accounting for wind energy deployment outcomes in canada: honours thesis

8/9/2019 Accounting for Wind Energy Deployment Outcomes in Canada: Honours Thesis

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Accounting for Wind Energy Deployment Outcomes in Canada

Honours Thesis

Environmental & Resource StudiesTrent University

Chris Ferguson-MartinApril 25, 2010

Supervisors: Dr. Stephen HillSecond reader: Dr. Asaf Zohar


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Table of Contents

1 Introduction.......................................................................................................................................42 Research Approach.........................................................................................................................52.1 Research Framework.............................................................................................................52.2 Why These Regions? ..............................................................................................................7

2.2.1 National vs. Provincial Analysis ................................................................................72.2.2 Justification of Province Selection........ .......... .......... .......... ........... .......... .......... ....... 8

2.3 Geographical Wind Resources ...........................................................................................93.2 Electricity System & Dominant Technologies........ .......... .......... ........... .......... .......... .... 112.4 Planning Policies ..................................................................................................................14

2.4.1 Governmental Wind Policies................................................................................... 142.4.2 Regulatory Approvals and Siting Processes........... ......... ............ ......... ........... .. 15

2.5 Financial Policy Incentives............................................................................................... 162.5.1 Wind Energys Economic Barriers ........................................................................162.5.2 Types of Financial Policy Incentives for Wind Power ........... ......... ........... .... 18

2.5.2.1 Feed-in-Tariff (FIT) Based on (Lewis & Wiser, 2007)............ ......... .. 192.5.2.2 Renewable Portfolio Standards (RPS) Based on (Lewis & Wiser,2007) 202.5.2.3 Government Tendering Based on (Lewis & Wiser, 2007) ........... .... 212.5.2.4 Tax Incentives Based on (Lewis & Wiser, 2007) .......... .......... ........... .. 222.5.2.5 Carbon Trade & Offsetting Systems Based on (S Hill & Thompson,2002) 232.5.2.6 Carbon Tax based on (S Hill & Thompson, 2002) ............................... 25

2.6 Stakeholder support and opposition............................................................................ 262.6.1 Pro-Wind Movements................................................................................................ 272.6.2 Anti-Wind Movements............................................................................................... 28

2.7 Ownership Patterns ............................................................................................................ 302.7.1 Community Wind Power...........................................................................................312.7.2 Corporate Wind Power based on (Kildegaard & Myers-Kuykindall,2006) 32

2.8 Canadas Federal Government........................................................................................ 333 Findings & Results........................................................................................................................ 34

3.1 Ontario...................................................................................................................................... 343.1.1 Geographical Wind Resources................................................................................ 34

3.1.2 Electricity System & Dominant Technologies......... ........... .......... .......... .......... . 353.1.3 Planning Policies .......................................................................................................... 37

3.1.3.1 Regulatory Approvals and Siting Process.......... ........... ......... ............ ........ 423.1.4 Financial Policy Incentives....................................................................................... 433.1.5 Stakeholder Support and Opposition............. ........... ......... ............ ......... .......... ... 46

3.1.5.1 Pro-Wind Movements........................................................................................ 463.1.5.2 Anti-Wind Movements ......................................................................................50

3.1.6 Ownership Patterns....................................................................................................523.2 Alberta...................................................................................................................................... 53

3.2.1 Geographical Wind Resources................................................................................ 53


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3.2.2 Electricity System & Dominant Technologies......... ........... .......... .......... .......... . 543.2.3 Planning Policies .......................................................................................................... 56

3.2.3.1 Regulatory Approvals and Siting Process........ ........... .......... .......... .......... . 583.2.4 Financial Policy Incentives....................................................................................... 593.2.5 Stakeholder Support and Opposition............. ........... ......... ............ ......... .......... ... 60

3.2.5.1 Pro-Wind Movement..........................................................................................603.2.5.2 Anti-Wind Movement ........................................................................................ 62

3.2.6 Ownership Patterns....................................................................................................623.3 Manitoba..................................................................................................................................63

3.3.1 Geographical Wind Resources................................................................................ 643.3.2 Electricity System & Dominant Technologies......... ........... .......... .......... .......... . 653.3.3 Planning Policies .......................................................................................................... 66

3.3.3.1 Regulatory Approval and Siting Processes........ ........... ......... ............ ........ 69

3.3.4 Financial Policy Incentives....................................................................................... 703.3.5 Stakeholder Support and Opposition............. ........... ......... ............ ......... .......... ... 713.3.5.1 Pro-Wind Movement..........................................................................................713.3.5.2 Anti-Wind Movement ........................................................................................ 74

3.3.6 Ownership Patterns....................................................................................................743.4 Nova Scotia............................................................................................................................. 75

3.4.1 Geographical Wind Resources................................................................................ 763.4.2 Electricity System & Dominant Technologies......... ........... ......... ........... .......... . 763.4.3 Planning Policies .......................................................................................................... 78

3.4.3.1 Regulatory Approvals and Siting Process.......... ........... ........... .......... ........ 803.4.4 Financial Policy Incentives....................................................................................... 81

3.4.5 Stakeholder Support and Opposition............. ........... ......... ............ ......... .......... ... 833.4.5.1 Pro-wind movement .......................................................................................... 833.4.5.2 Anti-Wind Movement ........................................................................................ 85

3.4.6 Ownership Patterns....................................................................................................864 Conclusions..................................................................................................................................... 87


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1 IntroductionWind energy is the fastest growing electricity generation technology in the

world, having doubled in installed capacity every three years since 2001 and

currently accounting for 2% of the worlds installed generation capacity (WWEA,

2009). Despite the distributed multitude of wind, actual wind energy

implementation that is, wind turbines and farms is scattered unevenly

throughout the world.

Canada is no different. It is home to some of the windiest areas in the world. One

must simply venture to the shores of Atlantic Canada, the prairies on WesternCanada or the Great Lakes of Ontario. But while some regions have taken full

advantage of the wind resource and implemented high levels of wind projects,

others have curiously low amounts of wind energy implementation. This begs the

question, why? Certainly there must be other forces at play.

Evidence suggests that several main factors beyond physical wind resources can

influence wind energy systems. Indeed, a similar study to mine was performed in

the European context that identified and analyzed the role of planning policies,

financial support systems, stakeholder support & opposition and local ownership

patterns on wind energy deployment rates (Toke, Breukers, & Wolsink, 2008).

Building on the work of Toke, Breukers & Wolsink, the purpose of my thesis is to

assess the role of these factors in a Canadian context using the provincial case

studies of Alberta, Manitoba, Ontario and Nova Scotia and identify additional

factors that might influence provincial wind deployment rates.

This thesis document is structured as follows. First, I provide a review of the

research approach taken throughout the study, with emphasis on the conceptual

framework developed by Toke, Breukers & Wolsink. The next chapter provides a

detailed overview of the institutional and structural factors explored in the study.

Third, the findings and results of each province are explored by examining each

factor in detail. Finally a summary of the findings is provided in conclusion.


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2 Research Approach2.1 Research Framework

In 2008, a study was published that sought to explain the differing deployment

outcomes of wind energy schemes throughout Europe by identifying and analyzing

four institutional factors the study is hereby referred to as the European Study

(Toke, et al., 2008). These factors included: government planning policies; financial

support systems; landscape values; and local ownership patterns. The study builds

on the framework developed by Toke, et al. in 2008. Indeed, a study such as mine

was specifically warranted by the authors, as the article clearly states: This gives

the opportunity to other research programmes to test, and refine, these hypotheses

in other case studies.


