Merci.
Bonjour, mesdames et messieurs. Good morning, ladies and gentlemen.
I believe everybody has a copy of the deck that was circulated in advance. I'd like to just take you through a broad overview of renewable energy, the role it plays in Canadian energy supply, and the array of federal and provincial programming that has been in place to support it. Then I'll turn it over, at the end of the presentation, to my colleague, who's more of an expert on the renewable fuels component, to speak before I offer some concluding remarks.
If we turn to slide 4 of the presentation, the definition of renewable energy is energy produced without depleting resources, and the three main sectors in which it's used are electricity, thermal energy, and transportation fuels. The availability of the resource varies widely across Canada, and there's a wide range of technologies that produce renewable energy in different stages of development.
In slide 5, we're tried to give you a schematic that illustrates the various technologies that people are talking about, broken down between electricity, thermal, and fuels. As you go to the right-hand side of the schematic, there are the technologies that are in the most advanced stages of development. So if we're talking about the electricity side, of course, the furthest to the right is large-scale hydro. Biomass, wind, and landfill gases are increasingly competitive with conventional generating sources. Solar and geothermal are a little bit further behind, and then tidal and energy crops are in the very early stages of development.
A similar array is on the thermal side, where you have firewood--as we'll see later--being one of the most widely used sources of thermal renewable energy. Solar air heating and ground-source heat pumps I'm sure we'll discuss later. Solar hot water and deep water cooling are a little bit earlier in the chain. There's a similar array that you see on the renewable fuel side.
Together, all renewable energy technologies make up about 17% of Canadian energy supply, and you can see that's dominated, really, by hydro, large hydro and biomass. People burn firewood, but also it's in large part biomass used in the pulp and paper industry. About 50% of the energy needs of the pulp and paper industry are met through biomass.
So you can see that the technologies that are increasingly the focus of attention—tidal, solar, wind, and everything—represent currently quite a small slice of the total energy supply. However, as we'll see later, they are technologies that are growing rapidly.
Regarding just electricity and thermal renewable energy first, on the next graph, on page 8, you can see within the electricity sector again that large hydro is about 60% of Canadian generating capacity, with renewables making up about 3%. “Emerging renewables” is the phrase we use to refer to the suite of technologies--wind, solar, geothermal, biomass, but not large hydro.
Chart 9 gives some 2003 figures for capacity additions, and I'm sure my colleagues will have more up-to-date statistics and additional information to provide to you.
While renewables are currently a small slice of our total electricity supply, a number of them--small hydro, solar, and wind--are growing very rapidly, although solar doesn't turn up in this graph as much because the graph is looking at just the electricity side.
The federal government has traditionally supported renewable energies through three broad arrays of policies. The first is on the research and development side. For example, there's the Canadian Wind Energy Institute in Atlantic Canada. There's the National Solar Test Facility. Should you have additional questions on our technology dimension, we have some experts from the department here who can respond to any questions.
The next block of support is tax measures. There's quite an attractive tax regime for an array of renewable energy technologies. Class 43.1 is essentially a writeoff at the rate of 50%. You can depreciate your investment over two years or two and a half years, subject to some of the tax rules. The Canadian renewable and conservation expense gives a 100% writeoff on test turbines for wind farms and the like. It's analogous to the kind of exploration tax credit that we have in the oil and gas industry, although it's not a 100% writeoff for exploration expenditures.
There were an array of programs providing direct support, which we'll hear about later. The two of most interest to this table are: the renewable energy deployment initiative, which among other things provided incentives for solar at the rate of 25% for certain applications, thermal applications in the commercial and industrial sector; and the wind power production incentive, which provided a subsidy of one cent per kilowatt hour over ten years for new wind farms. Both programs are now under review as part of the new government's reconsideration of its approach to energy and climate change more generally.
The array of federal initiatives has really stimulated or helped to stimulate a broad variety of complementary provincial initiatives. Each province has different ways of supporting them. In the annex to the presentation, you'll see a detailed list of what the targets are for each province and the array of measures in place for support.
A wide variety of instruments are used in the provinces to support renewable energy. Most do it through requests for proposals operated by the utility or, in Ontario's case, by the Ontario Power Authority. In other cases, they have renewable portfolio standards, where there's an obligation on electricity suppliers to source x percentage from renewable energy. In Ontario we increasingly see standing offer contracts, where you set a price to pay x cents per kilowatt hour for any eligible technology that comes in under that price. It's designed to reduce the administrative costs for some of the small producers. Direct government procurement of renewable energy is another way.
I'll stop there. I'll have some concluding remarks, but I'd turn it over to Chris, if I could, to take you briefly through the renewable fuel story.