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Water Today Title November 20, 2017

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Q&A - Ontario Research and Innovation


WaterToday - How does the government of Ontario define innovation for funding purposes?

Research and Innovation - Ontario uses a broad concept of innovation, which emphasizes creativity by people and businesses to encourage new ways of thinking and doing that bring about improvements, whether to an individual business, an industry, government, the economy or society as a whole.

The government has an ecosystem approach to innovation, which means that we fund a range of activities that form different parts of the spectrum of innovation and place significant emphasis on collaboration and interaction between the assets that we have in Ontario so that we help accelerate the pace of the ideas-to-market process - the essence of commercialization.

This includes world-class curiosity driven science as well as applied, problem-solving research at universities, colleges and research institutes; making connections between entrepreneurs, inventors, investors and business mentors to help innovative businesses scale up through the Ontario Network of Entrepreneurs; supporting risk capital to increase the supply of funding to help innovative businesses grow; providing support for entrepreneurial activities in universities and colleges through Campus-Linked Accelerators; fostering links between academia and industry; providing funding to support skills development, and nurture and attract talented people; making connections between small and large businesses to facilitate the development and adoption of new technologies; and providing support to help the growth of knowledge-driven clusters of firms and supporting institutions.

WaterToday - What are your prime areas of interest when it comes to innovation with regards to water?

Research and Innovation - Ontario's interests in accelerating innovative water technologies are both environmental and economic.

There are more issues and pressures on global water resources that emerge every year including severe weather events and changing climate, population growth and urbanization, emerging contaminants; and, aging infrastructure. Considering these pressures, it has been estimated that by 2030, the demand for water will outstrip supply by 40%.

These growing needs have seeded a global market for water technology that is expected to grow to over $1 trillion by 2020.

Our government recognizes that Ontario's capacity in the water sector is enormous, and that to compete in this fiercely competitive global market will require not only dedicated support from government, but a collaborative effort from our companies, key sector partners, including utilities and municipal end users. That is why Ontario has invested heavily into policies and programs that accelerate water technologies in general, and in areas that are increasingly in demand such as treatment technology and infrastructure rehabilitation. This is why our government is also involved in trade missions that increase our global profile, and create new opportunities for our innovative clean tech sector.

In fact, earlier this year, Premier Wynne led a mission to India. During the mission, Ottawa's Clearford Water Systems and India's Essel Group announced a partnership to bring an all-in-one wastewater collection and treatment system to India.

In the past number of years Ontario has solidified its position as a globally recognized hub for water technologies. This has been reinforced by the introduction of the Water Opportunities Act in 2010, Ontario's Water Sector Strategy in 2013, and the ongoing work of our sector support organizations such as the Water Technology Acceleration Program (WaterTAP) and the Southern Ontario Water Consortium.

Ontario's water companies are also stepping up to the unique challenges of today and the battle to mitigate and adapt to climate change:

For example, several Ontario companies are now working with California, a state that will require US$69-billion worth of drinking water and wastewater infrastructure projects to address future municipal and industrial water shortcomings. With state-wide mandatory water reductions now in effect, California also has $8.5-billion worth of funds available for investments in critical, long-term, and sustainable water supply and delivery.

Ontario companies such as Pure Technologies (Mississauga), Greyter Water Systems (Toronto), WatrHub Inc. (Toronto), UV Pure Technologies (Toronto),Lystek (Cambridge), Greyter Water Systems (Toronto) to name but a few, are all helping California to improve and optimize their water and wastewater systems.

WaterToday - The focus of Ontario's Innovative agenda is: extracting value from investments in research and innovation; targeted investment in opportunities where Ontario can be a global leader; and working faster - at the speed of business. Can you briefly elaborate on these three points?

