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Feasibility Study

The Future of “Green Industry” in Southern Ontario

How to attract Investors

Prepared by:international trading company

Helmut Ebert

P.O. Box 424Welland ON L3B 5R2

CanadaTel. 001 905-788-3577

Email: info@itcwebdesigns.com

Date: 2010-06-27

Updated: 2010-09-14

Executive Summary:

Global warming is a fact and cannot be any longer questioned. It is also known that the resources for oil,

natural gas and coal are dwindling and that the western world depends on supplies from not always reliable

countries.

In a long term view higher prices for this energy must be expected. W ars to secure a supply of the needed

energy sources have proven to be costly and unsuccessful. If the costs of a such a war would be added as

a surcharge to the price of fossil fuels, “green energy” would be very competitive.

It should not be questioned that it is favorable to invest in our countries to become step by step independent

from imports and save the fossil fuels for the chemical industry.

Important work has already be done in Canada, especially in the fuel cell sector and the hydrogen technology.

The only known suitable alternative to the present cars for individual mobility will be cars using fuel cells and

hydrogen. Battery powered vehicles will gain a certain niche market.

W ind power and solar power are the major promising environmental friendly sources to produce electrical

power in our countries.

The intent of this study is to support the federal government from Canada and the provincial government from

Ontario to convince potential investors from Europe to establish subsidiaries for production of wind turbines

and solar panels. Southern Ontario with the W elland Canal and access to the Great Lakes has a big

advantage with respect to transportation of the heavy components.

It is important that the federal and the provincial governments work together to achieve this task for the benefit

of our country.

The benefits to establish green industry will be shown, but also foreseeable risks and complains.

My role could be a link between the European industry (preferable the German industry because I speak the

language) and involved authorities in Canada.

I became a Canadian and want to help.

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Table of Contents:

Chapter Page

1. Objectives 3

2. Wind Farms 3

2.1 Suggested Approach 4

2.2 Advantages for Investors 4

2.3 Concepts to be evaluated 5

2.4 Well known Manufacturers of Wind Turbines 5

2.5 Realistic Prerequisites for Success 6

2.6 Helpful References 6

2.7 Expected Benefits for Canada 7

3. Solar Panels 8

3.1 Suggested Approach 9

3.2 Advantages for Investors 9

3.3 Concepts to be evaluated 9

3.4 Well known Manufacturers of Solar Panels 9

3.5 Realistic Prerequisites for Success 10

3.6 Helpful References 11

3.7 Expected Benefits for Canada 11

4. Expected Environmental Concerns 11

5. Conclusion 13

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How to attract Investors for “Green Energy” to the

Niagara Region

Draft! Not complete!

1. Objectives:

The purpose of this presentation is to attract mainly investors from Germany, one of the leadersin green technologies, to southern Ontario.I am a retired German engineer with extensive experience in many fields.I recommend to prepare for the first approach a well written proposal which has been approvedby the relevant Canadian authorities. This proposal should demonstrate that an investment willnot be lost and will pay off. To make it trustworthy also all foreseeable risks shall be listed.The proposal shall as short as possible to avoid that it will not be read by the decision makingpeople. Naturally, the interests of both countries must always be kept in mind.• Canada:

• To create well paid jobs by establishing a future oriented industry.• To gain new know how which can be used for other new developments, such as

the hydrogen technology.• To create additional jobs by providing the required infrastructure.

• Germany (Europe):• To gain more market share and earnings by additional sales• To become more efficient by stronger purchasing power • Cost savings and easier access for sales to the American market• Cost savings by tax and duty exemptions (a free trade agreement shall be

achieved) This presentation considers many Canadian resources which can help to create a successstory.Valuable work done already in other parts of our country shall be used for the benefit of all ofus.

