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Improving Energy Performance in Canada – Report to Parliament Under the Energy Efficiency Act - 2003-2004

Chapter 8: Renewable Energy

Renewable Energy Use

In 2002, renewable energy generation capacity from renewable sources accounted for 61 percent of total Canadian electricity capacity (see Table 8-2). Most of the renewable energy used in Canada comes from either hydro-electricity or thermal energy from biomass such as wood-waste sources.

Hydro-Electricity
Hydraulic power is a renewable energy based on the water cycle – evaporation, precipitation and flow of water toward the ocean. Canada has abundant water resources, and its geography provides many opportunities to produce low-cost energy. Tapping the energy from moving water has played an important role in the economic and social development of Canada for the past three centuries.

In 2003, hydro power accounted for about 60 percent of total electricity generation. Small-scale hydro-electric projects, with a capacity of 20 megawatts or less, constitute about 4 percent of Canada's electricity-generating capacity. Small-scale hydro has good potential for increased production.

Biomass
Bioenergy is a renewable source of energy derived from organic substances known as biomass. Biomass is supplied by agricultural wastes (such as chaff, straw, grain screenings, husks and shells, food-processing residues and methane) and forestry wastes (such as logging slash, sawdust, black liquour from the pulping process and other industrial waste). Other biomass supplies include animal litter and manure, landfill gas methane, urban wastes to be incinerated and sewage for biogas. Bioenergy contributes about 6 percent of Canada's primary energy, mostly for industrial process heat, electricity generation and residential space heating. Corn and other agricultural products are also used to generate ethanol and biodiesels for the transportation market.

TABLE 8-1

TABLE 8-2

Bioenergy production represents Canada's second largest renewable energy source. Most bioenergy is produced from organic refuse and used with the facilities in which the energy conversion takes place. The pulp and paper industry produces and uses most of Canada's bioenergy. Industrially produced heat and electricity, independent power producers' electricity, electricity from urban wastes and residential wood heat are all considered commonplace in Canada's energy mix.

Home heating with wood usually takes the form of stand-alone wood stoves, wood furnaces with hot-water or forced-air systems, fireplaces with advanced combustion inserts, high-efficiency fireplaces or high-thermal-mass masonry heaters. About 3 million Canadian households use wood for home heating. Canadians usually prefer roundwood, but alternatives include wood chips and pellets.

Earth Energy
As a result of the sun heating the surface of the planet, the temperature of the earth that is one or two metres below the surface remains fairly constant – between 5°C and 10°C. This is warmer than outside air during the winter and cooler than outside air during the middle of summer. A ground-source heat pump takes advantage of this temperature difference by using the earth or the ground water as a source of heat in the winter and as a "sink" for heat removed from indoor air in the summer. For this reason, ground-source heat pumps are known as earth energy systems (EESs).

During winter, EES installations remove heat from the earth using a liquid, typically an antifreeze solution, that circulates within an underground loop. It then upgrades the heat with a conventional heat pump and transfers it to indoor space or the water-heating system. During summer, the system reverses this process to operate as an air conditioner. EES installations supply less than 1 percent of the market for space and water heating and cooling in Canada.

Wind Energy
Wind turbines convert the kinetic energy of wind into electrical or mechanical energy. Canada has a large wind resource potential because of its large size and northern location. A 1992 study by Natural Resources Canada (NRCan) estimated the technical wind energy potential in Canada at about 28 000 megawatts. If developed, this could supply 11 percent of total Canadian electricity consumption. In 2003, wind energy accounted for less that 1 percent of Canada's total electricity generation.

Wind energy also provides mechanical power. Several thousand wind-powered water pumps are used throughout Canada, mostly in the Prairie Provinces. As well, Canadians use small, residential-sized wind turbines to power cottages and remote houses (see Figure 8-1).

Solar Energy
Three main technologies use energy from the sun:

• passive solar technologies is a term that means buildings are designed and located to maximize their reception of solar energy.
• active solar thermal systems convert solar radiation into thermal energy for heating air or water in residential, commercial and industrial applications.
• solar electric (photovoltaic) systems use solar radiation to produce electricity.

