Canada Is #5 For Renewable Investment

January 27th, 2015 by Roy L Hales

Part 5 of the 7 Most Attractive Nations for Renewable Investments

Originally Published by the ECOreport

Canada is #5 for Renewable Investment, according to last September’s Renewable Energy Country Attractiveness Index (RECAI) last September. This may explain why investments for 2014 jumped 26% in 2014, over the previous year, to $9 billion.

Find That Surprising

Many will find that surprising, considering that the present government’s preoccupation with fossil fuels. Prime Minister Stephen Harper is an Albertan, who once worked for Imperial Oil. Developing the gas and oil sectors has been a cornerstone of his economic policy. They provide a quarter of the nation’s exports. Scotiabank recently edged down its prediction “for Canadian GDP growth for 2015, from 2.3% to 2.2%, in light of the continuing slump in crude oil prices.” Harper recently said curtailing oil sand’s emissions in the present economic climate would be crazy. Oil prices have fallen and Alberta’s economy may be going into a recession.

The Canadian government does not appear to see the opportunities in the clean tech sector. There were actually more people directly employed in the clean tech sector then directly employed in oil sands in 2013. (23,700 vs 22,340). That is in spite of the fact many of Canada’s renewable resources are relatively untouched. There is not a single geothermal project online, though the potential is believed to be comparable to the US. Nor has there been much development of the abundant wind and solar resources in the prairies. Virtually none of the incentives that established the oil sands have been made available to the Clean Tech Sector.

Canada’s recent advances in the renewable sector have largely been made through provincial initiatives or because of (largely foreign) private investments.

Canada’s Biggest Renewable Sector

Canada’s biggest renewable sector is hydropower. There is 73 GW of hydroelectric capacity. More than half of this is in Quebec, but BC and Manitoba also obtain most of their electricity from dams. As a result, all three provinces have grids that are +95% “green” in terms of emissions.

This technology can also cause extensive damage to the local ecosystem during construction. The Site C dam project, in BC, appears to be another example of a mega-project being imposed upon a largely resistant local population. It could also be breaking Treaty #8, if the province doesn’t secure an agreement with First Nations. Peace River residents are fighting the proposed dam because it would submerge valuable farmland and thousands of square miles of boreal forest (creating a LOT of CO2). It would also severely impact local fish and wildlife. One of the alternative solutions that BC Hydro has not endorsed is smaller dams in more strategic locations.

There is nevertheless great potential for hydopower, if it can be developed in a manner that is sensitive to local concerns and the ecosystem.

BC’s Big Success Story

BC’s big success story is its’ carbon tax. It was instituted six years ago. Fuel usage is down 16.1% and economic growth has kept pace with the rest of Canada. The province has some of the lowest corporate income tax rates in Canada.

“The carbon tax is revenue-neutral, meaning every dollar generated by the tax is returned to British Columbians through reductions in other taxes. The carbon tax is expected to generate more than $1.2 billion in revenues in 2014/15 and more than $1.4 billion in tax cuts.” a BC Ministry of the Environment spokesperson explained.

The program’s success has drawn potential imitators. Portland State University is proposing that a tax based on the BC model be set up in their state. Now that Ontario is thinking of setting a price on carbon, the Globe and Mail is suggesting she look to the West for a successful model.

The 10,000th EV Sale

Plug’ n Drive just celebrated the 10,000th EV sale in Canada. According to Director of Operations Josh Tzventarny, the number was 10,443 at the time of this writing.

“In Ontario, Quebec and BC they have had incentives of up to $8,000 off the cost of the electric vehicles and that’s really grow the industry to where it is today,”said Tzventary.

He added, “Luckily since the first car was sold, in 2011, battery costs have dropped by about 40%. So the prices of the cars are coming down and the incentive isn’t as necessary. They are becoming more and more competitive.”

