:
Thank you very much, Mr. Chairman.
It's always a pleasure to be called before a committee of the House of Commons and to have the opportunity to present the industry's views.
I'm going to present a brief picture of the coalition, then talk about how geothermal energy contributes, or can contribute more to integrated energy systems in the communities. I'll conclude by talking about our industry organization experience.
I just remembered that, last time, I spoke far too quickly for the interpreters. I promise I'll speak more carefully today.
Essentially, the Canadian GeoExchange Coalition is an association of geothermal sector stakeholders. It is a matrix representation. We represent all stakeholders: installers, manufacturers, people from the financial sectors and so on. It's a comprehensive association.
We're talking about the integrated approach to energy services in a North American context. We think there is a real North American challenge, even though we're talking about communities. Currently, a number of issues must be resolved in the energy sector.
The first is to adapt to noticeable fluctuations in energy prices. This is an everyday reality. It is also important to continue optimizing the overall energy supply and demand chain, whether it be by securing or better managing traditional energy sources, improving energy efficiency or the efforts that must be made to integrate renewable energy in the supply and demand equation, while considering the decisive role Canada plays in energy security in North America.
We have to put the debate in this context and define the role of the communities in energy management. This requires us to rethink how our energy is moved in and around municipalities and communities, while building and upgrading infrastructure to reflect the adoption of new energy technologies, particularly renewable energy, while ensuring economic growth and sustainable development without losing a single job and, if possible, creating new jobs. We think the challenge is extremely important.
The energy forms found in isolated regions, whether it be oil, hydroelectricity or natural gas, are transported to the communities through various mechanisms. This is the traditional approach to energy supply and demand.
In reality, however, most of the energy consumed within communities is thermal energy. So this is energy that has been transformed and essentially generated by fossil fuel combustion. Another important reality for the communities is that organizations do not have a culture of energy management. The communities are used to receiving energy, not managing it.
The conclusion that must be drawn from this is that we must promote the wider use of technology that produces thermal energy more efficiently within the entire supply-demand chain and accelerate the wider and wisest of available technologies to move thermal energy within our communities. This is the central point of our position.
Obviously, the key technology for transferring this energy is geothermal heat pumps and heat pumps in general. The key tool is the integrated energy systems approach within communities.
If you turn the page of the presentation, you'll see a visual representation of what we consider an integrated approach for providing energy services. I won't review each of these points, but, essentially, in the upper left-hand corner of the slide you'll find the traditional energy sources that enter the community, whereas all the other boxes represent potential energy sources or sources of energy consumption, whether it be municipal waste management, cogeneration from industrial processes and excess heat produced by arenas and supermarkets. A large quantity of thermal energy is thus being lost.
I've strategically placed what I call thermal storage and heat exchangers. This is the concept of geoexchange. These devices can be installed in a municipality to absorb this energy and subsequently to redistribute it in the community.
However, the market raises many barriers to the integration of these devices. I won't review them one by one, for lack of time. Whatever the case may be, we are faced with exactly the same barriers as other forms of energy, that is to say financial issues, reluctance to move away from current practices, the renewable energy products and services supply bottleneck and regulatory and standards issues. The development of integrated energy services in the communities thus faces all these traditional barriers to energy efficiency.
For us, the integrated energy services approach requires a market transformation. It is unrealistic to think that we will expand and improve the way energy circulates in the communities if our ultimate objective isn't to transform markets, and thus to move from the current method to more futuristic methods of delivering energy. The market raises barriers, but market failures must also be resolved. When the market is unable to resolve those barriers, governments and industrial associations must address market failures. The transformation of these markets will obviously be achieved through market solutions. This also involves the promotion and revision of certain standards and practices. This won't be done by itself; we must acquire the tools to do so. Governments have an important role to play in this regard. Then applications and standards must be implemented. It isn't simply a matter of implementing standards; they must also be enforced. Otherwise there will be no market transformation.
