In Calgary, where about a third of downtown office space lies empty, a possible way forward for the city centre is taking shape inside a building that once housed the headquarters of oil giant Suncor Energy.
Space inside the downtown tower is being transformed into a new Energy Transition Centre, which will include offices for an accelerator program where young companies and start-ups will try to figure out how to decarbonize the world. The program’s proponents say it underscores the city’s continuing diversification from fossil fuel production.
The carbon removal accelerator is a partnership between the University of Calgary and Avatar Innovations, a venture capital fund and training and leadership forum. It will provide start-ups with opportunities to collaborate with researchers. Company founders will also be able to access investors, labs and carbon technology testing facilities.
The goal is to foster the growth of firms capable of winning funding from XPRIZE Carbon Removal, a $100-million prize purse being offered by the Musk Foundation for ways of permanently removing carbon dioxide from the atmosphere or oceans.
The Energy Transition Centre is scheduled to open on Oct. 1. Its modernized tower, which developer Aspen Properties Ltd. has dubbed The Ampersand, now has an open lobby, a gym, a lounge, a multipurpose sports court and a patio for dogs.
The move underscores what Deborah Yedlin, University of Calgary chancellor and Calgary Chamber of Commerce president, called a “profound shift” in the energy sector, as governments and companies around the world push to lower greenhouse gas emissions.
Considering that Calgary is the heart of Canada’s oil and gas sector and has expertise in related research, it makes sense that the city would become a hub for decarbonization efforts, she said at an event last week where the accelerator’s creation was announced.
Still, she doesn’t think the new Energy Transition Centre means Calgary is shutting its doors to the energy sector entirely.
“I think it’s an evolutionary process, and the energy sector is going to evolve with the need to decarbonize,” she said.
“It’s pivotal. It’s transformational. And I don’t think anybody should underestimate how important this is.”
It’s a potential boon for a city where more than 15 million square feet of downtown office space lie empty. Vacancy rates currently hover around 34 per cent. Commercial real estate services firm CBRE expects that number to surpass 35 per cent by the end of the year.
“That’s basically anywhere from 70,000 to 80,000 people that are not working in the downtown core today, that were working in the downtown four or five years ago,” CBRE vice-president Greg Kwong said in an interview.
Mr. Kwong said technology-related companies now take up about 5 per cent of the overall occupied office space in downtown Calgary – up from less than 1 per cent just four years ago.
“That part of the market is growing, and I expect it should go further,” he said.
Oil and gas related companies still take up 70 per cent to 75 per cent of occupied office space in the downtown core, Mr. Kwong said, but he expects Calgary’s business makeup to continue to change.
“The world is prioritizing climate change as a big issue, so the energy business has had to shift their priorities as it relates to their business strategy and how they’re going to operate,” he said. “As a result of that, they’re taking less space in downtown Calgary.”
Kevin Krausert, chief executive officer of Avatar Innovations, said he believes energy transition is today’s biggest economic opportunity. The most compelling innovations, he said at the accelerator launch event, are going to be in decarbonizing oil and gas.
“Whether that’s carbon capture, hydrogen, geothermal or long-duration storage, these are solutions we’re already working on,” he said.
Collaboration will be required to commercialize and scale those solutions, he said, and this will play a role in refilling Calgary’s empty office towers.
Suncor Energy Inc., Enbridge Inc., Shell Canada, Imperial Oil Ltd. and Cenovus Energy Inc. have all committed to providing experts and industry access to start-ups in the accelerator.
“Major players are at the table, and that’s absolutely critical to be successful,” Ms. Yedlin said.
XPRIZE vice-president Marcius Extavour said hitting net-zero emissions is simply not enough to stabilize the Earth’s climate.
“We have to go further and create the capacity for so-called negative emissions. We have to remove emissions that are already in our atmosphere and dissolved in our oceans,” he said at the launch.
“But – and this is a crucial point – we can’t take our focus off of direct reduction of emissions today. Carbon removal is not a replacement for that. It’s actually a separate but complementary exercise, and we’re going to need both.”
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