North American renewable energy strategy out of reach, experts say
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Perry Hoffman

December 14, 2010

Marlo Raynolds, executive director of the Pembina Institute, pointed a finger squarely at the federal government as the chief reason why a North American renewable strategy is essentially unreachable. “I think it’s embarrassing to not even have a federal representative to be able to be able provide a video clip to open up this conference. I don’t think they realize the pace at which this industry is growing,” he said. “The growth opportunity is huge and the federal government is completely blind.”Natural Resources minister Christian Paradis was to have opened the conference with a video message, but it wasn’t available due to apparent technical difficulties.

Hope for a North American-wide strategy on renewable energy is slim to none, according to experts who spoke at Solar Canada 2010 last week.

There was consensus among all the session’s panelists that a first, and most important, step towards developing a North American Renewable Energy Strategy is putting a price on carbon. Unfortunately, they noted that this wasn’t going to happen anytime soon and is likely further away than previously thought because of the Republican success in the recent US mid-term elections.

Raynolds said pricing carbon puts solar and other renewables on a level economic playing field with conventional energy generating technologies. “You have to either tax carbon - put a price on carbon - or recognize the additional value that renewable energy offers. In other words [you have to] provide those incentives to recognize the true value that renewable energy does provide. So politically you have a choice, either make the bad pay or reward the good.”Jeffrey Simpson, noted Globe and Mail columnist and author, agreed that putting a price on carbon is the best way to developing a continental renewable energy strategy. “It is the single most important thing that governments can do and it’s not going to get done on North American basis any time soon,” he said. “Setting a price on carbon is dead in the water.”

Without a price on carbon, then governments have to rely on subsidies to prop up renewables and this isn’t necessarily the best approach, Simpson said. “In the case of subsidies, it’s extremely difficult for a government to set a subsidy that makes economic sense, that has political buy-in, doesn’t over-price whatever it is you’re trying to subsidize, and governments are struggling with that very thing,” he explained.

“I think these are difficult times for establishing the correct price and the correct subsidy. And since the Ontario energy statement of a couple of weeks ago that says that 1.9% of Ontario’s energy is going to be produced by solar by 2030 but the cost will be $9 billion, something is going to give on that front in my opinion.”

Linda Bertoli, senior partner and chair of national electricity markets group with law firm Borden Ladner Gervais LLP (BLG), said there are three elements required for a North American renewable energy strategy: political will to establish a long-term vision for the electricity sector; regulatory simplicity among the various jurisdiction both domestic and international; and government policies that support innovation, research and development to make renewables cost competitive with conventional energy.

“We’ve seen our federal government taking a fairly limited view of its role in respect of renewable energy policy,” she said, noting that in addition, the provinces are moving forward with their own individual approaches. “That is difficult to meld into a common philosophy for North America.”

Robert Hornung, president of the Canadian Wind Energy Association (CanWEA), said there are three major barriers to a North American renewable energy strategy: linking a renewable energy strategy with a climate change strategy; provincial jurisdiction over energy; and competition with the US for investment dollars in renewable energy projects.He noted that while Europe has a great climate change strategy, it has a completely independent renewable energy strategy. “The fact that we tend to link those two together I think puts us behind the eight ball,” Hornung said.

“The United states has been trying to pass the national renewable electricity standard for a number of years and broad bipartisan support can never get through Congress because it’s always part of climate change bill,” he explained. “In Canada right now…we have a federal government that is potentially saying the way we need to deal with renewables is through our climate change strategy. And it’s true that climate change strategy can help with renewables, but it’s not all we need to do.”

Provincial jurisdiction over energy and renewables is also a big barrier, according to the CanWEA president. It “makes it very hard for us to develop a national perspective on this issue, to develop a national policy, a national position to advocate for vis-a-vis the United States.”

Commitment to renewables in Canada, said Raynolds, is an issue that needs to be fixed before we can begin talking about a North American renewable energy strategy. “The US is going to do just fin without us. The US is outspending Canada 18 to 1 per capita on renewable energy. That’s the scale of investment they’re putting into this very rapidly emerging industry and we’re just not seeing that level of commitment in Canada.”

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