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Canada

Canada

Progress remains local

Ontario and Nova Scotia are leading Canada's nascent community wind market, while Quebec has had considerable success in developing projects co-owned by municipal governments. But progress remains patchy as developers and energy regulators look to overcome financing and grid-access challenges.

Larger distribution issues

In Ontario, there has been a grassroots campaign since the late 1990s aimed at developing wind projects backed by local, citizen-based ownership. This has resulted in the introduction of a generous feed-in tariff (FIT) as well as grants to assist with pre-construction "soft costs", such as meteorological testing, for projects at least partially owned by either local community organisations or Aboriginal groups. But only a small number of community wind projects have been connected to the provincial grid, almost all having been developed for local distribution by individuals, like farmers and other landowners, rather than by broad-based community groups representing individual Ontario residents, as campaigners had envisaged.

Despite policies explicitly designed to support community wind, there remains a risk that few new, larger community projects will be built. While sizeable community wind projects have been granted FIT approval and are ready to go, they are not being granted grid access. With so many upgrades to the grid necessary across Ontario, priority is being given to requests from larger, commercial projects.

"It’s a very competitive environment," says Deborah Doncaster, executive director of Ontario’s Community Power Fund. "We want the provincial government to legislate that priority be given to upgrading transformer stations in locations where there are applications from community wind projects."

In the absence of such a pro-community wind policy, Doncaster is advising community groups to consider joining forces with commercial developers, an approach that would see community capital used to buy into wind projects that have a greater chance of securing grid access. In exchange, commercial developers would be eligible for higher FITs and grants.

Local success

The Atlantic province of Nova Scotia has seen its wind-energy profile skyrocket since it adopted ambitious renewable-energy targets and a comprehensive FIT programme with higher tariffs for community wind. A healthy number of applications for community projects with capacities greater than 50kW will be reviewed by FIT regulators this autumn.
Meanwhile, two small community wind projects approved prior to the FIT began operating this year on local distribution networks — the 1.5MW Watts Wind and the 800kW Spiddle Hill projects. Both were funded by a roughly 50-50 combination of debt financing and investment from individual residents via government-guaranteed community economic development investment funds (Cedifs). These are an attractive vehicle for Nova Scotia residents saving for their retirements as they offer tax breaks of up to 65%.

Watts Wind president Stan Mason warns that many would-be developers are likely to face financing challenges. The group behind Watts Wind now has several new projects on the drawing board and is seeking the required debt financing to complement its community equity. "We’re concentrating on aligning ourselves with financial backers," says Mason.

David Stevenson, president of the Spiddle Hill project, hopes that more community wind developers will combine debt financing with Cedif funds because it links individual citizens’ investments with on-the-ground wind projects. "We need six or eight successful companies of this type in the province," he says.

Although they are expected to, Nova Scotia’s municipal governments have yet to become involved in community wind.

Municipal control

Several of Canada’s largest community wind projects are sited on land owned by Quebec’s municipal governments — with the municipalities themselves owning a stake. In most cases, municipalities have partnered with established commercial wind developers and have not sought citizen-based investment. While the province does not operate a FIT, the 20-year power-purchase agreements recently offered by utility Hydro-Quebec are based on similar prices to those available to community wind projects in Ontario and Nova Scotia.

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