Very briefly, I will say that our experience with geoexchange has transformed the markets in the past four years. Essentially, after years of consultation with power companies and various governments, both provincially and federally, we have developed a global quality program and a self-regulating industry-led approach that works relatively well. Ultimately, the quality equation that we have developed essentially has three parts: training for individuals, accreditation for professionals and systems certification. This equals, first of all, market discipline for the industry, among the people who work in it, but especially for consumer and stakeholder confidence in the technology. That's the fundamental point that concerns us. And you'll find that in the approach for the communities as well.
I won't dwell on the next slide, but it shows the results achieved after two years of implementing our quality program. Several hundreds of individuals have been trained and are fully qualified, and several thousands of systems have been certified by the coalition. We therefore have a great success story that can be replicated with other forms of energy.
In the current situation, we see opportunities for the industry to grow and for government to help. The government's first role is to provide assistance for infrastructure and technologies for the integrated approach. Every single form of renewable energy within the communities becomes more efficient when combined with another energy form. The combination of two technologies normally yields a better result than the sum of those two energy forms individually. Applying 10, 15 or 20 different energy forms to the community as a whole amplifies the situation. It is therefore important that infrastructure programs aim to achieve a higher degree of integration.
Another promising component would be to set performance goals. We could lay out a medium- and long-term vision in the communities. For example, we must understand that, based on the standards, a building will have to be heated with so many kilowatt-hours and Joules per square metre. We shouldn't merely insulate a wall with R-40 or R-60 products or whatever. This is much more a performance approach than a prescriptive approach.
In addition, the current recession might provide the right opportunities. With respect to manpower training, there is currently a need for new worker training. There's also a need for investment to replace infrastructure. It is important to replace current infrastructure based on energy systems, not on each specific component. There must also be a focus on capital stock turnover cycles. If we don't do it now, we won't be able to do it in future.
In short, the business model for an integrated approach works relatively well. We've proved that the deployment of geoexchange is realistic. As for the need to adapt existing standards, the confidence of stakeholders in the communities depends on the development and implementation of standards. We also note a serious need to better inform stakeholders. Obviously, the self-regulating model that the coalition has developed in the geoexchange sector could be adapted to other forms of energy.
Thank you very much.
:
Thank you very much. It's a pleasure to be here.
We are a not-for-profit industry association representing pretty much everyone and anyone having to do with wind energy, large and small, in Canada. We have about 410 corporate members now, including manufacturers, developers, research institutions, service providers to the industry, etc. So it's a fairly big group.
It's a pleasure to be with you here today presenting to you some ideas we have on the contribution that small wind, in particular, can make to providing energy services in Canadian communities.
At present, as probably most of you know, the vast majority of attention within Canada in the world of wind is focused on large wind systems. These are the large, 80-metre-tall turbines that are used for utility-scale transmission-connected projects. They now provide about 1% of all Canada's electricity. Within CanWEA the majority of our activities are focused on the large wind systems, but there is a very active group within CanWEA looking at what we call small wind systems. These are the ones I'd like to talk about today.
To us, a small wind turbine is anything under about 300 kilowatts in size. If you look at the large utility-scale turbines, there is a fair degree of uniformity in them. The installations may have ten turbines or a hundred turbines, but they're largely used for the same application: to provide electricity to the grid.
When you start looking at small wind, there is quite a differentiation between the applications that exist within it. There are basically three I'd like to talk about today, because they each represent to us very different opportunities and different challenges. To act on that opportunity requires three very different strategies.
The first category is a small-sized residential system. That would be between one and ten kilowatts in size. The second category is what I'd call medium-sized commercial and farm installations. That would be between ten and 100 kilowatts in size. The third is large wind and wind diesel systems for remote communities, and that's about 50 to 300 kilowatts in size. As I say, all three of them play very different roles and they have different opportunities in being part of an integrated community energy system. In all three, there are very different strategies you have to use to promote them. I'll talk about them each individually.
The first application is what I'd call small-sized residential systems. A typical installation would be someone who in their backyard has a one-kilowatt system that costs about $6,000, and that provides 10% to 15% to 20% of their household electricity needs if they're in a good wind regime. At present there are not a lot of these systems in Canada, somewhere between 300 and 400. At CanWEA I would say about a third of all the calls we get are about these small wind systems. People love them. Their main interest is usually driven from an environmental perspective: they want to reduce their consumption. It's rare that they're interested in it from a purely economic perspective; mainly they want to reduce their dependence on the grid. So that is for the small systems.
