Category Archives: wind

Canada’s clean electricity exports to triple under U.S. Clean Power Plan

Originally published in the Toronto Star tablet edition, Star Touch.

By Tyler Hamilton

As Canada’s petroleum sector struggles with the reality that sub-$30 (U.S.) oil could be here for some time, the country’s power sector is prepping for a dramatic increase in U.S. demand for clean electricity.

Call it a shift from pipelines to power lines.

Action on climate change is the reason — more specifically, U.S. President Barack Obama’s Clean Power Plan, which aims to slash carbon dioxide emissions from power plants by a third by 2030.

The plan is expected to triple the flow of Canadian electricity into Midwestern and northeastern border states, part of a broader U.S. effort to comply with the international climate obligations that 196 countries agreed to in Paris.

Stakeholders from the Canadian power sector are calling it a breakthrough. “We are very pleased with the outcome,” said Patrick Brown, director of U.S. affairs with the Canadian Electricity Association (CEA).

Screen Shot 2016-01-18 at 11.04.21 AMClean electricity imports from Canada are a multibillion-dollar opportunity, but have typically not counted toward state-level renewable energy mandates. After being heavily lobbied, however, the U.S. Environmental Protection Agency recognized imported power, including hydroelectricity, as an important way for states to comply with the new federal emission rules.

Brown said 80 per cent of electricity generated in Canada is emission-free, versus about 20 per cent south of the border. “That’s a real competitive advantage that we believe the Canadian government and provinces need to leverage,” said Brown, adding that an education effort is underway to make state officials more aware of the import option.

The North American Electric Reliability Corporation, which monitors and regulates grid stability in Canada and the U.S., estimated in a report last April that net Canadian electricity exports under the Clean Power Plan could grow three-fold between 2020 and 2030 as demand for renewable power grows in states such as Ohio, Michigan, New York and jurisdictions in New England.

In 2014, such exports represented $3 billion in cross-border trade, meaning the market could be worth $9 billion annually within the next 15 years. The projections are consistent with the preliminary findings of a new high-level report prepared by Boston-based consultancy London Economics International.

“States could decide they don’t want Canadian power, as there’s nothing in the plan that says they should use it. But it does encourage states to look in that direction,” said Andrew Finn, an associate of the Canada Institute at the Woodrow Wilson International Center for Scholars in Washington, D.C.

Finn has spent the past few years pointing to Canada as something more than just the oil sands and pipeline projects, both of which have overshadowed the hydro import option.

“Frankly, the Keystone XL pipeline project took so much oxygen out of the room, but with that out of the way this idea has more room to breath,” he added.

Longer term, some observers say the size of the export market has potential to reach $40 billion a year. Jatin Nathwani, a professor of engineering and environment at the University of Waterloo, estimates that clean electricity trade to the U.S. could soar 10- to 20-fold over the next few decades as part of a continental-wide effort to reduce greenhouse-gas emissions.

“Such an epochal change is conceivable over a 30- to 50-year timeframe consistent with the timelines for achieving a low-carbon economy,” Nathwani argued in a 2014 analysis that was featured in a report from the Canadian Academy of Engineering.

But the transition from pipelines to power lines comes with its own set of challenges, not unlike those experienced by Keystone XL proponents. Long distances and sometimes rough geography make for high upfront infrastructure costs and considerable risk, especially in the face of any political or public opposition to transmission infrastructure routes.

The fact that the constitution gives the provinces authority over electricity generation and transmission has historically been a sticking point.

“Support for expansion of electricity generation and transmission facilities — on a vastly increased scale — as part of a deliberate national ‘export driven’ strategy is either limited or all too often met with derision or outright hostility,” Nathwani wrote.

Still, the opportunity could prove irresistible. As more sub-national jurisdictions move to price carbon, and as more vehicles and industrial activities switch to running on electricity, power consumption is expected to rise in the United States faster than domestic developers can keep up.

The International Energy Agency, meanwhile, has warned in one scenario that the accelerated retirement of aging U.S. nuclear reactors could see nuclear power supply drop by as much as 70 per cent by 2040.