During the 1990s, NRCan assisted a Canadian company in developing a perforated solar absorber to preheat ventilation air and reduce a building's fuel requirements for space heating. This technology is more cost-effective than conventional solar air-heating technologies and is gaining acceptance in Canada and abroad. Systems have been installed on industrial and commercial/institutional buildings throughout Canada.

The installed photovoltaic power capacity in 2003 was 11.75 megawatts, with an estimated annual production of 10 gigawatt hours of electricity. The bulk of this capacity is "off grid" (not connected to an electrical transmission system), where the price of photovoltaics is competitive with conventional stand-alone power systems or an extension of a grid to a given location.

Typical applications include telecommunications systems, water pumping and purification, remote monitoring and control, remote residences, lighting and beacon systems for the Coast Guard, and numerous consumer applications, such as hand-held calculators. The Canadian Coast Guard is the largest individual user of photovoltaic systems in Canada, with an estimated 7000 navigational buoys, beacons and lighthouses.

Canada has more than 100 grid-connected photovoltaic systems installed on residential rooftops and buildings, providing on-site power with a combined capacity of just over 400 kilowatts. Significant reductions in equipment costs were observed, with Canadian photovoltaic panel prices decreasing to $6.18 per watt in 2003 compared with $11.09 per watt in 1999 (an average reduction of 15 percent per year).

NRCan delivers several initiatives to increase the use of small-scale renewable energy in Canada. The following is the array of NRCan renewable energy programs.

Renewable Energy Programs: ENergy from the FORest (ENFOR)

Objective: To improve the understanding of the role of biomass production for energy and to improve biomass productivity from natural forests and from plantations growing willow and poplar.

ENFOR, managed by the Canadian Forest Service (CFS) of NRCan, undertakes research and development (R&D) on the production and harvesting of forest biomass for energy through the private sector, universities or CFS research centres. ENFOR also investigates the broader environmental effects of harvesting from forests and short-rotation plantation culture, focusing on sustaining forest productivity and improving the sequestration and storage of atmospheric carbon in forest ecosystems. ENFOR also supports research on information systems to determine the quantity and quality of biomass in Canadian forests.

Key 2003-2004 Achievements

• Several species/varieties of willow and poplar have been assessed for production in Ontario, Quebec and the Prairie Provinces. Plantation establishment has been successful in many regions, and industry in western Canada is now engaged in the large-scale planting of fast-growing poplars.
• The CFS, the Canadian signatory to the International Energy Agency (IEA) Bioenergy Agreement, continued its collaboration with a series of workshops, seminars and publications.
• The IEA publication Biofuels for Transport describes the activities of tasks working on production of fuels from raw biomass processed into a more convenient form to be used as a fuel. It includes liquid biofuels, wood pellets and briquettes. The position paper Municipal Solid Waste and its Role in Sustainability describes the use of household and commercial waste in the energy mix, and the opportunities presented by this energy source.
• Major successes include the further development of the Forest Biomass Inventory of Canada; the modelling of whole-tree harvesting/nutrient cycling; the Carbon Budget Model of the Canadian Forest Sector; and the development and testing of species, clones and the establishment and fertilization of energy plantations.
• The publication Sustainability of Renewable Biomass for the Production of Energy by Peter J. Hall was presented at the World Forestry Congress, Québec City, September 2003.

For more information:
nrcan.gc.ca/cfs-scf/science/resrch/bioenergy/

Renewable Energy Programs: Initiative to Purchase Electricity From Emerging Renewable Energy Sources

Objective: To purchase electricity from emerging renewable energy sources (ERES) that are certified by a third party as having low environmental impact, with the objective of reducing greenhouse gas (GHG) and other air pollution emissions associated with federal electricity consumption.

Between 1998 and 2001, NRCan entered into three pilot projects to purchase electricity from ERES for federal facilities in Alberta, Prince Edward Island and Saskatchewan. NRCan has pledged to purchase 20 percent of its electricity from ERES by 2010.