The challenge for these systems, the one to ten kilowatts, is that presently there are no incentives from either utilities or governments to recognize the benefits these present. When you think about it, you've got someone coming out and spending $6,000 on their own system, which is effectively like spending $6,000 on energy efficiency, because you're reducing your load on the grid and there's also GHG reduction benefits that come from that. So there's an interest, but no incentive that's provided for that in the same way there are incentives provided for energy efficiency measures in homes.
The second challenge to those kinds of systems is that often the cost of connecting them can be equal to or greater than the cost of the system itself. An inspector comes and says you can connect your small wind system and it will cost you $5,000; you have already spent $5,000 on your system, so that can have quite an impact as well.
What we feel needs to happen there is provision of incentives either in the form of rebates or tax incentives that recognize the environmental and system benefits these systems bring. In the United States, the Congress just passed an investment tax credit that applies to all small wind systems and quite a large range of systems. We don't have anything like that in Canada.
The second type of system that we think presents a real opportunity is the mid-size farm systems, and these are between 10 kilowatts and 100 kilowatts. At a typical installation here, you're looking at a 65 kilowatt machine. It will cost you about $180,000 to $200,000. That can provide 50% or more of all the electricity requirements for a medium to large-size dairy farm. So that becomes quite an interesting proposition. Currently, there are very few of these systems in Canada. We estimate that there are between 70 and 100 of them.
There's a huge interest in these systems, and it's for a very different reason: it's mainly economics. A lot of farmers look at these things and say yes, this is a big upfront investment, but I'm basically locking in my electricity price for a period of 20 years and I'm gaining independence from the grid. We saw during the blackouts in 2007 and before that some farmers would lose $50,000 to $60,000 worth of product from a two-day blackout, and they're looking for a hedge against that.
One of the other interesting things and a little known fact about these sizes of systems is that worldwide there are about ten manufacturers of systems between 10 kilowatts and 100 kilowatts. Half of these are Canadian, and they sell almost everything they make overseas, because there's no market for it in Canada. So the challenges here are pretty significant. The initial costs are very high. Farmers are generally looking for a return on investment of 10% or greater, and they're looking for a recognition of the benefits that these systems bring in the form of an incentive.
So what we'd be looking for here with the first systems, the smaller ones, is a direct rebate or a tax incentive. On the second type of system, these mid-size ones, we're looking at more of a production incentive. So you get a payment similar to what happens now with eco-energy. It's based on per unit of electricity generated and you get a payment for it, either that or something like a feed-in tariff, which has now been introduced in Ontario under the Green Energy Act.
The second big thing that needs to happen is we need to streamline the connections process, because with these systems you can buy a $200,000 turbine and set it up and then the utility comes in and says we need to spend $50,000 to figure out what impact this is going to have on the grid. The impact it will have on the grid is less than that of a large welding machine.
The third type of system--and this is what we call small wind as well--is a large wind and wind diesel system for remote communities. These are generally between 50 kilowatts and 300 kilowatts. A typical installation.... If any of you have travelled to the island of Ramea in Newfoundland, you'll find an installation there that consists of six 65-kilowatt wind turbines connected with a bunch of diesel generators, and that provides about 80% or more of all the electricity requirements for the island of Ramea.
There are over 300 northern and remote communities in Canada. Right now they all rely on diesel generation. That diesel generation costs them anywhere from about 25¢ per kilowatt-hour up to $1.50 per kilowatt-hour, which is 15 times more than what we pay in the south. It also causes great pollution from diesel spills, from air pollution. It also brings few local benefits, because you're basically shipping in the diesel, you're burning it, and that's it.
This is another area where Canada has huge expertise. If you looked around the world and tried to find your leading experts on wind diesel, you'd find over half of them in Canada. The problem is they're applying this expertise mainly overseas. If you go to Alaska, Alaska has piles of Canadian wind turbines, Canadian technology, Canadian control systems that they're using to power many remote communities in places like Kotzebue. It's a case where we've got this expertise, we've got a niche, we've got the technology, but we don't have the domestic market to support it.
