Canada

Canada

Quebec and Alberta light fire under Ontario

The holding of a combined conference of the Canadian Wind Energy Association and the Independent Power Producers' Society of Ontario in Toronto made it abundantly clear to all that Ontario is dragging its feet on renewable energy, compared with Alberta and Quebec.

If enthusiasm could win the day, then wind power developers from the provinces of Quebec and Alberta were the champions at the combined conference of the Canadian Wind Energy Association (CanWEA) and the Independent Power Producers' Society of Ontario (IPPSO) near Toronto in November. With considerable focus on the country's flagship 100 MW Le Nordais wind project on the Gaspe Peninsula in Quebec, developers painted an enthusiastic picture of wind power in Canada today. Missing from this rosy scene, however, were the lurking spectres of utility recalcitrance and government apathy when it comes to renewables, especially in Ontario, Canada's largest electricity market.

The combined three day conference drew some 400 people in total, with 100 at the CanWEA seminar on the first day listening to presentations from 18 speakers. Most participants at the seminar were Canadian, with a sprinkling of US and European delegates. Exhibitors at the trade show numbered 45, with ten from the wind sector. The next two days of the conference were devoted to broader issues of independent power policy and electricity competition, with four specific wind presentations.

Setting the upbeat mood of the input from Quebec and Alberta was Yvan Dupont, president of the Axor Group of Montreal, co-developer of Le Nordais. In a keynote address, he talked of the "coming explosion in the Canadian wind energy market." He lauded the Quebec government for its support of wind, including its C$5.6 million grant to the Le Nordais 100 MW. The Axor Group owns half the project, with the other half owned by M&N Wind Power of London, an NEG Micon and Nichimen Corp joint venture.

RECIPE FOR SUCCESS

Dupont listed six factors which made Le Nordais economically viable: size, location, turbine quality, low construction cost, low interest rates, and excellent lenders. "The unique scope of Le Nordais makes it the Canadian and Quebec benchmark in wind energy," he enthused. "The project has allowed us to attain a critical mass of new knowledge. Our engineers and technicians have had experience with wind farm installations and our lenders have learned how to assess wind farm related risks."

Dupont tempered his praise when it came to the government's tax break incentive. His company had come "face to face with the limitations" of the Canadian Renewable and Conservation Expenses (CRCE) program, he said. "Exploration expenses for wind energy are so low that the tax relief provided by CRCE is inadequate."

Speaking on the same panel as Dupont, Ontario Energy Minister Jim Wilson also lauded the Gaspe development as an outstanding example of the rapid growth of wind power worldwide. His comments seemed more than a trifle ironic on the conference floor, however, where participants were only too well aware that his government has done little to date to support wind power.

It became apparent at the conference that it will take a great deal to lift Ontario from its current policies, which favour government owned bulk power generation in the coming competitive market. Wind power advocates took the opportunity to present suggestions for sustainable energy policies the Ontario government could adopt in the critical period before market restructuring is complete and before retail competition begins in the year 2000.

CanWEA's Jim Salmon said Ontario's any one of several incentive schemes could be adopted, including a "dispatch first" policy for renewables, competition on the basis of full costs of generation and a stranded debt charge holiday for renewable electricity, whereby purchasers of renewables power would be released from paying the stranded debt levy on electricity prices to pay for past nuclear development. The best bet to spur wind power is a greenhouse gas emissions cap and trading system, added Salmon, as well as offering utility customers a choice in green power.

LEARNING BY EXAMPLE

"The Ontario government could learn from the Canadian government's procurement of green power in Alberta," he suggested. Delegates noted, however, that renewable suppliers are still smarting from Ontario Hydro's termination of its Renewable Energy Technology competition in 1997, which had been designed to implement some 60 MW of renewable energy projects in the first round (Windpower Monthly, September 1997). Salmon's overall message was clear: if Ontario does not develop a wind power industry soon, Quebec will get all of the business going.

Mitchell Rothman of Hagler Bailey backed Salmon's comments, urging fair market rules for renewables in the new Ontario market to allow scheduling and recovery of capital costs. Renewables generators will need to compete against the successors to Ontario Hydro, and market rules must recognise the virtues of renewable generation and support its added economic value, he said.

Like Rothman, Philipp Andres of Vestas American Wind Technology Inc said there must be provision for long term contracts in the competitive Ontario market, since spot market prices will prevent installation of projects with high up-front capital costs and low operating costs. Other desirable measures would be a "must run" policy for renewables and a green energy consumer exemption from the surcharge on power bills intended to help pay off Ontario Hydro's debt, estimated at C$23 billion (Windpower Monthly, December 1998).

"In order to meet the commitments made by Canada in Kyoto, a comprehensive and timely policy for the promotion of renewable energy, energy efficiency and emission reductions from existing generating facilities is absolutely mandatory in Canada's largest market," Andres stated.

For Canada as a whole to bring stability to its wind industry, Andres said, the country needs to adopt one of several key policies, including a Renewable Portfolio Standard, an emissions cap and trading system or production tax credit.

Green pricing

Wind developers and utility representatives from Alberta discussed a mechanism working well for wind in their province: the green pricing "Greenmax" scheme arranged by utility Enmax together with Vision Quest Windelectric Inc of Calgary -- Canada's first program allowing customers to buy renewables generated power at a premium price.

"Now that markets exist, green energy proponents must learn to market their products, differentiate them, and educate customers," said Vision Quest's Fred Gallagher. Seventy percent of Canadians want wind energy and are willing to pay the premium, he said.

Greenmax subscribers are 160% above projections, according to Enmax's Ed Hucman, who added that the program is "going excellently" with "enormous" customer response -- a surprising development because Calgary is centred in the oil and gas heartland of Canada. Enmax buys wind energy from Vision Quest, which has installed a total of four Vestas 600 kW wind turbines to meet the contract (story page 12).

Fundamental to Alberta's developments in this area has been the Eco/Logo green certification program, in which Canada is attempting to avoid the confusion in California and other US states over whether power suppliers are really green, according to Les Welsh of Environment Canada. The Eco/Logo program works by a consensus process from a broad base of stakeholders and has been privately managed since 1995 by TerraChoice for Environment Canada.

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