Natural Resources Committee on March 12th, 2009

[Jonathan Westeinde]

Just quickly, we develop projects across the country. We reacted the way we did and Dockside is a reality more because of municipal government leadership and, to a certain degree, provincial leadership. When we're in other provinces and other places, that's missing. To the extent that the federal government can create more of a national clear signal and vision for the country of what we're trying to do, that will create a level playing field across the country. That relates to carbon pricing and things like this that trickle down to make these things work with all the pieces.

Secondly, we benefited a great deal in the sense that the federal government has various projects for R and D and funding mechanisms for that. This works for a range of newer technologies. There's a range of fully viable technologies today, but the vacuum is in project financing. To the extent that the federal government can get involved in assisting project financing, there's a realm of technologies that are ready to go if that aspect of the market can be assisted.

[The Chair, Conservative, Leon Benoit]

You are out of time, Mr. Regan, so we'll go now to--

[Geoff Regan, Liberal, Halifax West, NS]

What were you saying earlier about midnight?

[Voices]

Oh, oh!

[The Chair, Conservative, Leon Benoit]

Yes.

We'll now go to Mr. Trost for up to five minutes.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you, Mr. Chair, and I may be sharing some of my time with some of my colleagues.

I guess I'm having a little bit of a problem reconciling a couple of things here. I'm hearing from some places that there's payback, that it's cost comparable with various projects. And then I'm also I'm hearing about a 12- to 13-year length of time for cost recovery. I'm sort of doing back-of-the-envelope calculations and coming back with about 6%--based on the rule of 72--rates of return, which is not going to motivate a lot of businessmen to do that. And then I hear $136,000 per unit extra charge.

I know my own electricity bill is, even with the monthly fees and so forth, under $40 a month. And so what I actually pay for electricity, excluding the actual service charge--and I know I'm a fairly low user--is really in the neighbourhood of $20 a month, in Saskatchewan. In Ontario, the rates are crazy. So I'm having a hard time figuring out where this actually gives the best payback and where it doesn't.

I have a general question for everyone: if you didn't have extra government financing, if we just concentrated on helping you at the federal level by making regulations that made it simpler for you and cleaning up other programs that would be out there irrespective, etc., could these projects go without an extra dime of federal financing? You seem to have all taken initiative without a massive federal government program. So that's my core question. Without extra federal dollars, do these projects go?

[Dr. Shahrzad Rahbar, Representative, Vice-President, Canadian Gas Association, Drake Landing Solar Community]

May I take a stab at that?

What you've seen today is a range of projects. Some, like Okotoks, are leading-edge, if not very close to bleeding-edge--

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

They're experimental.

[Dr. Shahrzad Rahbar]

--demonstration of a concept. So those would not have gone without federal funding.

The committee heard earlier on from other panels on developments in B.C. and developments in Ontario without a single cent of government funding, with all private capital. I think what you would not be seeing are some of the more innovative ideas. You'd be seeing incremental change over time if there were no upfront costs. You'd eventually get there. It would take longer and perhaps would be very evolutionary--

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

I'll let everyone answer too, but if I can sort of paraphrase, you're saying we should treat this like we do R and D funding. So there's a bit of a clump for some projects, and then when it's mainstream or more economical, the businessmen will then take it once the concept's proven?

[Dr. Shahrzad Rahbar]

That's correct. There are maybe a couple of additional points. It's an interesting space because it intersects federal, provincial, and municipal jurisdictions.

What we have seen to date has been primarily a result of local leadership. There is a huge role for the federal government as you think about energy demand, be it in terms of greenhouse gas reductions or waste or whatever the agenda is, acknowledging that integration has a role to play, along with removing barriers to federal funding. You've heard from many of the projects about how they had to disassemble projects just to be able to benefit from--

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

That's why you go to your local member of Parliament. We're good at that.

Okay, with limited time, could everyone else then quickly give some answers?

[The Chair, Conservative, Leon Benoit]

Mr. James, go ahead.

[Jamie James]

Thank you.

We're subject to a little bit of unfair competition with incumbent utilities as well, and sometimes as a result we're asked unfair questions about whether or not our payback is within time. If you look at the payback on a hydro dam or a centralized power plant, that can take quite a long time also. It's a very fair question in the sense that everything has to make business sense, and as developers who are going to be trying to sell these assets, we have to make sure we have a business case to make--

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

You're not a charity. Your investors don't--

[Jamie James]

That's right, nor are our investors if we aren't able to make the project work.

But there is a spectrum from the centralized conventional energy plant to.... Okotoks may be on the far end of the spectrum. Dockside pulled back a little bit more. Southeast False Creek is in there somewhere. You have Markham District Energy in Ontario. You have Regent Park--

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

So again, with time running away here, what you're saying is that it depends on the project and it depends on how far it is? I'm getting nodding answers--

[Jamie James]

Yes, they have to be smart projects.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Would there be pretty much agreement, then, from Guelph's perspective too?

[Jasmine Urisk]

I can just give you an example in Guelph.

For example, we've invested and bid in to the Ontario Power Authority RFP for a small generation plant at our landfill site. What made that achievable was the fact that we were able to gain some FCM funding at very good rates. Had we not had that, that would not have been an economically viable project, for example. That's just one example. It's traditional technology. There's nothing leading-edge about that. But it required that in order to be economically viable.

[The Chair, Conservative, Leon Benoit]

Dr. Penny Ballem from Vancouver.

[Dr. Penny Ballem]

There are two things. The speed at which we want to make the shift.... In a municipality like Vancouver, about 40% of our greenhouse gas comes from buildings. If we want to make it quickly, having available even low-interest financing is a huge benefit for the ability to get it done and engage broader groups across the sector. And there is a payback.

[The Chair, Conservative, Leon Benoit]

Thank you.

Finally, Monsieur Laframboise, for up to five minutes.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

I have a simple question for you, Mr. Dolan. You note the following in your submission: “Presently, the costs of some of the more advanced technologies makes them uneconomic. ”

Could you clarify that statement for me? If more advanced technologies do exist, why then were they not used, at Vancouver's Olympic Village, for example? Perhaps this would have been a good opportunity to use these advanced technologies and reduce costs.

[The Chair, Conservative, Leon Benoit]

Who was the question directed to?