What does the renewable energy sector want from the federal government? Part I
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Perry Hoffman

January 25, 2011

With the federal budget likely only weeks away from being tabled in the House of Commons, Canadian Green Tech takes a look at what some of the demands are from the Canadian renewable energy sector. In Part I, we look at wind and solar.

The Canadian wind and solar industries called on the federal government to increase its support for the renewable energy sector during pre-budget consultations last fall. And while this will come as little surprise to many, the two national industry associations tempered their demands recognizing that federal coffers hold little extra cash for subsidy programs.

The Canadian Wind Energy Association (CanWEA), for example, hasn’t called for the renewal of Natural Resources Canada’s ecoENERGY for Renewable Power program, although there’s little doubt it would cheer if such a move was taken. Instead, the association is seeking a modest amount of money for three specific initiatives. It wants the federal government to make a one-time contribution of $3 million for Canadian wind integration study as well as an additional $25 million over five years towards wind energy capacity development initiative and $63 million for a northern and remote wind energy initiative.

The wind energy capacity development initiative would help ensure that Canada conducts its fair share of research and development on wind energy technologies. According to Sean Whittaker, VP of policy for CanWEA, “the goal of that is to make sure that for every turbine that's installed in Canada, you are maximizing the number of jobs in the economic investment that happens in Canada as a result.”

Under questioning, Whittaker addressed the issue of the intermittency of wind energy and the cost disparity with conventional thermal power generation technologies.

On the first point, he said size matters and that the more turbines a wind energy developer has the more consistent the power generation is. “In fact, a lot of utilities with a lot of wind on their grids find that the variability of the fleet of turbines across their jurisdiction actually varies less than the demand they get,” explained Whittaker.

Cost isn’t that big of an issue in a jurisdiction such as Alberta where there is a price on carbon. The difference in cost between wind and conventional technologies is fairly small and that gap could be reduced to zero if the Alberta government allowed the price of carbon to move higher. It’s currently capped at $15 per tonne with the money going into a technology development fund.

According to Whittaker, wind developers such as TransAlta, Suncor and Shell would like to see the current $15 per tonne price move higher which would then improve the economics of wind energy development.

The Canadian Solar Industries Association (CanSIA) wants the federal government to renew the ecoENERGY for Renewable Heat program, an initiative that has stimulated growth in the solar thermal sector and created hundreds and hundreds of jobs, according to Enerworks president and CEO Phil Whiting. The ending of the program has left the solar thermal industry in difficulty, he added, noting that Enerworks revenue has decreased 50% in the six month period following the cancelation of the program.

Whiting spoke of the difficult his company and the sector is facing in the wake of the shuttering of the program at Solar Canada 2010 last month.

“This industry is a fledgling industry and needs support in the early days to grow and achieve its potential. We're asking for $10 million a year to grow an industry that has the potential to produce thousands and thousands of jobs for Canada,” he told the Standing Committee on Finance in pre-budget consultations last fall.

Whiting said that Canadian companies are among the leaders in this industry with domestic firms supplying the technology in half of all solar thermal installations in the country. “But without support that industry is going to decline and eventually disappear,” he lamented.

The primary problem for the solar thermal sector in Canada is the high up-front costs of acquiring the systems. Once installed the cost to heat water is comparable to current electricity costs.

“The cost of energy to produce solar hot water across Canada is about $0.07 a kilowatt hour, which is comparable to grid energy,” Whiting said. “The challenge is that the consumer who chooses to do this has to spend money up front to buy the system to get the energy savings in the future. So what we need to do is bridge that gap, to help them bridge the gap, to get the payback time shorter and shorter and shorter as the industry grows and expands and get economies of scale.”

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Keep Reading, Part II

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