“The demand for electricity is going to keep going up,” said Dan Woynillowicz, policy director at Clean Energy Canada. He added that in a post-Paris world it will need to be low-carbon electricity, which bodes well for Canada.

“We need to get that message out in the same way we’ve had that full offensive championing the oil sands,” Woynillowicz said. “Imagine if we took that same level of effort to promote clean electricity exports?”

That’s exactly what some observers expect Prime Minister Justin Trudeau will do when he visits the White House for a state dinner with Obama. The two leaders have already indicated that closer co-operation on climate action and energy policy will be part of their discussion.

As for what Trudeau should do to stimulate investment on the Canadian side, Woynillowicz said it comes down to reducing risk and creating market certainty. That means creating political and financial supports, such as federal loan guarantees, and rallying the Canadian public behind the idea.

“Hopefully the Canadian government has learned some lessons in light of its experience on the pipeline side,” he said.

This article was part of a series produced in partnership by the Toronto Star and Tides Canada to address a range of pressing climate issues in Canada leading up to and following the UN Paris climate summit. Tides Canada is supporting this partnership to increase public awareness and dialogue around the impacts of climate change on Canada’s economy and communities. The Toronto Star had full editorial control and responsibility to ensure stories are rigorously edited in order to meet its editorial standards.

After Paris, it’s time for Canada to finally join IRENA

IRENA is the International Renewable Energy Agency, a UN-affiliated organization established in 2009 to promote awareness and growth of renewable energy technologies on the global stage. It’s a kind of counter-balance to existing agencies that have long represented the fossil fuel and nuclear industries. The idea for IRENA goes as far back as 1981, but it took a quarter century to get the political traction it needed.

Today, 145 countries have officially joined IRENA and another 30 are in the process of becoming members. That would bring the total to 175. By comparison, the 42-year-old International Energy Agency has only 29 members, while the 59-year-old International Atomic Energy Agency has 167 members.

Canada is a founding member of the IEA and IAEA, yet Canada is the only G8 countries not part of IRENA. In fact, all other G8 countries were founding members of IRENA. Canada isn’t even in the process of joining, yet China, India, Australia, Saudi Arabia and Iran are already members. Even Syria is signing up. The only other large country that sits with Canada outside of this massive international group is Brazil.

The Harper government avoided it like the plague. Not joining made a statement that even like-minded governments in Australia refused to make. But times have changed. Canada has a new government that says it’s serious about taking climate action. Canada played an important role in reaching a binding international climate agreement in Paris last month. Canada’s provinces have set ambitious emission-reduction targets that will require accelerated deployment of renewable energy. The country simply can’t afford to remain on the outside of IRENA.

So what’s the government’s position? Here’s the answer I got back after posing the question:

Screen Shot 2016-01-14 at 10.52.53 AM“‎The Government of Canada was recently asked to join the International Renewable Energy Agency. This request is still under review,” said Caitlin Workman, press secretary for Catherine McKenna, Canada’s federal minister of environment and climate change.

It’s safe to say that since IRENA was founded the invitation for Canada to join has been a standing one.

Some might say: Who cares? It’s just another international agency that costs money to join and doesn’t offer much in return. I’d argue it does offer value. It will keep Canadian officials more abreast of global trends in renewable energy, but more important, it will give Canada a seat at a table filled with dozens of countries looking for the skills, knowledge and technology required to transition their economies away from fossil fuels.

The export opportunities for Canada are immense. The World Bank, in a report released in September 2014, estimated that investment in clean technologies in developing countries over the next decade will exceeded $6.4 trillion (U.S.). Of that, $1.9 trillion will be focused on renewable energy technologies, with a significant chunk of that creating an opportunity for small- and medium-sized businesses. In my opinion, that number is likely low-balling the opportunity, especially in the wake of the Paris climate summit.

IRENA is an opportunity for Canada to identify the needs of others, and the role it can play in meeting those needs.

