Ontario: Leading Canada's Green Economy - A Lesson For British Columbia
In September, the Ontario government announced a series of initiatives in the renewable energy sector which are designed to open up investment opportunities in that province's green economy on its way to establishing Ontario as "North America's leader in renewable energy" (its words not mine).
Ontario calls its initiatives the "Ten Steps to Green Energy". Below is a list of those ten steps, along with some comparison to what has or has not been done in British Columbia.
1. Ontario announced it will close four coal-fuelled power units in 2010 - four years ahead of the 2014 target. In BC, we do not have coal-fired electricity generation facilities, but BC Hydro's aging Burrard Thermal, which burns natural gas to create electricity, still exists. A decision on its closure is expected, but has not yet been made.
2. Ontario launched an Aboriginal Energy Partnerships Program. In BC, there is the Remote Community Clean Energy Program which last year provided $20 million to remote communities to encourage and support sustainable remote community clean energy systems.
3. Ontario announced the $250 million Aboriginal Loan Guarantee program (ALGP). In BC, there is no similar program, except as mentioned above. I wrote about the Ontario aboriginal program here.
4. Ontario gave the go-ahead to Hydro One to begin work on 20 new transmission projects. In BC, BCTC filed a $5.3 billion Ten Year Capital Plan in 2008, which includes $657 million over 10 years for interconnecting clean and renewable generation. Also recently announced is that the 330 km Northwest Transmission Line will proceed at an estimated cost of $404 million.
5. Ontario, through the Community Energy Partnerships Program, is trying to make it easier for communities in Ontario to bring green energy projects to life. I am not aware of a similar program in BC, but the Community Energy Association is promoting energy efficiency and alternative energy through community energy planning and project implementation in British Columbia. Here is a good summary of its work.
6. Ontario, through the Municipal Renewable Energy Program, is trying to make it easier for municipalities to bring green energy projects to their communities. I am not aware of a similar program in BC, but the Community Energy Association's vision is somewhat parallel.
7. Ontario established the Renewable Energy Facilitation Office (REFO), to assist developers, communities and municipalities obtain information on developing renewable energy projects in Ontario. In BC, we have Front Counter BC and the BC IPP Office. BC has also published the IPP Guidebook to assist IPP developers through the province's regulatory process.
8. The province's Renewable Energy Approval (REA) process became law by regulation through enactment of the Green Energy Act. There is no similar express renewable energy regulation in BC.
9. Ontario develops domestic content requirements which would ensure at least 25 per cent of wind projects and 50 per cent of large solar projects be produced in Ontario. There is no similar production requirement in BC.
10. Ontario's Green Energy Act became law and by regulation introduces North America's first comprehensive feed-in tariff program that guarantees specific rates for energy generated from renewable sources. There is no Green Energy Act in BC and BC does not have a specific feed-in tariff, but BC Hydro has the Standing Offer Program for projects less than 10MW.
As the above analysis reveals, while it has taken some steps forward, BC has not yet acted in the same cohesive and coordinated manner that Ontario has in its support of the renewable energy sector in this province. In particular, the fact that a pronounced and comprehensive multi-fuel source feed-in tariff for BC has not been proclaimed is one of the greatest differences between BC and Ontario. In my view, this is the principal reason why Ontario today is attracting considerable investment in green energy, while BC waits on the sidelines. The BC government would be wise to examine and learn from the Ontario green energy experience if it truly wants to become a renewable energy powerhouse.
Renewable energy is a very important topic in BC. I welcome your comments and/or suggestions. Feel free to make a direct comment on the blog below and I will post them in due course.
Warren
You are right on the mark. BC can learn numerous energy policy and leadership lessons from Ontario. But it can similarly take ideas from the US and other geographies.
Clean energy developers will question 'why BC'? As will investors. Ontario offers higher off-take prices (and therefore investor returns) and substantially lower developer risk (feed-in tariff vs clean call) than BC. The US offers substantial financial incentives (that boost returns and lower risk). In the absence of compelling ties to BC, or material sunk costs in BC projects, then developers and investors will simply choose other geographies over BC. Clean West sees this trend in the marketplace.
Ontario's feed-in tariff is as bold as it is controversial. The related power acquisition cost for clean power is high (utility wind prices escalate from 13.5c/kWh versus 10c in BC SOP, solar rooftop up to 80c/kWh). Yet, the provincial content requirements are very strict and escalate further in time. As a result then Ontario will create jobs across the clean energy equipment and service value chains and also stimulate clean energy production. From engineer installers that put solar panels on residential rooftops to manufacturers of wind turbine blades and gears, then jobs will be created and a new industry will be born. Ontario has learned from its RESOP challenges and make better policy. Clean West celebrates the Ontario feed-in tariff.
BC relishes technological innovation. It has abundant talented people with highly creative ideas. And supportive policy. This is absolutely fantastic. No question. But if BC has the intent to meaningfully produce clean energy, in addition to simulate cleantech IP, then it needs to demonstrate to developers and institutional investors that BC is worth their attention. Policy makers should reflection on the Ontario / BC items in Warren's list, and also consider the US and other geographies (e.g. offshore wind in Europe).
Yet there is a silver lining. BC policymakers can learn from the successes and mistakes of their peers elsewhere. As my old business school professor, Costas Markides, advocates in his corporate strategy book "Racing to be Second" then second-movers have the luxury of speed and cost over their first-mover cousins. Second-movers can avoid the tardy processes and expensive budgets inherent in creating something from scratch.
BC is blessed with significant natural resources. It has the wonderful ability to steal great ideas, avoid pitfalls and race to be a clean energy leader. Or not.
Ross McDonald
Clean West Capital
Thanks for the very informative post. Unfortunately in BC the planners and the enviro-activists are all too busy trying to write, rewrite, and yet overwrite the rules. The energy plan is in shambles, and the province is too intimidated.
Also pls. note that about 6% of the province's energy is through coal fired plants originating in Alberta and WA.
It's nice to know that a lot of people have been pushing efforts to make planet earth a better place. With biofuels, and all other alternative resources for energy, we might be able to curb the growing problem that is global warming and at the same time preserve the ecosystems of the world. The Earth's natural forces such as wind, hydro and solar power are limitless and effective ways to gain energy. So unless the winds stop blowing, the seas stop roaring or the sun dies out, there'll always be a place to go for energy. Kudos mother earth!
I am so excited about all the latest advances in geothermal technology-its so clean and earth friendly and efficient- a real answer to our energy problems.