Research and Innovation
Extracting value from investments in research and innovation:
In addition to a continued commitment to research, Ontario's innovation agenda is focusing on how to create widespread value from this research excellence in terms of jobs, prosperity and opportunities for Ontarians. Greater strategic focus in provincial funding for basic research and the infrastructure to support it will help pull together pockets of strength that are too often scattered. The goal is to create critical mass and extract more value in areas that offer significant economic and social potential to Ontario.

Targeted investment:
The Ontario government is committed to making targeted investments in several high growth sectors in today's global economy. As part of the Jobs and Prosperity Fund (JPF), the Ontario government is investing $2.7 M to allow the government to partner with businesses to enhance productivity, innovation and exports in the Ontario economy. These are the three critical pillars of success in today's global economy. Within this fund, New Economy Stream has a focus on Ontario's key sectors, including advanced manufacturing, life sciences, and information and communications technologies. In addition, the Food and Beverage Growth stream provides funding for strategic investments that help create sustainable jobs enhance innovation, productivity and market access strengthen supply chains in the food, beverage and bio-product processing sectors. A third stream of the fund - the Strategic Partnerships Stream - provides funding for industry partners that develop enabling technologies for Ontario's priority sectors and focuses on technologies with the potential to transform multiple industries across Ontario, and give the province a leading edge in technological innovation.

Working faster/at the speed of business:
One of the government's key commitments is to renew its efforts to further improve the province's competitive business environment by introducing new tools that will help reduce unclear, outdated or unnecessarily costly regulatory requirements on businesses, and accelerate the modernization of old service delivery processes.

For instance, under the Red Tape Challenge initiative, Ontario is providing an online consultation tool designed to identify and eliminate duplication, lessen compliance burdens, shorten response times and make it easier for businesses to interact with the government. It is engaging with the public, businesses and stakeholders in addressing regulatory challenges and identifying opportunities to reshape Ontario's economy.

The government is also introducing a new Centre of Excellence that will champion international best practices for regulatory quality, simplicity, alternatives to regulation and cost-benefit analysis. The centre will create a network of experts and strengthen Ontario's knowledge and research base on modern regulatory practices as drivers of economic growth.

WaterToday - Wastewater nutrients from industry, agriculture and septic systems are the prime threat to our water resources; do you see filtration as part of your biotech innovation push?

Research and Innovation - Absolutely, this is a huge area of opportunity for the province; and again, wastewater treatment and nutrient extraction offers multiple environmental and economic benefits. This also aligns with the Province's recently released Climate Change Action Plan. This is why Ontario's sector support organizations such as WaterTAP and SOWC are involved in so many wastewater treatment and efficiency companies.

As a specific example, Ontario-based Lystek International specializes in the recovery of organic materials from treatment plants. Their technology not only increases the production of biogas that can be used to generate clean energy, it also reduces the amount of waste material that needs to transported to landfill or incinerated. Similarly, Bishop Water Technologies is providing innovative treatment solutions for municipal water and wastewater. Their solution reduces the energy needed during treatment through the use an innovative process that doesn't require standard treatment technologies (i.e., centrifuges, pumps and drying presses).

The province of Ontario also has regulations designed to protect its water resources which do not specify technologies to use to achieve the desired results. Examples of regulations protecting water resources include the Clean Water Act, Nutrient Management Act, Water Resources Act, Safe Drinking Water Act, Sustainable Water and Sewage Systems Act, Environmental Assessment Act, and Lakes and Rivers Improvement Act.

WaterToday - The 2009 report "A Bright Green Future" identified the four factors that have historically hampered the growth of cleantech in Ontario as : limited access to needed risk and growth capital; not enough local demand to support globally competitive technologies; an insufficiently attractive business environment; and a lack of resources to assist entrepreneurs in commercializing innovations. What progress has been achieved in these areas over the last 6 years?

