The new Renewable Energy Act, passed by the legislature before Christmas, requires PEI's two public utilities to acquire 15% of their electricity supply from renewable sources by 2010 and 100% by 2015. If they fail to comply they are subject to fines up to C$300,000.
While the 100% target is by far the most ambitious in North America, the volume required to meet it is relatively small. The province, Canada's smallest with a population of 137,000 and an area of 5660 square kilometres, has a peak demand of about 200 MW.
It also has an estimated wind power potential of 400-500 MW, a resource, says Energy Minister Jamie Ballem, that will form the core of the province's strategy for meeting its goal. The challenge will be to find a way to back up the wind generation, he says.
Ballem expects to find the solution in a regional approach to meeting electricity demand. Energy ministers in Canada's four Atlantic provinces are actively pursuing the idea of integrating the region's electricity generation and markets, which would provide a market for PEI wind while allowing it to access, and possibly invest in, renewable generation in neighbouring provinces.
The legislation also requires utilities to offer net metering to renewable energy generators up to 100 kW in size and a guaranteed feed-in tariff for all other renewable generation. Large-scale developers, however, will have to sign over all environmental attributes to the province.
Claiming the green credits, says Ballem, is PEI's way of ensuring the province benefits from the exploitation of its wind resource. "We looked at it and said this is our resource as a province. It is, in effect, our oil. If somebody comes in a puts up a wind development and takes all the benefits off-island, what's in it for us as a province?"
In return, he says, PEI will offer tax credits to companies and individuals investing in renewables, wind resource data and an open access transmission tariff to allow them to access markets off the island. "Between the price that we'll establish for renewable energy, and the fact that in wind there is the federal wind power production incentive (WPPI), we think a developer will be able to make money." WPPI pays producers C$0.01/kWh for the first ten years of a project's life.
Work on developing the regulations that will put the legislation into effect, including setting the level of the feed-in tariff, is underway.