Year in Review 2013: Canada’s Renewable Energy Markets

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  • December 23, 2013

sidebar11By Marlo Raynolds

BluEarth Renewables has had an exciting year advancing hydro, wind and solar projects across Canada. In my role as Vice President of Market Development, I have collected a lot of air miles crisscrossing the country to understand, evaluate and drive change in the key markets for renewable energy in Canada.

Sound public policy is critical for all energy markets – oil, gas and electricity. Renewable energy policy is diverse across Canada as it is largely a provincial matter. Here are my thoughts on the key Canadian renewable energy industry highlights for 2013.

British Columbia
The biggest surprise in B.C. this year was the outcome of the provincial election. Going into the election, with anticipation that the NDP would form the government, there was significant concern and uncertainty in the renewable energy sector; particularly, what prospects for investment in clean energy there would be. Even with the re-elected Liberal government, uncertainty remains. In the short-term, B.C. has a lot of power. The Integrated Resource Plan (IRP) put further cold water on possible investment in B.C. due to perpetuating the 1,100 megawatt (MW) Site C project. The project is a proposed third dam and hydroelectric generating station on the Peace River in northeast BC – a questionable project from a cost-effectiveness and stakeholder acceptance perspective.

Many renewable energy developers and investors are looking towards liquefied natural gas (LNG) developments on the northwest coast to buoy their prospects, with the province’s commitment to “cleanest LNG ever.” However, it remains very unclear what this means and to what extent LNG developments will actually occur. In short, 2013 has been a year of great uncertainty for advancing renewable power in British Columbia. It is a market that continues to attract interest because of its incredible renewable resources, but B.C. has failed to implement policy to attract investments.

Alberta has very strong underlying fundamentals in terms of good demand growth and an aging coal-fired generation fleet. This fleet will ultimately need replacement and cannot be replaced with traditional coal-fired power because of current Federal regulations. Unlocking the amazing renewable energy opportunities in Alberta are only a policy away. However, the much anticipated “Renewable Energy Framework” and revisions to Greenhouse Gas Emissions Policy, especially the price on carbon, did not occur in 2013. Despite increased pressure on Alberta to improve its environmental record, renewable energy policy didn’t top the priority list. However, a new cabinet position was recently created called the Associate Minister of Electricity and Renewable Resources so 2014 just might be set-up for some policy movement.

This great prairie province is a relatively small market when it comes to electricity; however, with its significant reliance on coal power, it is a market that holds potential for renewable electricity options. It would be difficult to call 2013 an exciting year for renewable energy in Saskatchewan, but there are rumours of a wind power strategy to emerge from SaskPower early in 2014. We hope this will outline investment opportunities moving forward. It could be some of the lowest cost wind power in the country because the wind sure does blow across the prairies.

2013 was a roller-coaster for the renewable energy sector in Ontario. There was a constant possibility of an election and the threat of the Progressive Conservatives shutting down renewable energy projects. Premier Wynne shifted the Feed-in-Tariff (FIT) program for large-scale projects towards a competitive Request for Proposal (RFP) process. This shift makes sense as the FIT served its purpose to rapidly develop the industry with a standing offer price attracting billions of dollars of investment. Moving forward, the RFP process will help drive down prices through competition while continuing to attract investment. The year ended with the Long Term Energy Plan (LTEP) coming out with a very reasonable commitment to wind, solar and hydro power projects for the next few years. The details of the RFP process will be ironed out in the first half of 2014 and will be very important to watch.

The anticipated call for wind power emerged at the end of 2013. The details on how Quebec will select project developers will be the focus of attention going into 2014. Quebec’s interest in renewable power development appears to be largely driven by an interest in sustaining manufacturing and local economic development. What is absolutely clear is without a local partner in Quebec, it will be very challenging to compete.

Nova Scotia
The Atlantic Provinces are a relatively small market for electricity in Canada, but nevertheless one of interest for many project developers. Nova Scotia’s renewable energy targets are leading edge and the combination of a small-scale feed-in-tariff program with a competitive process for larger scale projects is effective. Unfortunately the outcome of the last RFP process was very questionable with Nova Scotia Power being a partner in all winning contracts. A small group of concerned companies challenged the Utilities Board on whether or not Nova Scotia Power fairly participated in the competitive process. The matter is still before the courts but will influence whether the market opens up again to real competition. The government changed in 2013 and the Liberals have introduced legislation allowing direct sales between generators and consumers, but it is not clear how much this will open up opportunities for renewable energy in the province.

Overall, 2013 was fairly rocky year for renewable power development. Regardless, a number of significant projects were built and many more proposed. It is encouraging that despite significant uncertainty, investors remain interested in the Canadian renewables market. 2014 could be an exciting year for advancing clean energy with the right moves in policy. With domestic expertise and technology improving all the time, more competitive prices, and heightened awareness about greenhouse gas pollution, renewable energy is well positioned for the years ahead.

Dr. Marlo Raynolds is BluEarth’s Vice President of Market Development.