Good Company

01 Feb 2008Archived News Energetics in the News

PUBLISHED: Qantas The Australian Way - by Giles Parkinson - Jonathan Jutsen, Executive Director and Founder, Energetics Pty Ltd talks about the change in business attitudes towards climate change.

 

Australian innovators are answering the call to halt climate change with timely technology and prudent business solutions.

For Alan Burns, the moment of revelation came when he was swimming underwater in Kapalua Bay, off the Hawaiian island of Maui. “I wanted to sit in one of these channels that had been carved out of the rocks by the waves, watching my son surf over the top. But I was getting dragged in at 10 knots and dragged out again. I didn’t realize how much horizontal and vertical motion there was in the waves.”

It was a frightening experience. Just like the time he almost got jammed under a ledge while diving for lobsters off Rottnest Island, near Perth. But it sowed the germ of an idea. Burns, an oil and gas man, figured there must be a way to harness that clean energy – and he set himself the task to find it.

After nearly two decades toying with designs and investing millions of dollars, Burns’ Carnegie Corporation is on the cusp of delivering the world’s first “underwater wave farm” – a technology that could provide a zero-emission solution to global energy and water problems.

The idea of Burns’ Ceto technology (named after a Greek sea goddess) is deceptively simple. A buoy, about seven metres in diameter, is tethered underwater just off the coast. As the buoy is moved by the sea, it drives a pump that delivers highly pressurized water onshore, where standard technology converts it to electricity or desalinated water. By the end of this year, Ceto is expected to be commercially ready and Burns says a wave-energy converter producing some 50 to 70 megawatts of electricity – enough to power up to 35,000 households – could be in place by 2012. The nature of the technology means it is infinitely scaleable. An area the size of 10 football fields would be sufficient to meet Sydney’s water needs, or 60 fields for 10 per cent of its energy requirements.

Burns’ oil and gas company, Hardman Resources, was sold for $1.5b in 2006, and he says it is inevitable that the world will move to 100 per cent sustainable energy over time. “We have the wit and the manufacturing expertise to make it work. I am a great optimist about the ability of humans and technology to solve problems.”

Carnegie is just one of a number of companies pursuing technologies that could deliver the clean energy needed to arrest the impact of climate change, or reassessing the way they do business to make their operations more sustainable. Former mathematics lecturer and investment banker Dr. Tom Denniss has established Oceanlinx, a Sydney company pursuing its own wave-energy design – it sits on the water – air is pressurized as the swell enters a chamber and a vaccum created as it leaves, both actions driving a turbine. A wave-energy generator has been set up at Port Kembla in NSW, and in Portland, Victoria, the company is in the advanced stages of gaining permission to deploy 18 1.5MW units. Another scientist, Dr Eric Dunlop, is developing technologies that use algae to produce zero-emission fuel on a massive scale. Australian companies are developing geothermal energy (water pumped through hot rocks 3-4km underground to produce steam) and commercially viable solar power.

Within the aviation sector, the US Air Force is also planning test flights with engines powered by jet fuel produced with oils extracted from algae, while Swiss inventor Bertrand Piccard has set himself the target of completing a round-the-world-flight in his solar aeroplane Solar Impulse in 2011. Its first flight is scheduled for later this year. But it is not just the new technologies that will drive change in a carbon-constrained world, it’s a new way of thinking about business. Companies across the globe are re-examining the way they do business to make them more sustainable and reduce their carbon footprint.

For some, it is simply a matter of being more efficient. For others it’s an opportunity to create a new business model. Take Shai Agassi, a California-based entrepreneur who wants to adopt the mobile phone model to sell cars running on (renewable) electric power. He left a high-flying position with a software company to create Project Better Place. Agassi’s mission statement was to set up a network of recharging stations in densely populated areas so customers could subscribe to a plan and an electric car of their choice, just as with mobile phones.

“It’s making electric cars the more affordable, more sane, more sustainable solution that is faster and cheaper for consumers,” he says. “We need to change the way consumers buy an (electric vehicle) so that it fits the current social contract we have with our cars, providing a normal car ownership experience even if the car has an electric drive train. With the right infrastructure, right car, right battery and right consumer experience, the industry as a whole will benefit and there will be enormous economic opportunity.”