Already, representatives from its 145 members are gathering in Abu Dhabi for IRENA’s sixth-annual assembly to discuss the role of renewables just one month after the Paris summit. There will be much to discuss as they tease out the details of the Paris agreement, and much back room dealmaking that Canada will not be a part of.

Canada should be there showing leadership.

 

 

Solar is booming in Ontario, but you’d never know it from the data

Screen Shot 2016-01-13 at 12.43.29 PMOntario’s Independent Electricity System Operator released its annual “Electricity Data” report on Tuesday, and it breaks down the supply mix in 2015, 2014 and 2013. On the surface there hasn’t been a big shift over the past three years. We see that nuclear and hydro output has been fairly consistent. Natural gas generation was up slightly in 2015 compared to 2014, but was still lower than 2013 levels. Coal has been completely phased out, but at only 2 per cent of the mix in 2013 it wasn’t a dramatic change.

Wind as a share of the electricity mix has doubled to 6 per cent since 2013. Electricity from biofuels more than doubled, but still represents less than 1 per cent of the mix.

Then there’s solar. Looking at 2013 data, you might be confused to see Ontario didn’t have any solar on the grid. A teeny weeny bit appeared in 2014 and that increased 14-fold in 2015, but still represented a measly .25 terawatt-hours of electricity in a system that generates 154 terawatt-hours a year. In other words, a rounding error.

It’s a misleading figure, and it makes solar look like an insignificant contributor to Ontario’s electricity system, which couldn’t be further from the truth.

So what’s the deal? The above figures are for transmission-connected generation, meaning only the biggest solar projects connected directly to the transmission system are recognized. Those projects total 140 megawatts on a grid with 27,000 megawatts of capacity.

But look under the hood and you see something quite different. When accounting for solar that is connected to the local distribution system, the figure is an impressive 1,766 megawatts.

“So over 90 per cent of solar in Ontario isn’t being included in their annual figures,” points out Keith Stewart from Greenpeace Canada. “If we did include it all, solar would be about 2 per cent of total generation. It’s a clear example of how conventional power-sector thinking is blinded to the role of renewables and the evolution towards a more decentralized grid.”

In other words, this so-called “embedded” solar generation is making a big difference, especially during times of summer peak demand when the sun is shining strong and air conditioning loads put stress on the grid.

 

Tracking the transition to a low-carbon economy: $5.2 trillion invested since 2007, according to report

gts_1.13_web_mediumEthical Media Markets calls itself an independent publisher of research reports and other information related to the emerging green economy, and every six months it comes out with an annual and mid-year update to its Green Transition Scoreboard. The scoreboard has been tracking private investments in the green economy globally since 2007. In its August 2013 report, it highlighted what it is calling a “dramatic mid-year surge” in cumulative global investment since 2007, rising to $5.2 trillion by August from $4.1 trillion in February. And remember, this is private investment — i.e. it excludes investment in government projects.

The jump, according to the report, is partially driven by the following trends: “…the write-down of fossil fuel assets; the inevitable wave of nuclear plants due to be retired; the exposing of hypothetical forecasts of 100 years of shale gas; and the decline of large, centralized electricity generation.”

Nearly $2.4 trillion has gone into renewable energy investments, making it the largest investment theme out of the $5.2 trillion total. Energy efficiency investments represent $1.33 trillion, followed by green construction at $880 billion, corporate R&D at $378 billion and remaining “cleantech” at $235 billion. Ethical Markets Media says it comes up with these numbers by scanning reports from Cleantech Group, Bloomberg, Yahoo Finance, Reuters and many UN and other international studies and individual company reports.

The report has a narrow definition of “green” investment. It excludes funds invested in nuclear power, carbon capture and sequestration, and biofuels, with some limited exceptions. Even so, it projects the $10 trillion investment mark will easily be reached by 2020 and, alongside this increase, we will see a transition away from fossil fuels.