2. Wind Farms:

To use wind power to produce electricity has a long history in Germany. The company MBB forwhich I worked was a pioneer for many new technologies, such as solar panels for heatingwater, a large wind turbine (Growian) which was an expensive but necessary learningexperience for future developments, the first working prototype of a magnetic levitation train etc.I have prepared years ago a proposal to build wind farms on the east coast of Newfoundlandwhich could be used mainly for the production of hydrogen especially for the European and USmarket.In the meantime in Europe major offshore projects for wind farms have been started. Theproduction of hydrogen to store not used electrical power is under serious consideration. However, Newfoundland should still be considered as a preferable place for such a project inthe future.Battery powered cars will not meet the requirements in the foreseeable future to replace theconventional gasoline powered vehicles. The development of fuels cells is the only promisingsolution at this time and many improvements have already been achieved.

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Ballard Power Systems, a Canadian company is one of the leaders in this technology.The independence from oil supplies from critical countries and the job creation in Canada willbe major benefits in addition to the environmental friendly technology.

2.1 Suggested Approach:

• To claim that we need jobs and have qualified workforce will not attract anybody. Companies must beconvinced that there is a market in Canada and especially in Ontario. Advantages to investors must be trueand convincing.

• Guaranteed government funding must be defined.• A realistic plan for the first series production of fuel cell powered cars shall be available. Many companies

claim that this will be in 2015 for the production vehicles.• Wind patterns must be shown. (Available from the “Canadian Wind Atlas”, see:

http://www.windatlas.ca/en/index.php)• It is recommenced to give a higher priority to off-shore wind farms. I expect less environmental restrictions

and complains.• All foreseeable complains shall be reviewed and sound answers must be prepared.• It must be made clear that a fair works share agreement is essential for any contract.

• The federal government shall have country wide regulations for wind farms in place which have to be metfor the designs, construction, of wind turbines and wind farms, similar to the Transport Canada regulationsfor aircrafts. These regulations should also meet those from the USA or should be validated by USauthorities.

2.2 Advantages for Investors:

Wind farms have already been built in Southern Ontario on the northern shore of Lake Erie.To establish an industry in the Niagara Peninsula has the following advantages:• The Welland Canal and the harbor in Port Colborne allow cost efficient transportation

by vessels to favorable locations on the Great Lakes in Ontario and in the USA• Some of the essential manufacturing industry has already invested here:

• Towers for wind turbines• The Great Lakes seem to be a favorite place for large off-shore wind farms. The

advantages are:• Close to end users of the produced electrical power. That means less new power

lines are required.• Farms built off-shore should be preferable to avoid or reduce legal problems with

farmers, cities and professional complainers.• This will hopefully also reduce problems to meet environmental standards.• Again reduced costs for transportation.

• Canada is using the metric system and most companies are familiar with that. However,the drawing system is different what has to be pointed out. Otherwise bad surprises canbe expected!

• The following products and services should provide cost savings for the North Americanmarket when manufactured or provided here:• Rotor blades (eventually at Eurocopter in Fort Erie)• Modular graphite casting for nacelles, gear boxes etc. Not a single Canadian

company is known to me who can do that.• Required machining of the castings.• Supplies for wind turbine control systems.• Generators.• Metall parts, such as ladders, doors, railings etc.• All kind of cowlings and other composite parts. (Again Eurocopter could certainly

do some of this.)

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• Assembly work.• Installation of the wind turbines.• Monitoring service.• Required maintenance

• An additional benefit for a subsidiary of a wind turbine company will be the chance todeliver smaller wind turbines with diesel back up to remote areas all over Canada andthe USA.

2.3 Concepts to be evaluated:

• Kind of wind turbines to be used with respect to:• Initial costs• Operating costs (includes reliability)• Efficiency

• The main concepts to be compared are:• Wind turbines with gear box• Wind turbines without gear box

• Locations - both possible locations shall be evaluated::• Off-Shore - at least for highly populated areas with many protesters• On land

• Used tower design• Steel tower• Concrete tower

• Expected work share (Canadian content). Major parameters shall be:• Costs• Qualification and experience• Quality• Reliability for delivery• Availability of specific materials. A conversion list may be required.• Schedule for using Canadian suppliers.• Audit of possible subcontractors to ensure proper quality control etc.