One of the challenges that you run into here, as soon as you want to install wind in a small community, is many of the utilities will say, “We already paid for our diesel generators, so all we're going to give you for this wind is what you help us reduce in terms of diesel fuel use. So if you reduce our use by 100 litres, we'll pay you the equivalent of 100 litres of diesel.” What they're not including is all of the costs of the incumbent technology that they've now paid off, so you have an unlevel playing field. What is needed here, again, is an incentive that gets them over that hump.
For the last two years the Canadian Wind Energy Association has been advocating for something we call the remote community wind incentive program. It's essentially an expansion of ecoENERGY for renewable power, but is designed specifically for northern and remote communities. We feel it has tremendous potential. With an investment of approximately $51 million, you'd be able to provide 10% of all the electricity in Canada's north from wind. The wind is there and the technology is there. They're Canadian turbines, so we just have to put two and two together.
In conclusion, we have a very strong demand for wind power from a range of places. Residential homeowners are interested in the small systems. Farmers are interested in the medium-sized systems. Remote communities are interested in the larger systems.
These systems provide many benefits. First, the electricity supply is close to where the demand is, so you reduce line losses and make for a more robust grid. We have an opportunity to make Canada a leader in the development of these mid-sized systems. There's a general consensus that we're going to see a lot more electrification of rural communities, not only in Canada but across the planet. If Canada is well positioned with those technologies, we can really see the benefits from that development.
The challenges are really significant. There's a need to recognize the environmental benefits that come with these systems. There's a need to help wind deal head to head with incumbent technologies like diesel generators. In all these cases we feel that government can really play a key role.
In 2001 the wind power production incentive was brought in. It was one cent per kilowatt-hour. It morphed into the ecoENERGY program. The push it gave to the large wind industry was tremendous and can't be understated. We're now sitting at 2,400 megawatts of installed capacity, largely because of the push that gave. We feel that the same push is required for the small and medium-sized systems now.
With that I'll conclude my remarks. Thank you very much for this opportunity to present.
I'd like to thank the chair and the committee for inviting the Pembina Institute to present today.
The Pembina Institute is a sustainable energy think tank. We're one of Canada's largest environmental NGOs, and we have offices in Vancouver, Calgary, Edmonton, Drayton Valley, Canmore, Toronto, Yellowknife, and across the river, in Gatineau. We're spread across the country, and we have a pretty good understanding of what's going on nationally.
I appreciate your having me here today. I know next week would have been a better opportunity to fit me in. Unfortunately, I had committed to being in Saskatchewan and Alberta next week. I've been invited by many communities in those two provinces to discuss how they can get involved in renewable energy systems. It's following up on some research we recently published called “Greening the Grid”, on how Alberta could implement renewable energy to reduce its carbon footprint.
Unfortunately, I didn't have time to get a formal presentation together in the few days since I was invited, and again that was because I was in Alberta last week. I was delivering the keynote address to a conference put on by Alberta Agriculture. This conference was looking at how farmers can take advantage of renewable energy systems on their own farms and behind the meter.
This event took place in Taber, in southern Alberta. It was completely sold out. They had to turn away farmers and landowners who wanted to attend, and who were all looking for ways they could be reducing their own environmental impact. The attendees at this conference saw presentations about small wind, solar, geothermal, as well as one technology that was teaching cows how to pump their own water so it wouldn't require any power. There was a whole breadth of information there. I must admit that I left that conference probably more enthused than any conference I've gone to in a long time. It was very inspiring to see the level of interest in southern Alberta.
I've been working with the Pembina Institute since 2002. My area of research is focused on renewable energy and energy efficiency systems. I've worked a lot with communities, which is the topic we're talking about today. I've worked with communities as far north and remote as the border of Manitoba and Nunavut, all the way to the city of Toronto. I've worked with Dawson Creek, British Columbia, and up to Tuktoyaktuk, Northwest Territories. I've worked with individuals, with co-ops, large oil companies, and with governments to look at ways they can be implementing renewable energy technologies and energy efficiency technologies.
