2023 Year in Review: Cleantech in Action
2023 saw continued focus on developing and adopting clean technologies to displace fossil fuel use and support climate change targets, with some calling this year a critical inflection point for the energy transition[i]. In this article, we highlight key technological developments and discuss several governmental initiatives.
Nuclear Power on the Rise
Nuclear power is gaining increased attention as a key energy source. This was clear at the COP28 summit in December 2023, where over 20 countries agreed to “work together to advance a global aspirational goal of tripling nuclear energy capacity from 2020 by 2050”. These countries also committed to “mobilize investments in nuclear power”. The agreement highlighted the “key role of nuclear energy in achieving global net-zero greenhouse gas emissions” by 2050 and noted the benefits of new nuclear technologies, like their small land footprint and ability to pair well with renewable energy sources.
Many countries are already placing a heavy focus on nuclear power. In France, nuclear power is a major electricity source, with 70% of electricity derived from it. The French government’s recent plan to invest €52 billion in six new nuclear reactors, with the first expected to begin construction before 2027, reinforces its commitment to nuclear energy.
China is also advancing in nuclear technology, having started operating the world’s first fourth-generation nuclear reactor in 2023[ii]. These new-generation reactors are designed to be safer and more fuel-efficient than their predecessors. The reactor, a 200 MW modular unit, exemplifies China’s focus on small modular reactors (SMRs). SMRs, typically under 300MW, are gaining traction globally due to their potential to make reactor construction faster and more cost-effective.
In North America, GE’s early 2023 announcement of a partnership with Ontario Power Generation to build a small modular reactor at the Darlington New Nuclear Project site in Bowmanville marks the first commercial contract for an SMR in the continent.[iii] In parallel, Atomic Energy of Canada Limited (AECL), Canadian Nuclear Laboratories (CNL) and Global First Power (GFP) announced that Chalk River Laboratories would be the location for a new clean energy demonstration project “that would serve as a model for future small modular reactor (SMR) deployments to support remote and industrial applications”[iv]. These projects, among others, represent a significant step forward in North America’s nuclear energy development.
Solar in the Spotlight
Solar power technology adoption continues to progress at a rapid pace. The amount of renewable energy capacity around the world increased by 50% in 2023, reaching an estimated 507 GW, with solar accounting for three-quarters of additions worldwide[v]. Solar investments in 2023 are expected to surpass that of upstream oil for the first time.[vi]
“Wind energy took off in the 2010s and now contributes approximately 10% to the US electricity supply, according to the US Energy Information Administration. But more recently, solar power capacity additions have outpaced that of wind as renewable energy developers look to take advantage of large markets where the sun shines bright, such as in Texas. The boom in battery storage installations, often colocated next to solar energy generators, has also contributed to more demand for solar energy in states looking to decarbonize power grids.”[vii]
New advancements in solar power technology are also pushing the boundaries of energy efficiency, with a key milestone of 30% efficiency being achieved by multiple research groups around the world. The feat makes 2023 a “revolutionary” year and could further strengthen solar power’s roles in decarbonization.[viii]
Alongside record-setting installation investment and efficiency gains, solar power costs are falling, with the cost of solar power dropping by nearly 90 percent over the last decade[ix]. The shifting economics means that solar renewable energy can be cost-effective in new applications. Researchers from Germany found that 53% of Europe’s 41 million homes would be able to supply themselves independently using only local rooftop solar power generation, and this proportion could increase to 75% by 2050[x]. While nuclear remains attractive from the point of view of baseload electricity generation, it will be interesting to see if nuclear will be able to compete with solar on price as both technologies continue to develop.
Electric Vehicles Accelerating
Along with renewable power, the adoption of electric vehicles continues to be a critical component of decarbonization. In 2023, Global electric car sales rose by 31%[xi]. Surprisingly, the Tesla Model Y – a battery electric vehicle – was the top-selling vehicle of the year, with it being the first time that an all-electric car topped the yearly global car sales charts.[xii] China is leading the way in EV adoption, followed by some European countries, and the United States, Canada, Australia, other European countries, and other Asian countries are far below them[xiii].
As battery technology improves, strong demand for electric cars is expected to continue. Vehicle manufacturers around the globe are also setting aggressive EV production goals.[xiv] This growth will require that renewable electricity generation and infrastructure can keep pace, including the impact that EVs may have on the grid.[xv]
Funding Opportunities and the Clean Growth Hub
The growth we witnessed in 2022 with respect to support and programs directed to clean technology continued in 2023. In fact, the amount of financial and non-financial support available for clean technology in Canada reached unprecedented levels in 2023.