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Figure 1: Overview of institutional factors affecting the transfer of geographic potential into

implementation (Toke, et al., 2008)

As such, my study applies similar research methods. Like the European Study, mine

is an examination and comparison of case studies, specifically that of the provinces

of Alberta, Manitoba, Ontario and Nova Scotia. (The justification for selecting these

provinces is discussed in greater detail in the section below). However, in the case of

Canada (and specifically the individual provinces), very few case studies existed, so I

was required to the construct provincial case studies. In order to accomplish this

effectively, a significant review of existing literature, policy documents, media

reports, industry reports and other stakeholder publications was completed.


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Drawing from the European study, an historical institutionalist research approach

was applied to the study. When applied to wind energy in my study, institutions are

treated as decision-making structures, forms of organization of wind power,

planning systems and norms and agreements, which underpin wind power policy

and practise (Toke, et al., 2008). Moreover, it is recognized that institutions can

evolve or change over time due to functionalist, cultural and political factors

(Thelen, 2003). This theoretical approach was used to identify and understand the

main influencing factors of wind energy deployment. However, a historical

institutionalist approach alone was not sufficient to properly account for the

deployment outcomes in Canada, as it was clear that structural factors like the

physical structure of the electricity system and the historical presence of other

energy technologies have been extremely influential in all the provinces considered.

It should also be stressed that in no way does my study attempt to quantitative

results or conclusions. Rather, everything analyzed in the study is examined using a

qualitative lens.

2.2 Why These Regions?2.2.1 National vs. Provincial Analysis

Unlike the analysis of deployment outcomes in the European Study, this thesis does

not compare national jurisdictions. Rather, it looks at four sub-national

jurisdictions. In the North American context, this is likely appropriate for a number

of reasons. Canada is a federation and some of the responsibilities that might fall

under the jurisdiction of national governments in some other countries are instead

given to the provinces. Among these responsibilities are education, health care and

natural resources. A fourth major responsibility, particularly important to this

thesis, is electricity policy (Government of Canada, 2010a). Provinces are mandated

to control their own energy supplies and consumption without a significant role


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from the federal government although the federal government is involved with

any nuclear energy in Canada. As a result, when it comes to setting wind energy

policies, the province is the key governmental player. Moreover, Canadas provinces

are comparable in geographical size to many of the European countries analyzed in

the European Study.

2.2.2 Justification of Province SelectionTime limitations prevent a detailed comparison of every Canadian province and

territory. As a result, only a handful of provinces can be compared: Alberta,

Manitoba, Ontario and Nova Scotia. These four provinces were selected for fourreasons.

First, they represent nearly every major region of Canada: Alberta in the West;

Manitoba in Central Canada; Ontario as its own region; and Nova Scotia in the

Atlantic Provinces. These regions are separated by significant geographical

distances, but also represent a diverse mix of regional cultures.

Second, each province has considerable onshore or offshore wind resource

potential. Because this factor is roughly equal for each province, it can be viewed as

something of a control factor and makes it much easier to assess the impacts of

other factors.

Third, each province has employed a unique policy framework and financial

incentive system to encourage wind energy deployment. Policy incentive programs,

as discussed above, are often a key factor in the development of wind energy

systems and a comparison of different economic systems is of central interest to this

thesis.

Fourth, in addition to the differing economic incentive systems employed, the four

provinces have a wide variety of other differences, including but not limited to:


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socioeconomic statuses; governing political parties; and existing electricity systems,

generation technology and ownership.

2.3 Geographical Wind ResourcesThe key factor influencing the development of a wind power system is the physical

presence of geographical wind resources. Indeed, wind is the energy systems main

input. Even if hundreds of turbines are built in an area, no electricity can be

produced without the necessary wind conditions. One might liken it to a coal plant

without any coal.

Wind resources vary with geography. In generalist terms, the strongest winds can

be found at the mid-latitudes as the warm air originating from the equator interacts

with cooler air coming from the poles (Mares, 1999). Additionally, coastal regions

are especially windy, as temperature differences exist between water bodies and

landmasses.

Wind resources are measured by wind power density (often in units of watts per

square metre W/m2) or wind speed (metres per second m/s) at a particular

height, typically 30 m, 50 m and 80 m. In North America, the most accessible and

general data is available in the form of graphical wind maps, such as Environment

Canadas Canadian Wind Energy Atlas (2003) and the United States Department of

Energys (USDOE) Wind Resource Maps (2009). My study uses the Canadian Wind

Energy Atlas to assess geographical wind resources at an altitude of 80 m above

ground level and on an average annual basis in order to account for intermittency

and seasonal variations.

According to the American Wind Energy Association, in order for projects to be

economically viable, an annual average wind speed of at least 5.0 m/s should be

available (AWEA, 2009).


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Figure 2: Average Annual Wind Energy Density in Canada at 80m (Environment Canada, 2003)

A very detailed assessment of the United States wind energy potential was

completed in 1991 that measured the wind energy potential in each US state and

took excluding factors into consideration, such as national parks and transmission

capabilities (Elliot, Wendell, & Gower, 1991). As a result, it was able to calculate, in

megawatts, the potential supply of wind energy in the United States. Similar studies

have been completed for European countries and were used for the European

version of this study (Wijk & Coelingh, 1993). Unfortunately, such a study

especially one looking at each province individually has not yet been completed in

Canada. As a result, this study is not able to draw on fully quantifiable geographical

wind resources.


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Figure 3: Average Annual Wind Speed in Canada at 80m (Environment Canada, 2003)

While it is recognized that this lack of specificity is a shortfall of the study, it should

not overshadow the fact that each selected province has significant and often

economical wind resources. Moreover, the specific windy regions are explored in

much greater detail in the case studies below.

3.2 Electricity System & Dominant Technologies

The size, style and adaptability of a regions electricity system is one the most

significant factors influencing the development of wind power systems. Because

wind power is naturally decentralized, its relationship to the grid is unique from


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traditional centralized electricity generation. Most existing electricity transmission

in Canada is based on a centralized production network, meaning that large, single

power sources throughout the region and each feed directly into a central grid

(Centre for Energy, 2009). Transmission lines are therefore connected to these

relatively few sources of generation and then fed throughout the region. Some

regions use only one central grid and provide uniform access to the grid for every

consumer, while some have a series of groups often utility companies providing

access to the grid. In cases where a central grid is not available or accessible, regions

will create decentralized grids, which use a specific portfolio of energy generation

sources. Decentralized grids can be frequently found in remote areas located far

away from the central grid where it is often too expensive or inefficient to connect

to the central grid. Additionally, a rare option pursued by some is to simply take

their home off the grid.

One of the greatest advantages offered by wind power and frequently cited by its

proponents is its distributed nature. Unfortunately, while a distributed power

technology has several advantages, it is considerably more costly with regards toenergy transmission. The majority of electricity infrastructure throughout Canada is

centralized, meaning that generation is focused in a few prime areas and sent

through transmission lines onto the central grid. Electricity from wind power,

however, cannot operate in the same fashion. Because it is relatively decentralized,

transmission lines need to be extended to each wind power system. This can be

problematic, as many of the most generous wind sites are located far from the

existing grid. Moreover, as the distance of transmission and distribution (T & D)

increases, a greater share of electricity will inevitably be lost. In order to prevent

significant T & D losses, additional electricity system infrastructure must be built,

including substations and transformers.

