Natural Resources Committee on May 7th, 2007

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Let me challenge your answer a little bit. I'm not disagreeing completely, because I think there are ways that you could get involved to ensure that you're going to achieve the results, but you want to make sure that your tax dollars are spent productively and that you are getting benefits out of them.

So at the end of the day, if we're putting tax dollars into an incentive for me to put something on the customer side of my meter, yet we don't achieve the results with the local utility, how do I know that my tax dollars are being spent wisely by giving you that incentive?

[Gordon Shields]

What results would not be achieved in a regulated market where the utility is obliged to interconnect with the homeowner and the homeowner produces energy at a peak time, for example?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Let's say you have a windmill. As an example, you have a windmill and you're intending it for peak. I give you an incentive based on you taking a certain load off the grid, and then your windmill doesn't work. All of a sudden, I'm the default supplier, as the utility. The load growth has gone back up again, so now I have unpredictable load growth.

I'm just saying that to me that's a little dicey, unless we can get specific things like solar that is connected directly to hot water heating or something of that nature. Then you can say you've taken that hot water heating off the grid; it's no longer on the grid. That's all I'm saying, that you have to make sure that you have something that you're not putting the default supply back into—

[Andrew Cole]

By the way, in Ontario there are some very aggressive targets for conservation. Conceptually, it's hard to grasp, but fundamentally, Toronto has to be taken off the grid by 2025. It's a big city. It's a lot of demand, but conceptually, that's a big, big challenge. That's being met by an integrated supply plan for Ontario that includes renewable energy, that includes nuclear redevelopment, that includes very aggressive conservation.

Net zero truly is this idea that at any given time over the course of the year there will be enough energy put back in the grid as was taken from the grid, not necessarily synchronously with peak demands...that's very hard to do. But if in fact we went from having a dozen net-zero homes to having 50,000 net-zero homes spread across the country, there would be a noticeable contribution to the grid.

Again, this is evolving. The technology has been around for a long time. The first photovoltaic panels were much more expensive than they are now, much like a compact source of light 20 years ago was $35 and now it's $3. Or a pocket calculator used to be $80; now it's free in a cornflakes box.

So technology will help us along the way, but a lot of this is that many people think they're getting an energy efficient home just by buying any home, so I think that's something we have to work on for labelling. Many people would like to be part of a solution, but they don't necessarily have the discretionary extra capital to do so, so are there ways of stimulating that until it becomes more de rigueur? And price signals can help take us the rest of the way.

[Gordon Shields]

If I could just add...if I'm wrong, please tell me, but are you questioning how reliable is the power, in part?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Well, that's one aspect of it. Then you have to get net metering, and there are a lot of different things you have to have that not all utilities are on board with yet. But at the same time, there is reliability.

[Gordon Shields]

It is, but I think we're getting there in Ontario. And Ontario will be a perfect example for other provinces to consider this option, as a feed-in tariff, or an advanced renewable energy tariff, as it is referred to.

But I would suggest that I could ask the same question of what do you do when a nuclear plant in Ontario isn't ramped up quickly enough to meet the excess demand when we have a shortage or a peak demand in the summertime? Or what do we do when we have power plants that are shutting down in Ontario because of maintenance issues?

We put a lot of stock in central generation, but if you look at the home and you look at the on-site generation sources that could be available to it, and if we start looking at that as part of the energy mix as opposed to it being an add-on to the homeowner to benefit the homeowner only, it's not a benefit just for the homeowner; it's a benefit to society and to the energy paradigm that we're trying to pursue, which is a cleaner environmental energy source.

If you look at it in that context, then what we are truly doing is building a greener, more secure energy matrix.

[Simon Knight]

As has been pointed out, in Europe there's huge-scale deployment of this type of initiative. Their grids are stable; they have a system that works. There's nothing there currently that we couldn't be doing here for quite a number of years before we had to answer the question, “What do we need to do about the grid?” There could be 20 years of deployment of net-zero energy homes before we're even concerned about whether this is causing stability problems on the grid itself.

Even then, our grids are going to need to be upgraded anyway. The grid of the 20th century is not the grid of the 21st century. The grid of the 21st century is going to be a smart grid; it's going to be computer-controlled. It'll have much better wires and lines for moving the power as well, and it will be a system you'll be able to stabilize, because you'll be able to shift loads around in micro-seconds, rather than having people sitting in front of boards saying, “I think I need to move some load from this one to this one, because it's looking a little unstable.” It will be done by computer.

We need to invest in our grid system for the 21st century to allow these kinds of interconnections and allow this kind of large-scale deployment for these kinds of systems.

I worry that we keep talking about individual technologies. We need to start talking more along systems lines than of individual winners or losers amongst the technologies. Even within the home itself, what's come out of the net-zero energy homes, which has been very interesting for me in following the design charrettes and development of these houses, is that when you start thinking about the home as a system, you come up with a very different answer at the end.

What's happened out of this, what was premier out of all these developments, was the envelope of the house. It was the walls, the windows, the doors. It wasn't the solar system on top of the house. That was the icing on top of the cake that got you to net-zero. It was how you designed that house to start with that got you the big win.

I think it's the same thing when we talk about it on the larger scale and start talking about grid systems. It's how we design the grid for the future that's going to determine whether we're winners or losers in this, nationally or internationally. We as a country have the ability to be winners across the field. We just need to find out what the levers are and apply enough ingenuity to get there.

I'm sorry. That's just my rant.

