Clean Energy Investment Up in 2011

Posted by Valerie Mann on January 30, 2012

On January 12, 2012, Bloomberg New Energy Finance released data on clean energy investment, which showed a new high in clean energy investment at US$260 billion in 2011.  That’s a five percent increase over 2010 and five times the amount invested in 2004 in clean energy.

The driver behind the investment appeared to be solar with a 36% surge, significantly ahead of wind investment,.  That is notwithstanding a significant decline in photovoltaic modules costs and some pretty spectacular bankruptcies (Solyndra, SpectraWatt and Evergreen Solar).  The leading countries for investment were the US, much of it driven by government programs, and China.  Europe increased its clean energy investment by 3%.  The most notable project in Canada cited by Bloomberg is the Boralex inc. and Gaz Métro Limited Parnership 272MW Seigneurie de Beaupre wind farm phases one and two for $756m. After wind and solar, the  energy-smart technologies, including smart grid, power storage, efficiency and advanced transport, saw the greatest levels of investment.  While VC and private equity investment saw an increase, public market fund raising fell by almost $3 billion. 

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Costs of Inaction on Climate Change Revealed: National Roundtable Report

Posted by Christine Kowbel on October 26, 2011

On September 29th the National Roundtable of the Environment and the Economy (NRTEE) released its latest report – Paying the Price: The Economic Impacts of Climate Change for Canada – adding a valuable perspective to the climate change debate. The object of the report is to balance the long term economic impacts associated with inaction with the up-front expense of adaptation measures available to the federal and provincial governments. Deferring all action to the future could lead to annual adaptation costs and impacts of $5 billion by 2020, escalating to $43 billion by the 2050s.

Climate change is anticipated to impose the most significant costs on three representative aspects of the Canadian economy: the timber supply, coastal areas, and the health system. All of these impacts are of particular concern for British Columbians, but most alarming is the potential for $2–17 billion in annual costs associated with pests, fires, and reduced forest growth by 2050.

David McLachlin, the NRTEE President and CEO, said that the report “shows that adapting to climate change makes economic sense.” One example is implementing measures to enhance forest fire prevention, pest control, and cultivation of climate-resistant tree species. Under a low climate change scenario, the benefit to cost ratio of such measures is 9:1, which increases to 38:1 if high climate change is experienced.

The full report can be downloaded from the NRTEE website. The next NRTEE report will analyse what the private sector can do to reduce its risk and exposure to climate change, and ways in which the government can cost-effectively promote private sector adaptation.

Leading Canadian Geoscientists Generate Interest in Geothermal Energy

Posted by Amy Carruthers on October 13, 2011

In June, 12 leading Canadian geoscientists and researchers published a peer-reviewed report in the Journal of Geophysics and Geoengineering entitled “Geothermal Resource Energy Potential of Canada.”  This report is the first comprehensive study of Canada’s geothermal resources, and the results are spectacular. According to the authors – which include scientists from the Geological Survey of Canada – Canada’s in-place geothermal power exceeds one million times the country’s current electrical consumption and as few as 100 geothermal projects could meet Canada’s energy needs. The full report can be downloaded from the Natural Resources Canada website.

While only a small fraction of this resource could be developed economically, a recent press release by the Canadian Geothermal Energy Association (CanGEA) references the report and predicts that geothermal energy could realistically provide as much as 10% of Canada’s current electricity consumption. CanGEA also notes that the development of geothermal resources in Canada has finally begun, with several projects on the way and a record $200,000 price received in a public tender for Crown Geothermal Rights Permits in British Columbia in July. CanGEA claims that the geothermal energy industry represents a $25 billion market opportunity for companies that press ahead with the challenges of developing projects.

Anticipated federal regulations on emissions from coal and natural gas plants will likely provide further impetus for investment in geothermal energy in certain provinces. Alberta, for example, is currently dependant on coal and natural gas to generate electricity but is home to some of Canada’s most promising geothermal sites. Geothermal electricity generation is a process which emits very few emissions while providing reliable base load energy supply (which in many cases can be situated close to load), making it a more attractive alternative to gas than solar or wind energy.  However, at present the up-front exploration and development costs remain an economic barrier to the pursuit of such opportunities by most private sector renewable energy developers.

New Federal Regulations Proposed for Coal-Fired Electricity Generation

Posted by Amy Carruthers on September 13, 2011

On August 27th, 2011 Environment Canada published draft regulations for coal-fired electricity generation facilities.  The new regulations are part of the federal government’s sector-by-sector approach to regulating emission of GHG’s in order to fulfill Canada’s obligations under the Copenhagen Accord.  Statements made by Environment Minister Peter Kent indicate that the draft coal regulations have been prepared with the intention of aligning performance standards for coal-based facilities with the emissions targets that will be set for natural gas-fired plants in the near future.

