:
Thank you, Mr. Chair. It's a pleasure to be here before the committee once again as you discuss the greening of Canada's electricity system. I believe you have the presentation slides before you.
Just to remind you, CanWEA is the national industry association for the Canadian wind energy industry. We have more than 300 corporate members, including wind turbine and component manufacturers, utilities, wind project owners and developers, and a whole range of service providers to the wind energy industry, including construction services, wind resource assessment services, and many others.
It's appropriate that the Wind Energy Association is here for this discussion today because wind energy clearly does green the electricity system. Wind is a renewable energy source; it produces no greenhouse gas emissions, air pollution, or water pollution; and it produces no toxic, hazardous, or nuclear waste. Even on a life cycle basis, studies have shown that a wind turbine will produce enough energy in less than a year to offset the energy used to create, build, and construct the turbine and its components, and to fuel the turbine, although some studies say it takes a year and a half. With a 20- to 25-year expected operating lifespan for a wind turbine, you're looking at quite a positive payback there.
Also from an environmental perspective, well-sited wind turbines have no significant impacts with respect to either noise, land use, or birds. I'd be happy to discuss that further if the committee wishes.
It's important to note that wind energy does more than simply green the electricity system. Ultimately, we want to move beyond the concept of greening and to the concept of moving toward sustainable energy and a sustainable electricity system. That requires more than just environmental attributes. It requires economic contribution, and wind energy provides that as well.
Wind energy creates investment on the scale of $2-million-plus per megawatt of installed capacity. In terms of job creation, it creates about ten and a half direct and indirect person-years of employment per megawatt of installed capacity. In addition to those benefits, wind energy is produced predominantly in rural areas. Rural areas have often been hard hit by declines in other natural resource sectors, whether you're talking about agriculture, forestry, or mining. It provides additional benefits to those communities by providing an industrial source for the tax base, which can make a very significant contribution, and through land lease payments to landowners who host wind turbines.
This is why you're starting to see initiatives such as the one taken by John Deere, the tractor manufacturer. John Deere has created a new business arm that is a wind farm development and financing arm. John Deere is working to help farmers in the U.S.—and soon in Canada—to obtain the financing required to be able to develop wind projects on their land. The wind in essence becomes a supplementary crop in addition to their existing crops, thereby providing an opportunity for family farms to stay in business longer, given the challenges that those operations face at this point in time.
Wind also contributes to consumers in terms of cost savings. There is no fuel cost associated with wind, so I should just add that you have a situation in which a wind project can give you a very high certainty in terms of what the cost of electricity from that project is going to be for a twenty-year period. You don't have that with all sources of electricity generation.
If you look forward, there's a broad international consensus, including among groups such as the International Energy Agency, that the cost of wind energy is still going to go down, because we haven't seen the peak in terms of technological development. We also know that the costs of other forms of electricity generation are likely to go up, whether it's coal or natural gas, as a result of environmental costs being incorporated, such as with hydroelectric developments, because they're increasingly further afield and require more transmission. In fact, in the United States at this point in time, there are a number of examples of where we have seen that people who signed up to join green power programs in the U.S. were paying a premium to be able to benefit from wind energy. They are now actually paying less than the rest of the rate base because the cost of conventional electricity has gone up at a faster rate.
Wind can be installed quickly and in a modular fashion. That's a savings for the electric utility system. You don't have to overbuild to try to meet some future demand. You can build in a modular fashion to meet actual increases in demand. And it's distributed generation, which can help to reduce the need for new investment and infrastructure.
I'll go through the next few slides quickly, as this is meant to be just an update.
Canada's installed capacity is just past 1,500 megawatts, but there has been rapid growth in wind energy. In 2002 we had an installed capacity of 236 megawatts. We've gone from 236 megawatts to 1,500 megawatts in five years. If we look forward, our estimate now is that with provincial targets and initiatives in place, Canada will have 5,000 megawatts of installed wind energy capacity by 2010, and 10,000 megawatts by 2015.
I've listed some of the provincial initiatives. I'd be happy to talk about them in more detail, but I want to spend a moment talking about the situation in Alberta.