Key 2003-2004 Achievements

• The Government of Canada received its second full year of electricity from ERES in Saskatchewan and Prince Edward Island. An estimated 32.4 gigawatt hours (GWh) of electricity from ERES were delivered to the grid in Saskatchewan as well as 13 GWh in Prince Edward Island. These projects resulted in an estimated emissions reduction of 29 000 tonnes of GHGs in Saskatchewan and 11 000 tonnes in Prince Edward Island.
• NRCan also continued to receive 10 000 GWh of electricity from ENMAX Corporation in Alberta. This purchase resulted in GHG emissions reductions of about 9000 tonnes annually.
• The governments of Prince Edward Island and Saskatchewan are purchasing electricity from ERES for their facilities.
• SaskPower constructed a second wind farm in Saskatchewan in fall 2002. This wind farm provides electricity for SaskPower facilities, provincial government facilities and SaskPower's "green" power purchases.
• The governments of Ontario and Alberta committed to purchasing electricity from renewable sources. Ontario targeted 20 percent of its electricity use, and Alberta entered into long-term contracts for 210 GWh annually.
• The Government of Canada issued a Request for Proposals (RFP) in Ontario for the purchase of 90 GWh of electricity from renewable resources, annually, for a period of five years. The RFP closed on December 12, 2003, and the evaluation of the proposals was underway at the end of the fiscal year with a contract award expected early next fiscal year.
• The Government of Canada also initiated or continued negotiations with NB (New Brunswick) Power, Nova Scotia Power and Newfoundland and Labrador Hydro for the purchase of additional quantities of electricity from renewable resources in their respective provinces.

For more information:
nrcan.gc.ca/redi

Renewable Energy Programs: Photovoltaic and Hybrid Systems Program

Objective: To support the development and application of solar photovoltaic technologies and the integration of distributed energy resources to the electrical grid in Canada.

The program contributes to increasing the use of photovoltaic energy technologies in Canada by developing technologies and by facilitating the development of a Canadian-based globally competitive solar industry. It also contributes to the development of policies and programs. In collaboration with Canadian industry and universities as well as international energy research organizations, the program undertakes research and development activities and fosters information exchanges that will encourage the adoption of photovoltaic-hybrid systems that produce electricity from solar energy and another energy source; validates the performance and safety of utility-interactive inverter products; supports the development of building-integrated photovoltaic technologies and systems; and facilitates the development and adoption of harmonized standards and codes for photovoltaic and distributed generation systems in Canada.

Key 2003-2004 Achievements

• Initiated a partnership with Xantrex Technology Inc. to develop and demonstrate a multi-energy (hybrid) technology that will combine and integrate several types of renewable energy (photovoltaic/wind/fuel cell) into a single system with a generator. The system offers an effective alternative energy solution that decreases GHG emissions by reducing fossil fuel use.
• Co-hosted a workshop, in collaboration with the Yukon Energy Solution Centre, to demonstrate the viability of the use of renewable energy in off-grid residences in Canadian northern communities.
• Championed a national initiative to facilitate the acceptance of utility-interactive inverters and simplified grid-interconnection requirements for renewable energy generation to become part of the electricity supply in Canada.

For more information:
cetc-varennes.nrcan.gc.ca/en/er_re.html

Renewable Energy Programs: RETScreen^® International Clean Energy Decision Support Centre

Objective: To build the capacity of planners, decision-makers and industry to implement renewable energy and energy efficiency projects.

This objective is achieved by developing decision-making tools that reduce the cost of pre-feasibility studies, by disseminating knowledge to help people make better decisions, and by training people to better analyse the technical and financial viability of possible projects.

Key 2003-2004 Achievements

• Increased the number of users of the RETScreen International Clean Energy Project Analysis Software to more than 43 000 people in 200 countries and trained 1123 planners, decision-makers, professors and other professionals via the delivery of 28 RETScreen training seminars across Canada and 11 internationally with a number of partners.
• Released Version 3.0 of the RETScreen Wind Energy and Small Hydro Project Models in partnership with the World Bank's Prototype Carbon Fund and the United Nations Environment Programme, which incorporates an improved GHG emissions baseline tool to account for the emerging rules under the Kyoto Protocol.
• Developed a new Combined Heat and Power (CHP) Model for RETScreen, and initiated the development of a new Refrigeration Project Model for applications such as supermarkets and ice rinks.

