Canada

Canada

RENEWABLES COMING INTO FOCUS

Canadian members of parliament and senior civil servants learned of the availability, economic potential and environmental benefits of wind and other renewables at the first renewable energy commercial markets conference in Canada, which included a strong trade show. The event attracted 318 participants to hear 38 presentations. The article reports on the event's sponsorship, its key political and utility speeches, some of which clearly highlighted Canada's ambivalence on renewables, and on discussions of financing models and market restructuring, with reference to specific projects. The Canadian government seems to be reorienting its broad energy policy towards renewable energies but tangible policies and programmes are in short supply. But a federal "green procurement" policy is to be announced and Canada has made promises on climate change. The article concludes with information about the Canadian wind industry's latest technology innovations.

Canadian federal parliamentarians and senior civil servants learned first hand of the availability, economic potential and environmental benefits of wind and other renewables at the first renewable energy commercial markets conference in Canada, which included a strong trade show. The April 10-12 event held at Ottawa's historic Chateau Laurier hotel, adjacent to the federal parliament, attracted an impressive 318 participants to hear 38 presentations.

Sponsorship of the event was surprisingly broad-based, including the Canadian Wind Energy Association (CanWEA), major Canadian utilities such as Ontario Hydro, TransAlta Utilities and Hydro Quebec, the Independent Power Producers Society of Ontario (IPPSO), industrial firms, numerous federal and provincial government departments and other organisations. Conference originator and organiser, Jeff Passmore, CanWEA vice president, said the event was successful in showing the federal political community of Ottawa that renewable energy is commercial in 1995.

Canadian Minister of Natural Resources Anne McLellan and honorary conference chair Senator Dan Hays, opened the event. "The development of renewable energy systems provides an excellent opportunity to promote environmental objectives, ensure long-term energy security, and participate in a growing international market. Renewable energy technologies are making significant progress, and the government of Canada will work with the renewables industry, academia, and other orders of government to strengthen and build upon these advances," said McLellan. She indicated that Canada's federal government is reorienting towards energy efficiency and alternative energy programmes now that budget policy is shifting away from its traditional mega project orientation, particularly in fossil energies (Windpower Monthly, April 1995).

Hays said, "The growing importance of renewable energy is assured not only in Canada, but throughout the developing world where the opportunities for trade are enormous. The important question for us as Canadians is whether we will be involved in that market as buyers or sellers."

The conference drew more than ten Liberal members of parliament and senators, as well as senior civil servants. Among those actively supporting renewables for the domestic and export markets was Liberal member of parliament, Clifford Lincoln, a senior parliamentary secretary. He described the environmental industry as at the forefront of positive change for Canada.

However, it remains to be seen if the parliamentarians and civil servants can translate this enthusiasm into tangible policies and programmes promoting renewables. They are confronted by Canada's entrenched and heavily subsidised fossil fuel and nuclear energy industries, as well as what Lincoln called Canada's dubious distinction as a world champion in energy waste. He also pointed out that only about 4% of Canadian energy research and development funding is currently directed towards renewable energies.

McLellan said a federal "green procurement" policy is to be announced, which could mandate that renewable electricity be used in federal buildings. Such a policy was already proposed by a task force on federal economic instruments last fall (Windpower Monthly, February 1994). Also, she indicated that Canada's National Action Programme on Climate Change, tabled in Berlin earlier in the month at the first meeting of the Conference of the Parties to the Framework Convention on Climate Change, "commits Canada to endeavour to increase the contribution of renewable resources to the nation's energy supply. In addition, Canada, along with the US and other developed countries, agreed last week in Berlin to help developing countries reduce their emissions of greenhouse gases through a mechanism known as joint implementation." This would require developed countries to compensate for their pollution by helping environmentally aware development in the Third World.

Berlin disappointment

However, Louise Comeau of the Sierra Club of Canada pointed out at the conference that Canada, the US, and certain other countries prevented more definite progress in Berlin towards a firm greenhouse gas stabilisation timetable, and that the fossil fuel lobby remains very well organised and powerful, both economically and politically. She also pointed out, as did Lincoln, that Canada may fail to meet its commitment to stabilise CO2 emissions at 1990 levels by 2000 without stronger, further initiatives. She also challenged Canada's renewable energy industry and energy efficiency sector to form links with environmentalists and others.

Canada's ambivalence towards renewables may be personified by McLellan, an Alberta MP who last year was reported to have strongly opposed a carbon tax plan for Canada which was actively under consideration in the federal cabinet until being shelved (Windpower Monthly, May 1994). Influential Albertan fossil fuel producers reap profits and boost the provincial treasury while contributing towards carbon dioxide emissions, global warming and climate change, and prefer the laissez faire government policy which favours voluntary greenhouse gas reductions.

In addition, certain Canadian electric utilities, often agents of provincial economic development and patronage, for years overestimated electrical growth rates and overbuilt heavily government subsidised central coal and nuclear electrical stations. These installations presently limit Canada's ability to manoeuvre and to procure significant amounts of renewable capacity and the development of renewable markets.

Representatives of Canada's two largest utility emitters of CO2, TransAlta Utilities Corp (TAU) of Alberta and Ontario Hydro, also described their new renewable and sustainable energy "eco-efficiency" orientation, which appeared somewhat limited. TAU purchases wind power and other renewable power under the Alberta Small Power Research and Development Act, but Jim Leslie, vice president of the largest Canadian investor owned utility, sees renewables as only a "niche" market, and one which needs to be market-driven. However, this generation was 245 gigawatts in 1994, representing a potential CO2 equivalent offset of 0.2 megatonnes.