Some of you may be aware that the Alberta Electric System Operator put in place a 900-megawatt cap on wind development, out of concerns associated with integrating wind energy into the grid in Alberta. Alberta has a very unique grid, in that it has very few interconnections to other jurisdictions. It has one major one to B.C., and that's about it. The Alberta Electric System Operator just issued a document called Market and Operational Framework For Wind Integration In Alberta. That document describes a series of tools that will be used in Alberta to facilitate wind integration, as has been the case in other jurisdictions around the world. These include wind energy forecasting, the use of balancing services, and the use of power management at wind facilities themselves. With those tools, the Alberta Electric System Operator has now said it feels it will be able to remove the 900-megawatt threshold. That's just an indicator that there is an opportunity in Canada to significantly expand wind penetration with the use of tools that have been adopted in other countries.
In 2015, 10,000 megawatts of wind would represent about 4% of Canada's electricity demand. Around the world, we already see countries in which wind energy meets 20%, 8%, or 6% of electricity demand. We're looking at a decade from now, so there's no doubt that we're still behind the world leaders in this area, but things are changing. The 9,000 megawatts of wind energy to be built between 2005 and 2015 would produce almost 20% of the electricity generated by facilities constructed in that decade. That gives you a sense of where wind energy is fitting into utility planning decisions at this point in time, but 10,000 megawatts certainly only scratches the surface of Canada's potential.
In the next slide, I've highlighted the current federal initiatives with respect to wind energy development: the ecoENERGY renewable power program, the Canadian renewable conservation expense, and accelerated capital cost allowance provisions. All of them are very important for the wind industry, but we can build on those existing efforts. We can do so in an effort to have the federal government move forward with provincial governments to pursue the more ambitious targets now on the table.
There are several things we offer for thought and reflection in that regard. First, allow wind energy to participate in any domestic emissions trading system for greenhouse gases, through either an allocation of allowances or through allowing the creation of greenhouse gas offsets from wind energy. It's our view that as the costs of environmental degradation and environmental pollution are reflected in the marketplace, this will decrease the need over time for government support in terms of allowing these technologies to move forward and penetrate into the marketplace. Ultimately, the market will be able to facilitate this, but the market actually has to reflect the real costs of different generating sources.
The federal government could build upon existing measures and develop a more comprehensive wind energy strategy. This could include initiatives such as enhanced green power procurement at the federal level; streamlining of environmental assessment processes; investment in research and development, and not just in technology but also in policy-related R and D; and public education and outreach around wind and renewable energy and their contributions to Canada's electricity system. Ultimately the federal government will also have to consider federal policies to support options in light of the fact that the ecoENERGY renewable power program is likely to be committed well before its current expiry date of 2011.
There are also opportunities to look at wind development on other scales and in other jurisdictions. The Canadian Wind Energy Association is developing a proposal for a remote communities wind incentive program, and I'd be happy to provide more details of that to the committee. This program has been developed out of a recognition that existing support structures will not facilitate the deployment of wind energy in northern and remote communities. Those existing structures simply do not recognize the increased costs associated with electricity generation in those circumstances. There is a real desire and need to facilitate the deployment of wind energy and other renewable energy sources in these communities, because most of them are currently getting their electricity from diesel fuel, which is extremely expensive and also polluting.
There are a number of unique challenges with northern and remote communities—logistical, technical, and capacity-building challenges—and that's why the incentive we're proposing includes both a capital investment incentive, on a dollar-per-kilowatt basis, as well as a production incentive, such as the ecoENERGY renewable power program, on a cents-per-kilowatt basis, to overcome financial and other barriers to moving this forward.
It's a low-cost program. Our estimate is that for a $74 million contribution over a 15-year period, such a project could facilitate the deployment of 34 wind energy projects in remote and northern communities. These could reduce diesel costs by $375 million over the same period, reduce greenhouse gas emissions, and provide some economic opportunities in those communities. Again, I'd be happy to discuss that further.
Canada does have a tremendous wind energy opportunity. We're facing a situation right now where we still have increasing electricity demand throughout the country and increasing concern about the environmental impacts of conventional electricity generation. Wind energy can green the electricity system and build an industry.