For more information:
www.retscreen.net

Renewable Energy Programs: Bioenergy Technology Program

Objective: To support efforts by Canadian industry to develop bioenergy technologies.

Technologies supported include combustion, biochemical conversion of biomass to ethanol, thermochemical conversion of biomass to bio-oil and biogas, and biomass preparation and handling. Activities are directed toward improving the reliability and lowering the cost of technologies, disseminating information on technology feasibility and economics to potential users, and helping industry commercialize its products in domestic and foreign markets.

Key 2003-2004 Achievements

• With ongoing support from NRCan and other federal departments, Iogen Corporation is continuing on a successful path to full-scale commercialization of its process for producing fuel ethanol from agricultural residues, such as straw. Iogen Corporation successfully doubled its capability to produce fermentable sugar from wheat straw in its pre-commercial demonstration plant. The company can now process 50 tonnes per week of wheat straw to sugars and is on target to produce over 700 000 litres of ethanol annually.
• NRCan supported the University of Toronto (U of T) in the development of an innovative technology that can convert any seed oil, waste grease, and animal fat and tallow into high quality biodiesel fuel. The technology produces biodiesel at ambient pressure and low temperature to yield a superior product at a significant cost reduction, both in capital cost and operational cost. U of T licensed the process to the BIOX Corp. of Oakville, Ontario, which successfully demonstrated in a million-litres-per-year pilot plant that the process can cost-effectively convert high fatty acid feedstocks into biodiesel. BIOX also recently received support from the Sustainable Development Technology Canada (SDTC) program to build a 60-million-litres-per-year commercial demonstration plant.
• Canadian biomass companies have received funding support from agencies such as SDTC, the Federation of Canadian Municipalities, Technology Partnerships Canada and provincial/territorial agencies to build the first industrial demonstrations of pyrolysis technologies that will convert wood residues to heat, power and electricity. The successful demonstration of these processes – that have higher conversion efficacies than straight combustion systems – will help to accelerate their introduction into the energy field.
• Earth (Canada) Corporation was hired by the City of Edmonton to evaluate all gasification technologies worldwide to determine their technical and economic suitability for a municipal solid waste application for the city – 150 international technologies were reviewed, 11 were found to be technically acceptable. Enerkem Technologies, based in Sherbrooke, Quebec, was ranked in the top three technologies overall and was also ranked first for the lowest-cost technology.

For more information:
www.canren.gc.ca/bio/index.asp

Renewable Energy Programs:
Renewable Energy Deployment Initiative (REDI)

Objective: To stimulate the demand for renewable energy systems by helping the supply industry in its marketing and infrastructure development efforts, including the provision of financial incentives.

REDI targets four systems: solar water heating, solar air heating, earth energy, and high-efficiency, low-emissions biomass combustion. REDI promotes these systems in the business, federal and industrial markets through three means: a financial incentive, market assessment, and information and awareness.

Key 2003-2004 Achievements

• Distributed $2.5 million in REDI financial incentives among 89 projects valued at $22 million; the projects were completed in 2003-2004.
• Collaborated with the Association of Canadian Community Colleges to support the development of a national renewable energy training strategy to be delivered across the college and institute network.
• Sponsored a renewable energy course for architects in partnership with the Royal Architectural Institute of Canada.
• Supported innovation by expanding the list of technologies supported to include another solar air-heating technology and paid for its testing at the National Solar Test Facility.
• In collaboration with the Canadian Electricity Association and the Geothermal Heat Pump Consortium, Inc., signed a contribution agreement to establish the Canadian GeoExchange Coalition to promote earth energy in Canada.
• In collaboration with industry partners, produced several new publications on renewable energy, including Micro-Hydropower Systems – A Buyer's Guide; Performance Directory of Solar Pool Collectors; and REDI, Set, Go – Toolkit for Municipalities.

For more information:
nrcan.gc.ca/redi

TABLE 8-3

Renewable Energy Programs:
Renewable Energy Technologies (RET) Program

Objective: To promote energy diversity and support efforts by Canadian industry to develop renewable energy technologies.

