Sustainable Energy Options for Canada: Wind Energy

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Sustainable Energy Options for Canada Wind Energy
Robert Hornung President Canadian Wind Energy
Association June 7, 2009 Canadian Responsible
Investment Conference
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CanWEA

• Represents 425 companies (Canadian, American and
  other countries) engaged in the wind energy
  industry in Canada
• Members include turbine manufacturers, component
  suppliers, a diversity of project developers,
  owners and operators and a broad range of service
  providers for the wind energy industry
• Mandate includes
• Public policy development and advocacy
• Communications and outreach with a variety of
  stakeholders
• Education and networking opportunities

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Drivers for Wind Energy Development

• The need for a more environmentally sustainable
  electricity system (GHG emissions, air pollution,
  water pollution / use, hazardous / toxic /
  nuclear wastes)
• A desire to support rural economic development
  (investment, jobs, local tax payments, land lease
  payments)
• A desire to capture new industrial development /
  manufacturing / export opportunities in a rapidly
  growing 21st century technology
• A desire to ensure cost-effective electricity
  production over the long-term

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Wind Energy A Rapidly Growing Source of
Electricity in the World

• Global installed capacity of wind energy has
  grown from 4,000 MW in 1995 to 120,000 MW in 2008
• 27,000 MW installed in 2008 - 47 billion US of
  investment
• In 2007, more wind energy capacity was added to
  the grid in Europe than any other form of
  electricity generation
• Wind energy facilities now exist in more than 60
  countries and the global industry employs 400,000
  people
• Wind energy provides electricity equivalent to
  20 of Denmarks electricity needs, 13 of
  Spains, 8 of Portugals, 7 of Germanys, 6 of
  Irelands.
• Canada is the 6th largest producer of electricity
  in the world, but Canada ranks only 16th in wind
  energy penetration

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Wind Energy in Canada (2008)

• 523 MW added in 2008
• 2nd highest year
• Capacity end 2008 2,369MW
• Electricity for over 600,000 homes
• 1 of Canadas total demand

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Wind Energy Growth in Canada (MW)
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Wind Energy in Canada (2009 and beyond)

• Current installed capacity (June 2009) 2,550 MW
• Project a total of 650 MW to be installed this
  year (2nd best year ever), pushing Canada over
  the 3,000 MW mark
• An additional 5,000 MW of projects are either
  contracted or under construction
• Provincial government targets, if fully achieved,
  would result in 12,000 MW of installed capacity
  in Canada by 2015 (5 of electricity demand)
• Significant growthbut other countries are
  growing faster..we are falling behind

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CanWEAs WindVision 2025

• Opportunity
• 1 trillion to be invested in new wind plant
  globally between now and 2020 with 1.75 million
  jobs projected to be created as a result
• Canada can capture a growing share of this global
  investment opportunity
• Strengths
• Canada has a massive high quality wind resource,
  a large hydroelectric base, green energy export
  potential and a solid industrial manufacturing
  base
• Benefits of 20 Wind Penetration
• 55,000 MW of installed wind capacity
• Minimum 80 billion investment in Canada
• Minimum 52,000 new jobs

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Short-Term Challenges

• Global Credit Crunch
• Finance tougher to obtain and more expensive
• 2009 projections are lower than assumed one year
  ago
• But the fundamental drivers for wind energy
  growth remain in place
• Federal ecoENERGY for Renewable Power Program
• 1 cent / kwh production incentive paid over 10
  years
• Program funds will be fully allocated in Fall
  2009 (1.5 years ahead of schedule) no
  commitment to extend and expand the program yet
• 2000 MW of wind energy projects to be built by
  2011 expected this incentive absence will lead
  to project delays and / or cancellations
• Competitive Position vis a vis the United States
• New US initiatives providing market certainty and
  stronger incentives
• Fall 2009 US federal incentives kick in,
  Canadian federal incentives stop
• Capital already starting to move from Canada to
  the US action required or this flow will
  accelerate

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Longer-Term Challenges

• Thinking Big About Wind Energy Breaking the
  10 Myth
• Pricing Environmental Externalities
• Wind energy can create GHG offsets in Alberta,
  two attempts at federal GHG regulation have
  failed, now a North American approach
• Improving Provincial Wind Energy Procurement
  Processes
• Competitive tendering processes by Crown
  utilities create boom and bust procurement and
  marginal pricing
• Planning and Building Timely Wind Friendly
  Transmission
• Increasing Permitting and Approval Process
  Efficiency
• Building Active Community Support for Wind
• Developing the Canadian Wind Energy Supply Chain
• Very strong manufacturing base that is keen to
  explore new opportunities

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Some Examples of Thinking Bigger - Ontario

• Canadas largest province will end 2009 with
  1,200 MW installed capacity and has set a target
  of 4,600 MW by 2020 (likely to be increased)
• Ontarios Green Energy and Economy Act is poised
  to facilitate this and is precedent setting
  legislation in Canada that includes
• Feed-in tariffs for on-shore and offshore wind
• Right to Connect with an economic test
• Streamlined permitting and approval processes
  with province-wide standards and municipal
  participation (not decision-making)
• Local content requirements

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Some Examples of Thinking Bigger - Alberta

• Currently has 524 MW of installed capacity
• GHG regulatory framework in place that allows
  wind energy to create GHG offsets until 2014
  (expected to be superseded by a federal / NA
  system)
• Alberta Electric System Operator (AESO) has moved
  from a position of a 900 MW cap on wind
  development to proposals for new transmission
  that would allow an additional 2,700 MW to
  connect to the grid

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Some Examples of Thinking Bigger PEI

• Canadas smallest province has 72 MW of installed
  capacity, and will reach 150 MW in 2009
• Wind energy production currently equivalent to
  more than 15 of electricity demand
• Peak load in PEI is only 200 MW
• The government of PEI has set a target of 500 MW
  of installed wind energy by 2013
• This is meant to provide wind energy production
  equivalent to 30 of electricity demand as well
  as significant exports to the North-Eastern US

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Conclusion

• Canada has seen tremendous growth in wind energy
  and is poised for accelerating growth going
  forward, but we are only scratching the surface
  of our wind energy potential
• If Canada wishes to increase its share of the
  global wind energy investment pie, it must
  recognize it is competing for this investment
  other countries want it as well
• A key short-term challenge will be Canadas need
  to more aggressively compete for project and
  manufacturing investment with the United States
  (both federally and at the state / provincial
  level)
• Some Canadian governments are starting to
  recognize and respond to these challenges and
  opportunities, but we have some catching up to
  do.

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Want to Learn More About Wind Energy in Canada?

• Visit www.canwea.ca
• CanWEA Annual Conference and Trade Show,
  September 20-23, 2009 in Toronto
• More than 2,000 participants and 200 exhibitors
• Subscribe to WindLink, our biweekly electronic
  newsletter on wind energy in Canada
  (nataliemcclure_at_canwea.ca Subject WindLink)