In 2006, wind energy directly employed 163,000 people around the world. Global investments in new capacity for wind energy, installed in 2006, was worth $23 billion U.S. Wind energy now provides power for 22.5 million homes worldwide. This is what has happened in the last decade. The next decade will be much more aggressive, and there will be a much more rapid expansion of wind energy going forward.
Canada remains far behind at this point in time. If Canada wants to take on the label and name of a sustainable energy superpower, as has been referenced at different points, more needs to be done.
On the last slide, I provide some information on our annual conference and trade show, in which the committee may have an interest. It's the largest single renewable-energy event in the country. Last year, we had 1,200 delegates and 130 exhibitors related to the wind energy industry in the trade show. There's additional information on our website.
I've tried to keep my remarks brief. Thank you very much.
:
The Canadian GeoExchange Coalition is the only Canadian association that represents all the organizations involved in geothermal energy.
Here is a sample of the organizations that are part of the coalition. The coalition presently has about a hundred members in good standing: manufacturers, designers, engineers, architects, financial firms and institutions, governments and municipalities, in fact, the kind of membership that a fully representative association should have.
Now a word on the historical perspective. The coalition was created in 2001 thanks to significant financial support from Natural Resources Canada, and contributions from electricity utilities in Canada such as Hydro-Québec, Manitoba Hydro, BC Hydro and others. After having tried for a number of years to organize the geoexchange industry in Canada, and having failed three times in a row, the government and the electricity utilities decided to go all out in one last major effort in the hope that it would succeed. It worked.
From 2002 to 2005, we managed pilot projects more or less all over Canada, working with electricity utilities to prepare the market for more growth. From 2005 to 2007, we changed course a little and focused more on the development and deployment of the market transformation strategy, specifically on a program of workforce training and on the quality of technical installations. This training program is very comprehensive, and includes professions such as drilling, installation and design, both residential and commercial.
We recently entered into a partnership with the Association of Canadian Community Colleges. The five-year objective is to transfer to the colleges all the industry material that has been gathered in our training program. In five years, we see students leaving college as geoexchange professionals, or at least with the technical knowledge of one. We are very happy with this partnership. Parallel with it, we have developed a comprehensive program of accreditation of individuals and of certification of systems. Our people are therefore going to be qualified, and our systems are going to be installed according to trade practices.
I had a brief discussion with Mr. Ouellet about what geoexchange is. Here is a very quick definition for you. Four types of geoexchange are generally recognized, and it is important to distinguish between them. High energy involves temperatures greater than 150oC. Dry or humid vapours are extracted from the ground at a depth of 1.5 km and 3 km and used for electricity production. This is similar to average energy, where the temperatures are between 90oand 150oat a depth of 2000 metres to 4000 metres. At that temperature, we are often dealing with hot water or dry vapours that are used for electricity production. In Canada, these two forms of energy are mainly found in British Columbia.
In low energy, we are dealing with water extraction. The water is used for district heating. Canada has very few examples, but in Iceland, the technology is used to heat cities. Very low energy, which is traditional geothermal energy as generally understood, is often called a ground source heat pump.
The coalition represents mainly the last of these four areas, although we are presently in discussion with other industry representatives to see if we can work with them to bring all forms of geoexchange together into one association or area of interest.
Basically, a ground source heat pump takes one kilowatt-hour of energy to extract from the ground, or exchange with the ground, three, four or five kilowatt-hours of energy. This is not an energy-production technology, it is a technology that moves fuel or electricity for heating and cooling.
This is where interest in geoexchange finds its place in the overall Canadian energy picture. The performance and efficiency of the technology is around 300 to 500 per cent. One unit is used to produce three, four or five units. A great advantage of course is that, in buildings, just one device takes care of both heating and cooling.
What is a geoexchange system? It has three components: the underground loop, a heat pump that works on the same principle as a refrigerator, and an air or water distribution system inside the house.
In this technology, it is important to remember that even the most efficient pump on the market does not determine the efficiency of the system. What is important is the way in which everything is installed and designed. This is why we are so interested in workforce training, so that we have an efficient system and not just one of the three components, an efficient pump. An efficient, but badly installed pump and a badly designed system will not provide the desired results.
