To address the European context, it came down to energy policy. We've seen announcements of this. Ontario has done this, they followed the lead of Germany, and now we're seeing Nova Scotia coming on board. If you're going to have renewable energy play a role in your economy, you've got to say what it costs to produce wind below 100 kilowatts and this is what we're going to pay, plus 10%. If Mr. Von Waldow wants to build a biogas plant, chances are it's going to cost him 17¢, 18¢, 19¢ a kilowatt hour to turn that electricity and make a profit.
The problem is that everybody throws their hands up and says the economy can't absorb 19¢ a kilowatt hour, but what we need to keep in mind is that energy prices are going up and they will continue to go up over time. Just because Mr. Von Waldow puts in a biogas plant and it's turning 300 kilowatts doesn't mean the entire power grid now has to pay 19¢ for electricity.
The incremental piece he adds to the grid adds such a small extra cost that's absorbed across the entire rate base that nobody ever really sees it. But what you get is broad-based investment in renewables, because now he can go to the bank, “I've got a contract for 19¢. It's going to give him 12.5% return on my investment, on my farm.” Now he can go to Royal Bank or FCC and say, “Here it is, let's go to work.” They can tell him, okay, they can see that he has a set revenue.
The challenge we find is that when you go without a solid renewable energy...like a feed-in tariff policy. The economics are so marginal, the banks don't want to touch it. FCC barely wants to touch it. Then we're into programs. We're going to go and apply to NRCan or Agriculture Canada: it's a special project, it's a demonstration project. Well, you can only do so many demonstration projects. Without a broad-based policy mechanism to allow us to integrate, all you get is one-off projects.
So if we're going to do anything, if you want to know how to really engage renewable energy, take a look at the German policy; take a look at the Ontario policy, the Green Energy Act. That will tell you exactly what we need to do.
Now, I realize that's a difficult piece, because each province is in charge of its own energy destiny, but some support, to an extent, on pulling that together.... If federally there was a program to say we'll top up 3¢ on that power grid for renewable projects in agriculture, then maybe the province would come to the table with the other 4¢ or 5¢, whatever is needed. That would be a fairly good model for a program.
The other alternative is to put cash on the table so that you don't have to go and raise as much financing.