Similarly, Ontario Hydro is prepared to encourage development up to 125 MW of independent renewable energy technology, with a request for proposals imminent, as described by Brian Kelly, Hydro's director of environment and sustainable development (Windpower Monthly, April 1995).

Ontario Hydro chair and international environmentalist, Maurice Strong, was banquet speaker. He suggested that global climate change threatened the very future of the human species. He urged developed countries to reduce their environmental impacts and greenhouse gas emissions through efficiency measures and renewable energies in order to leave space for developing countries. He also indicated that Hydro is developing full cost accounting for decision-making, apparently much like BC Hydro has.

Tax credits, financing and power pools

Renewable energy tax lawyer Jay Shepherd, of Toronto based Shepherd, Grenville-Wood, said companies should be allowed to issue "environmental tax credits" for certified, environmentally beneficial products and services. His proposal would enable a green energy market to be driven by consumers. Shepherd's plan for a self-financing, revenue neutral environmental market system would "provide a significant impetus to the development in Canada of world-class environmental industries." The credits would be calculated by a formula reflecting the beneficial externalities of product use, and would be bar coded upon the product itself.

Wind and renewable energy project financing was described by Stephen Probyn of Probyn & Co of Toronto, the new president of the Canadian Council of Independent Power Associations and also president of the Independent Power Producers' Society of Ontario (IPPSO). He was joined by Robert McLeese, of McLeese Access Capital Corp of Toronto, also a member of the IPPSO board. McLeese imparted his vision of a strong and vibrant Canadian renewable energy industry which could grow rapidly like that of California, where appropriate governmental incentives led to the formation of an independent power industry of more than 400 firms, generating about $22 billion in investment from 1978 to 1992 and a return of over $50 billion.

Probyn noted that "financing deals continue to close in this sector" and that renewables dominate new non-utility generation projects in Canada. Utilities in Canada prefer renewable energy projects over natural gas cogeneration developments, he asserted.

Probyn announced the recent closing of $11.6 million in debt financing of the 18.9 MW Cowley Ridge wind farm, Canada's largest, with backing by insurance firms Mutual Life and Imperial Life, which he had arranged (Windpower Monthly, March 1995). He criticised the Alberta electricity industry restructuring initiative, now underway and scheduled to come into effect at the beginning of 1996. The restructuring is expected to establish a competitive wholesale market system and a "poolco" into which generators bid, with daily auctions and with prices set hourly. Probyn claimed the system disadvantages renewable generation by emphasising lowest cost generation and not recognising externalities. He advocated, instead, that it be based upon full cost accounting, such as that being implemented for the first time in Canada in a request for proposals by British Columbia Hydro for up to 300 MW of independent power now being assessed, which is based on the comparative "social costs" of generation.

The conference attracted 55 exhibitors, incorporating those who would have put on displays at the forthcoming CanWEA conference. Overflow exhibition space was required to house wind companies, government departments, photovoltaics, biogas, small hydro developers, and others. "The trade show and the speakers demonstrated that the renewable energy sector consists of real companies with real hardware and successful projects both in Canada and offshore. These can deliver on a host of federal government commitments such as job creation, tax revenue, CO2 emission reduction, technology innovation, export opportunities, and sustainable development," Passmore said.

Among the exhibitors, Dutch Industries of Regina, Saskatchewan, said its 80 kW Lagerwey turbine from Holland, installed at Cambridge Bay and generating power for the North West Territories Power Corp, is attracting keen interest from other remote northern communities. They might emulate its potential for displacing expensive diesel generation. Dutch president Izaak Cruson indicated his company is looking into establishing a company to develop and operate similar projects in the north.

Company news

Canadian wind turbine manufacturer, Sambrabec International, said it plans to scale up its compact 500 watt ducted wind turbine model -- and to build a 1 MW wind farm in Quebec. A second Canadian pioneer, Indal Technologies of Mississauga, Ontario, indicated its intention to return to manufacturing and marketing of vertical axis turbines (VAWTs). The company's booth promoted the Indal 500 kW VAWT, two of which were manufactured in the 1980s. The Atlantic Wind Test Site in Prince Edward Island and Southern California Edison have tested the machines, but they are not currently operating. The machine is based on Indal's 230 kW VAWT, which operated on the Magdalen Islands from 1977, and a series of 50 kW VAWTs operating throughout the world since 1978.

Electrolyser Corp Ltd. of Toronto, Ontario, announced the formation of its SunFuel Energy Systems Division to market photovoltaic-powered hydrogen producing energy systems. The company also has under development wind powered and other integrated power systems which generate hydrogen via electrolysis to provide electric power and hydrogen fuel on demand. The company is negotiating with wind power companies on possible collaboration.

A Vestas 225 kW wind turbine model from Denmark was on display outside the Chateau Laurier, destined for a US site. It attracted much attention from conference goers and passers-by. Kenetech Windpower of California, Tacke Windpower, the Canadian offshoot of German Tacke Windtechnik, and other wind power companies also exhibited.

Independent wind consultant and author Paul Gipe, of Paul Gipe & Associates of Tehachapi, California, gave a CanWEA-sponsored wind energy seminar on day three of the conference to an attentive crowd, and also a presentation during the plenary session on wind power's global status, which he said is now a $1 billion/year equipment business worldwide, generating some $750 million/year in electrical energy. Day three also held a well attended CanWEA "think tank" session to develop strategies to take advantage of the "opening" in federal policy making. The talks will be continued at the CanWEA annual conference, to be held October 2-4.

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