The next slide is a world map showing where geothermal energy can be found in the world. The circles show equivalent megawatts of energy. Canada is a little behind the United States and some way behind Europe. Our development is gradual. So this gives you a picture of Canada's place compared to the rest of the world.
I find the next slide interesting. This is Canada's energy flow. I draw your attention to the dotted box on the right where you see the terms useful energy and lost energy. You can see that in Canada we lose as much energy as we consume.
In the next slide, I have provided you with a summary. Once we remove from the previous slide all exports and other things, we are left with about 12 exajoules of energy that are available for use in Canada. If we subtract from that number all the energy losses that can be found in the system, whether it be in pipelines, non-energy uses or energy lost from electrical systems, as well as the energy that is lost in residential, commercial and transportation sectors, 4.87 exajoules remain. So 40% of Canada's available energy takes the form of useful energy.
This is where geoexchange can play an important role, specifically with regard to residential and commercial buildings. Given the losses, whether in the burning of fossil fuels for heating, or the use of electricity for heating, and all the losses in the system as it moves from the source to where it is consumed, if we install geoexchange technology at the place where the energy will be consumed, we will avoid all those large-scale losses.
The next slide quickly shows how we in the coalition are trying to introduce geoexchange into the overall Canadian energy picture. We do not want to say that geoexchange is going to solve all the problems by itself. We are looking at how all technological solutions fit into the overall energy picture to see how we can optimize geoexchange use by introducing this form of energy into buildings.
I will not discuss the four next slides. Essentially, they show the four stages of the quality program we have put in place. They describe our programs of training, of accreditation, of the qualification of firms, and finally, of the certification of systems. You can see that it covers the industry in a very comprehensive way.
We are making all these efforts for a number of reasons.
First, we are doing so to put in place a market transformation infrastructure in order to support expected growth. So to make an impact throughout the industry, we had to put our quality mechanism in place.
Second, we want to create a professional industry by an appropriate program of training and to have a qualified workforce.
Third, we are doing so to keep Canadian financial resources in Canada and to reinvest them into the needs of the industry in Canada. Up until now, geoexchange training came from the United States, and half the expenses went to the United States. None of this money came back to Canada to support the industry. So we have put a stop to this drain of our finances to the United States.
Fourth, we are doing it so that geoexchange can play a major role as a source of renewable and reliable energy in Canada. Low energy geoexchange is available everywhere in Canada. In a moment, I will talk about projects in the Northwest Territories and Yukon.
Last, we are doing it to enhance the role of the industry, and of its contribution to energy systems in Canada.
Are we there yet? No, but we are well on our way. We will not reject any partnership opportunity that arises if it can move our industry forward.
I tried to make my presentation as quickly as possible out of consideration for the interpreter.
:
A lot of the points we'll make today are provided in the briefing; you can certainly review those after the fact.
Thank you very much, Mr. Chairman. We certainly appreciate the opportunity to come and to present to the committee.
The Canadian Solar Industries Association represents about 150 corporate members who participate in the manufacturing, project development, and distribution, as well as sales and installation, of solar technologies. It's estimated that the Canadian solar industry employs between 900 and 1,200 people in Canada, and we've installed about 16 megawatts worth of PV or electrical capacity and about 250 megawatts of solar thermal. Unfortunately, these amounts typically lag well behind a lot of the industrial leaders in the world, such as Germany, Japan, Australia, Austria, and the United States.
At this time, though, we'd certainly like to take the opportunity to thank the current government for a lot of the initiatives that are in play, particularly the extension of the REDI program, which became the ecoENERGY renewable heat initiative, and the extension of the tax ruling on classes 43.1 and now 43.2.
The solar technologies we cover are photovoltaics, which is obviously the production of electricity; solar thermal, which covers heat, and that's in the form of water as well as air; and passive solar, which is space heating and daylight.
Obviously Canada is a very bountiful nation in terms of non-renewable energy, and at some point we look at the progressive nature of the industry but feel that we are a bit complacent in terms of renewable energy generation. Some of the points within the presentation itself are to clearly point out that the public is obviously well interested in having renewables put on the table.