Another important characteristic of the electricity system is the ownership

structure. Generally, a provincial electricity system can be classified as private,

public or a hybrid. Private systems are open and competitive and electricity is


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provided by private developers. If the grid is still regulated by the government, the

government often enters into power purchase agreements with private developers.

However, in some cases the entire system is deregulated and developers must enter

into power purchase agreements with individual customers. Private electricity

systems are generally more conducive to wind energy projects as private

developers tend to commit to the risk of developing wind projects compared to

crown corporations, especially in areas of significant wind resources. Moreover,

private systems tend to involve less bureaucratic processes, which can often delay

projects. Private systems, however, are more influenced by the supply and demand

for electricity and prices can be quite volatile. A public system consists of a crown

corporation holding a monopoly and generally being under no obligation to

purchase power from private developers. Public monopolies tend to be well versed

in technologies they are already familiar with and are less willing to develop wind

energy projects than their private counterparts. However, since public monopolies

are often established with the public interest in mind, electricity rates are kept low.

Moreover, generation, transmission and distribution are usually all controlled by

the one entity. Under a hybrid system, the electricity system is open andcompetitive, but crown corporations are competitors within the energy

marketplace.

The third aspect of an electricity system that could influence wind energy systems is

the nature of the existing and dominant generation technologies. As climate change

and energy security concerns have become more important to governments,

electricity generation technologies that are non-renewable and/or greenhouse gas

emitting are becoming more of a vulnerability. Many provinces with these

generation technologies, such as coal-fired, gas-fired and petroleum-fired

generation, are beginning to move away from them and look to green energy

technologies. However, some provinces, particularly those flush with hydroelectric

generation, have little incentive to move away from their dominant technologies as

hydro tends to be considered renewable and emissions free. Nuclear energy has also


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come under criticism and has the potential to provide governments with an

incentive to move towards wind energy.

2.4 Planning PoliciesWind power systems, like any infrastructure project, are subject to regulatory

involvement. In Canada, such involvement can come from any level of government,

be it local, provincial or federal. Planning policies as a primary institutional factor is

composed of several sub-factors:

2.4.1 Governmental Wind Policies

When dealing with energy policy, provincial governments can adopt official policy

stances to specific energy technologies. These policies indicate a strategic direction

a government will take with a particular energy technology. Energy policies focused

on a specific technology can be supportive, oppositional or even non-existent

many in the public policy area believe that no policy is indeed a policy in and of

itself.

Supportive policies can vary from something as simple as an oral statement of

interest from a government official to a complex program with firm economic

incentives and realistic policy targets. It is very important to make the distinction

between a supportive policy for wind technology versus other energy technologies.While supportive policies for wind are almost entirely beneficial for implementation

rates of wind power, supportive policies for other energy technologies may have an

opposite effect. For example, a supportive governmental policy for an expensive

technology such as carbon capture & storage (CCS) might hinder the

implementation of wind energy in the same jurisdiction by taking up a greater share

of finite financial and political resources. Supportive policies for renewable energy


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technologies (not including hydroelectric power) as a whole, however, are often

headlined by wind energy technology and frequently lead to a greater share of

implementation compared with other renewable technologies.

Oppositional policiesto wind energy can be particularly harmful to implementation

rates as these types of direct policies often consist of moratoriums on wind energy

deployment. While neither the federal government nor any provincial governments

in Canada have gone as far as to prohibit wind energy, regional and local

governments throughout Canada have done so, effectively eliminating wind power

development in those particular jurisdictions. Wind energy can, however, benefit

from oppositional policies to other energy technologies. For example, when a

government opposes the development of a particular energy technology because it

is non-renewable, the renewable characteristics of wind energy might attract the

interests of the government as an alternative energy source.

2.4.2 Regulatory Approvals and Siting Processes

Because a wind energy system even one with only one turbine is a major

infrastructure project, its development can have significant environmental,

economic, cultural and social impacts. The deployment of a wind energy system is

thus subject to a host of regulatory approvals.

The complexity of a particular projects approvals and siting process is very much a

function of the location of the project and the governing bodies given jurisdiction

over that particular location. Each level of government has particular and

sometimes differing requirements to be met in order for a project to receive

regulatory approval. Moreover, several approvals may be required from multiple

facets of one level of government. For example, several provincial departments may

have separate (and even overlapping) regulatory approval requirements for just

one project, while additional approvals may be required at federal and local levels.


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The complexity of the regulatory approvals process can have significant bearing on

the development of a provincial wind power system. Indeed, a complex approvals

process can delay the development of a wind power system and in many cases,

actually leads to the cancellation of projects. Streamlined and less stringent

approvals processes can increase the development of wind power systems, however

such processes can very well lead to social controversies & anti-wind movements,

particularly as a result of poor public participation processes.

2.5 Financial Policy IncentivesWind, like many renewable energy technologies, is considerably costlier than the

majority of traditional major energy technologies, especially those powered by fossil

fuels like natural gas and coal-fired plants. Indeed, the cost of electricity produced

by wind energy can range from $0.07-$0.12/kWh, much higher than rates from

traditional fossil fuel or large hydroelectric production, which generally range from

$0.04-$0.06/kWh (Centre for Energy, 2010). As a result, wind energy technologies

often require economic incentives to make the technology cost competitive or at

least economical to the developer, which is almost always impossible without some

form of economic incentive.

2.5.1 Wind Energys Economic BarriersWind is not always cost-competitive with other energy technologies for several

reasons. First, wind power is intermittent. That is, the wind does not always blow. It

is not uncommon to witness large turbines lying still because the winds are not

strong enough. And because the wind resource itself cannot be controlled, the

amount of electricity produced from wind power systems is unpredictable; it ebbs

and flows. Indeed, the average capacity factor which will vary slightly depending

on the location of wind technologies in Canada is approximately 30% (CanWEA,


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2008). This means that the turbine is only producing 30% of what it is built to

produce. Other energy technologies, like coal, have controllable resource inputs and

predictable levels of energy production and thus comparatively high capacity

factors. This not only makes high capacity technologies cheaper, but also makes

them trustworthier to supply the electricity grid. Additionally, limited electricity

storage technology hinders the potential of capturing and storing valuable

electricity produced from wind at low-demand times where the electricity would

otherwise go to waste.

Secondly, wind, because it is made up of air, is not relatively dense. As a result, a

large share of air needs to be captured in order to create electricity. Comparatively,

water has a density nearly 1000 times greater than air, making it much easier to

create electricity with a much smaller amount of water (Lide, 1990).

Thirdly, the environmental & health benefits of wind power are not taken into

account in the price of electricity. (These unaccounted for factors are known in

economics as externalities). More accurately, the environmental and human healthcosts of other energy technologies are not accounted for in electricity costs. Fossil

fuels, for example, which release carbon dioxide into the atmosphere, are

considered one of the prime causes of anthropogenic climate change, which is now

well accepted to have serious economic impacts throughout the world. With very

few carbon-pricing schemes existent in the world and virtually none in Canada

(except for moderate prices in British Columbia and Quebec), the economic costs of

carbon emitting electricity producers are not being fully taken into account (Carbon

Tax Center, 2009). Moreover, the air & water pollution costs of fossil fuel-related

production are rarely taken into account nuclear and even hydroelectric

technologies also have potential human and environmental health impacts. Indeed,

every energy technology has external costs not wholly accounted for in the price of

electricity. But without a meaningful price put on the external costs of other

energy technologies, particularly carbon emissions, the external benefits offered by

wind energy technology will not be reflected in the price of electricity produced.