The regulations will apply to coal-based plants which begin producing electricity after July 1st, 2015 as well as plants which are at the end of their useful life (defined generally to be 45 years after commissioning but subject to certain exceptions). The performance standard for coal-based plants subject to the regulations is set at 375 tonnes of CO2/GWh, which is the emissions intensity level for natural gas combined cycle technology, a high-efficiency type of natural gas generation. 

Environment Canada has provided an explanatory document together with the draft regulations.  The analysis included in the document explains that the electricity needs of provinces currently dependant on coal-powered generation are expected to be met through increased investment in natural gas facilities and through inter-provincial transfers.  In particular, over 2015 to 2030, it is expected that Alberta will import more of its electricity from British Columbia, with a net increase of 31 TWh in imports (roughly the amount of power required to supply 200,000 households over the fifteen year period).  A small rise in the cost of electricity for consumers is expected, ranging from a $0.73 increase for residents of Saskatchewan to a $2.14 increase in the monthly power bill for Alberta residents.

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Alberta Moving Forward with Carbon Capture Storage (CCS) Projects

Posted by Amy Carruthers on August 15, 2011

The province of Alberta announced July 27, 2011, that it is moving forward on another Carbon Capture Storage (CCS) project. The Swan Hill Synfuels project will use an innovative coal gasification process to mine Alberta’s substantial “stranded coal” stores, previously thought to be inaccessible. It is estimated that the $1.5 billion project will be able to produce 300 megawatts of power once running at full capacity; enough to power 25% of the homes in Edmonton. With the use of CCS on the project, Alberta Energy Minister Ron Liepert said Alberta will have created a reliable and inexpensive source of energy that will meet or exceed federal emissions standards, continuing:

The result will be world-leading, clean power generation that will supply secure, reliable and competitively priced electricity to Albertans for decades to come, while delivering major ... environmental performance improvement.

The project, for which the Albertan government has committed $285 million from its $2 billion Carbon Capture and Storage Fund, is the third CCS project moving forward in Alberta. The second of the three projects is the Alberta Carbon Trunk Line, to which the government contributed $495 million and which will move 14 million tonnes of carbon per year. The third is the Shell Quest carbon capture and storage (CCS) project, which will be funded with Alberta committing $745 million over 15 years and the federal government $120 million through its Clean Energy Fund.

Alberta has also announced that it is introducing an update to its carbon offset program as “a short-term measure to help ensure large-scale carbon capture facilities can move forward.” The update will grant qualifying large-scale, direct injection CCS projects a bonus carbon credit for each tonne of offset credit earned through CCS.

Vancouver - The "Greenest Jobs" City

Posted by Valerie Mann on August 11, 2011

In early July of this year, the Vancouver City Council adopted, in principle, the Greenest City 2020 Action Plan (GCAP) including the target of doubling the number of companies actively engaged in greening their operations over 2011 levels by 2020. 

The GCAP has a number of goals - clean water, clean air, parks within 5 minutes walking distance of everyone in the city, zero waste, leading the world in green building design.   Implementation of the GCAP goals (i) involves capital, (ii) affects development decisions and (iii) impacts the City's operating budget. 

Perhaps the most interesting goal is not only to make Vancouver a 'green livable' city, but to ambitiously become a 'Mecca of green enterprise'.  Green jobs.  Lots of them.  Green jobs takes, well, 'green'.  It means meeting the capital needs of companies involved in clean technology.  It also means attracting and retaining the best talent to maximize the commercialization and export opportunities for companies actively engaged in the green economy.  That is an ambitious and laudable goal. 

To be fair, the GCAP casts a wide net with its definition of what constitutes a 'green economy'.  It is not only comprised of companies involved in clean technology, but also green building design and construction (including those who renovate, retrofit and operate 'green buildings', and the architects and engineers who design them), waste management including e-waste specialists and compost collectors and, to expand the list a little bit further - local food.  Not all of those endeavors will take the same amount of capital infusion.  Some will take little or no additional capital, and will simply be a transformation of the processes undertaken in industries that do not now describe themselves as 'green'.  

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BC Municipalities addressing Climate Change through New Regulation

Posted by Michael Lee on August 03, 2011

In partnership with the provincial government, thirty-six BC municipalities have opted into a new regulation that requires all new homes to be built “solar hot water ready.” While not requiring the installation of solar hot water systems in new housing, the regulation will require new construction to be built to allow easy installation of these systems and this will include making provision for an area for a solar collector.

Because solar power is not a viable renewable option in many communities in BC, the provincial government decided to make the new regulation optional. The regulation came into effect on June 21, 2011 and the province estimates that it will add between $200 and $500 to the cost of constructing a new home where the regulation applies.  The province also estimates that the installation of a solar hot water system in a single-family home could reduce the GHG emissions of that household by as much as two tonnes per year.

The regulation is a good example of how governments can use forward-looking laws to make future reductions in GHG emissions much easier and cheaper. By adding a relatively small amount to the cost of building a house, the regulation ensures that new homes are equipped for an easy transition to a green energy option. With solar technology expected to improve significantly over the next few years, this regulation will ensure that the opt in communities will be ready for an easier transition.