There are currently about 2,000 Level 2 charging stations, that take up to 8 hours for a full charge, in Canada. The next hurdle is the availability of a fast charging public charging network, that will make driving long distances easier.

Investments In Solar Energy Jumped 47%

Investments in solar energy jumped 47% in 2014. Most of this money has gone to Ontario, where there are provincial incentives.

“Ontario has seen very large growth in wind and solar and other types of renewable generation since the (provincial) government introduced the Green Energy and Green Economy Act in 2009. The Act and the government’s Long Term Energy Plan intended to bring more renewable generation to the province. The Independent Electricity System Operator (IESO) has responsibility to ensure the renewable generation gets built and reliably integrated into the grid,” said Alexandra Campbell, Manager, Stakeholder and Public Affairs IESO.

According to Campbell, there is currently 2,200 MW of solar capacity online in Ontario and another 875 MW under development. Ontario is the only province with extensive utility scale development. There are two 100 MW projects under development, the Grand Renewable Energy Park and the Kingston Solar Project. Rooftop solar is very popular, thanks to an attractive Feed-in-tariff rate and streamlined permitting process.

There are net metering programs in several other provinces, but no incentives to spur real growth.

SunMine, in Kimberly BC, has the potential to be the largest utility scale project in Canada. Its lofty elevation and +300 days of sunshine a year combine to give this site a solar potential equivalent to California. SunMine could be built up to 200 MW of capacity, but its contract with BC Hydro is only for 2 MW. This project would also need to receive another 2 cents @ kWh to finance building up to full capacity.

A Record Year for Wind

Canada had a record year for wind installations in 2014, adding another 1.8 GW of capacity in 2014. A significant portion of the investments came from First Nations, Municipal Corporations or local farmers.

More than half the new installations were in Ontario, where IESO says there are currently 3 GW of installed capacity and another 2.6 GW under development. (Quebec is the nation’s #2 wind province, with 2.4 GW.)

Some rural Ontario communities resist the imposition of industrial scale projects, but a much different story is coming out of Alberta. Canada’s first commercial wind project was installed at Cowley Ridge in 1993 and there currently 1.1 GW of capacity. Though there are complaints prior to construction, a study by the Pembina Institute found that Albertan complaints stop after projects are built. The difference appears to be that the turbines were erected on revenue property (farms and ranches), not in communities seeking a quieter lifestyle. Concerns about possible negative impacts seem to fade away once Albertans see the reality.

Alberta has some of the best wind resources in Canada, but there are no incentives for developers. Consequently, only 350 MW of capacity was added in 2014. The province’s new climate change framework may change this.

Renewable Investments

2014 was a record breaking year for renewable investments in Canada. In a recent press conference, Clean Energy Canada said $4.5 billion was spent in the wind sector and$2.8 billion on solar.

A more disturbing fact emerges in Clean Energy Canada’s report Tracking the Clean Energy Revolution. Four out of the five top financiers over a five year period, were foreign. They were, in order of size of their investments:

From Japan: Mitsubishi UFJ Financial Group Inc – $1.2 billion From Canada: Manulife Financial Corp – $750 million From Japan: Mizuho Financial Group Inc – $660 million From Germany: Deutsche Bank AG – $470 million From Germany: Norddeutsche Landesbank Girozentrale – $360 million

The Canadian financial sector needs to take note of this. Foreign investors are taking advantage of opportunities overlook.

A similar picture emerges from the wind sector. Over 98% of the turbines erected in Canada, during 2014, were supplied by five foreign corporations: Siemens (Germany), GE (USA), Vestas (Denmark), ENERCON (Germany) and Senvion (Germany).

While the Canadian government focuses on fossil fuels, it is letting foreign corporations take over our renewable sector. Federal tax brakes and research support, during the 1990’s, enabled the oil sands to become what it is today. Who will own Canada’s renewable sector a decade from now, if similar support isn’t given to the nation’s clean tech sector?

Images above, in descending order











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