One of the interesting parts about solar energy is that it has the capacity and potential to play an important role in the diversification of clean energy in the future of Canada. It also creates numerous employment opportunities for the local community. Obviously it's putting into the energy mix in terms of not being a central source, but quite diversified.
Some of the myths you see out there today include that there's not enough sun in Canada, and you can see from the presentation that there is; also, that the solar industry cannot provide very much energy, and that's false. One square metre of south-facing windows can supply as much power as a baseboard electric heater. The amount of solar energy falling on 15 square kilometres of Canadian land equals the entire energy capacity of all the nuclear power plants in Canada.
To give some of the global facts on solar energy, internationally solar energy is now a $15 billion a year industry, and it's growing by 35% annually. Many of the major electronics firms in the world, such as Sharp, Sanyo, Kyocera, and Mitsubishi, are operating and developing plants within the nations that basically support their products, particularly in Germany and Japan.
In April 2006, the National Bank of Canada issued a report on solar, recommending the solar industry sector as a major investment opportunity. Because of the increase in market stimulation of solar technologies that have led to greater economies of scale, solar energy production costs have continued to decline over the last 20 years and will continue to decline moving forward into the future.
Concerning sales targets and national sales, the leading solar nations in the world experience strong leadership and support from their national governments in financial support for R and D, demonstration, and market stimulation incentives. These countries have established national energy frameworks with challenging yet obtainable solar PV and thermal targets, providing a vision to inspire further clean energy generation. In Japan and Germany this is fairly evident. For example, Germany's renewable energy focus has created more than 170,000 jobs. Many of these countries have national targets for solar PV. The Canadian government at this time has no energy targets for PV or solar thermal.
Solar is one of the preferred energy sources of Canadians. There's strong public support for the development of solar energy. In a 2005 survey, the question was asked, “Would you like to see the following energy sources developed?” Solar energy received the highest approval, with 92% of Canadians approving of solar energy.
I think a key thing to remember from this is the thought about solar being a peak power generator. As you're well aware, a lot of the brownouts occur during midday. Clearly there's a lot of sunshine at the same time. Solar produces power during periods of peak energy demand, reducing the need for expensive peak power generating plants that often produce a lot of CO2-emitting fuels. In relative terms, solar power is much more cost-effective compared with peak energy production from starting up fossil fuel-based power plants, adding to the economic and environmental value of solar-generated electricity.
Solar creates more jobs than any other energy source. These jobs tend to be highly skilled positions throughout the solar value chain, including a requirement for qualified tradespeople to install the solar applications across Canada in all sorts of communities.
One other area that one never talks about is the production of PV. Until a year or so ago, the product that was used in the production of solar power modules was actually the residual from the manufacturer of silicon chips. The computer industry uses very high-grade silicon to produce their chips, and the byproduct of that is typically used for the production of solar cells. So the actual product itself comes from product that would actually be just a byproduct and not used. Of course, demand has increased some of that, but a lot of that feedstock is still used from the chip manufacturers themselves.
The economic opportunity for Canada here is that the rapid growth of the PV industry worldwide has created a shortage of this silicon feedstock. Production of silicon requires a large amount of electricity. Most PV modules are manufactured in Germany and Japan, countries whose electricity rates are very high, producing a lot of GHG content.
We have an opportunity here in Canada, particularly in B.C. and Quebec, to help produce some of this feedstock. It's clean, inexpensive electricity that we get from these provinces, basic natural resources such as silicon and aluminum production, and we have a very skilled workforce. What is missing? The home market for this type of product.
I'll move to some of the recommendations that CanSIA is proposing.
Certain things should be looked at, including solar in a national energy framework; more commitment from the government and consistent policies so that the policies put in place today continue on and build an industry that's not short-lived; an increase in the budget for solar to match that of our major trading partners; meaningful support to grow the use of solar, which needs to be increased to $75 million annually; and support for market stimulation.
With regard to potential deployment support mechanisms, there could be some form of product subsidies, and certainly a look at some sort of financing program. You're already doing tax incentives, but more could be done there as well. There should also be some form of energy mandate for buildings.
A lot of this is spelled out in the actual presentation itself.
At this time, I can introduce our new executive director, Elizabeth McDonald.
:
Thank you very much for the questions.
