The last few years have been an interesting time for wind energy in Canada. Between 2003 and 2009, Canada's installed wind energy capacity increased tenfold. By the end of this year, Canada's installed wind energy capacity is expected to exceed 4,000 MW. In addition, there have already been promising developments that bode well for continued rapid and accelerating growth of the industry going forward. For example, British Columbia, which had zero wind energy capacity before 2009, now has more than 800 MW built, under construction or contracted. However, the good news is not limited to wind development.
Significant new investments were announced in the wind energy supply chain, as manufacturers such as Enercon and REpower are working to meet domestic-content (DC) requirements in Quebec. In Ontario, Siemens announced a new blade facility, and manufacturers such as Daewoo and Linamar committed to investing in wind energy manufacturing in Canada.
Recently, NAW spoke with Robert Hornung, president of the Canadian Wind Energy Association (CanWEA), about the state of Canada's wind energy industry, its successes and the challenges that lie ahead.
North American Windpower: The ecoENERGY incentive – which awarded eligible wind energy projects with a production incentive payment of C$0.01/kWh in their first 10 years of operation – was instrumental in the increase in wind project development. Are there any forthcoming incentives from the government that will replace the program?
Hornung: The current federal government has indicated that it wishes to support the development of wind energy and other clean and renewable electricity sources through the establishment of a regulatory framework for carbon that includes a carbon price. At the same time, it indicated that Canada would take the U.S. government's lead on carbon regulation, in the interest of establishing a North America-wide system. Unfortunately, there remains significant uncertainty about the timing of this regulation – particularly given recent developments in the U.S. – and it is certain that there will be a significant gap in time between the final end of the ecoENERGY incentive and the introduction of a fully functioning carbon market. With neither in place, it will be more challenging for Canada to compete for wind energy investment with the U.S.
NAW: Many developers were upset because it appeared that Samsung was given preferential treatment regarding the granting of transmission access. Has the Ontario government clarified its position on the Green Energy and Green Economy Act of 2009 (GEA) following the deal it granted Samsung?
Hornung: CanWEA has consistently opposed the granting of preferential access to scarce transmission resources in exchange for commitments related to the development of the wind energy supply chain. While it is now clear that Samsung will have preferential access to both existing and new transmission capacity, there is still a tremendous amount of uncertainty as to when and where Samsung will take advantage of this opportunity.
As a result, wind energy project developers in Ontario face uncertainty with respect to the amount of transmission capacity that will be available for their projects, thereby increasing risk and cost. Our best hope is that the agreement will work to leverage more rapid construction of new transmission capacity rather than simply serving to lessen access to transmission capacity for other companies in the wind energy industry.
NAW: Quebec has a current goal of installing 4,000 MW of wind energy capacity by 2015. What will the province's wind energy market look like after that time?
Hornung: Quebec positioned itself as a Canadian wind energy leader when it established a target of 4,000 MW of wind energy by 2015, and most of the projects required to meet that target have now been contracted. Beyond 2015, however, the only commitment that has been made is that Quebec will add 100 MW of new wind energy capacity for every 1,000 MW of new hydroelectric development. The uncertainty surrounding Quebec's wind energy market after 2015 is of great concern to wind energy project developers and the wind energy supply and value chains that are being established in Quebec to meet the needs of the industry through 2015.
NAW: What will the Ontario wind energy market look like in 2015?
Hornung: Although Ontario has not established a formal target for wind energy development, it has laid the foundation for continued and sustained growth in the sector through the GEA. In addition, Ontario has developed a plan for new transmission in order to facilitate wind energy development, and it is likely that we will see new transmission capacity come online even after 2015.
The Ontario Power Authority's 2007 Integrated Power Supply Plan (IPSP) had originally envisioned that the province would have 4,600 MW of wind by 2020, and we are confident that Ontario will easily exceed those numbers if the current policy framework remains in place. The expected fall release of the government's new IPSP will provide greater clarity on the new expected target.
NAW: What are the challenges involved in building the Canadian supply chain?
Hornung: While Canada is well positioned to play a significant role in the North American wind turbine supply chain, we are competing with the U.S. for this opportunity. To be successful, Canada must create a strong and sustained market for wind energy deployment domestically, and Canadian companies must demonstrate that they can compete cost-effectively with other potential sources of supply to ensure access to the much larger U.S. market. Although DC requirements have driven some investment in the wind energy supply chain in Canada, they are not enough to guarantee that investment will occur. Canada must also present a relatively attractive investment opportunity.
NAW: Are there any opportunities for Canada to export wind energy to the U.S.? How is CanWEA moving to make it happen?
Hornung: Like the U.S., Canada has a massive wind energy resource. There are clearly opportunities for Canada to export wind energy to areas of the U.S. that have a high demand for electricity, such as in the Northeast and California.
For Canada to capture this opportunity, provinces must explicitly identify exportation as a priority and collaborate in the development of policy and infrastructure to make it happen. In September, CanWEA, in conjunction with the New Brunswick government, hosted a conference to further discuss these issues. We are pleased to see increasing discussion of these opportunities in Canada.
NAW: What is CanWEA doing to streamline siting and permitting policies for wind energy projects?
Hornung: There is still room to improve the efficiency of the permitting and approval processes without diminishing their effectiveness. We have been pleased to see increased efforts across Canada to streamline the permitting and approval processes through the adoption of one-window approaches for project developers. The most obvious example of this is Ontario's Renewable Energy Approval process. However, many of these initiatives remain in their early stages, and it is not yet possible to assess their ultimate impact and effectiveness.
NAW: Planning and building so-called ‘wind-friendly’ transmission is needed for the build-out of the Canadian wind industry. How will the industry achieve this goal?
Hornung: We have seen several good examples of planning wind-friendly transmission in Canada. The most obvious examples are seen in Ontario and Alberta, both of which have announced plans for significant new transmission investments targeted primarily at bringing more wind energy online. The key challenge now is to build this transmission in a timely fashion. CanWEA is also seeking to launch a Canadian Wind Integration Study that will provide insight into the new transmission required to facilitate integration of 20% wind in Canada.
NAW: If Canada is to meet its wind energy potential, more than C$80 billion of investment is needed. Can you provide a status update on this investment and steps CanWEA is taking to meet this goal?
Hornung: The global recession and subsequent reduction in electricity demand means that less wind energy will be required to meet 20% of Canada's electricity needs in 2025. It will now take 43,000 MW to reach that goal rather than 55,000 MW, which was previously estimated.
With more than 6,000 MW of new wind energy already contracted to be built across Canada over the next few years – and provincial targets in place that require even more wind energy to be built – we are confident that Canada will have a minimum of 12,000 MW of wind energy in place by 2015. This would put us on track to meet our 2025 target. There is still work to be done, however, to ensure that growth in the 2015-2025 period will allow the target to be met.
