Thank you very much, Mr. Chairman, for the opportunity to be here today.
I'll start off just by telling you a little bit about the Canadian Wind Energy Association. We have 300 corporate members, including turbine and component manufacturers, several utilities, project owners and developers, and a range of service providers to the wind energy industry.
Interestingly, our membership is quite diverse. We have some of Canada's largest energy companies. Some of Canada's major oil and gas producers are part of our association. We have a number of electricity producers that have quite a mix of fuels from which they're producing power. We have utilities that are primarily coal-fired. We have utilities that are primarily hydroelectric. The thing that unites them all is that they're all investing in wind, and they're all looking at wind as an opportunity going forward.
Wind energy does not produce greenhouse gas emissions and it does not produce air pollution. From the perspective of the Canadian Wind Energy Association, increased deployment of wind energy must be an important component of any credible strategy to clean the air or reduce greenhouse gas emissions.
In addition to its environmental benefits, wind energy also provides a number of economic benefits, particularly in rural areas, where the best wind resources can be found. Those economic benefits include investment, job creation, improvements to the municipal tax base in rural areas, and also lease payments to land owners who provide their land for placement of turbines in order to generate electricity.
In terms of wind energy in Canada, as is the case with many types of natural resources, Canada is actually blessed with a tremendous wind resource. It's probably the best wind resource in the world, and it has to be at least in the top three. Canada's installed wind energy capacity has increased from 137 megawatts in 2000, to 1,460 megawatts at the end of 2006, a fairly significant rate of growth.
At this point in time, provincial governments have established targets for wind energy in most jurisdictions across Canada. If you add all of those together, they add up to about a minimum of 10,000 megawatts of installed wind energy capacity by 2015. Having 10,000 megawatts of installed wind energy capacity in 2015 would account for about 4% of Canada's total electricity, starting from essentially zero in 2000. Most importantly, if you look at the new electricity generation facilities expected to be built in the decade between 2005 and 2015, and at the electricity that will be produced from those facilities, we project that wind energy will produce about 20% of that electricity, which gives you a sense of how wind energy is fitting into future investment plans at this point in time.
While Canada is a leader in the exploitation of some renewable energy technologies, like hydro power, which we've discussed, we've really only scratched the surface of our wind energy potential. Today, wind energy accounts for about 0.5% of Canada's electricity demand. It accounts for about 20% of Denmark's electricity demand, 8% of Spain's, 6% of Germany's, 4% of Ireland's, and 4% of Portugal's. These are all countries that are looking to significantly expand the penetration of wind energy in their systems going forward.
Canada is in a very unique situation because of our large hydro dominance in the electricity sector. Because wind and hydro are very complementary—Pierre Fortin mentioned this in his presentation—hydro can in essence serve as a storage mechanism for wind energy. That will allow us to achieve higher levels of penetration for wind energy in Canada than we might have seen in a number of other countries around the world.
I have included a couple of graphics that I won't speak to. They're there just for information. They look at the growth of Canada's installed wind energy capacity and how that capacity is distributed across Canada at this point in time.
To increase the deployment of wind energy in Canada, we need a stable, long-term, and sustainable policy framework. We've seen some initial steps in that regard at the federal level. We've had the Wind Power Production Incentive, and now the ecoENERGY for Renewable Power program. At the provincial level, we've seen a mix of renewable portfolio standards, requests for proposals for wind renewable energy, and standard-offer contracts in some jurisdictions.
Bill C-30, Canada's Clean Air Act, can play a very important role in complementing existing government policy measures by putting in place regulatory and market mechanisms to incent and accelerate investments in wind energy going forward.
From our perspective, Bill C-30 should do this through regulated limits on emissions and the rapid establishment of a domestic emissions trading system that includes mechanisms to allow for participation by wind energy and other renewable energy sources.
Reflecting the environmental benefits of electricity generation in the market will further enhance wind energy's growing cost competitiveness. I can tell you that in the last 20 years, the cost of wind energy has declined about 80%, and if you talk to people like the International Energy Agency, they will tell you with a high degree of confidence that their expectations are that the cost of wind will continue to decline going forward, which is clearly not the case for a number of other technologies.
It's important to reflect these costs in the market, because putting environmental costs into the marketplace will allow players in the market and investors in the market to have better information. Better information will lead to more optimal decisions. We can really make the market system work by essentially dealing with a market failure—the fact that these costs, the externalities are not reflected in the market at this time.
From our perspective, an emissions trading system should strive to put all new investments in electricity generation on a level playing field, and it must also provide opportunities for wind and renewable energy to participate directly in the system. There are a number of ways you could do that. You could do that through the allocation of emission allowances to wind or renewable energy. You could do that by allowing wind or renewable energy to produce emission offsets that would be able to participate in the system. No matter what path is chosen, we believe it's important that these technologies be able to participate.
Several of the preceding speakers already pointed out the importance of getting the market signals right. Investments in electricity generation are for the long term. If you put in place a new generation facility, you're going to have that facility in place for the next 20 to 60 years, along with all the attributes that come with it, positive or negative. A long-term, stable policy framework is required to provide investors with a clear understanding of emission reduction requirements and targets and of how these will evolve over time.
We believe that ultimately, if Canada wants to move forward and become a leader in emerging renewable technologies—like wind, like solar—and not just in some of the existing renewable technologies that are well established, like hydro, we'll need to do what other countries have done. Ultimately, we'll need to build on existing policies, to build a domestic emissions trading system, and actually develop a comprehensive strategy to move some of these technologies forward.
Some elements of the strategy might include targets, green power procurement initiatives, the streamlining of environmental assessment and permitting processes, education and training initiatives, research and development, and public outreach.
I'll give you one example. The country of Spain, in the year 2000, had about 1,000 megawatts of installed wind energy capacity, so we're a little bit ahead of where they were at that time. In the year 2000, their government adopted the outlandish goal of having 13,000 megawatts of wind energy in place by 2011. In 2006 they abandoned that goal, and they replaced it with a new goal of 20,000 megawatts by 2010, which they are on the path to meeting.
We can move quite quickly to put in place renewable energy technologies if we have the political will and the desire to do so. Canada has a tremendous wind energy opportunity. We have an opportunity to clean the air, reduce greenhouse gas emissions, and build an industry. In 2006, globally, wind energy directly employed 163,000 people. Investments in new wind energy capacity in 2006 totalled $23 billion U.S. globally. Wind energy now provides electricity for about 22.5 million homes worldwide. Again, ten years ago, that number was almost zero.
We remain far behind the global leaders in wind energy deployment. Bill C-30can make an important contribution to closing the gap by providing clear and sustained market signals that incent and accelerate development and deployment of wind energy and other renewable technologies.