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Ontario raises the bar for clean energy

National Post
Julius Melnitzer

With the enactment of its Clean Energy Act in May 2009, Ontario positioned itself as a world leader in renewable energy incentive programs.

"The legislation brings jobs to the province and makes energy conservation a way of life for Ontarians”, says Danielle Waldman of Gowling Lafleur Henderson's Toronto office.

Part of Ontario's Climate Change Action Plan, the legislation establishes a feed-in tariff (FIT) that allows vendors to sell renewable energy to the provincial grid at guaranteed rates, creates a new streamlined approvals process for renewable energy projects, establishes domestic content requirements for wind and solar projects, and creates the Renewable Energy Facilitiation Office.

It benefits solar photovoltaic, onshore and offshore wind, water power, biomass, landfill gas and biogas development. So far, the FIT program has attracted 700 developments generating 2,500 megawatts of power. "Measured by the overwhelming response to the Ontario call, the FIT program has been a huge success so far”, says Jason Kroft of Stikeman Elliott LLP's Toronto office.

Unfortunately, the rest of the country is lagging behind.

"Nothing in Canada compares to the scope of Ontario's undertaking”, Mr. Kroft says.

About a year after the Ontario legislation became law, British Columbia introduced its own Clean Energy Act, but the legislation - which also contemplates a FIT program - is still at a consultative stage.

"The Ontario FIT program is broader in scope”, says Paul Cassidy of Blake Cassels & Graydon LLP's Vancouver office. "For example, solar power is not part of the program in B.C. and wind probably won't be included either. The current thinking appears to rule out cleantech that doesn't really need government assistance”.

In other words, the B.C. program is aimed primarily at emerging programs, while the wider Ontario legislation targets the larger players too. But British Columbia does have a significant renewable portfolio standard including clean power calls that target 90% of new generation to be 100% greenhouse gas emission (GHG) free.

As well, B.C. has committed $25 million to its Innovative Clean Energy Fund to support the development of clean energy and energy-efficient technologies in the electricity, alternative energy, transportation and oil and gas sectors. The province has also invested $89 million in the world's first fleet of 20 hydrogen fuel cell buses and a refuelling infrastructure through a federal-provincial partnership.

In Nova Scotia, the government included a FIT program as part of the Renewable Electricity Plan it introduced in April. "The Nova Scotia concept is what's known as a micro-FIT program”, Mr. Cassidy says. "It's community focused and aimed at small generation providers in the hope of spawning cleantech programs from the ground up”.

By contrast, Alberta has no visible renewable portfolio standard and no major commitment to renewable power development.

"Coal-fired electrical utilities and oil sands producers are responsible for most of the existing renewable project developments in Alberta, and just about all of them are wind power projects”, says John Goetz of Fraser Milner Casgrain LLP's Calgary office. "There appears to be no visible renewable portfolio standard in the province and therefore no major commitment to renewable power developments”.

Instead, the province is encouraging cleantech development through its Climate Change and Emissions Management Fund, which by April 2010 had amassed $187 million through charges collected under the province's two-year-old emissions-reduction legislation. So far, the province has committed $71 million of that total to cleantech solutions.

"What Alberta is spending won't do a lot to increase clean energy generation in the province, and it's a drop in the bucket compared to what Ontario, Quebec and B.C. are investing”. Mr. Goetz says. "The province's emphasis has been on cleaning fossil fuels, from which the coal-fired plants and oil sands will benefit most”.

To that end, the province has committed $2 billion to carbon capture and storage (CCS), by far the lion's share of Alberta's investment in cleantech.

For its part, Quebec has eschewed a FIT program. Instead, it has "a fairly aggressive target and encourages investment in accordance with those targets through calls for renewable power”, Mr. Cassidy says.

With the province's wind production target at 4,000 megawatts by 2015, wind power will likely drive the bus there.

"The Wind Energy Association believes that the Quebec targets are realistic and can be met”, Mr. Cassidy says.

Critics of FIT programs say that in a country where utilities are often publicly owned, FIT programs are unncessary.

"The thinking is that the utilities will encourage investment by making calls for power”, Mr. Cassidy says.

But FIT programs have the advantage of guaranteed pricing schemes that envisage contracts as long as 20 years, whereas tender calls allow for short-term planning only.

"A FIT developer can model a long-term project based on a fixed price”, Ms. Waldman says. "When you're ordering millions of dollars in equipment for your project, there's considerable security in knowing that corresponding revenue is guaranteed”.

On the other hand, FIT programs are subject to concerns about their fate in the event of a change of government or of government policy. Critics also say that FIT programs mask costs and that government subsidies will eventually be borne by consumers.

For the time being, however, comprehensive FIT programs appear to the rule.

"When you get a comprehensive FIT program like the one in Ontario, the rules and the pricing are absolutely clear”, Mr. Kroft says. "Clients tell me that if they know what the rules are, they will move on cleantech projects. Maybe it's just human nature to respond best to games with clear rules”.

Meanwhile, even as Ontario gets most of the attention in the cleantech world these days, Prince Edward Island, with a population of less than 150,000, may be leading the pack. The province was the first to adopt renewable energy tariffs as a policy mechanism to encourage wind development, balancing the tariff with a renewable-energy portfolio standard goal of 15% of generation from renewable sources by 2010.

But the province met this goal in 2007 and increased the target to 30% by 2016. Overall, the strategy has delivered innovative policies, public engagement benefits and economic results.

"P. E.I. is home to the Wind Energy Institute of Canada where they test every turbine used in the country”, Ms. Waldman notes. "So it could well be that when it comes to cleantech, our smallest province is our national leader”.

El contenido de las noticias que se presentan en esta sección es responsabilidad directa de las agencias emisoras de noticias y no necesariamente reflejan la posición del Gobierno de México en este u otros temas relacionados.


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