I guess I'll start by pointing out that the 10,000 megawatts in the context that I mentioned is not actually the CanWEA target; it is provincial government targets added together. Is that achievable? Yes. In fact, provincial governments already have a high degree of confidence that it's achievable, which is why they've set that out.
Canada has an outstanding wind resource. We have the world's longest coastline and second largest land mass. We have better wind resources than probably any other country except Russia. We have studies that show, for example, that in the province of Quebec, within 15 kilometres of existing transmission lines, you have over 100,000 megawatts of wind energy potential.
So it's not a shortage-of-resource issue. The issue really becomes an issue of integration and how you can best integrate that power. Canada again is fortunate in that we get 60% of our electricity from hydro, which is a very good match for wind energy in terms of facilitating integration.
Can we easily move beyond 4% to 10%? Yes, I think so. Can we move up to 20%, where Denmark is? Over time, I imagine, yes. I should point out that the Danish government and the main Danish electric utility have now commissioned a study to look at how they can move Denmark to 50% wind penetration. That work is going to be producing results in the next year or so.
I can't give you an exact number, but I can tell you that we believe 20% is a reasonable goal to work towards over time.
:
Thank you very much for your questions. There's quite a bit there, so if I miss something, please come back.
First, there are three things I'll touch on.
In terms of public opposition to wind energy projects, I think it's fair to say that it is emerging as more of an issue, but from our perspective, it's simply emerging as more of an issue because the number of projects is also increasing at the same time. As a percentage of the projects that are actually being produced, it's not actually increasing. The vast majority of projects across Canada, I will say, still have very strong community support. In fact, that partially explains why last year was very much a record year for Canada. We more than doubled the installed capacity, etc.
In Quebec there has been a lot of concern raised by the municipal governments, in particular, about wind development. The situation in Quebec is unique in that in all other jurisdictions, when a wind developer pays property taxes, for example, those go directly to the municipality; in Quebec that does not happen. In Quebec those revenues go into the provincial government, and then the provincial government reallocates them. They don't necessarily reallocate them in the same manner as they actually receive them. Therefore it's not always the case, then, that the municipal governments obtain the benefits in proportion to the fact that these projects are in their area. So as an industry association, we have worked with the municipal associations in Quebec to look at alternative mechanisms for ensuring that revenues actually go to the municipal governments that are hosting these projects. We are trying to work to develop some joint proposals to bring forward to the Quebec government on this issue.
We are working increasingly with municipal governments, I will also say. In fact, in June, in London, Ontario, we'll be hosting a conference on municipal issues in wind energy, where we're expecting about 250 municipal officials to come to learn about provincial priorities, about issues related to wind energy, to hear about some of the successes that have occurred in order to move forward. One of the challenges, of course, for a municipal government is that often when a wind energy developer comes in and says, “I would like to build a project here”, it's the first time a municipal government has had to deal with this. They have no existing by-laws, regulatory controls, anything like that, and so it's a process, in a sense, of learning by doing at this point in time.
With respect to investors in Quebec, Quebec calls for proposals. It's interesting because you described a sort of anarchistic situation that some people have described in Quebec. From our perspective, most of the Quebec process is actually very orderly. Hydro-Québec has identified a request for proposals, has gone out and done that. Now, Hydro-Québec has also signed some contracts outside that process, and I think that's where this perception of anarchy comes from. The Quebec government is the only provincial government at this point in time in Canada that actually requires local content requirements in its requests for proposals. So 60% of the investment associated with a wind energy project in Quebec must be made in Quebec. When you ask who is investing in these projects, it's true that from a turbine-manufacturing perspective, we don't really have Canadian turbine manufacturers at this point, although we now have, in Quebec, two different initiatives to license European technology and to actually manufacture the turbines in Quebec. So that will be a new initiative there in that regard.
In terms of the development, in the first request for proposals in Quebec, the company that won the bulk of the contracts under that is a partnership of a Quebec-based company, Energex, and an Alberta-based company, TransCanada Energy. So there is significant Quebec participation in that initiative.