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Fourth, wind power technology is a relatively new and emerging technology and the

supply of wind turbines is still relatively limited. Indeed, because of high global

demand and the lack of a major turbine manufacturer in Canada, Canadian wind

power projects are frequently subjected to a two-year lag time between an order

and final delivery of the turbines (CanWEA, 2003). The need to import the turbines

from abroad further increases the cost of wind power technology, as the cost of

shipping overseas and on land composes between 5-10% of the total system of cost

of a wind system in Canada, compared to only 3-5% for domestically manufactured

turbines (of which there are virtually none in Canada) (CanWEA, 2003; Lewis &

Wiser, 2007).

2.5.2 Types of Financial Policy Incentives for Wind PowerThe forms of economic incentives range greatly and the different strategies are used

throughout the world. Some offer direct financial inputs to wind power, while

others offer sweeping advantages to renewable energy technologies as a whole.Some incentive programs place penalties on the impacts of certain technologies

through a tax or fee system, while some taxes or fees are waived for wind power.

The types of economic incentive systems used and how they impact wind power are

listed below.

In addition to the presence of an economic incentive program, the stability of such

a program is also extremely important to the development of a wind power system.Generally speaking, economic incentive programs are more successful and lead to

greater implementation rates when created as long term, stable programs that

provide wind developers a predictable rate of return (Deutsche Bank Group, 2009).

Indeed, when economic incentive programs are introduced and removed or changed

only a few years later, it can stymie the development of wind power, especially


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when such removal or change is unexpected which happens quite frequently when

matched with relatively unstable political involvement.

It should also be noted that several of the incentive systems listed below need not be

mutually exclusive and can actually work quite effectively in concert. For example, a

renewable energy-specific program, like a feed-in-tariff can operate in accordance

with a more sweeping and broad program, like a carbon tax.

2.5.2.1Feed-in-Tariff (FIT) Based on (Lewis & Wiser, 2007)A Feed-in-Tariff (or FIT) is a fixed price of electricity offered to the producers of

particular technologies from the major consumers of electricity (often the

government). This fixed price is often much higher than the market rate of

electricity and is thus meant to make the production of electricity from that

particular technology more cost-competitive and economical for developers.

A FIT can be directed at a specific energy technology or incorporate several different

types. This structure offers an advantage for renewable energy development

because it allows different prices to be set for different technologies, ultimately

recognizing the differing costs between technologies and allowing all technologies

to become economically viable. If a particular FIT program is designed properly i.e.

having a high enough financial incentive and long-term purchase agreement and

remains stable and predictable, it can be considered the most desirable and effective

form of stimulating the development of a wind power system (Deutsche Bank

Group, 2009).

A FIT program, however, can offer several drawbacks. First, it is a subsidy and can

be expensive. It generates little to no revenue for the government and is thus

payable by the taxpayers. However, the costs of a FIT can also be met by marginally

raising the market rate of electricity and spreading the costs of the program among


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all consumers of electricity. Secondly, a FIT program might considered by some to

be unfair because it allows the government to pick and choose particular

technologies, rather than leaving it up to the market to decide.

FIT programs are most well known for spurring the development of wind power

systems in Europe, especially in Germany, Denmark & Spain among the worlds

leaders of installed capacity and penetration rates for wind power (Lewis & Wiser,

2007).

2.5.2.2Renewable Portfolio Standards (RPS) Based on (Lewis & Wiser, 2007)Also known as Mandatory Renewable Energy Targets (MRET), Renewable Portfolio

Standards set a minimum percentage of electricity from a particular energy supplier

(for example, a local electricity utility) to be sourced from renewable energy

sources. An RPS often covers a broad range of renewable technologies and therefore

does not focus directly on wind power, although wind because of the economic and

technological advantages listed earlier generally makes up the majority of a

suppliers renewable energy portfolio under an RPS. Indeed, in order to combat the

relative dominance of wind power in renewable energy portfolios, some states in

the USA have instituted RPS programs that require a certain percentage of the

renewable energy not come from wind power.

State and provincial governments primarily set RPS programs in North America,

while national programs have been set in regions throughout Europe and Asia. Such

programs have been particularly successful throughout the United States, especially

in Texas, which constitutes the largest installed capacity of wind power in the USA

(WWEA, 2009).

Policy scholars have identified several drawbacks of RPS programs since their

inception including both the competitive mechanism set by such programs and the


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government auctions are potentially fraught with risks of political corruption as the

competitive process might not be genuinely competitive. This drawback of course, is

not limited to wind power projects. Perhaps the biggest drawback to a government

tendering process is bad design, as was found in the United Kingdom during the

1990s. In the UK, the tenders frequently consisted of uncertainties and low

profitability and ultimately led to a strong disinterest from developers (Mitchell,

1995).

The number of potential drawbacks should not steer one away from the relatively

successful history of government tendering of wind power projects. Indeed, it has

been remarkably successful throughout the United States, China and as seen below,

Canada.

2.5.2.4Tax Incentives Based on (Lewis & Wiser, 2007)One of the greatest powers held by a government is its power of taxation. Whether

federal, provincial or local, governments have the ability to tax a wide variety of

activities, products, consumers and industries. Wind energy developers on the other

hand, like any business, generally despise taxes because they eat into the economic

viability of a project. This intersection creates a viable opportunity for attracting

investment into wind power development, as a series of different tax strategies can

be applied to wind power development to make projects economically viable. Such

strategies can include deductions or credits applied to income tax, property tax or

even capital gains.

In a detailed survey of international wind deployment strategies completed in 2007,

Wiser & Lewis found that in almost every country surveyed, tax incentives played

only an accompanying role to other more influential programs, most notably long

term power purchase agreements with added financial incentives.


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2.5.2.5Carbon Trade & Offsetting Systems Based on (S Hill & Thompson, 2002)

While the previous three strategies have been used as direct form of economic

incentive, carbon trading & offsetting programs place an economic value on carbon

dioxide and indirectly make carbon-emissions free energy technologies, like wind

power, more economically viable. Carbon trading and offsetting can be very

distinctly different strategies.

Carbon trading (also known as cap-and-trade) involves a government placing a limit

(a cap) on allowable carbon emissions from emitters and allocating permits (orcredits) to those whose emissions are below the limit. A stiff fine will be issued to

any emitter whose emissions are greater than the limit, but emitters can purchase

credits from those under the limit. While the price of a permit may initially be set by

the government, the demand for and supply of the permits that is, the open market

will later set the price.

A carbon trading system can be very beneficial to wind power technologies as it

makes competing energy technologies specifically, carbon-emitting technologies

more expensive by adding a financial cost to the carbon dioxide produced. In order

to avoid this cost, energy consumers will be inclined to shift from traditional, fossil

fuel energy sources to emissions-free sources like wind power. Moreover, wind

power firms could qualify to receive carbon credits and could sell these permits on

the carbon market, thereby making wind power more profitable.

A carbon trading system is dependent on several factors to make it effective as a

stimulator of wind power development. First, the price of carbon must be high

enough to both influence energy consumers to reduce their emissions and make the

shift to wind power technology. Arguably, elements of the former are more easily

obtained primarily through a series of alternative corridors like energy

conservation and efficiency while achieving the latter is considerably more

difficult. According to New Energy Finance, a clean energy consulting group recently


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purchased by the media conglomerate Bloomberg, an average carbon price of

US$38/tonne is required to make onshore wind power economically viable without

additional subsidy (The Economist, 2009). Offshore wind is even more expensive.

