Renewable energy exports
Canada faces leadership challenges in the new green economy
When oil is priced at $70 per
barrel during a world-wide recession, it is safe to say the demand
for renewable energy, particularly
in North America, is here to stay.
When such non-market forces as
carbon regulation and other state-mandated requirements are added
to the mix, there is little doubt that
“green power” has a bright future.
Canada is in many ways as well
endowed with renewable resources as it is with conventional energy
sources. For example, it is estimated to have the second-highest
potential for wind energy development in the world, exceeded only
by Russia. And notwithstanding
Canadians’ much discussed and
lamented high per capita energy
consumption, Canada’s renewable
energy resources far outstrip its
domestic load (demand).
Fortunately, there is a vast renewable energy market demand south
of the border, creating a truly massive opportunity to be met by virtually all parts of the country.
Moreover, politicians across
the country routinely trumpet
their desire for their province to
become an energy leader in green
power and technology. 2010 will,
in many ways, be a pivotal year
for policy makers to step up to
the plate to make those words a
reality. Given our comparatively
small population, and the head
start enjoyed by others (such as
Denmark, Germany and Spain)
true leadership in green energy
can only be marked by our ability
to export this energy.
Merely serving our local
demand will make no one but ourselves characterize us as leaders.
But the non-exhaustive list of challenges discussed below must be
overcome if Canada is to assume a
leadership position in the new
&ANGELA
STOLZ
PAUL
CASSIDY
green economy through its export
of its renewable energy.
politicians and policy makers to
make Canada a leader in the green
energy world.
The simple reality is that in
most parts of the country, many
renewable energy projects of any
significance inevitably occur in
traditional territories. First
Nations, therefore, need to be
consulted and, if necessary, successfully accommodated in these
projects. Some projects currently
underway, such as wind farms
and small hydro “run of river”
facilities, already show the value
of partnering with First Nations
to make these projects a reality.
Transmission
Developing renewable energy
for export will be a pointless exercise if there is an insufficient transmission grid resource to get it to
market. While there is a long history of transmission intertie
between Canada and the U.S., the
grid is configured for existing, conventional energy sources, such as
large-scale hydro dams and coal
fired generation plants.
The green energy resource will
require adjustments in addition to
the grid to accommodate its more
dispersed format. In some cases,
expensive new transmission interties will be required, which will
involve the construction of grid
additions to infrastructure on both
sides of the border. If one believes
in the development of renewable
energy, one must also believe in
transmission expansion.
MARK BOLTON / ISTOCKPHOTO.COM
export policies. This is primarily
because of concerns related to
meeting domestic demand first,
and other, more political concerns, such as whether private
developers should play a role.
At bottom, an energy export
policy must be clear, coherent and
stable, or else the required public
and private investment will be in
jeopardy or unattainable.
production potential.
Export licensing
A rational export policy also
requires a rational export licensing
scheme. The current licensing
regime under the National Energy
Board Act has been designed primarily with conventional energy
sources in mind, and may not be
sufficient for green energy.
For example, requirements in
the licensing regime that local
demand be offered the power in
potential priority to export
demand may have the effect of
unduly restricting the export market because, as noted above, the
local load (expressed on a national
scale) will never be sufficient to
maximize all of Canada’s energy
Environmental permits
Green energy projects, whether
for domestic or export use, have
been and continue to be hindered
by environmental permit processes designed for the conventional
energy world. Some provinces,
notably Ontario and B.C., are taking steps to remove some of the
impediments created by NIMBYs
and others to renewable energy
projects. However, permit constraints remain a persistent issue
that will, if not remedied, undermine an effective export market.
Export policy
Even if the renewable energy
resource exists and the transmission grid is sufficient to get it to
the market, an export policy
must be designed to make it a
reality. Many provincial governments are wrestling with their
First Nations concerns
The fulfillment of Canada’s
potential to be a renewable energy
export powerhouse is inextricably
tied to the successful resolution of
the many First Nations concerns
that exist across the country with
regard to resource development in
their traditional territories. The
success or failure of the resolution
of these concerns will go a long
way to determining the outcome
of the promises made by Canada’s
Eligibility
One of the principle drivers of
the green energy market in the
U.S. are “renewable portfolio
standards” (RPS) imposed by
several states requiring that a
significant percentage of power
generation originate from renewable sources. For example,
California has a requirement that
33 percent its of electrical generation meet eligibility to be considered as a green energy source
by 2020. A federal RPS standard
will also likely be imposed.
A major difficulty potentially
arises if the eligibility requirements cannot be met by Canadian
exporters. For example, small
hydro projects may not qualify in
some states for the RPS criteria.
These artificial constraints
may challenge the ability of a
green energy export market to
thrive in Canada. ;
Paul Cassidy and Angela Stolz
practise environmental and
energy law at Blake, Cassels and
Graydon LLP in Vancouver. The
views expressed in this article are
solely their own.
World watches as Canada dithers on carbon emissions
DONALEE MOULTON HALIFAX
Santa and his work crew may
have arrived on Dec. 25, but for
many lawyers the really big event
of the month took place days earlier: the United Nations Climate
Change Conference – Copenhagen,
2009.
Going into the conference
Canada was on thin ice; coming
out the landscape may be a little
less tenuous. Still, there will be
tough promises to live up to.