• How to store electrical power:• Preferable in form of hydrogen which can be produced by electrolysis. Hydrogen

will be the main energy source for fuel cells which will be available in the nearfuture to power electrical cars. This technology will make us much moreindependent from oil imports, create jobs by building the required infra structureas well as supplies for the automotive industry. It is certainly time to invest now in this technology and the required infra structure. Ballard Power Systems is theCanadian leader in developing fuel cells. Battery powered cars will only be aniche market.• To push this technology forward buses for public transportation shall be

also used similar as already in BC.• Dynetek Industries Canada manufactures high pressure (up to 450 bar)

cylinders for the storage of hydrogen in Canada, The have beenapproved by:• The German TÜV, DRIRE, KHK, Bureau Veritas, Australian Work

Cover Authorities, US Department of Transport, TransportCanada, Canadian Provinces.

• The development in other countries targets a pressure of 700 bar toextend the range of fuel cell powered cars.

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• Another approach can be to use sodium-sulfur batteries for storage of electricalpower. I will follow up a project obviously planed on the Orkney Islands in theUK.

• It is strongly recommended to select only partners which have a proventechnology

2.4 Well known Manufacturers of Wind Turbines:

Company Location Concept Website

ENERCONGmbH

Germany Gearlesstechnology

http://www.enercon.de/en/_home.htm

Nordex Germany Geartechnology

http://www.nordex-online.com/en

Siemens AG World wide Bothtechnologies

http://www.energy.siemens.com/hq/en/power-generation/renewables/wind-power/

http://www.windfair.net/siemenswindpower/welcome.html

Vestas Denmark Geartechnology

http://www.vestas.com/en/about-vestas.aspx

2.5 Realistic Prerequisites for Success:

When I came as director of engineering for a German company to Ontario the expectations ofsome citizens of the selected community were unrealistic.To claim to have a well trained work force is far away from a proof and reality. This applies forall high tech companies who establish a subsidiary here.Certain infrastructure must be provided. This is especially important for the transport andhandling of the oversized an heavy components. The following shall be considered from bothparties:• By Canada:

• An easy accessible location for the wind turbine assembly plant andsubcontractors if applicable. Important is access for speciality trucks / railway.

• Close to a harbor for sea transport.• All utilities, such a water, sewer, electricity must be in place.• Special equipment for lifting and transportation must be available. (See more

under references!)• By the Investors:

• All required expertise, transfer of know how, must be provided step by step bythe investors.

• Specialists have to be hired from all over the country and extensive training ofkey people in Germany and Canada is normally mandatory.

• A training plan for key people will be required.• Also a learning curve until full productivity can be achieved must be considered.• To prevent labor problems it shall be prevented to have the subsidiary unionized

If this cannot be avoided the relation between management and unions must becooperative as much as possible. A not cooperative union facing an ignorantmanagement which does not maintain communication with the work force about

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economical and safety matters are certainly the reason for many failures in thepast.

• By both Parties:• Environment studies, to convince all those who will fight this technology

2.6 Helpful References:

• Wind Turbines: Designing With Maintenance in Mind, see:http://www.powergenworldwide.com/index/display/articledisplay/293559/articles/power-engineering/volume-111/issue-5/features/wind-turbines-designing-with-maintenance-in-mind.html

• A map and a list of all wind farms in Canada and planned projects for the future can be found at:http://www.canwea.ca/farms/wind-farms_e.php

• Ballard Power Systems, see: http://www.ballard.com/

• See also: Fuel Cells -The Opportunity for Canada, a report by Pricer waterhouse coopers at:http://www.pwc.com/ca/en/technology-industry/fuel-cells.jhtml