Two of the more notable programs include the Strategic Innovation Fund: Net Zero Accelerator (“NZA”) and the Sustainable Development Technology Canada (SDTC) fund. The NZA awards funds to projects geared towards reducing greenhouse gas emissions. With up to $8 billion in government funding, the NZA supports large-scale investments in key industrial sectors across the country. The SDTC operates recurring seed funding rounds, with an average award between $50,000 to $100,000, for promising early-stage cleantech entrepreneurs of innovative technological projects with environmental and sustainability benefits. The SDTC also operates recurring start-up and scale-up funding rounds, with an average award between $2 and $4 million, for the development and demonstration of clean technologies and for early commercialization.
The Clean Growth Hub (“Hub”) was launched in 2018 as the federal focal point for clean technology and acts as the Canadian government’s coordinating center for federal cleantech activities. The Hub is a one-stop shop for information about funding and services related to cleantech initiatives. One of the Hub’s main objectives is to help entrepreneurs find and understand the federal programs and services that are right for them. As part of meeting this objection, the Hub provides information and advice that is regularly updated to reflect the available federal financial and non-financial supports.
While relied on most often for information on federal funding opportunities, the Hub also helps with access to expertise in regulatory issues, as well as export information. As government initiatives related to clean technology continue to intensify, the Hub becomes an even more valuable resource to help cleantech innovators and adapters navigate the seemingly endless (and still growing) number of available financial and non-financial supports and programs.
Further Support of Cleantech by Patent Offices
On June 6, 2023, the United States Patent and Trademark Office (USPTO) updated its Climate Change Mitigation Pilot Program (“USPTO Program”) to expand the scope of eligible subject matter. The initial phase of the USPTO Program that launched in June 2022 was limited to accelerating the examination of patent applications directed to innovations that reduce greenhouse gas emissions. With the recent expansion in 2023, the USPTO acknowledged that in addition to emission reductions, emission prevention and monitoring technologies will be necessary to achieve net-zero emissions by the year 2050. Patent applications directed toward this broader range of climate mitigation innovations are now eligible for the USPTO Program.
Patent applications accepted into the USPTO Program are advanced out of turn, resulting in accelerated review by an examiner. The fee normally required for filing a petition has been waived, and there is no additional government fee associated with obtaining expedited examination. The expanded USPTO Program will run until either June 7, 2027 or the date that a total of 4,000 patent applications are accepted into the USPTO Program.
The Canadian Intellectual Property Office (CIPO) offers a similar Green Technologies Program (“CIPO Program”) that has been in place for over a decade. Like the USPTO counterpart, the CIPO program is designed to fast-track the examination of the patent applications accepted into the program with no additional government fee. The scope of the CIPO Program is broad. Patent applications directed to “a technology which, upon commercialization, would help to resolve or mitigate environmental impacts or that helps conserve natural resources” are eligible for the CIPO program.
With its expansion in 2023, the USPTO Program narrows the initial gap in scope with the CIPO Program. The scope of the CIPO program may remain slightly broader than that of the expanded UPSTO Program due to the inclusion of technologies that help conserve natural resources. These types of programs, which offer fast-track examination without the expense of additional government fees or legal fees associated with meeting onerous procedural requirements, can be very valuable for cleantech startups.
Canada Establishes Green Alliance with the EU
On November 24, 2033, Canada and the European Union (“EU”) signed a Green Alliance at a bilateral Summit in St. John’s, Newfoundland. With both parties aiming to be climate-neutral by 2050, the Green Alliance sees the like-minded parties pledge to align their domestic and international climate policies in pursuit of this goal. Within the agreement, Canada and the EU pledge support for the industrial transition and the development and deployment of innovative net-zero technologies, as well as enhanced research and innovation cooperation in the areas of climate change, energy, environmental degradation and loss of biodiversity, agricultural resilience and food security, ocean sustainability and clean aviation. Increasing regulatory and business cooperation between Canada and the EU is another one of many highlights established by the Green Alliance. The EU-Canada Green Alliance is only the third agreement of its kind, following the EU-Norway Green Alliance signed in April 2023, and the EU-Japan Green Alliance signed in May 2021.
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