Research and Innovation - Ontario continues to implement new programs and policies to build and accelerate our cleantech sector. In fact, fighting climate change while encouraging innovation and productivity is key part of the government's plan to grow the economy and create jobs. An important part of this plan is creating a low-carbon economy through a cap and trade system, which will limit pollution, reward innovative companies and create more opportunities for investment in Ontario. In fact, in this year's, budget we announced plans to commit $55 million to develop new approaches to make investments in exchange for equity in clean tech firms. This is in addition to previous commitments such as the Northleaf Venture Catalyst Fund.

Ontario's new carbon market is expected to amplify an already robust cleantech sector- and this is extremely positive news for cleantech companies and investors. In fact, Ontario has the fastest-growing cleantech sector in Canada — with $8 billion in revenue, 3,000 companies and 65,000 employees. We have world-class R&D capabilities, low business costs, access to industry talent and generous government incentive programs. We are now also a major centre of cleantech finance. The Toronto Stock Exchange (TSX) and TSXVenture Exchange (TSXV) list more cleantech and renewable energy companies than any other exchange in the world. These 110 companies have a total market capitalization of $30 billion.

We have already begun delivering on key programming related to the recently released Climate Change Action Plan. The $325M Green Investment Fund includes a new $74-million innovation initiative, which will help reduce emissions by encouraging industry to adopt leading-edge clean technologies. We have partnered with Ontario Centres of Excellence (OCE) to implement this exciting new program, known as "TargetGHG."

With the cleantech sector expected to exceed $2.5 trillion globally by 2022, the economic opportunities for Ontario are incredible, and attainable. The newTargetGHG program will help to further strengthen our cleantech sector and position Ontario to compete and win in this lucrative and important market, while significantly reducing local and global GHG emissions.

With specific regard to the water sector, Ontario is supporting several organizations to help accelerate our companies. From testing and demonstration, to piloting and first customers, to business growth strategy, Ontario has developed an integrated approach to supporting water technology companies as they navigate the path from idea to market leadership.

Three existing organizations - the Southern Ontario Water Consortium (SOWC), the Ontario Clean Water Agency (OCWA), and the Water Technology Acceleration Project (WaterTAP) - are working together to develop and provide a coordinated approach to guiding and supporting both emerging and established water sector companies on their path to success. These organizations have complementary roles to play in collaborating with companies, end users, government, and other partners to "clear the path" to advance innovative water solutions from Ontario. They share a goal to help Ontario's water sector to grow while providing important economic, environmental and public health benefits to Ontarians and addressing critical global water issues.

WaterToday - In "A Bright Green Future" it is also stated that by 2013, many renewable sources of energy are expected to compete with grid power. How far is Ontario from achieving this goal today?

Research and Innovation - The costs of wind and solar projects have fallen dramatically in the past several years and Ontario's Feed-in Tariff (FIT) rates and Large Renewable Procurement (LRP) process are reflecting those reduced costs.

For example, FIT and microFIT prices for new solar projects have been reduced between 50 to 75% since 2009 through annual price reviews.

Also, new for FIT 4, applicants had the opportunity to voluntarily reduce their base FIT price to receive priority points. This encouraged competition and is expected to result in even further cost savings.

The results of the first phase of Ontario's competitive LRP were announced in March 2016. Sixteen (16) contracts, representing almost 455 megawatts (MW) of renewable energy capacity were offered.

LRP introduced strong competition between developers of large renewable projects, to help drive down price. The procurement also included a maximum acceptable price for each renewable technology in the Request For Proposals. These maximum prices were established using IESO's internal data, industry feedback, and international and North American pricing trends for large renewable projects.

The results for LRP I show that the weighted average price for solar projects (15.7 ¢/kWh) is more than 40 percent below the maximum price accepted under the program, and the weighted average price for wind projects (8.6 ¢/kWh) is more than 20 percent below the maximum price. The weighted average price for waterpower projects (17.6 ¢/kWh) was also below the maximum price accepted under the program.

WaterToday - Can you tell us about the Innovation Demonstration Fund (IDF) and how innovators can access it?