If there's a common thread that runs through all this work I've done, it's that Canadians are looking for a way they can be involved in solving the climate crisis and solutions they can do in their own homes and communities. I've become more and more convinced that projects at a community level and on individual levels are essential to empowering Canadians.
I'm very happy to see this committee taking on this important topic and looking at what role the federal government can play.
I finished a master's degree in mechanical engineering, looking at wind turbines in the north specifically. I decided I wanted to continue on to PhD work, and I quickly realized that mechanical engineering wasn't the place for me. It wasn't really technology that was the problem; in most cases it was policies or lack of support, or both, that hindered the uptake of renewable energy technologies. In fact we often have policies that do the opposite, that actually prevent sustainable energy development. I find myself more and more in the policy world, because that is where the barriers are that we need to overcome if we want to implement these technologies.
I recognize that your task is a bit daunting, and the scale of issues and the complexities of Canada, both geographically and politically, can't be understated. I have learned in my travels across Canada that it's not a one-size-fits-all for every community and every city. I don't think that should come as a surprise to anyone, but I also don't think it should be used as an excuse for inaction or delay at a federal level.
In fact the federal government has led the way in pushing renewable energy development in Canada, as Sean was saying in the previous presentation. The former WPPI, or wind power production incentive, which is now the ecoENERGY for renewable power program, really kick-started wind energy development across Canada.
As a result, we saw province-by-province targets, complementing policies and goals, none of which existed until the federal government took the first step. The same can be said for their home retrofit program, where you saw provinces and territories matching grants and programs that the federal government took the lead on.
As far as the white paper that outlined a lot of the work we're talking about today, I would suggest there's very little to argue with in that paper, particularly the title, which is A Consensus For Urgent Action.
Also, within that document there is a suite of actions required--not one silver bullet--from pricing pollution to awareness and education. In fact, most of the policies and recommendations in that document are policies that most of us have probably seen before, either already in action in other leading jurisdictions or throughout policy discussions that we've had, either surrounding climate change or sustainable energy development.
What I feel we've lacked in Canada is really the right scale of investment to get us there. I've circulated a document—I'm not sure if everyone has seen it already—that we prepared that compared the recent economic stimulus packages of the United States and Canada. It's available on the Pembina Institute's web page, if you don't have a copy.
On a per-capita basis, the United States is set to outspend Canada by a factor of six to one in support of renewable energy, energy efficiency, and public transit. When I talk to renewable energy developers all across Canada, they're worried today about the growing market in the United States. They're worried that Canada could be left out of the growing green energy economy of the 21st century.
While there are many opportunities that I think we could be talking about today, I don't really have the time to go through each individual one, but I do want to highlight a handful that are important at a community level.
First of all, as Sean was highlighting, there is no support for renewable energy projects at a small scale in Canada, whether that's at a community scale, an individual scale, urban or rural, northern and remote, or even individual homes. Having support at a federal level for renewable electricity systems at a small scale is important and complementary to what we have on a large scale.
Access to capital has always been a barrier for renewable energy and energy efficiency, whether it's at a large scale or at a small scale, and that's really been accentuated in the current economic situation. Loan guarantees or issuing green bonds is an idea that potentially the federal government could take up that would free up capital without requiring a huge federal outlay of cash.
The last thing is policy stability and predictability. Renewable energy systems require capital and they require consultation, both of which take time. Policy uncertainty can be as big a barrier as having the wrong policy in place.
If there is one issue that I would like to push back on in the QUEST document, it is the need for more pilot and demonstration projects. I know that's not a focus of the paper, but it is one of the recommendations. That may be true in some cases, but I would say most of the technologies we're talking about here today are already on the ground, either in Canada or somewhere else in the world. We know how these technologies work, whether it's a high-penetration wind-diesel system in Ramea, Newfoundland, or a solar village in Okotoks, Alberta, or a biomass district heating system in Chibougamau, Quebec. We need to have the desire to get beyond pilot projects and into rapid and urgent implementation, and given the scale of investment that's about to happen and is about to be unleashed in the United States, now is the time for Canada to invest.
Thank you.
