Having Their Say: CanWEA Clarifies True Source Of Canadian Wind Success
July 15, 2014
A recent report summary by GlobalData, which ran in June, fails to grasp the nuances of the Canadian wind energy market, according to Tom Levy, director of technical and utility affairs at the Canadian Wind Energy Association (CanWEA), who rebuts several claims made by the research and consulting firm.
GlobalData: “Policies set by federal and state governments in the U.S. and Canada are driving the growth of renewable power generation and maintaining the countries’ status as global leaders in this industry.”
Tom Levy: With the exception of a long-standing government of Canada accelerated capital cost allowance program, the only major federal support program for wind energy (Wind Power Production Incentive/ecoEnergy for Renewable Power) expired several years ago.
CanWEA does not anticipate the federal government renewing this program; rather, the growth of wind energy in Canada in recent years has been driven by provincial procurement initiatives. The only current federal government commitment related to renewable energy was made in 2006 by Prime Minister Stephen Harper and stated that Canada would have 90% non-greenhouse gas (GHG)-emitting electricity by 2020. In reality, however, there is no proposed federal policy or plan to actually meet this goal, and it will not be met.
Although Canada is a strong contender in using non-GHG-emitting sources of power generation (approximately 75% of our electricity system is already non-GHG emitting), we are not even close to punching above our weight when it comes to wind and solar energy.
GlobalData: “[F]ederal policies, such as the U.S. government’s production tax credit (PTC) and Canada’s ecoEnergy program, alongside state policies including renewable portfolio standards (RPS) in the U.S., are fundamental to the continued development of renewable power in North America”
Levy: In Canada, the ecoEnergy for Renewable Power program still is providing funds to some existing wind energy developments; however, no new wind energy development projects are able to obtain federal funding. In fact, since March 2011, the program has not provided any money for new projects. More importantly, nearly half of the current wind energy fleet has been constructed absent of any federal support in Canada and has been driven through provincial procurement initiatives.
GlobalData: “In Canada, the ecoEnergy program has seen approximately $5 billion invested in a variety of federal schemes to provide feed-in tariffs (FITs) and to fund renewable energy projects, finance technology initiatives and support energy efficiency. There are no federal targets for renewable energy production in Canada, but each province has been authorized to develop its own policy framework.”
Levy: The federal ecoEnergy for Renewable Power Program is providing $1.4 billion to Canadian wind energy projects over 15 years, but as mentioned earlier, has supported no new wind energy projects since March 2011. It has not supported any FIT mechanisms for wind energy. Canada’s electricity sector is organized along provincial and territorial lines. In most provinces, government-owned public utilities play a leading role in the generation, transmission and distribution of electricity (Alberta is the major exception to this rule). Most jurisdictions, however, have prevented government-owned utilities to participate in wind energy projects and have allowed independent power producers to bring these projects forward.
GlobalData: “Quebec has a target of achieving 4,000 megawatts of wind power by 2015, while provinces such as British Columbia and Saskatchewan are targeting 90% and 100%, respectively, of new power generation from renewable resources by 2016.”
Levy: The devil is in the details – Quebec has a hard cap of building no more than 10% wind energy capacity relative to hydroelectricity capacity. While Quebec remains strongly committed to its target, full implementation will now occur after 2015. British Columbia may be interested in new renewables, but primarily if those come from Site C, a massive hydroelectric dam that has been on the books for well over 20 years. The province has also defined natural gas as “clean” generation when used within the emerging liquefied natural gas industry.
With respect to Saskatchewan, it is unclear where GlobalData obtains its information, since that province is primarily focused on constructing a single carbon capture project called Boundary Dam 3 with a 110 MW nameplate capacity. While there are rumors of a new procurement mechanism for wind energy, nothing is expected to be announced until at least 2016, with proposed in-service dates of 2018 or later.
GlobalData: An analyst at the research firm is quoted as saying, “Of all the Canadian provinces, Ontario has the greatest renewable energy capacity due to a comprehensive FIT program developed under its Green Energy Act of 2009. Ontario’s Renewable Energy Standard Offer Program sets a FIT for small renewable energy production projects, with the aim of making it easier and more economical for businesses to supply renewable power to the provincial grid.”
Levy: Ontario only has Canada’s greatest renewable energy capacity if one excludes hydroelectric generation. GlobalData also appears to confuse the various procurement programs that Ontario has enacted in the past. Originally, wind and other renewables were procured under the Renewable Energy Supply I, II and III competitive programs. Following these, the government put in place the Renewable Energy Standard Offer Program (RESOP) program aimed at projects with nameplate capacities of 10 MW or less. Following RESOP, the government put in place, through the Green Energy Act, the FIT program, which did not limit project size. Presently, the FIT program has been modified to limit project sizes of 500 kW or less, and larger projects will now be procured through the large renewable procurement program presently being developed.
CanWEA acknowledges GlobalData’s positive outlook for Canada. However, pervasive factual errors create an impression of significant federal commitment and support for renewables in this country – which is far from reality.
Courtesy: North American Windpower