• DMI Industries, manufacturer of wind towers, see:http://www.dmiindustries.com/careers/locations.php?step=4

• Germany's First Off-shore Wind Park in Operation, see:http://www.hydro-international.com/news/id3837-Germanys_First_Offshore_Wind_Park_in_Operation.html

• German Hydrogen and Fuel Cell Association, see: http://www.dwv-info.de/e/index.html

• Hydrogen in Canada, see: http://www.hpath.org/resources/path-newsletter-02-11-02.pdf

• CANADA RUNS ON HYDROGEN AND FUEL CELLS, see:http://www.globe2010.com/media/13221/canada_hydrogen_fuel_cells_factsheet.pdf

• Dynetek Industries Ltd., Canada, see: http://www.dynetek.com/cylinders.php

• Goldhofer AG, (specialist for transportation), see: http://www.goldhofer.de/gh-en/index.php

• Germany's First Offshore Wind Farm, see: http://www.alpha-ventus.de/index.php?id=80

• AEP TESTS SODIUM SULFUR BATTERY’S, ELECTRICAL ENERGY STORAGE CAPABILITIES, see:http://www.aep.com/Newsroom/newsreleases/?id=790

• Sodium-sulfur (NAS) Battery for Large-scale Energy Storage, see:http://www.jase-w.eccj.or.jp/technologies/pdf/electricity/E-17.pdf

• The Energy Source of the Future, Evonik Industries Europe‘s largest battery cell factory (represented also inCanada) , see:http://corporate.evonik.com/en/company/evonik-in-focus/energy-efficiency/Energy%20Source%20of%20the%20Future/Pages/default.aspx

• Innovation Park, Queen’s University, see:http://www.innovationpark.ca/article/solar-energy-production-has-enormous-potential-southeastern-ontario

• Erie Shores Fact Sheet, see: http://erieshores.ca/ErieShores.PDF

• A Study of Supply-Chain Capabilities in the Canadian Wind Power Industry, see:http://www.oreg.ca/docs/Wind%2520Power-Final%2520Rpt-edited.pdf

• The Great Lakes - an overview, see: http://en.wikipedia.org/wiki/Great_Lakes

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Towers made by DMI Using the Welland Canal for shipping

2.7 Expected Benefits for Canada:

Some of the mentioned German (European) key companies have already subsidiary or officesin Canada - very often even in Ontario.If successful I can see the following benefits for Canada and especially Ontario:• Creation of well paid manufacturing and administrative jobs in a new industry.• Jobs for existing companies to built up the required infra structure. In most cases empty

and deserted old building will not be suitable, but large brown fields can eventually beused if in a suitable location.

• More work for already existing companies if qualified.• Challenging jobs for young graduates in many work places.

3. Solar Panels:

In Germany the solar industry has a workforce of about 80 000. The majority of solar panelsmanufactured and installed in Germany convert solar light into electricity. The main competitorsare in China. Unfair subsidizing by the Chinese government (It is claimed that government loansmust not be paid back) and lower wages are becoming a major problem. German companiesfight this with better technology and reliability.High investments will be required to guarantee a high productivity to stay competitive.However, also the German government was helping the establishment of the solar industry.They were subsidizing the prices of the electrical energy. You can see solar panels on the roofs of private homes, of barns and on public buildings.It is expected that the task to be competitive to conventional produced electrical power will bereached in the near future. In Europe solar panels are a fast growing market. A plan is evaluatedto built a huge solar farm in Africa to deliver electricity to Europe. This plan has certainly manyrisks.The following systems shall be considered:• Solar Photovoltaic Systems• Solar Thermal Systems

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A solar power plant in southern Ontario The construction has already started

3.1 Suggested approach:

• Guaranteed government funding must be defined.• Bylaws, building codes must be available. It may happen that certain countries in Europe

may make it mandatory to install solar cells on ne buildings.• Show market potential for:

• Solar Photovoltaic Systems• Solar Thermal Systems for heating water, such as:

• Warm water for home use• Heating of swimming pools (elements can be used as part of the

mandatory fence) For this application reliable low cost panels can bepreferable to costly ones with higher efficiency!