While such a price is not unheard of, no such price exists anywhere in North

America. Second, a carbon trading system must be regulatory as opposed to

voluntary as energy consumers are far less likely to participate in a voluntary

program. Third, critics of carbon trading programs frequently point to the free

allocation of permits to energy consumers by the government rather than at a cost.

While this can be politically effective, it makes the system itself far less so. Carbon

trading markets are no different from global free markets like a stock exchange or

currency exchange in that they face similar risks of market collapse and financial

crime, which both require heavy regulation and oversight to properly maintain the

market.

Carbon offset programs (based on (Cernetig, 2010), however, require no general

market for trading and are almost always voluntary in nature. It works quite simply:

When participating in some activity, be it taking a flight or heating your home, somecarbon dioxide will inevitably be emitted into the atmosphere contributing to

climate change. Carbon offset programs allow individuals to offset those carbon

emissions by paying an offset company to contribute to a project that is carbon-free

or even removing carbon. Projects commonly include tree planting, renewable

energy projects and the introduction of new technologies to the developing world,

such as energy efficient stoves (Cernetig, 2010). Wind energy can benefit from such

programs as they can act as a source of investment for particular projects.

Carbon offsetting is a relatively new phenomenon and services are provided by

hundreds of different companies throughout the world. Because it is almost all

voluntary, such programs are not particularly stable. More importantly, the

effectiveness of such programs is highly variable. For example, several projects

commit funds to tree planting, but fail because many of the trees die. Because of its

relative infancy, the carbon-offset industry is self-regulated and companies apply to


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industry standards rather than what would be traditionally more strict government

standards. Furthermore, there is no universally accepted price of carbon, even

within the industry itself and as a result firms commonly charge a differing and

arbitrary price on carbon. Indeed, several carbon-offset firms have run into trouble

after actions like overcharging and unsuccessful projects have been publicly

revealed (Cernetig, 2010).

Apart from the flaws of the carbon offsetting industry, they can still provide a source

of funding for wind power projects. Several firms within the United States

contribute much of their funds to wind energy projects. However, carbon-offsetting

programs alone cannot provide wind power systems with the necessary funding and

in many ways act as a supplementary support for wind power systems.

2.5.2.6Carbon Tax based on (S Hill & Thompson, 2002)Similarly to carbon trade systems, a carbon tax aids to provide an economic

incentive to wind power through the establishment of a carbon price. However,

unlike under a carbon trading system where the price of carbon is determined by

the free market, the price is instead fixed by the government implementing the tax.

A carbon tax works relatively simply. Once a price of carbon is established (for

example, $10/tonne), the tax is applied to a variety of products based on the carbon

emissions of each product. For example, unleaded gasoline carries a generally

consistent level of carbon-dioxide emissions when consumed in a car and a carbon

tax would add a fixed cost to the price of gasoline. By adding an additional cost to

carbon-emitting products and behaviours, a carbon tax is meant to discourage such

things and encourage both the reduced consumption of such behaviour and a switch

to non-carbon emitting products and behaviours. Wind energy can certainly provide

the latter.


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Because the costs of a carbon tax are generally applied throughout a regions entire

economy some carbon taxes only apply to certain activities, such as Quebecs

carbon tax on industrial fossil fuel-based energy generation it is consumers who

suffer the burden of the tax, rather than the industrial sector, as is the case under a

carbon trading system. This makes carbon taxes politically vulnerable. Indeed, it is

well accepted throughout the public policy sphere that the introduction of a new tax

is politically dangerous, especially if the tax impacts the entire electorate directly.

Similarly to a carbon trade system, in order for a carbon tax to be effective the price

level of carbon needs to be set at a reasonable price. What is reasonable depends on

a variety of economic, political, ideological and environmental factors, but also on

the goal you are trying to achieve. As mentioned above, onshore wind power

generally requires a carbon price of US$38/tonne, whereas offshore wind and solar

PV require carbon prices of US$136/tonne and US$196/tonne, respectively. Using a

carbon tax to encourage a specific energy technology is not particularly effective and

rarely if ever is it the main purpose when implementing a carbon tax; rather, it is

usually a jurisdictions efforts to reduce overall carbon emissions.

National carbon taxes have existed in many parts of Europe for several decades, the

highest and most effective being in Norway and Sweden (Carbon Tax Center, 2009).

In Canada, a national carbon tax proposition arguably led to the defeat of the

Opposition Liberal government, while a provincial tax has been successfully

implemented in British Columbia and Quebec (Whittington, 2008). However, as

mentioned with relation to both offsets and carbon trading systems, a carbon tax

acts as a supplementary support program for wind power.

2.6 Stakeholder support and opposition

Wind energy can have significant impact on a wide variety of stakeholders. The

presence of a turbine can bother nearby residents, while communities can benefit


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economically from projects. Farmers may see it as the misuse of agricultural land,

while governments might see it as a way to combat climate change. The list could go

on. Stakeholders have the potential to make or break a wind energy system

depending on which way they throw their support. Sometimes, no support or

opposition is even offered. Generally, the influence of stakeholders can be assessed

by analyzing the role of two distinct stakeholder movements: the pro-wind

movement and the anti-wind movement.

2.6.1 Pro-Wind Movements

The level of advocacy in favour of wind energy development has the potential to

heavily influence implementation rates in a particular region. Pro-wind movements

can vary in size, style and organization but they often share a similar mechanism

through which their impact on wind deployment is felt: government policies.

Because pro-wind movements often include members of the public or important

stakeholders, the government might be keen to listen. Of course, the level of

influence held by the movement would very much depend on the size of movement,

its arguments and the level of influence held by the stakeholders involved.

Pro-wind movements can exist for a variety of reasons. Some, such as the Canadian

Wind Energy Association are trade associations representing wind energy industry,

while some groups, like the Ontario Sustainable Energy Association, see wind

energy as a means to increase shared community prosperity. Many pro-wind

movements are now centred on concerns over climate change. A variety of specific

stakeholders are especially influential as advocates of wind energy, most notably

farmers and other agriculturalists. Wind energy is often seen as a potential boon to

farmers, especially as the profitability of small farms decreases.

Sometimes the most influential stakeholders in a pro-wind movement are not

directly advocates of wind energy, but rather their own advocacy work is indirectly


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linked to wind energy. For example, movements opposed to other energy

technologies especially those whose negative qualities are not shared by wind

energy can lead to a push for more wind energy implementation.

2.6.2 Anti-Wind Movements

Large, commercially sized wind developments are often a subject of much social

controversy and can frequently spur opposition. Social opposition to wind projects

can play a high degree of influence over the deployment of wind systems. In many

cases throughout the world, social opposition has severely hindered thedevelopment of wind power systems despite the economic feasibility and

environmental benefits.

The size, type and influence of such opposition can vary greatly. Predominantly,

opposition to wind power arises out of the local communities where a particular

project is being developed. These opposition groups can vary from a small cohort of

concerned residents to a formally organized and well-entrenched group. As will be

discussed below, opposition groups are also existent at the regional level. These

groups, which may span an entire province, are often considerably more organized

and influential than smaller, case-specific groups. National and international

movements against wind power also exist, however there is no well-organized

group with a focus specifically on wind energy in Canada.

Opposition to wind power is often attributed to NIMBYism (not in my backyard), a

phenomenon particularly synonymous with environmental issues. NIMBYism is

characterized by the selfish attitudes held by those that are in favour of a general

initiative (for example, wind power or nuclear power) many of these initiatives

are considered to be for the greater public good as long as the specific actions

involved in said initiative will not impact them directly (such as wind turbines or an

underground hazardous waste facility being placed near their property) (Devine-

Wright, 2005). However, this emphasis on NIMBY attitudes might be misplaced.