As Quebec has now issued a 2,000-megawatt RFP, I am well aware that there are many people from outside of Quebec looking at that because it's the world's largest request for proposals, ever, for wind energy, so it's a tremendous opportunity. But there are also many organizations within Quebec who are planning to bid into that RFP, and ultimately it will be those who can provide that energy at the lowest cost who will succeed.
Good afternoon to each of you, and thank you for coming this afternoon.
Just by way of comment, I'm certainly interested in the proposal you're developing for northern and remote communities. Coming from Labrador, I'm very knowledgeable about the cost of energy and the whole issue of diesel and what that does.
I'm not sure how much you know about the Ramea project, but could you comment a little on the Ramea project and how it's been integrated with diesel and how it's going forward, just so we have a case in point to deal with here.
In Newfoundland and Labrador—just as another case study, so to speak, if you want to use it in that fashion—why is there only 0.4 megawatts of production? What are the challenges you see in terms of wind energy there?
And then I have a more general question. It seems that each of you is trying to plug into the existing systems, which makes sense, I guess, to a certain extent. Is there any thought on how each of you would be integrating, thinking theoretically, outside of what currently exists? Is there any thinking going on now about how you would integrate geothermal, wind, and solar power outside of what currently exists?
A witness: Outside of nuclear, oil, and gas.
:
Thank you, Mr. Chairman.
For starters, I'd like to come back to Mr. Gourde's comment about the capital cost allowance. The three of you were being very kind, in my opinion, when you claimed that everything was going well. However, I think you have some major problems on your hands. You should be asking for a great deal more. Fortunately, Mr. Thorne told us earlier that the nuclear energy industry received more funding than all of the other renewable energy industries in Canada combined.
Were you aware that several years ago, the Canadian nuclear industry was being funded to the tune of $500 million per year, whereas the combined funding awarded to all renewable energy industries totalled only $5 million per year? Last year, Canada's nuclear industry received $175 million, whereas once again, you received a mere pittance. It defies comprehension. We shouldn't be deluding ourselves into thinking that we're going to develop solar energy. There are people like Mr. Allen—and I can understand him—who don't know that solar energy is one of the most powerful energy sources. He was surprised to hear that. I can understand, because nothing has been said about this energy source. You continue to be short-changed.
Yet, your industry's potential is enormous. Your lovely chart ignores geothermal energy. But the fact is that in the United States, research into geothermal energy is being funded. How much is Canada spending in this area? Nothing, or almost nothing.
Recently, the Massachusetts Institute of Technology found that geothermal energy in the United States could produce anywhere from 255 to 5,000 times more electricity. The potential of geothermal energy is enormous and Canada has even more geothermal energy than the US. All existing and future buildings in Canada could be heated by geothermal power. Passive solar energy could be used to heat all buildings in Canada. Why isn't this being done? Because there has been no incentive on the part of the federal government. That needs to change. At one time, work was being done in this area, but Mr. Mulroney closed down the research labs on Montreal Road in Ottawa.
Clearly, we are wasting energy producing greenhouse gases, when we could be avoiding this. You three are the only ones capable of preventing greenhouse gas emissions. However, there's no question that more funding is provided to research on oil than on passive solar energy, despite the incredible potential of this energy source. Therefore, there's a very real problem here. Capital cost allowances are just a minor problem. There is no incentive or money to develop renewable energy sources.
I'm astonished, Mr. Tanguay. Why did you not address the need to conduct in-depth research on geothermal energy?
:
Your presentation covered a lot of ground. I'd like to focus on the question of taxation.
Let me first say that this is our first opportunity to appear before a committee to present the work the coalition is doing, and I hope it won't be the last. It's all part of the way in which an industry is run. Since we've reached the stage where we're becoming more vocal, you're going to hear a lot more about us in the years ahead.
The issue of how the geothermal energy sector is taxed is somewhat more complex because the greatest potential identified for the short term is the renewal of heating plants in Canada's industrial sector, particularly in Quebec and in Ontario. The institutional sector presents no special interest from a taxation standpoint. Therefore, no special attention has been paid to it, for obvious reasons.
We are very pleased to see that geothermal energy has been included in the new tax provisions. Now, at least, the industrial or manufacturing side of things is covered. We can't complain and we are extremely pleased. Our challenge is to determine how we can influence energy policies to promote the more rapid expansion of geothermal energy in sectors that traditionally, do not come under federal jurisdiction, notably the institutional sector which includes hospitals, schools and so forth. I admit that there is a tremendous amount of work still to do.