3.2 Advantages for Investors:

• Location in southern Ontario provides the following benefits:• Close to the most populated area of Ontario• Close to the US border• Excellent connections to water ways, railways and highways• Attractive location with good climatic conditions for the settlement of key staff

from Germany or other countries.• Industrial properties and facilities are available.• Obviously at present time no major manufacturers in all of Canada.

3.3 Concepts to be evaluated:

• Solar Photovoltaic.• Solar Thermal Systems.• How will hazardous waste handled.• How will recycling of damaged units be handled.• Will it be economical to use sodium-sulfur batteries for storage of electrical power. (It is

reported that first large prototypes can store up to 10 megawatts and that they have along life cycle)

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3.4 Well known Manufacturers of Solar Panels:

Company Location Website

Conergy Group Germany http://www.conergy-group.com/en/desktopdefault.aspx/tabid-2171/3113_read-9849/

The Bosch Solar Group, Germany http://www.bosch.com/content/language2/html/4942.htm

Q.Cells Germany http://www.q-cells.com/en/company/index.html

Schott solar Germany http://www.schottsolar.com/global/

Solarwatt Germany http://www.solarwatt.de/eng/index.php

Würth Solar Germany http://www.wuerth-solar.de/web/en/wuerth_solar_2009/Solar_Startseite_neu_aktiv.php

3.5 Realistic Prerequisites for Success:

Southern Ontario does not have a work force which has any training or experience in this kind ofindustry. Old deserted buildings are not suitable for production. Brand new facilities with state-of-the-artequipment are required to compete against imports from far east.Government funding is required to open especially the private market.Bylaws must be changed to allow installation and delivery of electrical power into the grid.Most of the other prerequisites are the same as for establishing a wind turbine industry.Especially the following shall be considered by both parties:• By Canada:

• An easy accessible location for the manufacturing plant.• All utilities, such a water, sewer, electricity must be in place.• By the Investors:

• All required expertise, transfer of know how, must be provided step by stepby the investors

• Specialists have to be hired from all over the country and extensive trainingof key people in Germany and Canada is normally mandatory.

• A training plan for key people will be required.• Also a learning curve until full productivity can be achieved must be

considered.• To prevent labor problems it shall be prevented to have the subsidiary

unionized. If this cannot be avoided the relation between management andunions must be cooperative as much as possible. A not cooperative unionfacing an ignorant management which does not maintain communicationwith the work force about economical and safety matters are certainly thereason for many failures in the past.

• By both Parties:• Environment studies, to convince all those who will fight this technology

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3.6 Helpful references:

• Ontario Green Energy Act, see:http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&BillID=2145&detailPage=bills_detail_the_b

• OPA - Ontario Power Authority: Renewable energy micro feed-in tariff program, seehttp://microfit.powerauthority.on.ca/

• Ontario - Solar task force report, see:http://www.mei.gov.on.ca/en/pdf/conservation/OSTF-Final_Report103108.pdf

• Day4 Energy Inc., see: http://www.day4energy.com/EN/company.htm

• Sodium-sulfur (NAS) Battery for Large-scale Energy Storage, see:http://www.jase-w.eccj.or.jp/technologies/pdf/electricity/E-17.pdf

• The Energy Source of the Future, Evonik Industries Europe‘s largest battery cell factory(represented also in Canada) , see:http://corporate.evonik.com/en/company/evonik-in-focus/energy-efficiency/Energy%20Source%20of%20the%20Future/Pages/default.aspx