:
Thank you, Mr. Chairman. Thank you for inviting us to present our proposal to you today.
We are a network of Quebec forest worker cooperatives. The federation, which has been in existence in Quebec for 70 years, represents 38 cooperatives that provide work for 3,000 persons. We are forest development specialists. We produce and plant trees. We have planted more than a million trees since our inception. We also do a lot of harvesting, transportation and road work. We are generally the suppliers of industrial forest concerns. Some cooperatives are also active in processing.
In view of the prices that the forest sector in Quebec and across Canada has been undergoing for more than two years now, we are seeking ways to improve our industry's competitiveness. Through our work, we have discovered that forest biomass is a very promising development opportunity. We want to propose that you consider it in your current analysis of the integrated approaches for providing energy services in Canadian communities. We believe it is a particularly promising opportunity for Canadian communities because it can improve and reduce our dependence on oil. It also assists in local development and land use.
My figures apply solely to Quebec. We have no information on the rest of Canada. As Quebec forests represent only 20% of Canadian forests, we assume this potential is at least as great elsewhere in Canada.
In Quebec, the department of natural resources and wildlife estimates that the potential volume of available forest biomass is 6.5 million dry metric tonnes. Stated more simply, that is equivalent to approximately 20 million barrels of oil a year. That is very significant potential. The resource is not entirely available for energy production and should not be used completely, but it nevertheless represents a very significant volume.
Unlike other energy sources, biomass is a sector with a number of very different segments. You can heat directly with biomass, logs or wood chips, as is done in institutional boilers, and we'll be talking to you about that at greater length. This biomass can also be processed into pellets and densified logs. You can also produce electricity and heat or just electricity or ethanol. However, the niche we consider most promising for communities is the direct heating of institutional buildings.
We have determined a number of reasons why our network is targeting this niche. First of all, from an energy balance standpoint, it is the most efficient way to use energy. For a unit of oil, we'll produce 15 units of thermal energy. In the case of ethanol, the ratio is one to 4.6; for pellets, one to six. Thus, we use all or virtually all the energy available from the resource.
We also achieve very low energy costs in short supply cycles. Supply costs are slightly lower than 3¢ per kilowatt, compared to 8¢ for electricity and more than 11¢ for fuel oil. It must be said that we were particularly concerned about the situation in the winter of 2008. So this is a promising economic option.
The technology required for this processing is available. High efficiency boilers are beyond any comparison with wood heating. There is considerable popular controversy in Quebec, but at the temperature at which the heat is produced, all gases are burned and steam emissions and dust levels are very low.
As regards employment, one job is created for every 500,000 metric tonnes of biomass. That's very promising for land occupancy.
With respect to improved industry competitiveness, we use roads created and equipment already on the land. It is impossible to challenge this under the softwood lumber agreement. It is simply a process improvement. That's very important and very beneficial for us.
In addition, the optimization of economic benefits for the communities is made possible through projects carried out at the community level and capital to which the communities have access.
The carbon footprint is also very good. Four cubic metres of wood is equivalent to two dry metric tonnes, which avoids releasing 2.5 tonnes of carbon. That's a very promising aspect.
This also has the benefit of decreasing energy dependence. Oil use has declined considerably, but long-term forecasts are a major concern and the communities are somewhat held hostage by this dependence. It must be understood that the cost of fuel for a wood boiler represents less than 50%, whereas the fuel cost for oil is more than 80%. These are very conservative figures. So this is already very promising.
We've briefly presented our federation's development strategy in this sector. We hope to provide energy to 300 to 400 institutional buildings, which would represent the creation of nearly 1,000 jobs and would capture 15% of available biomass. I'll spare you the details, but simply to say that this is a strategy. It is something very concrete, even though it is at the preparation stage.
There's one point I want to emphasize regarding our strategy, which would cost approximately $446 million to implement. The biggest cost is the cost of the equipment that the institutions need to acquire in order to make this transfer. It is in this respect that Canada could play an important role. We are currently seeking all possible solutions to get through the crisis, to create economic activity without recurring effects over time. This investment would help create sustainable jobs, and subsequent expenses would be borne through operations.