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Indeed, social opposition to wind energy projects is more appropriately explained

by the perceived impacts the project might have on the visual landscape, rather than

ones location within it (Wolsink, 2000). Moreover, Landenburg finds that ones

proximity to a wind power project has little to do with their acceptance or

opposition to the project (Landenburg, 2008).

Social opposition to wind energy projects is not limited simply to NIMBYism or

landscape values. Indeed, a broad range of factors can lead to and exacerbate social

opposition in wind power projects (based on (Wind Concerns Ontario, 2010)

Noise: Because wind turbines are frequently sited in rural areas, the noisecreated during operation creates noise levels generally higher than the

norm. Residents living or working nearby might find the noise created

intrusive and obstructive of the relative calmness found in rural areas.

Additionally, shadow flicker from the turbines can create an annoyance to

those living or working on adjacent properties.

Health Concerns: A growing concern related to the wind power industry isthe impact of wind turbines on human health. The presence of low-

frequency vibrations produced by the turbines in operation is believed by

some to be associated with a variety of illnesses, including migraines and

sleep deprivation. This issue has received relatively little academic study

and is still very contentious, but nonetheless is a significant contributor to

social opposition.

Wildlife Concerns: The presence of industrial wind turbines are frequentlycited as posing significant risks to bird and bat populations, particularly

when placed in migratory paths. While the evidence for and against these

claims is again debatable and regulations try to reduce these risks, it is also

a significant contributor to social opposition to wind power.


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Property Values: The presence of wind turbines (primarily because of theaesthetic, noise & health concerns) is widely believed to have a negative

impact on property values in the region affected by the wind turbines.

Distribution of Risks & Benefits: Wind power projects can sometimesunevenly distribute the risks and benefits of a project. For example, some

projects might be owned by a private group from another jurisdiction that

reaps all the economic rewards, while the residents nearby are left with the

risks associated with their health, quality of life and property values. When

the distribution of risks and benefits is not adequately balanced, social

opposition is often created.

Siting Processes: Regulatory siting processes can vary between jurisdictionsand each has its own package of requirements that need to be met by the

developers. Frequently, the degree to which these processes are followed

(even if followed to the full extent of the law) can lead to social opposition toprojects. Public consultation processes are particularly problematic as the

regulatory requirements are widely considered to be inadequate with

regards to effective public participation in the design and development of

the project.

2.7 Ownership Patterns

Wind power systems are typically owned in one of two fashions: corporate or

community. Both ownership styles offer their own advantages and disadvantages

and are common in different regions throughout the world. The nature of the

ownership style can have significant influence over social acceptability, profitability

and ultimately the implementation rates of wind power in a particular region.

Indeed, according to the European study, local (or community) ownership coincides

with higher deployment outcomes than corporate ownership (Toke, et al., 2008).


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However, a broad range of national traditions, including co-operative business

traditions, energy activism and government policies, also influences wind

ownership patterns. As a result, the relationship between deployment outcomes and

ownership patterns can vary greatly between regions.

2.7.1 Community Wind Power

Community wind energy projects (or local wind energy projects) are those that are

owned by and generally located near or within a community. While ownershipstyles can vary (co-operatives, local municipalities, First Nations Groups, etc),

community projects are owned by members of a community often many different

people or organizations and the benefits of the project are accrued directly back

into the community. Because the financial benefits are kept within the community,

the chain effects tend to have a greater financial impact than a corporate project of

the same size (Kildegaard & Myers-Kuykindall, 2006).

Community wind projects are generally considered to be more socially acceptable

because those most directly impacted by the project can have a say in its design

(Andersen, 1998). Also, a balance of risk and benefit is found with these projects. As

is often the case with corporate projects, much of the non-financial risk is taken only

by the community such as visual, environmental and health impacts while the

main benefits financial revenue are taken out of the community. Community

projects can eliminate such risk disparity. These projects can also increase energy

resiliency within a community, as community members become involved and by

association, begin learning about energy use overall. Community members also have

the option of choosing how the electricity from the projects is allocated.

Community projects, however, have several drawbacks. They can often take much

longer to install as community organizations generally take longer to make

decisions, become organized, raise capital, etc (Kildegaard & Myers-Kuykindall,


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2006). The projects are often much smaller and less financially viable as their

corporate counterparts, which makes it more difficult to find investors. As such,

community energy projects frequently require additional subsidies and funding in

order to become financially viable.

Perhaps Canadas most well known community energy project is the Exhibition

Place Wind Turbine in Toronto, ON. Co-owned by a Toronto community co-

operative and Toronto Hydro, the 750 kW project generates enough electricity for

250 homes (TREC, 2010).

2.7.2 Corporate Wind Power based on (Kildegaard & Myers-Kuykindall,2006)

Corporate wind energy projects are generally those that are privately owned by a

small number of investors who are based out of a non-local area. Much of the

financial risk of these projects is taken from non-local areas, and as such, much ofthe financial benefits are also returned to those areas. However, the community

takes the social, environmental and visual risks where the project is placed.

Corporate wind energy projects are by far the most common type of project and are

very much like any conventional business. Corporate projects, because they are

more heavily financed and much larger, tend to be much larger and are more

attractive under RfP processes. Moreover, they tend to be built much faster (per

kW) than community projects as the focus from developers is on the project itself,

while community member developers frequently already have main jobs.

Corporate projects, however, tend to generate considerably more controversy than

community projects. These projects tend to be designed only by the developers and

if community members are involved, it is primarily in a consultative sense. The risk

disparity mentioned above is an especially contentious issue and is often an


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underlying factor of additional issues of controversy. While community owned

projects attempt to bring stakeholders into the ownership scheme, corporate

projects tend to lease or rent the rights of stakeholders. For example, land that

cannot be purchased by developers is often leased directly from landowners, such

as farmers. Unfortunately, controversies have frequently arisen as some developers

use misleading contracts and other irresponsible tactics when dealing with

landowners.

2.8

Canadas Federal Government

Canadas federal government has had a relatively small role in wind energy policy

throughout the country. As discussed above, it has a much less active role than

provinces in the electricity generation sectors. Because its role has been uniform to

all Canadian provinces, its role will not be assessed in great deal throughout the case

studies. While its role has been small, it is worth a brief overview of the federal

governments role in wind energy policy in Canada.

From 1997 to 2001, the government operated the Federal Canadian Renewables

and Conservation Expenses program, a moderate tax deduction program for

renewable projects (Snodin, 2007). A more effective program was later introduced

in 2001 as the Wind Power Production Incentive (WPPI) program. Under the WPPI,

wind projects were given relatively small incentives of $10-$12/MWh for a period

of no longer than ten years (Snodin, 2007). The program had allocated funding for

up to 4 GW of installed capacity by 2010. The program ran until 2006, when it was

frozen and later cancelled by the Conservative government (Snodin, 2007).

In 2007, the government introduced the ecoENERGY for Renewable Power Incentive

(ERPI), a strikingly similar incentive program to that of the WPPI. Paying $10/MWH,

the ERPI was designed to provide $1.48B worth of funding for up to 4000 MW of

projects between 2007 and 2011 (Snodin, 2007). However, renewable energy


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project deployment has been so successful in Canada that the programs funding had

been fully allocated by 2010, one year ahead of schedule (Government of Canada,

2010b).

