IN THE NEWS ~ Canada underselling' renewable energy sector, say policy experts

Critics call for tougher oil and gas regulations and an end to fossil fuel subsidies.

Chris Plecash, The Hill Times.

Alberta's oilsands continue to overshadow the renewable energy sector because the federal government doesn't have a strategy for non- and low-emitting energy generation and is "underselling" renewables in Canada, say experts.

"ne of the things we're missing in Canada, is that we're not taking our renewable energy industry seriously and we're not seeing the same type of promotion, whether it's domestic or international, of Canada's expertise," said Tim Weis, director of renewable energy and efficiency policy at the Pembina Institute. "When you compare it to things like the oilsandswe've got politicians making international trips, buying ad space in Times Square and The New York Times. We're not doing that when it comes to clean-tech."

Mr. Weis sees great progress in Canada's wind energy capacity. Canada has jumped from 13th to ninth place in world rankings of wind energy generation since 2006, and is in the top five when it comes to hydroelectric power generation.

"We haven't done that in a really coordinated way. That's partly why we've undersold ourselveswe've got Quebec doing something, and Ontario doing another thing," he said.

The Pembina Institute estimates the current size of the worldwide clean energy industry at $1-trilliona figure that could triple by 2020 as emerging economies look to generate more of their energy from renewable sources. However, Canada's current share of the worldwide industry is only one per cent.

Vicky Sharpe, president and CEO of Sustainable Development and Technology Canada (SDTC), said that she'd like to see Canada's share of the international industry grow to two per cent by 2020, generating an estimated $60-billion in annual revenues and 125,000 jobs across the country.

"That number of jobs is as big as any of the other sectors. Canada has got great, leading edge companies, but we can actually seize a greater share of that market and bring wealth back to Canada," Ms. Sharpe told The Hill Times.

This year's federal budget invested $325-million over eight years in SDTC. Since 2002, the foundation has invested nearly $600-million through the SDTC Tech Fund, which invests in the development and demonstration of projects addressing climate change, air quality, water and soil quality; and the NextGen Biofuels Fund, which supports commercial-scale demonstration facilities for renewable fuel production.

Ms. Sharpe said that while Canada has a lot of capacity for innovation, the private sector continues to view renewable and clean energy projects as risky investments. SDTC addresses this by "de-risking" projects, fronting up to 30 per cent for a project's commercial demonstration and assisting small and medium enterprises with securing additional private sector funding.

Budget 2013 also expanded the accelerated capital cost allowance for commercial equipment investments to cover biogas production equipment. Previous budgets have expanded the tax credit to cover capital investments in biomass, wind, solar, small-scale hydro.

The government invested $1-billion in clean energy generation over five years through the Clean Energy Fund introduced during the recession, with $850-million for the demonstration of carbon capture and storage and renewable energy technologies, and another $150-million going towards the research and development of renewable and clean energy generation.

Another $5-billion has been invested in clean and renewable energy generation and energy efficiency through the ecoEnergy suite of programs, both through direct funding to leverage private sector investment, and through tax credits such as the popular but now defunct ecoEnergy Home Retrofit program, which covered up to $5,000 of homeowner expenses. There were 250,000 households registered for the program, which ended in 2012. The ecoEnergy Renewable Power program also closed in 2011, but will contribute funding for 104 projects until 2021.

In all, the federal government says that it's invested $17-billion in support for renewable energy generation and clean-tech since taking office in 2006 through funding and tax credits. But despite all the investments in clean and renewable energy research, development, commercialization, and deployment, it's the environmental impact of Alberta's oilsands that dominates the Canadian energy conversation and draws international rebuke.

Philip Gass, a project manager at the International Institute for Sustainable Development's climate change and energy program, said that Canada needs "a more cohesive message" on energy that includes a growing role for renewables and clear regulations on emissions from the energy sector. He noted, for example, that hydroelectric generation in Manitoba and Quebec receives almost no attention, despite the fact that both provinces export significant amounts of energy to U.S. markets.