3.7 Expected Benefits for Canada:

According to my findings there is no major manufacturer of any kind of solar panels in Canada.To miss this world wide growing market and to depend on imports would be extremely shortsighted with respect to creating safe and well paid jobs.A nation with so many natural resources should not act like a third world country by only exportingthose to industrialized countries.Going in partnership with the best and most successful companies shall be the preferable way toestablish this industry in our country.The foreseeable benefits are:• Creation of well paid jobs for our workforce. This is more beneficial to our country than to

subsidize the purchase of imported solar panels• Future employment of young graduates from universities• Job creation in related industry, such as

• Installers• Suppliers of sub systems• Recycling industry

4. Expected Environmental Concerns:

Protests and concerns from environmentalists, farmers, villagers etc. must be expected witheverything new. Even using green technologies will never exclude all hazards or effects on the environment.These effects must be minimized, but if we want to create jobs and remain an industrializedcountry we cannot stop to use newer technologies which have proven to be much moreenvironment friendly than working with fossil fuels.It is essential to be prepared and to have solutions in place to minimize these effects.

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The German industry is well prepared for this challenge.The following is a listing of expected concerns and possible solutions to avoid problems:

Expected Concern Solution

Even in Germany we have all kind ofprotesters against wind turbines

Europe has a long history with that. Just readthe book from Miguel de Cervantes about DonQuixote. He was fighting hundreds of yearsagainst wind mills and lost. So will his newfollowers after most of their arguments areproven to be pure demagogic.

The noise of the wind turbines lowers thequality of life.

The noise level has obviously already bereduced and proper building codes shouldplace the turbines away from settlements.

The visible rotor shadow during sun shine isvery disturbing.

Again a proper building code shall preventthat. An off-shore wind farm can also avoidthis and the noise problem.

Win turbines as well as solar panels are notesthetical. They will affect tourism.

I know many people who love to see thatenergy is produced in this way. We shouldhave guided tour through wind or solar farms.

Certain manufacturing processes for solarpanels may cause health hazards.

Germany has some of the toughest laws toprevent hazards to the workforce and theenvironment. Modern technologies havebeen developed and are being used. Strictcontrol is mandatory.

It is well known that hazardous material areused for the production of solar panels. Whichhave only a limited life span.

German companies are aware of this andknow how to prevent all kind of hazardsduring the production process.

Solar panels can contain hazardous materialswhich can caus serious problems to theenvironment

Similar to batteries, computers, TVs and otherelectronics they must be properly recycled. German companies offer already this service. This can create additional jobs.

Professional protesters claim that theelectricity produces by wind turbines or solarpanels is too expensive compared to thosemethods which we use now..

In deed it is still more expensive. But ourdependance of oil must be reduced as fast aspossible. New findings are also expensive toexplore and have already caused majorenvironmental damage. A serious failure in anuclear power plant can be catastrophic. Andcoal fired ones will contribute to a climatechange. Having not sufficient energy availablewill cost more. Green energy will create jobsin our country.

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5. Conclusion:

At present the highest priority should be to establish a wind power industry prepared for the futurehydrogen technology. This promises the highest variety of job creation in southern Ontario.For individual traffic fuel cells will be the future. Many companies are working on them. They will allowdriving a car over distances which cannot be met by battery powered cars.This technology will make Canada more independent from oil imports and will create jobs in ourcountry and will secure our standard of living.It is mandatory that the Canadian industry in this field shall not become an extended work bench offoreign companies. This can be achieved! The proof are companies in British Columbia and Alberta.A good partnership and support by our government are mandatory for that.Dynetek Industries Ltd., Canada has international partnerships with many well known companiesfrom all over the world.Solar panels are an other high priority. Spain is the leader in producing electrical power by using solarpanels. The German government will reduce the subsidies and the effect on the industry is not yetknown to me. Naturally, the industry is crying, but this is also a challenge to the involved industry tobecome more competitive. Something with also very important for the Canadian industry. Ourproductivity lacks behind other countries as far as I can see it. I hope that I am wrong.