3 Findings & Results3.1 Ontario

Ontario first began developing wind energy systems in the early 1990s, as its first

wind project, the 0.6 MW Tiverton Wind Turbine, was installed in 1995 (CanWEA,

2010d). Since then it has installed a total of 26 projects with an installed capacity of

1,208 MW. Nearly all the projects are located in southern Ontario and all are located

onshore. It has the highest installed capacity in Canada nearly double to those

closest to it although its penetration rates are only sixth in Canada, as wind

accounts for 3.4% of the provinces installed generation capacity (Centre for Energy,

2009).

3.1.1 Geographical Wind Resources

Figure 4: Average Annual Wind Speeds in Ontario at 80m (Environment Canada, 2003)


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The most abundant geographical wind resources can be found on Ontarios water

bodies, specifically the Great Lakes regions. Generally, wind levels, at an altitude of

80 metres, vary at an annual average from 600-800 W/m2 (~9-10 m/s) offshore,

while the coasts gather 400-600 W/m2 (~7-8 m/s). These levels are very high. The

only other region in Ontario with comparatively high wind resources is on the

northern coast of Hudsons Bay. Much of the remaining significant wind resources in

Ontario can be found in southern Ontario, particularly in the Bruce Region where

levels are generally 300-400 W/m2 (~6-7.5 m/s) and the regions slightly north

and east of Toronto which typically garner 200-300 W/m2 (~5-6.5 m/s). These

windy areas cover hundreds of thousands of square kilometers, providing Ontario

with significant wind energy resources.

3.1.2 Electricity System & Dominant TechnologiesOntarios electricity supply system is the only hybrid system that is, open and

competitive, but with publicly-owned competitors in this analysis. The

competitiveness of Ontarios system has been particularly catalytic to wind energy

deployment rates, while the nature of the dominant supply technologies have

provided incentive to invest in wind energy technology. Transmission capacity has

not played as influential a role in Ontarios wind energy deployment, but has

dictated wind siting at times. It is expected, however, that transmission capacity will

likely play a defining role in Ontarios wind energy future.

Ontarios hybrid electricity supply system was born as a result of the failed attempt

by Ontarios Progressive Conservative government to completely privatize the

electricity market. In 1998, the government passed the Energy Competition Act,

which opened the electricity market to competition (Rowlands, 2007). Then in

1999, the overarching crown electricity corporation, Ontario Hydro, was divided

into five separate organizations, two of which Ontario Power Generation (OPG)

and Hydro One were intended to be sold off as private businesses (Ontario Power


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Generation, 1999). The full privatization, however, never came to fruition as OPG

and Hydro One continue to exist as crown corporations to this day.

Regardless of the failed privatization of OPG and Hydro One, the Energy Competition

Act has been a defining aspect of wind deployment in Ontario. OPG which is the

generating arm of what was Ontario Hydro and Ontario Hydro itself, expressed

very little serious interest in wind energy, holding true to the general North

American trend of public utilities preferring to stay away from wind energy. As a

result, almost all of the wind energy deployment in Ontario has had to come from

the private sector. This would not have been possible without the competitive

nature of Ontarios electricity market.

Ontarios electricity system is overseen by a variety of arms length agencies, most

notably the Ontario Power Authority which oversees the long term energy supply

to the province and the Ontario Energy Board whichs primary mandate includes

setting electricity pricing rates. While it is a competitive market, it is a regulated

one.

Ontario has one of the most diverse electricity supply mixes in Canada. Nuclear

energy, gas, hydro and coal all make up significant shares of Ontarios generating

capacity, at 32%, 24%, 22% and 18%, respectively (IESO, 2010). The remaining 4%

is almost entirely made up of wind energy. Ontario also has the second highest

generating capacity in Canada at 35,485 MW. Despite this high level of capacity,

Ontario is facing a considerable shortfall in future generating capacity. Because of

political commitments to phase out its coal-fired power plants, a need to refurbish

many of its aging nuclear and hydro plants and an expected increase in electricity

demand, the province is estimating a need to replace or refurbish a generation

capacity gap of 25,000 MW within the next decade (IESO, 2009). This factor, in

addition to many discussed in the following sections, has provided significant

incentive to increase wind energy deployment.


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Available transmission capacity for wind generation projects has had a moderate

impact on the deployment rates, although this impact was only felt for a relatively

short period of time. Shortly after the introduction of Ontarios Standard Offer

Program in 2006, the Ontario Power Authority issued a moratorium on wind energy

purchases by Hydro One in the Bruce Area because Hydro One did not have

sufficient transmission capacity in that area (OCAA, 2007).Nearly all of the

transmission capacity in the Bruce Area was allocated to the Bruce Nuclear

Generating Station. The cap has been partially lifted since in order to make room for

some wind energy projects, but the OPA is in the process of building enough

additional transmission capacity to add an additional 2,500 MW to the area (OPA,

2009c). This area of southern Ontario is particularly important because of its

generally high wind resources.

Transmission capacity is expected to be a defining characteristic of wind energy

deployment in Ontarios future. The OPA is not currently assessing the impact of

new wind energy projects on transmission capacity, but has stated that this will

soon be a major consideration when evaluating projects (OPA, 2010b).Furthermore, the OPA has planned for a significant expansion and renewal of

Ontarios transmission capacity. While the OPA touts the employment benefits of the

$2.3 billion investment, there is some indication that such expansion will take many

years to complete at the detriment to wind energy deployment rates (OPA, 2010b).

3.1.3 Planning PoliciesOntarios government has taken a positive and supportive approach to wind power

for well over a decade, although the support has been variable and marred by

political interference.

Prior to 2003, Ontarios government approach to wind power was one oflaissez-

faire; that is, wind power would compete in the free market with other energy


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technologies without any economic support from the government, although the

government did recognize many of the benefits of wind power. At this time in

Ontario, a free market electricity generation industry was relatively new. As part of

its conservative platform, the governing Progressive Conservatives intended to

privatize the otherwise wholly government-owned electricity industry in Ontario by

selling off the assets of what used to be Ontario Hydro (Rowlands, 2007). While the

transition to a privatized market never was never fully complete, the monopoly of

Ontario Hydro was removed and the market was open to private developers.

This represented a significant shift for the wind power system in Ontario. Because

Ontario Hydro had never expressed any substantial interest in developing wind

power rather, its portfolio consisted almost entirely of nuclear, coal and

hydroelectric power sources any development of wind power had to come from

the private sector, which was considerably more interested in wind power than its

public sector counterpart (OPG, 1999).

This move by the Ontario government was by no means directly intended to inducea domestic wind power industry. Rather, the impact felt by the Ontario wind

industry was simply an externality of a more general approach to a smaller public

role by the Ontario government. Indeed, while this move towards privatization

opened the door for private wind developers which were given no special

economic incentives and forced to compete with other energy technologies the

government introduced concurrent programs that stymied wind power

development, most notably the five-year freezing of electricity rates (Progressive

Conservative Party of Ontario, 1994). This was seen as a boon for consumers, who

had previously been seeing electricity rates rise well above 5% annually during the

early 1990s (Daniels & Trebilcock, 1996). For wind developers, this presented a

remarkably significant challenge, as such low costs made wind power prohibitively

expensive. That being said, the government was fairly certain that a certain segment

of the consumer market would demand green power and thus felt it required no

extra attention (Government of Ontario, 2000).