This program supports the continued improvement of the economics and efficiency of renewable energy technologies. Technologies supported include bioenergy (combustion, biochemical conversion of biomass to ethanol, thermochemical conversion of biomass to bio-oil and biogas, and biomass preparation and handling), small hydro projects (less than 20 megawatts), active solar applications and wind energy.

Canada is a world leader in the production of renewable energy, with about 18 percent of its primary energy supply coming mainly from two sustainable sources: water (12 percent) and biomass (6 percent). Emerging renewable energy sources such as wind power and solar energy, both for heating and electricity generation, are rapidly gaining in importance and acceptance by utilities and industry.

Key 2003-2004 Achievements

• Funded work toward the development of new and improved engineering designs of small (less than 20 megawatts) hydro power plant equipment to increase efficiency and reduce costs.
• Helped establish an independent hydro turbine testing laboratory at Université Laval that provides research support to hydro turbine manufacturers such as GE Hydro and NORCAN Hydraulic Turbine Inc.
• Played a key role in establishing the manufacturing of efficient and cost-competitive small wind turbines (in the 10-275 kilowatt range) in Canada.
• Supported a project to further develop and improve the Wind-Diesel Integration Control (WDIC) system that now includes wind-diesel hybrid systems for remote communities also using hydrogen, biogas and batteries.
• Supported Frontier Power Systems of Prince Edward Island's installation of a wind/diesel project on Ramea Island, Newfoundland and Labrador, the first installation of this kind in Canada - a project that will reduce carbon dioxide (CO₂) emissions by about 750 tonnes per year.

For more information:
canren.gc.ca

Renewable Energy Programs: Wind Power Production Incentive (WPPI)

Objective: The WPPI is a 15-year, $260-million program to support the installation of 1000 megawatts of new wind energy capacity by March 31, 2007.

The WPPI encourages electric utilities, independent power producers and other stakeholders to gain experience in wind power, an emerging energy source. The incentive is approximately $0.01 per kilowatt hour of production and represents about half of the current cost of the premium charged for wind energy in Canada for facilities where good wind resources exist. Eligible recipients can receive the incentive for 10 years.

By displacing other electricity sources and through continued momentum, wind-power capacity installed under the WPPI is projected to reduce GHG emissions by 3 megatonnes annually by 2010.

Key 2003-2004 Achievements

• The program received 39 additional letters of interest for 2800 megawatts of wind-energy projects from developers, utilities and businesses. By the end of the fiscal year, four new projects were completed, for a total new capacity of about 15 megawatts. Two projects were in Prince Edward Island (8.3 megawatts), one in Saskatchewan (4.6 megawatts), and one in Quebec (2.3 megawatts) resulting in a commitment of more than $5.1 million of incentive payments over 10 years.
• Developed guidelines to assist wind developers, utilities and businesses in their submission of an Environmental Impact Statement under the Canadian Environmental Assessment Act. The Environmental Impact Statement Guidelines for Screenings of Inland Wind Farms are available from the program or on the WPPI Web site.

For more information:
canren.gc.ca/wppi

Renewable Energy Programs: Market Incentive Program (MIP)

Objective: The MIP is a $25-million program to stimulate emerging markets for renewable electricity. Funding is available until March 31, 2006.

Under the program, electric utilities, retailers and marketers submit proposals for consideration by NRCan and Environment Canada for projects to develop market-based programs and promote the sale of electricity from emerging renewable sources, having low environmental impact, to residential and small-business customers. The Government of Canada is to provide a short-term financial incentive of up to 40 percent of the eligible costs of an approved project, to a maximum contribution of $5 million per recipient.

The program's CO₂ reduction objectives are 1.4 megatonnes per year by 2010.

Key 2003-2004 Achievements

• Received 19 new proposals.
• Signed three contribution agreements with New Brunswick, Ontario and Prince Edward Island. The agreements could result in 28 715 new customers, 136 000 megawatt hours of incremental electricity and 107 kilotonnes of CO₂ emission reductions by 2006.
• Eight additional contribution agreements under negotiation.

For more information:
www2.nrcan.gc.ca/es/erb/erb/english/View.asp?x=457