With regard to our requests to the federal government, what we're seeing is that, since the biomass for institutional heating sector virtually does not yet exist in Canada, it has not yet been addressed. We hope, for example, that the ecoENERGY for Renewable Power program, which subsidizes at a rate of $10 per megawatt for up to 10 years of production, can apply to the production of thermal energy from biomass combustion. Ultimately, the federal government is currently subsidizing power production from biomass. This is a minor economic aberration, if you consider that this electricity will subsequently be used for heating. It's not very efficient, and it would be better to fund the boilers directly.
We're also thinking of the ecoENERGY Retrofit Incentive for Buildings, which also concerns biomass, but which is extremely limited in scope because it is based solely on energy savings. It would be better to subsidize the biomass contribution as a whole as a substitute for thermal energies, fossil fuels and even electric energy.
The last federal budget included measures for the transformation to a green energy economy. Those measures reflect Canada's commitment to reduce its greenhouse gas emissions by 20%. Those measures essentially address the development of carbon capture and storage technology. That's something that's very important to do, but we think it would be a very good idea to consider the biomass for heating sector. The $1 billion Green Infrastructure Fund could also be used to fund the transfer of institutional equipment.
Those are our recommendations. What we've come to tell you today is that, without really making a major financial effort, Canada can help improve its energy efficiency, help consolidate the communities and send a clear signal that we can develop green energy in Canada.
Thank you.
:
Thank you very much for the question.
There are two worlds within wind: large wind and small wind.
Within large wind at this point, we do have tower manufacturers. There's one in Saskatoon and another one in Gaspé. We have blade manufacturers. We have nacelle manufacturers. Content requirements were put in place, particularly in Quebec, for example, which required that 60% of all the project expenses be incurred in Quebec.
That's generated quite a lot of the nuts and bolts of the machines, but Canada also has considerable expertise just in terms of integrating wind. In terms of providing services to the wind industry, we have some of the world's leading experts in wind resource assessment, forecasting, etc.
Canada is very well positioned. Right now, about 4,000 people work in the wind energy industry in Canada. So that's large wind. And generally, for the content that you'll find in any given Canadian project right now, about 30% to 35% of the turbines or the project cost is Canadian.
But what we've seen in the States recently is that they have an incentive that's equivalent to about three times more than what the ecoENERGY program is worth. That has driven an incredible growth. Over the last year in the United States, we saw the start-up of 51 new wind turbine manufacturing facilities. There now are about 50,000 or 60,000 people working in the wind industry, because industry responded to the long-term signal that the U.S. government gave them, and they started planting. They said, “The government's in this for the long haul and we're going to start putting in these facilities because we know that the turbines we put out are going to find a market in the United States for many years to come”.
In the world of small wind, things are quite different. As I mentioned, it's a little-known fact that half the world's manufacturers of these medium-sized wind turbines are Canadian. I think of it in the same way as how Denmark, 15 years ago, had a small niche in terms of making turbines. They really pushed on it. Fifteen years later, they are now one of the top world producers of large wind turbines.
I think we're at the same place now. We have manufacturers like Entegrity Wind in Charlottetown, AOC, Energie PGE, Wenvor, and WES Canada. We have some strong manufacturing capability. They're now exporting almost all of their turbines, because that's where the market is. If we can kick-start our domestic market, just as they did in Denmark 15 years ago, we think these manufacturers will be well positioned at a point 10 to 15 years from now, when the market booms and all of a sudden there's this incredible need to electrify remote communities for the almost half of the world's population that doesn't have electricity. There's a huge possibility there now.
:
The ecoENERGY for renewable power incentive was brought on in 2007, and it had a target of about 4,000 megawatts. It was anticipated it would last until about 2010.
To make a long story short, it was the victim of its own success. It was oversubscribed very quickly because it was a really key driver in making these projects happen, and we think it was a real feather in the cap of the Conservative government for putting it in place. But again, it became a victim of its own success.
