The time has never been better for Canada to replace carbon-based fossil fuels with alternative energy, but several challenges still stand in the way, according to a new study by the Economist Intelligence Unit, sponsored by Ernst & Young.
A survey of 132 executives found that the most significant drivers for renewable energy are public perception and government, while cost and technological immaturity are still significant barriers.
‘We've seen a real willingness from the Canadian public to embrace the virtues of going green, but price is still a top consideration,’ says Cathy Cobey, Canadian head of Ernst & Young's climate change and sustainability practice group. ‘Renewable energy is necessary for us to reduce our reliance on fossil fuels – including coal, natural gas and oil – but it must be priced competitively.’
Despite recently announced government incentive programs, renewable energy still remains expensive for both consumers and suppliers in Canada, impeding the shift to new energy sources, according to the survey.
Canadian suppliers are concerned with the cost of generating renewable energy, with 64% saying high costs make renewable energy unattractive to their customers. It appears that their concerns are not unfounded, as 68% of energy consumers surveyed say their organization has not taken steps to develop and adopt a renewable energy strategy.
As a result, suppliers are not moving quickly to add renewables to their portfolio. Only 38% of suppliers see growth of their renewable energy portfolio as a high or extremely high priority, with almost as many (34%), indicating that it is not as much of a priority.
Fifty-seven percent of suppliers say that positive public perception is the biggest benefit to their organization incorporating renewables into its energy mix.
In order to make significant progress with renewables, both suppliers and consumers agree that government has a crucial role to play in providing the necessary impetus.
Government regulation is particularly important in Canada, where 73% of supplier-respondents see it as a barrier, compared with only 42% in the U.S. However, 46% of respondents say that recent policies, or those being proposed, are a step in the right direction.
SOURCE: Ernst & Young