By the end of 2008, Canada will have more than 2500 MW of installed wind energy capacity and close to another 6000 MW has already been contracted for construction in the next few years. Canada's provincial governments have adopted wind energy targets or put in place policies that should allow Canada to install a minimum 12,000 MW of wind energy capacity by 2016, representing 5% of Canada's total electricity demand. This represents substantial and rapid growth, but it only begins to scratch the surface of our wind energy potential.
It is projected that Canada's electricity demand will grow by 27% between now and 2025. At the same time, about 15% of the country's current electricity production will be eliminated as generating stations reach the end of their lifespan or are shut down for environmental reasons. Wind energy is a prime candidate to fill this rapidly emerging gap between electricity demand and supply in a sustainable and environmentally friendly manner.
Why wind energy? Wind energy brings the same potential benefits to Canada that it has already delivered on a larger scale in other countries: stable and predictable costs for consumers that are projected to decline over time, a broad range of environmental benefits, rapid installation of distributed generation at varying scales, and the development of a new industrial base that will bring significant economic benefits to rural communities across the country.
But Canada also has a number of unique characteristics that make wind energy an attractive choice. First, it has an outstanding wind energy resource. Capacity factors at Canadian wind farms average over 30%, and several exceed 40%. Our large land mass and lengthy coastlines ensure that quality wind resources are available in all regions of the country. In fact, Canada's entire current electricity demand could be met by wind farms that covered only 0.25% of its total land mass. Second, 60% of Canada's current electricity production is hydro power. This offers tremendous potential to facilitate enhanced levels of wind integration because of hydropower's ability to assist in managing the variability of wind energy production.
Third, Canada sits next door to, and is strongly interconnected with, the world's largest electricity market in the United States. This offers the potential for wind energy exports to help meet rapidly emerging green electricity requirements in the United States, particularly in regions like the Northeast, where it will be challenging to meet such requirements domestically. Finally, Canada has a strong manufacturing base that is well positioned to play a significant role within the wind energy industry supply chain.
As in all countries, wind energy continues to face a number of challenges in Canada related to issues such as ensuring equitable treatment for wind energy in electricity markets, designing transmission infrastructure to support wind energy development, and streamlining permitting and approval processes for wind energy projects. None of these challenges are insurmountable, however, and a broad range of stakeholders including governments, utilities and system operators are working with the wind energy industry to address them.
Canada has now been one of the world's top ten markets for new installed wind energy capacity for the past two years and is likely to continue to be so for the foreseeable future. The country already provides significant opportunities for project developers, service providers to the wind energy industry and wind turbine and component manufacturers. More is possible.
The Canadian Wind Energy Association will be releasing a new vision for wind energy development in Canada at its annual conference in Vancouver this month. Our objective is to stimulate a discussion on the strategic opportunities Canada has with respect to wind energy and the potential benefits this can bring. By getting Canadians to think "big" about wind energy and its tremendous untapped potential in this area, we hope to encourage Canada to take the steps required to ensure that the rapid growth projected for wind energy over the next decade is only the foundation for much more significant and accelerated growth going forward.
Robert Hornung, president, Canadian Wind Energy Association.