"I think as Canadians we need to promote a more holistic approach to our energy sector. It does include fossil fuels, but it also includes hydro energy in Manitoba and Quebec, and wind power in several provinces. It includes lower emissions from natural gas, as well," he said. "We've got several low and no carbon energy developments happening in our country and we're exporting clean energyit just seems like the oilsands continually dominates."

Dan Woynillowicz, director of policy and partnerships at Clean Energy Canada at Tides, said Canada was only "scratching the surface" of having a strategy for renewables, and federal politicians needed to take a broader view of energy that includes technology and services, rather than just commodities. Increasing demand for clean and renewable energy in India and China is a market opportunity for Canada to seize, he said.

"Canada is well positioned from a competitive perspective, but it's going to require a political recognition of that opportunity that can then serve as the catalyst for the policies and programs that can actually enable and ensure that in the years ahead Canadian business are well-positioned," he said.

Mr. Wollynonicz credited SDTC as "a model" program that ought to have received more support than it did in the latest federal budget. In particular, he said greater funding was needed for research into storing energy from intermittent renewable sources such as wind and solaran area he described as "the linchpin" for greater renewable energy deployment in the future.

" is a program that's working efficiently and effectively in terms of deployment of new technologies and leveraging private sector capital into clean energy deployment," he said. "As a result, it warrants receiving a much more significant injection of new money to deploy in the years ahead."

Policy analysts agreed that one of the biggest pieces missing from having a complete Canadian renewable energy strategy was regulations or pricing on emissions from the energy sector. Such policies would "even the playing field" by making renewables more cost-competitive with fossil fuels-based energy.

B.C., Alberta, and Quebec all have some form of carbon pricing in place, while Manitoba has used carbon pricing to encourage the use of biomass over coal. Ontario has also signaled plans to introduce some form of carbon pricing.

The federal government has rejected calls for national carbon pricing, and has continued to delay introducing proposed regulations on the oil and gas industry as part of its "sector-by-sector" approach to reducing greenhouse gas emissions.

With Leona Aglukkaq (Nunavut) recently taking over the file from Peter Kent (Thornhill, Ont.) as Environment Minister, it appears unlikely the federal government will meet its latest promise to introduce the regulations this summer.

"As the regulations are still being developed, it would be premature to comment further," Environment Canada spokesperson Mark Johnson stated in an email.

Green Party leader Elizabeth May (Saanich-Gulf Islands, B.C.) told The Hill Times that it would take "coherent goals" for greenhouse gas emissions reductions and renewable energy deployment for Canada to have a full renewable energy strategy. She described current federal and provincial policies as "a patchwork."

"Ideally, there would be a federal-provincial renewable strategy that would include those pieces that only provinces can do, such as feed-in tariffs, that link into federal strategies," she said.

Ms. May added that direct and indirect subsidies for the fossil fuel industry also needed to be addressed as part of a renewable energy strategy.

Canada has pledged to phase-out subsidies for the oil and gas sector as a member of the G-20 and APEC.

According to the federal environment commissioner's Fall 2012 report, direct federal investment in the oil and gas sector between 2007 and 2012 was more than $500-million, while tax credits like the accelerated capital cost allowance accounted for an additional $1.5-billion in indirect subsidies over that time.

"The important thing to ensure that renewable energy has any kind of chance is to stop subsidizing fossil fuels globally and in Canada," Ms. May said.

NDP MP Peter Julian (Burnaby-New Westminster, B.C.), his party's energy and natural resources critic, was also critical of the ongoing subsidies for the oil and gas sector.

"Their priorities are completely skewed and I think out of line with where most Canadians are," Mr. Julian told The Hill Times. "We need to provide real investments to the clean energy sector to provide support. We'd be working with the provinces to provide that leadership around clean energy innovation."

He was also critical of the government's decision to end many of its renewable and energy efficiency programs under the ecoEnergy suite. He said an NDP government would make energy efficiency a priority area for collaboration with the provinces.

"Ending the energy efficiency programs was highly irresponsible. That's one of the first things that a new NDP government would be looking to restore," he said.

[email protected]

Twitter: @chrisplecash

The Hill Times


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