Go ahead from Sweden.
Evidence of meeting #15 for Natural Resources in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was electricity.
A recording is available from Parliament.
Evidence of meeting #15 for Natural Resources in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was electricity.
A recording is available from Parliament.
9:40 a.m.
Ortelius Management AB, As an Individual
We are not really working with carbon capture; it's conversion from fossil fuels to biomass. That is the big task in Sweden. We are using biomass in a very high proportion today. That is the conversion we are working with today to reduce carbon dioxide emissions.
9:45 a.m.
Conservative
The Chair Conservative Leon Benoit
Thank you.
We now go to the government side, to Mr. Anderson for up to seven minutes.
9:45 a.m.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
Thank you, Mr. Chair.
We don't have a lot of time today to ask questions, but I would like to ask you if you could provide us with some information.
Ms. Wörlen, you had talked about power rates a little bit earlier. I'm wondering if it's possible for you to send the chair your rates for the different energy sources you've talked about this morning. There were a number of them—hydro, wind, biomass, photovoltaic, geothermal, and solar thermal. I'm wondering if we can get that, and some information on how your rates vary from business to residential, and baseload to peak and those kinds of things. If it would be possible for both of the presenters to do that for us, we could get an idea of how we can compare those rates, and then compare them to what's happening in our country right now.
I'd like to talk a little more specifically about these feed-in tariff rates. I think the other committee members are getting sick of me talking about the monopoly utility provider in my local province, but the reality is that it has not been very cooperative in terms of giving people alternatives for energy provision. So I'd like to know at what height those feed-in tariff rates have had to be applied in order to encourage development.
Then, Ms. Wörlen, you talked about how they have been decreasing gradually. I'd like to know where they are right now and at what point you think they won't be a factor anymore. Have you reached that point in your country?
I'd also be interested in having our Swedish guests speak to that as well.
9:45 a.m.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
What rate do we need in order to encourage development?
9:45 a.m.
Arepo Consult, As an Individual
There were a number of questions. Let me give you the last answer first.
It depends really on who you want to incentivize and what the framework conditions are that they must meet. I think as I mentioned and tried to emphasize earlier, it's not only the level of the tariff that is an incentive. If you give them a stable, long-term framework, this will already be a big help. So you tell them who has the obligation to connect them to the grid, what grace period the grid operator has, how long they have to wait until the grid operator takes action, whether they have to wait at all, and whether or not there are response periods that are tolerable.
Grid codes are, for example, often a point of debate. So if there is a clear grid code, if everybody knows what technical demands a plant has to fulfill, that saves a lot of time and transaction costs. So there are non-monetary factors that a regulator can put in place in order to make the process easier.
In terms of the absolute height, I would have to pull up those rates somewhere, because, as I said, they change every year. They are different according to each technology. They vary according to, for example, plant size in terms of photovoltaics, as they do under the Ontario scheme.
For wind, they depend on each single location, so the quality of the wind in a specific site is measured, referenced against the benchmark, and then also the tariff is referenced against the benchmark. So it's not a simple, straightforward answer. Wind, on average, reaches tariffs that can also be achieved on the power exchange, so the average tariff is not much higher than it is on the power exchange average. But for the others--biomass as well as solar photovoltaics--the tariffs are much higher. In fact, for solar photovoltaics, they are in the range of 40 euro cents per kilowatt hour.
The retail tariff for household consumers on average in 2007 was 20.6 euro cents per kilowatt hour. So that, too, is much higher than it is in Canada and most places. That retail tariff contains a significant share of taxes and fees that are put on top. Of this, the actual cost of transmission and the generation of electricity is 12 euro cents per kilowatt. So the end-of-the-pipe price, the delivered price of the utility, is around 12 euro cents per kilowatt hour. All the rest is charges and fees put on top by the government.
Did that answer all your questions?
9:50 a.m.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
Part of it. I'd like to hear from our other guests too.
I'm just wondering, you're talking about all the things that need to be done. In terms of employment, can you give me the numbers on what number of employees are bureaucrats who are trying to run the system and what percentage of employees are involved in the industry, in developing it, because it seems as if quite a structure has been set up here to try to support the industries?
9:50 a.m.
Arepo Consult, As an Individual
No, I don't think so. If you look on the slide--you have it in the lowest bar--I think the number is something like 4,500. And this is not only bureaucrats, this is also NGOs, a whole infrastructure of outreach people. They're not all government-funded, these 4,500, people like me.
9:50 a.m.
Conservative
The Chair Conservative Leon Benoit
From Sweden, do one or both of you have an answer to that question?
9:50 a.m.
Ortelius Management AB, As an Individual
I find it very difficult to answer because the terms vary all the time, especially in electricity. In Sweden, we have a trade market for electricity, so all the electricity goes to this trade market and the price is set based on the top price of the most recently produced kilowatt hour of electricity. This means that it differs all the time, depending on what the production system looks like at the moment.
But in general you can say that one-third of the price is the electricity, one-third is taxes, and one-third is the distribution costs, the transportation, according to the grid.
And the price is for renewable energy. You can buy renewable energy or renewable electricity, but the payment normally is a little bit higher priced, but that's more like an incentive for this production.
There is no real level that you can say because it varies all the time.
9:50 a.m.
Triple-E, As an Individual
What you could say is that the markets are demanding a lot of renewable energy in Sweden or in Scandinavia. It's popular among the companies in Sweden to buy renewable energy, which means they are prepared to pay a little more than they do traditionally, and then use it in the marketing of the company. So it's a way of living by example from the company. All environmental aspects are a big issue in Scandinavia these days, so a good company uses renewable energy and uses that in its marketing. So they are prepared to pay some more for it.
