Canada

Canada

Ontario failure while Alberta succeeds -- Mixed experience with green power

Ontario's only functioning green power program has been scrapped after the sponsoring utility decided it could not afford to compete in the province's coming competitive market place. Cambridge and North Dumfries Hydro launched its Earthwise Clean Power pilot project in March last year to test the market for renewable energy. The utility soon discovered that consumer interest did not match expectations, admits president John Grotheer.

Surveys showed 23% of its 43,000 customers would be interested in paying a C$0.0084/kWh premium for a blended product that included wind power, landfill gas and run-of-river hydro. While the utility knew not all would follow through, says Grotheer, it did expect at least 2-3% to sign up. "When we actually rolled out the pilot and worked through it, about one quarter of one per cent ended up paying the extra C$7 a month."

The customer base, says Grotheer, was too small to carry the program into Ontario's new power market, scheduled to open in May. "Because of the market complexities and requirements, you have to be a reasonable player with a reasonable quantity of customers," he says. "You've got to have a minimum of thousands of customers. We had one-hundred-and-fifteen."

Earthwise, says Grotheer, may have been more successful if the utility had been able to market the program more aggressively. "I think if we would have had more financial resources to be able to segment our market more to do target marketing, we may well have been able to do better. But we just didn't have that. In a pilot, you're cautious about how far you go off with your dollars."

Ongoing delays in the introduction of retail competition, which had originally been scheduled for November, also hindered the utility's ability to pursue commercial and industrial customers, two groups that Grotheer says showed a surprisingly strong interest in buying green. Seven signed up in the pilot's first year, but after that, uncertainty over the future of competition made the utility unable to commit to even year-long contracts.

The delays have affected more than the Cambridge utility. Greengrid Electric, which had planned to offer a 100% renewable product, went out of business waiting for the market to open. And Toronto Hydro, which serves Canada's largest city, has yet to announce the winner of a tender for 131 million kWh of green power supply issued in mid-2000.

In Alberta, however, Greenmax, Canada's first green power program, has arguably become the most successful in the country. Tapping into the commercial sector has been a key factor in the growth of Greenmax, operated by Calgary electricity retailer Enmax. The program buys more than 102,000 MWh of wind power from two Alberta producers. It is a far cry from only two years ago when, says Enmax's Theresa Howland, the program's performance was "a little bit sad."

Early last year Greenmax bought the output of six 660 kW wind turbines to supply 830 customers. Today, the program has about 3000 Calgary homeowners and more than 200 business and government organisations on its customer list. Less than 5% of its wind supply goes to the residential market.

"It's important to stress the commercial customer because this is where we have been able to grow the program," says Howland. Most recently, it signed a three year deal to supply the Chinook Centre, a Calgary shopping mall with 200 retail outlets, with 160 MWh of wind power a year. The purchase, which amounts to 1% of the mall's total consumption, makes Chinook the first shopping centre in Canada to buy green power.

While Alberta's introduction of retail competition in January 2001 helped open new markets for Enmax, it also presented the company with some interesting challenges in green power marketing. Awareness among consumers is low on several fronts, says Howland, including the choices available to them.

Over the past year, skyrocketing power prices, a provincial election battle over electricity deregulation and a controversial proposal to sell Enmax, which is owned by the City of Calgary, have all contributed to a high level of dissatisfaction with electricity services companies in Alberta, says Howland. "And yet, people still aren't taking the initiative to find out what the competitive offers and options are," she says. "If you build it, they will not come," she says. "You have to teach them why."

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