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The laissez-faire approach taken by Ontarios government shifted significantly

during the early 2000s. According to Rowlands, three separate issues occurred

concurrently to trigger such a shift: 1) Governmental committees were beginning to

explore support for wind power and other renewable technologies in much greater

depth; 2) The government began implementing an oppositional policy to its coal-

fired power plants, vowing to shut them down by 2015, largely as a result of strong

medical lobbies warning against the economic and health dangers of smog (this will

be explored in greater detail in the pro-wind movements section); 3) The e-coli

tragedy of Walkerton occurred in 2000, primarily as a result of an underfunded,

understaffed and undertrained government agency failing to properly oversee the

quality of the drinking water, sparking a growing concern among the public with the

governments approach to limited role of public bodies (Rowlands, 2007).

As a result of the culmination of these three events, two things occurred that are

particularly important to wind power. First, the government announced it would

introduce a renewable power standard, known as the Green Power Standard thisprogram will be explored in greater detail in the following Economic Support

Systems section. Secondly, and perhaps more importantly, the incumbent PC

government was defeated by the Liberal party in the 2003 provincial election.

Like the previous PC government, the Liberal government also implemented

oppositional policies towards coal-fired power, but instead chose 2007 as a target

year to have the plants shutdown this target continued be moved back through the

2000s as it became clear that meeting the targets would be extremely difficult

(Ontario Liberal Party, 2003). Nonetheless, the Liberal government has continued to

implement strong and supportive wind power policies since its election in 2003.

Indeed, they quickly announced targets of renewable electricity supplying 5% of the

provinces power by 2007 and 10% by 2010 (Ontario Liberal Party, 2003).


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To meet these targets, the government implemented its own version of the previous

governments Green Power Standard, using a government tendering process and

issuing a Request for Proposals (RfPs) (Rowlands, 2007). This system continued for

several years, largely because of the similarities between it and other RfP processes

the Ontario government was already very comfortable and familiar with. Again,

these policies were not focused exclusively on wind power, but because of wind

powers cost-effectiveness relative to other renewable technologies especially

important in an RfP process wind power made up a great deal of the projects.

The RfP soon became a political liability for the Liberal government, as costs of

projects skyrocketed, NIMBYism became rampant, and those not awarded RfP

contracts were left with nothing, making them particularly antagonistic towards the

government (Rowlands, 2007). But rather than backing away from supportive

policies of wind power, the government instead elected to pursue a different avenue

to support its development by introducing a feed-in-tariff, known as the Renewable

Energy Standard Offer Program (RESOP). This program was seen as considerably

more politically acceptable, largely because of the involvement of both the DavidSuzuki Foundation and the Ontario Sustainable Energy Association (OSEA), which

focused on the community and provincial development advantages of a feed-in-tariff

(Rowlands, 2007). Moreover, it garnered significant support from the provinces

agricultural sector, which could use the feed-in-tariff as an economic boon because

they could now own their own projects much more easily.

It should also be mentioned that the governments decision to move from an RPS

system to the RESOP was also motivated by political factors, namely its desire to

differentiate itself from the previous PC government in as many ways as possible

(Rowlands, 2007). Because the RESOP, unlike the RPS system, was not affiliated to

the previous government in any way, it was a politically attractive choice.

The RESOP program continued for several years and acted as the mainstay for the

governments policy towards wind power. The RESOP, however, became


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increasingly problematic, as it became clear that the approvals process and more

importantly, the price level, were delaying the development of wind power

significantly in the province (Rowlands, 2009). Concurrently, it became clear that

the governments ambitious plans to shut down the provinces coal-fired power

plants, one of the primary drivers behind the development of wind power in

Ontario, would be delayed. In 2007, the government changed its target to shutting

down all the plants by 2014 and continues to hold that target to this day (OCAA,

2010).

In 2009, the government introduced the Green Energy and Economy Act (shortened

to GEA), a wide-ranging piece of legislation that covers a broad range of

environmental and energy factors in Ontario. One of the main facets of the act was

an increased focus on renewable energy, including wind power. It introduced a

significantly more generous replacement of the RESOP, simply known as the Feed-

in-Tariff Program (FIT); much more ambitious targets of renewable electricity

over 15,000 MW of renewable generating capacity by 2025, with a strong desire to

exceed these targets ; a streamlined approvals process that would centralize theapproval for renewable energy projects; an obligation by utility companies to tie

new renewable energy projects into the grid; and a significant investment in

community power (Ontario Ministry of Energy and Infrastructure, 2009).

Interestingly, despite the 15,000 MW targets being announced and reprinted by a

variety of sources, as of April 22, 2010, the targets are no longer available on any

government website (HydroWorld, 2009; Pic Mobert First Nation, 2009; Sarnia-

Lambton Economic Partnership, 2009).

After the regulations were introduced in the fall of 2009, approximately 2,200

applications were submitted to the Ontario Power Authority the public body in

charge of managing the electricity supply in all of Ontario within three months for

a total of over 8,000 MW of generating capacity, almost all of which was from wind

power (OPA, 2009d). More recently, over 1000 MW of wind energy projects were

approved by the OPA (CanWEA, 2010c).


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The program, which is in its earliest stages at the time of writing, has been met with

significant administrative delays, but it is clear that the unprecedented scope of such

a program will garner considerable development of wind power in Ontario.

3.1.3.1Regulatory Approvals and Siting ProcessOntarios approvals process, for many years, was a fairly complex process. Wind

energy projects were typically required to go through myriad approvals from

different departments at the municipal and provincial levels. A requirement for

federal approval has been a rare occurrence as few projects take place on federal

land or are otherwise under federal jurisdiction. The provincial approvals process is

usually a mix of environmental, archaeological, construction and historical/cultural

approvals, much of which entailed some level of public consultation, such as an open

house or public meeting. For major wind energy projects, these processes could take

upwards of one year.

The municipal or local level approvals have been highly problematic for wind

energy projects. While these processes are primarily over zoning approvals,

complications can arise if amendments to the Official Plan are required. Moreover,

unlike a provincial approval which is provided by a sole government agency

zoning approvals and Official Plan amendments often require passage by the

municipal council or at least a standing committee, which can take time, especially if

the council requires more time to review the proposal. Sometimes projects can also

require approval by both a municipal council and a township council. Renewable

developers have also cited the redundancy in some of the approvals process because

the requirements at the municipal level can overlap with those at the provincial

level, such as the public consultation processes (Ontario Ministry of Energy and

Infrastructure, 2010).


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Although there is no publicly available data detailing the success rate of applications

in Ontario, developers have been long complaining that the approvals process is far

too cumbersome. Indeed, some organizations believe that as many as 50% of

projects are not approved or delay the process so long that the project becomes

uneconomical (Weis & Ratchford, 2009). They also count the refusal of utilities to

hook up the projects to the grid when using the 50% figure.

This has changed substantially within the past year. One of the controversial aspects

of the Green Energy Act has been its shifting of the approvals process. Under the

GEA, developers no longer require the myriad approvals described above. Instead,they simply require something called a Renewable Energy Approval, which is

provided by the provincial government. In order to receive an REA, a developer is

still required to go through the same assessments, but submits them at one time for

only one approval. More importantly and controversially the REA supersedes

any municipal authority on the projects. Quite simply, developers of wind energy

projects do not require any approval from the local government. This has proven to

upset many, although it, along with the obligation for local utilities to connect

projects to the grid, has contributed to a multitude of projects being approved

(Peterborough Examiner, 2009). Indeed, the Ontario government has awarded over

1500 MW of new wind energy projects within the past month (OPA, 2010a).

Assuming this shift in the approvals process is not politically capsizing, it could

signal a very rapid d

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