In terms of buildings, in my opinion, every building in Canada should indeed be heated and cooled through the use of geothermal energy. Where there is sufficient land available, this option would work for most buildings. However, the use of geothermal energy is precluded by certain geological conditions.
Before we go overboard promoting one particular form of energy, whether it be nuclear or geothermal energy, in my humble opinion, we should start by the building sector. If we continue to put up buildings that are improperly constructed or poorly insulated, what good will it do to install a geothermal heating and cooling system, when the cold winter air can creep in?
With your permission, I'd like to go back five years in time. Four or five years ago, I was working for the Association québécoise pour la maîtrise de l'énergie. As you well know, this association is involved in promoting energy efficiency. We made a presentation at the time to the Conference of Ministers of Energy and Mines in Halifax asking to have revived the famous National Energy Code for Buildings, which called for the construction of energy efficient buildings.
This particular code was developed in 1995 but has not been adopted by any one government. The idea was revived four or five years ago and it has now become a priority for Canada. The question is whether the federal and provincial governments will finally agree to put in place a building code in order to construct more energy efficient buildings.
That's the fundamental question we need to ask ourselves before we even get to the question of what system to install in these buildings to better heat them. My starting position is that all homes should meet the R-2000 standard. Then we could go on to develop a geothermal energy system that would be twice as compact, two or three times more cost- effective and capable of producing all of the energy people need.
Thank you again to our witnesses for your participation today. I hope you found it as helpful and as useful as we found it to be.
I'm going to ask the committee if they would bear with us for one minute while our witnesses pack up. I have three quick topics I want to go over.
One is on Mexico, and I want to comment on that because I'm not sure everybody was here. We have a request from a group of parliamentarians from Mexico. We are going to follow it up with an invitation from the committee to appear here, and we'll also take them to dinner. I expect there will be about half a dozen of them. I think we'll manage quite well, and we'll have some Spanish translation as well for those who require it. We'll report back. The clerk will consult with them, and we'll get you dates and times.
The next one is on logistics. I want to comment on the distribution of materials that our witnesses provide. We try to get them in advance. We've been reasonably successful in having the witnesses provide us with material in both languages, particularly on short notice. More recently, we have been trying to get them to you more quickly by sending them online through e-mail, and it seems to be reasonably efficient.
I want to again ask you all to designate someone on your staff to watch for this stuff, because we sometimes find that some members get it and others don't get it. I can assure you that it is sent to everybody. I want to remind you to check on it, because it makes it easy for everybody. But if you don't get something, please let me know.
The other thing I found very effective is when some of the witnesses come with their decks in colour, particularly when there are charts, graphs, and stuff. When we e-mail them to you, if you don't have colour printers in your offices—and I don't think very many of us have them—you don't get the full benefit of the charts and graphs. I'm going to ask the clerk if he can look into that somehow.
If we have coloured charts or graphs particularly, we don't have to print the whole deck. We could tell the witnesses to bring them. It's easier for us to follow the charts if they are in colour and not in black and white. Maybe you could suggest that the witnesses bring some extra copies in colour when they come. We can have an advance look at them when we get them by e-mail and when we're doing our homework. But when we look at them and follow them as they're making their presentations, it's nice to be able to follow them as they were distributed to us.
If anybody has any further comments on that, please direct them to me or to the clerk. It's coming along.
Last, I want to give Todd a few minutes to talk about Labrador and to bring you up to speed. I think we did it at the last meeting.
We're leaving at 7:30 in the morning from Ottawa, and we hope to get back by 4:30 in the afternoon. One of the restraints on our time to try to maintain the cost is to take a charter flight there and back. There is a limit on the pilots' time to be up and back and forth, and we can't extend it too much longer than that.
At this point, we are only including the visit to Churchill Falls, the plant, and a briefing from Newfoundland and Labrador Hydro. We'll get a full itinerary next week. We're still putting it together. The logistics are not particularly easy in a remote area, as Todd will tell you
But he has another request, so I'll turn it over to him.