[The Chair, Conservative, Lee Richardson]

No, it's a very good rant. I think it's probably one of the keys to what we've been hearing generally, Simon; that is, it's a systems plan that's going to be ultimately required here, and not just individual homes. But new districts are easier: you can have shared amenities, with one windmill for 25 houses, or put the solar panels on the community hall, or whatever. It's a system approach.

Before we wrap up and Mr. Ouellet tells you what you missed—

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

I have a last question.

[The Chair, Conservative, Lee Richardson]

—I wonder whether there's anything any of you would like to add.

No, you always get the last call, Mr. Ouellet—just in case they missed something.

[Simon Knight]

I have one thing.

When we come to these things, it's always a question of what the federal government can do, and I think what we need to have is more of a conversation about how the federal government, provincial governments, and municipal governments can work together to move these things forward, rather than just one level of government and one ask. I think the federal government has a huge role to play in working with those other orders of government to be successful at this. I would hope the elected officials and the government departments that are involved in this will start that conversation all the way down—I shouldn't say “down”—with the different orders of government, so that we can produce something that's the most successful in the world for the least amount of money required to make it go.

[Gordon Shields]

I forgot to allude to this. NRCan has also been an important stakeholder in this process, as well as other departments. Zero-energy housing has been raised at the level of the Council of Energy Ministers, and there's an intergovernmental working group on zero-energy housing. Progress is being made.

We don't want to lose the momentum now. We have a major trading partner next to us who's actively going down this path. We have several provinces that have approached the coalition to hold more net-zero energy home forums. We have a number of builders who really want to do this. If there's a willingness on the part of the federal government to help support it, you're going to have a ready marketplace to help react to that kind of leadership from the federal government.

[The Chair, Conservative, Lee Richardson]

Thank you.

Did you have anything further, Mr. Cole?

Mr. Stewart, do you have anything further?

Then I'll let Mr. Ouellet wrap it up.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Thank you, Mr. Chairman.

I congratulate Mr. Knight for his comments. I find them very accurate. We need those types of comments to guide us, particularly on the topic of the grid.

I would like to ask one brief question in reference to what you said. Several questions, such as those asked by Mr. Gourde, concerned the cost of such a house. Bearing in mind the concept of the net-zero energy house, a house heated exclusively through solar energy is more expensive in the beginning, as I recall. Several years later, however, it is not more expensive. When homes used to cost $75,000, houses with solar energy heating were built for $75,000.

In the beginning, construction of R-2000 homes cost $3,000 or $4,000 more. It was during the time when houses were worth $75,000. After a few years, however, the additional features paid for themselves. That is exactly what you or your colleague were saying: in the long run, it is not more expensive. It is therefore important to understand that a certain market volume needs to be attained. However, in order to attain this market volume, the government must absolutely do something very important: it must educate the public, send out information and make announcements.

The R-2000 program was sustained by the government for 10 years. It's hard to imagine launching a net-zero energy house program and abandoning it immediately afterward. That is what happened with the R-2000 program: it was dropped, and that was the end of it. In fact, smaller houses in Mr. Gourde's region do not meet the R-2000 standard, even though they should. There is no reason for that, because now they are not more expensive.

Are you going to ask the federal government to support a public information and incentive program? How much would you ask for?

[Gordon Shields]

I don't have that final figure yet, but as I said earlier, we will provide a budget submission asking for money. There was a figure applied to what our suggestion was on the GST abatement. I believe it was over 15 years. I'd have to go back to my records.

I threw this out as a discussion point because I think it's worth revisiting. And this is not the place to do it; the finance committee is. But the point is we were talking roughly about $2 billion over 15 years. It wasn't a lot of money—

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

No.

[Gordon Shields]

--a GST abatement.

So we would be happy to resubmit that. If we need to deal with proposals in that fashion, how much and over how long, we're happy to do that. But those are tools that certainly we like to suggest. And I will resubmit it to you, I promise.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Thank you very much.

[Gordon Shields]

Thank you for supporting it.

[The Chair, Conservative, Lee Richardson]

Thank you.

I'll thank our witnesses and excuse you.

I think we have a little bit of committee business left to do.

Thank you very much again. It was very enlightening and very helpful. I appreciate the cooperation of the witnesses with our questioners. I think it was a good day.

Thank you very much.

[Simon Knight]

We really appreciate the opportunity to speak to you today and would welcome the opportunity to come back if you have some further questions. And we'd like to actually, once we have our larger proposal together, come back and run that by you guys and see what you think about whether it meets the kinds of needs the government has in the future.

[The Chair, Conservative, Lee Richardson]

We'd be happy to see it. And as I say, we'll be completing a report, probably within the month, to the government and would welcome any further input.

Thanks very much.

I'm sure Monsieur Ouellet will be up to speed in any event. His colleague has some business for the committee.

Madam DeBellefeuille.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

In fact, I have a question, Mr. Chair. I have been going over the agenda for our next meeting on Wednesday, and I see that we will be hearing from witnesses during the first half of the meeting, and that we will be hearing from the minister during the last hour. I am surprised.

I have two questions. Firstly, will the minister appear alone, or accompanied by someone? Secondly, I've taken the time to study the budget and documents provided to us so that we can ask the minister good questions. I believe one hour with the minister is not enough time for us to consider such a substantial budget. Do you believe it would be appropriate to extend our meeting, perhaps with department officials, so that we can further delve into the department's finances?

[The Chair, Conservative, Lee Richardson]

No.