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Published in Summer 2004
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Power plan for renewables
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By Joshua Ostroff
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© Warren Gratz
The average US or Canadian household could reduce its greenhouse gas emissions by almost seven tons by switching to renewable electricity. |
With environmental concerns, global security issues and even massive blackouts all factoring in to a reevaluation of our energy use, the need for renewable energy has never been more pressing. Yet it still represents a small fraction of North America's market.
"The renewable energy market faces a few important challenges before it can gain widespread acceptance and attract potential investors," says CEC Environment, Economy and Trade program manager Véronique Robichaud, who heads the trinational organization's renewable energy work. "First of all, the consumer price of renewable energy is generally higher than traditional energy. Secondly, many people have the misconception that renewable energy is not as reliable as traditional energy. This is simply not true."
She also says that government agencies have yet to set a common, long-term vision for the development of renewable energy, and that policies already in place aren't being utilized to their full advantage.
There are several different sources of energy that fall into the renewable category. Heat and electricity can be produced from biomass via direct burning (favored by the pulp and paper industry) or biogas, such as methane from landfills. It can also be produced from geothermal power, hydro facilities, and solar power, both thermal and photovoltaic.
But the most common form of renewable energy is wind, with over 6,300 megawatts (MW) installed in the United States, and another 13,500 MW proposed. Canada has 327 MW installed with 900 planned and another 3300 proposed, though the Canadian Wind Energy Association claims it could achieve 20 percent of Canadian electricity needs, or about 50,000 MW.
Mexico, on the other hand, has less than 3 MW installed (albeit with over 800 MW "under construction") due to a lack of financial resources and foreign investment barriers. The country has, however, taken advantage of geothermal power, with 955 MW installed.
A leading producer of wind power in Canada is Vision Quest, a division of TransAlta, an Alberta-based company with energy interests across North America and Australia. TransAlta is also the biggest contributor of greenhouse gases in Canada.
"We're doing a whole variety of things to counter that," says Bob Page, vice-president of Sustainable Development for TransAlta, who is in charge of the company's proactive policies. "We're committed to having no net greenhouse gas emissions in Canada by 2024. That's a pretty expensive commitment on the part of the company [but] we think from a long-term point-of-view that it's going to be good business. It's not just altruism, but how can we best position the company for the future—spending some money today to plan for tomorrow."
They're achieving this through many means, including projects featuring energy efficiency, "clean coal" technology, tradable renewable energy certificates (allowing a company like TransAlta to sell greenhouse gas emissions credits to other companies and countries) and, of course, renewable energy.
TransAlta boasts about 40 percent of Canada's wind capacity and adds to it every six months or so. As well, the company owns land in five other provinces for further wind expansion—they're planning for 10 percent of their Canadian generation to come from renewables by 2010, up to 1000 MW from the current 350 MW—and runs geothermal power plants in California.
However, Page cites a lack of government aid to offset the cost of building new renewable energy: "There are some federal tax incentives, but it doesn't overcome the economic disadvantage. In Alberta, we have a free-enterprise tradition that is very helpful for wind, but in Ontario it takes years to [develop] anything because of the huge bureaucracy."
Robichaud agrees that governments can play an active role. "We'd like to encourage the three North American governments to develop some partnership with the industry. A program is already in place in the United States through the Environmental Protection Agency called Green Power Partnership," she says, "and we'd like to suggest something similar in Canada and Mexico to foster the demand for renewable energy."
Green Power Partnership is a voluntary program set up to promote the purchase, and reduce the transaction cost, of electricity derived from sources such as solar, geothermal, biomass, low-impact hydro and wind.
"We're trying to raise awareness of the option of green power as a step that you should take as an environmentally responsible organization," explains the EPA's Kurt Johnson. "Our big picture strategy is to highlight various leaders in green power purchasing and establish them as trend-setters."
The EPA is targeting the commercial, institutional and industrial sectors rather than individuals (though they hope customers will support products made with green power) because the current price differential is based on economies of scale. By creating a "tipping point" situation where buying green power becomes as standardized as, say, curbside recycling, the price will become competitive.
This type of government involvement is something that Pollution Probe's executive director Ken Ogilvie would like to see expanded, particularly in Canada, which lags behind its southern neighbor despite not facing financial impediments, as is the case in Mexico.
Ogilvie says that every market that has moved to renewables has been initially created through government policy (Denmark, Germany and Scandinavia). "The United States has had producer subsidies, technology development subsidies and infrastructure subsidies," he says. "The market has been created through regulatory tools as well as financial tools."
Renewable energy meeting
Realizing that there are major challenges facing the renewable energy market in North America is easy; what really counts is doing something concrete to try and surmount these obstacles.
So the Commission for Environmental Cooperation is hosting a renewable energy meeting in Montreal—dubbed "Building the Renewable Energy Market in North America"—in October 2004.
"We hope to catalyze some action if we put in the same room people who have the money and people who have the capacity to produce," says the CEC’s Véronique Robichaud. "We intend to discuss the creation of new North American partnerships, maximizing existing measures and policies such as renewable energy certificates, and connecting producers with buyers."
By bringing the energy industry, government regulators, international investors and NGOs together, the goal is to come up with recommendations that will make a difference across all three nations—and indeed, around the world.
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He feels that the cost differential between traditional and renewable energy is largely artificial, as fossil fuel and nuclear power have had their infrastructure and development subsidized over the years. He adds, "We don't price the environmental externalities associated with traditional forms of generation—[through their effects,] the smog pollutants show up in the hospital costs, but they don't show up in the [energy] price."
As well, Ogilvie believes the government needs to increase public education to demonstrate the mainstream potential of renewables; to explain the benefits for air quality and climate change as well as jobs, exports and technology development; and to facilitate the public's ability to purchase green power.
"It requires a big vision and a big push," he says."People need to see this is part of their energy future and understand the benefits."
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