Research and Innovation - At this point in time, the Innovation Demonstration Fund program is paused and is not accepting applications. No decision has been made on the future of this program, therefore we are unable to provide more information on when or if the program will be open to accepting applications.

Another upcoming option for companies that may have been interested in IDF is the new TargetGHG program. The ministry is partnering with Ontario Centres of Excellence to deliver this program, which will bring together industry, cleantech companies and researchers to develop and promote the early adoption of technologies that will reduce greenhouse gas pollution. By promoting the next generation of clean technologies to reduce emissions and increase efficiency, we will not only improve Ontario's environment, but our thriving innovation ecosystem as well. While specific details are not yet available, stakeholder and partnering consultations are expected to occur in summer 2016, followed by program marketing, and intake for some streams. The detailed program criteria will be tailored to the specific requirements of industry and the state of development of the technology solution. Please refer to the OCE website www.oce-ontario.org for updates as they become available.

WaterToday - Most innovation funding seems to privilege companies born out of university research, are there venues that are more geared to independent researchers and how would they know about them?

Research and Innovation - The Ontario Network of Entrepreneurs (ONE) was created to pool together the full-spectrum of programs, services and resources available to Ontario's entrepreneurs. The less time an entrepreneur has to spend finding and accessing programs and services, the more time they have to focus on "the business of running a business". ONE is a collaborative initiative that brings together centres/personnel whose primary purpose is to support Ontario's entrepreneurial community. To contact a ONE member, we have set up a website (onebusiness.ca) for information on how to connect to any of our 18 Regional Innovation Centres, 57 Small Business Enterprise Centres, or 13 Business Advisory Service locations.

WaterToday - Alternative energy is one of Ontario's priorities in innovation, within the solar and wind sector, is Ontario looking to increase its output or promote the development of new more effective products, like thermodynamics?

Research and Innovation - By "thermodynamics" we have assumed the question may be referring to new technologies such as energy storage and have answered such.

Ontario's electricity system has historically operated on a "just-in-time" basis − with decisions about electricity production based on real-time demand and the availability of transmission to deliver it. This may change with the emergence of new more cost-effective energy storage technologies, which allow electricity to be captured and dispatched to the grid whenever required. Storage can also benefit the system in the following ways:
  • Smoothing out fluctuations of solar and wind resources, bringing added stability to the electricity system;
  • Easing points of congestion in transmission and distribution networks by temporarily absorbing surges and excess power flow, allowing utilities to defer, or even avoid, expensive system upgrades;
  • Absorbing surplus baseload generation when the output is higher than minimum demands; and,
  • Providing critical reliability services that support voltage and frequency on the system.

Ontario has procured 50 MW of energy storage recently. In the first of a two-phase competitive procurement process, the Independent Electricity System Operator (IESO) selected storage technologies from five companies that will offer ancillary services to support increased reliability and efficiency of the grid. Technologies selected include batteries, flywheels, and hydrogen systems. The IESO will take the lessons from these projects, totalling approximately 34 megawatts (MW), to understand how to better manage the day-to-day operation of the power grid using electricity storage.

In the second phase of the procurement process, the IESO offered 10-year contracts to five companies for nine separate energy storage projects totalling 16.75 MW. Phase II sought energy storage technologies with a range of performance characteristics that can store energy when prices are lower and re-inject it at other times of the day when prices are higher and the energy has greater value. Technologies that were successful in this procurement included solid/flow batteries and a compressed air system. In addition, the Ministry of Energy supports a number of energy storage projects through its Smart Grid Fund that assist in the development of a modern, intelligent electricity system.

NOTE: These questions were intended for the Minister. The answers above were provided by a Ministry Spokesperson.

Other Q&As

Commissionner for the Environment - Julie Gelfand
Natural Resources Minister Jim Carr
Ontario Minister of Municipal Affairs, Bill Mauro
Indigenous and Northern Affairs Canada
Ministry of Environment and Climate Change, with input from Finance, Transport and Agriculture Canada

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