What we are seeing, says Dr James Bradfield Moody, general manager of international development at the CSIRO, is the development of a new business paradigm that will focus on the better use of dwindling resources.
“Instead of trying to sell you a product, they will sell you a service,” Bradfield Moody predicts. That way, it’s in the interests of the producer – be they manufacturers of cars, carpets, photocopiers or light bulbs – to make the products as efficient and long-lasting as they can.

In Europe, this is already happening. Power companies are signing contracts not to sell energy (gas or electricity), but to provide heating. French company Veolia found this particularly successful in Eastern Europe, where poorly constructed buildings had hopelessly inefficient insulation. It saves everyone money and cuts energy use. The concept has since spread to England, France and Singapore.

A similar approach is being taken by Sydney-based Custom Fleet, which is looking to expand the product it offers to clients of its 160,000-strong car fleet with ways to reduce their carbon footprint. “We are moving beyond fleet management and into carbon management,” says Paul Elliott, manager of products and marketing. He says the focus will be on carbon and cost reduction. Details have not yet been released, but will likely look at vehicle size and fuel types. “This has the potential to transform the fleet management business.”

Michael Molitor, the principal of Carbon Shift, one of a growing number of consultancies that advise companies on how to reduce their environmental footprints, says the price of carbon is being inserted into the DNA of business. “We are rapidly moving to a world where companies are offering low carbon solutions and capturing market share.”

Green Guru 1 – Paul Gilding (CEO, Ecos Corporation)

Paul Gilding has been fighting to protect the environment for more than 20 years. He decided the best way to drive social change was to engage and mobilise capital markets. So, in 1994, he resigned as an executive director of Greenpeace International and created his corporate consultancy, Ecos Corporation. It wasn’t easy: he was viewed as a heretic by his activist colleagues and with suspicion by the corporate sector. Ten years on and with climate change front-of-mind, he feels vindicated. Gliding has a theory: Scream, crash, boom. The scream is hearing about environmental issues; the crash is those warnings becoming reality and the boom is when we work out that it’s possible to fix these problems. “There will be a great process of creation as we build this new economy,” he says, “New sectors will come into being as new technologies and new approaches to business define this new world.”

Green Guru 2 – Michael Molitor (Principal, Carbonshift)

Michael Molitor says climate change is moving rapidly from being a scientific issue to a policy issue and business challenge. The principal of CarbonShift, and former head of PricewaterhouseCoopers’ global climate change team (he is still an advisor at PWC), says it is the hottest topic in the boardroom.

“We are rapidly moving to a world where a company’s market premium or discount is based on its carbon performance. If a company is not able to meet demands from its clients, or its investors, to manage its carbon footprint, it’s going to get whacked.” He says Australia, because of the low price of its abundant coal resources, is incredibly inefficient, but he sees that as an opportunity rather than a problem. “Saying coal is cheaper than wind is pretty stupid, because we don’t capture the real cost. That’s the point of the carbon price.”

Green Guru 3 – Jonathan Jutsen (Founder, Energetics)

Jonathan Jutsen, a chemical engineering graduate, launched Energetics in 1984. It wasn’t easy selling energy efficiency and cost reduction in the middle of an oil glut, but Energetics now employs more than 100 people and is growing at more than 40 per cent a year.

“We’ve noticed a big change in attitude… to global warming in the past 12 months,” he says. “There is a broadening of the view from seeing a company as an entity that generates short-term economic returns for shareholders to (one) having a wider contract with the community.”

Jutsen says the response to global warming requires major decarbonisation of the economy – resulting in huge business opportunities and risks.

“The future will not be the past plus a carbon price. Changes in markets and customer perceptions of carbon-friendly products and services will have significant impacts on business.”

Green Guru 4 – James Bradfield Moody (General Manager, International Development, CSIRO)

Just recently, James Bradfield Moody sent 200 copies of the Book of Love to Australia’s leading chief executives. He hopes they will all see fit to share its contents with each member of their company’s board. The Book of Love is a glossy manifesto prepared by the Young Global Leaders Climate Change Initiative, of which Bradfield Moody is a member, to celebrate the opportunities awaiting businesses and brands that help customers reduce their greenhouse emissions.

“The best way to achieve progress is for CEOs to talk to each other or for one to lead the way and make a lot of money out of it,” he says. That is what this book is designed to do. Bradfield Moody, an engineer and head of international development at CSIRO, says there has been a marked shift of perception in the corporate world “People are realizing that they’d better not be the last person on this bud.”

Join the conversation