9:50 a.m.
Ortelius Management AB, As an Individual
But when it comes to district heating, the prices are set every year. So it's once a year, and then the price is set for all the year. It's quite different. And these prices are set locally, so every operation sets its own price.
9:50 a.m.
Conservative
The Chair Conservative Leon Benoit
Thank you.
Thank you, Mr. Anderson.
We go now to the five-minute round.
Mr. Tonks, for up to five minutes. Go ahead, please.
9:50 a.m.
Liberal
Alan Tonks Liberal York South—Weston, ON
Thank you, Mr. Chairman.
Thank you so much to our witnesses.
The committee has been studying integrated energy systems, and I'm sure the members of the committee.... I certainly am impressed with the integration of the legislative framework and the cooperation that appears, on a strategic basis, to be between local authorities, transmission operators, and the other levels, the regional or provincial or whatever the equivalent levels of government are in both Germany and Sweden. I'm very impressed with that.
You have talked about the technology matches with residential and industrial parts of the economic sector. Are there any patterns or examples of how transportation, public transit--intra-urban, inter-urban--fits into the integrated energy format in both countries' experiences?
Mr. Chairman, as part of that, in Canada, in specific urban areas, there is a large environmental drive to electrify our old systems, diesel-driven systems and so on.
9:55 a.m.
Ortelius Management AB, As an Individual
I'm not sure if I really understood the question. Are you talking about the integration between the municipalities' expansion and this different system of housebuilding, the integration between the use of energy and the supply of energy? Is that what it's all about?
9:55 a.m.
Liberal
Alan Tonks Liberal York South—Weston, ON
Not quite. That's an easy one, because as we move to electrification there's an opportunity to drive that by new technologies, as opposed to simply building more coal-fired plants and reaching out for nuclear. For example, there's a move to look at wind power in terms of putting that into the energy grid to take the pressure, if you will, off our fossil fuel plants. That kind of strategy...is there anything similar in both Germany and Sweden?
9:55 a.m.
Arepo Consult, As an Individual
Maybe not with the integration with public transit, but in Germany we definitely see that wind is intermittent, and the intermittency is a big strain on the medium-level voltage grid, the 110-kilowatt grid. Often wind turbines have to be shut down because the grid is overloaded. However, there are definitely big research and pilot projects that look into whether there is an opportunity to store that surplus electricity on site, either in terms of batteries or as electricity, or chemically, or in terms of hydrogen, and then link this with the mobility sector. So all the big utilities in Germany are now doing projects together with the big car companies in Germany in order to investigate these opportunities. As well, some smaller companies and experts are trying to integrate locally.
A good option for this is car fleets of companies, such as delivery companies, but I don't know of any experiment in Germany where they try to combine this with public transit. Electrification in Germany is basically...I don't think they electrify any more of the tracks, but of course Germany is much more densely settled, so a lot of that has already been done in the past.
9:55 a.m.
Liberal
9:55 a.m.
Ortelius Management AB, As an Individual
Yes. There is quite a big public interest in Sweden as well, and it is still going on. We can see, as with the figures I told you about earlier, that we are using a lot of biomass in order to reduce the carbon dioxide emissions, and this is a huge transformation in the basic systems of electricity and heating production. We can also see biogas coming up as a fuel for cars and so on, and there is also an interest globally for electric cars. But biogas is also something that is going on quite a lot. Incineration, the use of waste in an incineration system...these incineration systems are integrated in the district and electricity production system. We produce electricity and heating in cogeneration plants from waste.
Then we have wind power, of course. There is a huge development of wind power in Sweden. The wind power system in Sweden actually works out well because we have hydro power to 50% and hydro power is very easy to regulate. So the differences in wind power can be regulated with hydro power.
10 a.m.
Liberal
Alan Tonks Liberal York South—Weston, ON
I have one very short question to Madam Wörlen. What is the percentage of the GDP that comes from wind power as compared to, say, the auto sector, as a benchmark? How do the two compare?
10 a.m.
Arepo Consult, As an Individual
Well, you definitely do not want to compare it with the car industry, which is still many orders of magnitude larger in Germany than wind power. I don't have the exact figure; I can pull it up for you.
But definitely there is a move, for example, for the established machine-building industry, which we have a lot of in Germany, to also diversify into wind, and this also affects the car industry. The car industry has definitely woken up to the call for new technologies. They have been asleep at the wheel, literally, for the last 30 years, or they have actually tried, with lobbying efforts, to prevent any kind of change in this area. Now in the last year or so they have been frantically waking up and seeing that they need to change something in their technologies. So they are now really kind of queasy and uneasy about having maybe slept too long and not having developed enough. There will definitely be a whole new force in this area in Germany.
Let me brainstorm some more about integration. There are a number of other opportunities for integration, and particularly the integration of renewably generated heat and cooling. You can actually use heat for air conditioning and reduce your cooling load with that. So that is one option where you want to integrate or think about integrating. There is also the question of heat storage. In terms of the overall system in Germany, we used to look at the electricity sector, at the transportation sector, and at the heat sector separately. With these new technologies we will have to look at it in a much more integrated way, but on a national level and not so much on a single-cost level only.
10 a.m.
Liberal
10 a.m.
Conservative
The Chair Conservative Leon Benoit
We will go now to Mr. Cullen, from the New Democratic Party.
Go ahead, Mr. Cullen.