Housing Inc. Starting in the 1970s with simple greenhouse additions and passive solar homes and retrofits for the environmentally conscious, Ostrowski’s work is increasingly attracting a much broader range of clients involved in campus greening, sustainable community design, greener office towers and lower impact oil and gas developments.Pages: 1 2