Says the report: “Increasingly, worldwide regulations are leaving fossil fuel investments as stranded assets with pension funds heeding the call to divest from fossil fuels and invest in green technologies. Dutch Rabobank will now refuse loans to companies involved in tar sands and shale gas, citing the long-term financial and environmental risks are too large. In July 2013, Storebrand, a major Norwegian pension fund advisor, excluded from its Energy Sector all 13 coal producers and the 6 oil companies with the highest exposure to tar sands ‘to reduce Storebrand’s exposure to fossil fuels and to secure long term, stable returns for our clients…'”

I don’t entirely agree with some of the conclusions this report reaches, but it adds another interesting perspective to the energy transition that is clearly taking place globally. Big dollars are being spent on cleaner forms of energy. That a transition is happening there is little doubt. The question now is: how fast, and can we accelerate it?

In major policy shift, government lets Ontario Power Generation bid for large renewable projects

lakeviewIt’s been eight days since Ontario Energy Minister Bob Chiarelli directed the province’s power authority to eliminate large renewable-energy projects from the feed-in-tariff program and design a competitive procurement process that will get the best deal for ratepayers. We knew this was coming, as Chiarelli said as much in a speech a couple weeks earlier. What we didn’t know is that the energy minister would direct the power authority to let Ontario Power Generation bid for these large projects (see page 3, third paragraph of directive).

This is a major policy shift, and I’m surprised it hasn’t received any coverage in the mainstream Ontario media. OPG is a crown corporation. Under its 2005 agreement with the Ontario government, “OPG will not pursue investment in non-hydroelectric renewable generation projects unless specifically directed to do so by the Shareholder.” Instead, OPG’s mandate has been to maintain its fossil fuel, nuclear and hydroelectric fleet of generation, and pursue new large hydroelectric projects. The reason for this restriction was to limit OPG’s clout in the marketplace and give independent power producers a chance to establish a foothold in the generation mix. The decision to let OPG bid for all large renewables — including wind and solar — is significant for a number of reasons:

  • This is getting close to what the Ontario NDP said it will do if elected. According to the NDP’s energy policy, “We will maintain the feed-in-tariff for small and community-based projects” and “for new larger projects we will move towards public ownership” through OPG. The Liberal government isn’t proposing complete public ownership of large renewables, but it is letting OPG bid for some ownership in a competitive process. Could this be part of a compromise that won it NDP support for the provincial budget?
  • Independent power producers, I would imagine, aren’t very happy about this. They will assert that they can’t compete against a giant like OPG that just happens to have the government in its corner. Is it a fair fight? Maybe not. But will it get the best deal for ratepayers? Presumably, yes.
  • Having OPG compete for renewables will create more opportunities to develop renewable resources in remote areas, and to partner with aboriginal communities. OPG has experience in this area, and many private developers are too risk-averse to go into these markets. They prefer to go after the low-hanging fruit, even if the orchard isn’t located in the best area.
  • Letting OPG compete in renewables could turn the Power Workers’ Union into an ally over time. Right now, renewables mean competition with union jobs. The PWU doesn’t like that — the fact that jobs at coal-fired power plants are being phased out and there is a significant threat to nuclear jobs as well. Renewables could be a path to save OPG jobs.
  • On that note, could letting OPG get into large renewables also be a signal that the province under this government is going to abandon efforts at building new nuclear reactors?
  • Finally, as a crown corporation, OPG can be directed to do things that other private developers would never take on — such as experimenting on a large scale with energy storage technologies, and being a test bed for energy innovation coming out of the province. Indeed, it would be interesting if OPG was directed to set aside a certain percentage of profits for R&D and to support pilot projects.

So that’s why I think this latest government directive is significant and should get more attention. Perhaps I’m reading too much into this, but my gut tells me no. I’ve long argued that OPG should be able to compete for large renewable energy projects. It’s something the Society of Energy Professionals, a shareholder in the nuclear business of Bruce Power, has called for since at least 2007. Many will complain, and for good reason. If a giant like OPG is to compete for these projects, how do we make sure it’s a fair competition? Will the process be transparent? Reasonable questions, but not a reason to not do it.