For more on the regulation and for a list of the communities that have opted into the regulation, click here.

Tribunal Decision a Big Victory for Wind Power Industry in Ontario

Posted by Amy Carruthers on July 28, 2011

Ontario’s environmental review tribunal has given the wind power industry a significant victory that will help open the door to wind turbine developments in the province.

The tribunal ruled this week on a challenge by a group of residents who were opposing Suncor’s development of a wind farm to near Thamesville, Ontario. Their opposition relied on the grounds that the turbines would be close enough to homes to cause health-related harm.

In a nuanced decision the tribunal found that there was no evidence that turbines placed according to current regulations—which require a 550 metre setback from human dwellings—can cause harm to humans. However, the tribunal also concluded that there is convincing evidence that the turbines can cause harm if they are too close to homes. The debate then, according to the tribunal,

has now evolved to one of degree. The question that should be asked is: What protections, such as permissible noise levels or setback distances, are appropriate to protect human health?

The appeal was the first heard under Ontario’s Green Energy Act (GEA) and followed on the heals of a previous challenge to the setback regulation which had failed at the divisional court level (see March 10, 2011 post). In that decision the court rejected a challenge to the setback regulation and recommended appeals under the GEA as an avenue for further challenges. The fact that this was the first such appeal heard and that the decision again upheld the regulation, represents a significant setback for wind farm opponents in the province.

The Canadian Wind Energy Association hailed the decision as a victory for the wind industry, however the lawyer representing wind farm opponents was also positive, stating that the tribunal’s conclusion that the issue was one of degree opened the door to further challenges. We will continue to monitor the ongoing developments.

Nunavut Releases Document Charting its plan to Address the Impacts of Climate Change

Posted by Christine Kowbel on July 15, 2011

In an attempt to address the fact that "climate change is already having a significant impact in Nunavut," Nunavut’s minister of Environment Daniel Shewchuk announced the release of the territory’s plan to address climate change going forward: Upagiaqtavut - Setting the Course, Impacts and Adaptation in Nunavut.

Because Nunavut’s contribution to the global warming problem is very small (in terms of GHG emissions for instance), the document is primarily reactive, focusing less on what Nunavut can do to decrease its contribution to global warming and more on how it can address the potentially enormous impacts of climate change on its land, economy and residents. The government’s approach revolves around four components, or napui:

  • Napuk 1 – Partnership Building – focuses on identifying and developing partnerships with other governments, industry, stakeholder groups and within the government of Nunavut to coordinate efforts.
  • Napuk 2 – Research and Monitoring – involves efforts to monitor and assess the impact of climate change in Nunavut.
  • Napuk 3 – Education and Outreach – includes the general spread of information to all interested parties, but will also specifically involve the “transfer of knowledge and skills from elders to youth.”
  • Napuk 4 – Government Policy and Planning – requires the integration of “climate change considerations” into the decision making process at all levels of government.

Key to the implementation of these napui is the establishment of an interdepartmental working group that will guide the territory through this process.

The paper concludes on a positive note, placing climate change as the next on a long list of difficult obstacles that the Nunavummiut have already successfully overcome.

California Cap and Trade - still aiming for 2012

Posted by Gordon Craig on July 12, 2011

California’s First District Court of Appeal has continued the stay of a Superior Court’s order which had enjoined the California Air Resources Board (CARB) from continuing to work on developing its cap and trade regulations for California (See our post “California Update—renewable energy”).  The Superior Court had earlier required CARB to undertake further analysis of its AB 32 Scoping Plan (See our post “California Court Puts Brakes on Cap and Trade Program”).  As reported, the Superior Court had found that CARB did not adequately evaluate alternatives and approved the Scoping Plan before receiving and responding to public comments.  That decision of the Superior Court has been appealed by CARB and, with the stay now continued, CARB can continue with work on developing the cap and trade program to meet the January 1, 2012 start date for cap and trade in that state. California is a leading member of the Western Climate Initiative (WCI), which includes six other US states, British Columbia, Manitoba, Ontario and Quebec.

Meanwhile, on July 1, the Chairman of CARB reported to a senate committee that while California still proposes to start its cap and trade program in 2012, the first compliance period, initially planned to be 3 years from 2012-2014, will now be shortened to 2 years covering 2013 and 2014 (Chairman Nichols’ published remarks).  As well, it was announced that the first quarterly auction of emissions allowances will be delayed to the second half of 2012, rather than February 2012 as originally planned.  Reasons for the delay include the need to test and model the system to make sure it cannot be gamed. CARB has published draft regulations covering allowance distribution and details on offset protocols and will hold public workshops to obtain feedback before final regulations are issued in the fall.

No recent word from British Columbia confirming whether its cap and trade program is on track to commence January 1, 2012.  BC’s proposed regulations have yet to be published.