It is currently projected that all the funds in ecoENERGY will be allocated by the end of 2009, one year ahead of schedule. And 1¢ per kilowatt-hour, it should be mentioned, is about three times less than what is currently offered in the States. President Obama, when he came in, moved extremely quickly on wind, and very aggressively, and he said they are going to extend their incentive out to 2012, saying that by 2012 they will have a carbon price that will level the playing field, but that until then they need this incentive.
So we were of the mind that it would be desirable to extend ecoENERGY to 2012 to match the U.S. government's commitment, but not to change its level—to keep it at 1¢ per kilowatt-hour—just to provide that long-term signal.
We certainly have been making the case that the long-term signal will result in jobs and direct investment. There is going to be $1 trillion that will be invested in the wind industry between now and 2020, globally. The question is what we have to do to attract a bigger part of that investment in Canada. There is no question we're competing with the United States in this respect, so the better we can do to provide a long-term signal, the more we're going to be able to attract and be able to create jobs with it.
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I would almost like to give Mr. Allen some of my time, but I'm sure that wouldn't placate the other side. I don't want to cause him any problems.
Thank you very much. It's all been very helpful.
In particular, I'm sure the committee has been impressed with the transformation that takes place in terms of the commercialization of research into the development of new products, and then the associated skill set. When you talk about nearly 2,000 installers, the workshops with respect to residential and commercial designers, and all of that infrastructure, that's how it seems to me. I'm sure the committee has taken the story line with respect to industrial transformation, global competitiveness, and so on.
I was going to follow up on Mr. Tanguay's point with respect to Mr. Weis saying that pilot projects weren't required, but I wonder if I could sort of characterize, from an urban perspective, what I believe is the necessity for pilot projects with respect to integrated energy systems. I'm sure there are urban examples with respect to the use of biomass in urban parts in Quebec.
I'm not focusing on any single technology, but on the opportunity in terms of brownfield redevelopment across the country with respect to contributing to transit systems in terms of their self-sufficiency in taking them off the traditional energy grid, where they are localized and somewhat self-supportive, and integrating that into community development. The only example I can think of, Mr. Chair, that we have seen with respect to that scale has been the Dockside Green approach that's been taken in Victoria.
All of these small examples are extremely important. When you talk about farm and residential adaptations and the implications, all of that is extremely important. What could we do, as a committee, to put forward a menu of support systems that would encourage the kind of integrated urban application where you would have hundred-acre sites being transformed, sites that are part of large communities within cities, for example, in Toronto?
What is it that we could do, other than pilot projects, that would inspire the application across the country from all levels of government and from the development industry in regard to the capital formulation and the kinds of programs that have been suggested? As a committee, what could we do that would start to drive that kind of agenda?
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Thank you very much for that question. It was a very good question.
With respect to environmental assessment, any wind project that goes ahead right now has to, at the very least, undergo a provincial environmental assessment. If it receives federal support or is near water, then it requires a federal environmental assessment as well. To be honest, those processes are exhaustive, they're time-consuming, they're very difficult, but they really do vet the projects well. We feel that the projects that come out of the federal and provincial EIA processes are really solid.
One of the problems that you run into is ratcheting requirements, and this is something that we've seen where you start getting overlaps of requirements. A developer in New Brunswick may have to do a provincial environmental assessment and then have to do a federal EIA that covers 90% of the same things. And then they're in a municipality, and the municipality says they have to do a survey on this type of bird species, and that might be something they've already done at the federal and provincial levels but it's not accepted.
So it's a matter of streamlining. It's not changing the rigour of it, because, to be honest with you, our interest is in having projects that are really viable and sound. It's a matter of making sure there's as little overlap as possible and as great a certainty as possible so that you have set timelines for how long it will take a project to go through the process from A to B.
With respect to your second question, it's interesting to note our wind vision: 20% of all of Canada's electricity coming from wind. If you took all those turbines and spaced them out correctly, they would occupy land about the size of Prince Edward Island; so one five-thousandths of Canada's land mass would be occupied with these turbines. So you don't need much space to provide one-fifth of all our power.
We're agnostic with respect to who develops wind, because there's a role for everybody. In New Brunswick you have TransAlta. It's an Alberta oil firm, primarily a fossil fuel firm, that's developing that project. You have Acciona, which is an international developer--