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Federal Initiatives to Encourage Emerging Renewable Energy

Presentation to CEA Workshop

Ottawa, November 25, 2002

by David BurpeeNatural Resources Canada

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Federal Energy Policy

Open-market framework– decisions on prices, investments, etc. made in

competitive and freely functioning markets– focused interventions when necessary

• climate change– Kyoto objective of reducing greenhouse gas

emissions at 6% below 1990 levels– post-Kyoto commitments likely

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Climate Change Strategies

international permits

lower carbon energy

supply efficiency

capture, sequestration

demand efficiency

Issue: finding the path of lowest cost and

maximum benefits for Canada

substitution amongst conventional sources

emerging low/no-carbon sources

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Electricity Table (Nov. 99)Measure #7

– ensure the availability of emerging non-GHG-emitting technologies by the commitment period• wind, solar, biomass, geothermal, extra-low-

head hydro, micro-turbines run on renewable resources

– governments to introduce initiatives to help reduce cost of deployment through experience, scale, etc.• procurement, production and consumer

incentives, small RPS, net metering

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Federal ResponseGrid-electricity

– Government Purchases• 3 successful pilots• 20% federal commitment

– Market Incentive Program• marketing expenses of ‘green’ power programs

for residential and small business customers– Wind Power Production Incentive

• about 1 cent per kWh for ten years to encourage 1,000 MW of new capacity over 5 years

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Expected Results by 2010Gov. Purchasing

direct: 450 GWh/yr 0.3 MT*

Market Incentive

indirect: 3,200 GWh(5% of residential customers purchasing a

portion of their requirements)1.7 MT*

WPPIdirect: 2,600 GWh from 1,000 MW

indirect: 2,600 GWh from 1,000 MW2.8 MT*

Total about 9,000 GWh(e.g. 12% of new demand)

4.8 MT*

* at 542 tonnes per GWh

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Federal Response (end)

On-site generation– Micropower Connect

• partnership to develop Canadian guidelines for connection with the main electrical grid

– federal on-site generation• installation of 125 kilowatts on federal

facilities

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Promising Emerging REWind Power

– 200 MW installed capacity– high-quality resource with

nearly ‘unlimited’ potential– no technical limits to grid

integration in short/medium term– near price-competitive,

costs still declining• 6 to 7 ¢/kWh in good regime• less 1 cent WPPI incentive

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Promising Emerging REBiomass

– currently, waste biomass:• 1,300 MW from industrial waste• 100 MW from biomass-methane

– limited new potential from waste but with large emission reduction potential• wood waste, methane from landfill site, sewage

plants and agriculture activities• near price-competitive, potential revenues from

GHG credits

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Promising Emerging RESolar Photovoltaic

– 10 MW installed capacity– good-quality resource with nearly

‘unlimited’ potential– no technical limits to grid

integration in short/medium term– price-competitive in off-grid

applications– costs still declining but only

expected to become price-competitive only post-Kyoto

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The Road AheadClimate Change Plan for Canada

– proposes new actions with 100 MT reductions, including• target of at least 10% new electricity capacity from

emerging renewable sources– 7,000 GWh/yr by 2010– or 2,750 MW expressed in wind power equivalent

• Establish goals for more efficient buildings; renewable energy systems an contribute (e.g., geoexchange)

• Comprehensive approach to large industrial emitters sectors (targets, emissions trading, offsets, cost-shared strategic investments)

• Coordinated Innovation Strategy

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Annex - Draft Definition Emerging Renewable Electricity

– wind power, solar photovoltaic, geothermal power– hydraulic power, including from fresh water if:

• turbine / plant size: individual turbines of 2 MW nameplate or less, or total plant capacity (nameplate) of 15 megawatts or less; and

– plant refurbishment: increased production from plant automation, equipment improvements using computational fluid dynamic (CFD) optimization, or

– innovative applications: wastewater treatment plant outfalls, pressure relief valves in water supply systems, irrigation canal drop structures, syphon intakes and hybrid energy systems, or

– innovative turbine‑generator units: low head (with head less than 15m), pump as turbine and variable speed units

– electricity from biomass combustion• technologies: gasification, two‑stage combustion, fluidized bed

combustion, combustion system with a modern (novel) air system• when methane: from landfill sites, or from anaerobic fermentation of

municipal sewage or animal manure