Evidence of meeting #8 for Natural Resources in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was budget.
A recording is available from Parliament.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Let me put it this way, then: you have sufficient applications in front of you to spend the rest of the renewable power incentive.
Director General, Energy Resources Branch, Department of Natural Resources
Yes, unless a high proportion of them don't meet the criteria.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Right, but that would be unusual. You've had experience with this, so you know what the....
What's confusing to me, then, is that we essentially haven't renewed or we haven't supplemented any more incentive for wind production. -South of the border, our largest competitor has increased—not just maintained or cut the program, but increased—their wind production by another 53%. In terms of other competitors around the world, such as China, we're producing one-seventh of what China is producing in wind power, which I think would strike many Canadians as strange. In general terms, we think of the Chinese producing a lot of coal-fired plants, that they're in a more nascent economy when it comes to energy and Canada should have the shiny new stuff. We're producing on a level of only one-seventh of what China produces, and we're spending much less per capita than our American counterparts.
Does this concern the department at all when we look at our competitive advantage in terms of the renewable energy market, where not only are we spending less, but the others are actually moving away from us? They're gaining in speed while we're staying still, which probably means we are falling behind.
What have I said that's incorrect?
Assistant Deputy Minister, Earth Sciences Sector, Department of Natural Resources
It's always awkward for us, because of course we could always spend more money and we could always have bigger programs. We think obviously this is a valuable area in which to invest. The issue is that at some point we have a fixed budget and we have to prioritize. We are spending a significant amount on wind and we'd like to spend more, but again, within the amount of money that's available to us, we're going to try to maximize the impact of that.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Sure, but the same cannot be said of the budgets for CCS or biofuels. Is that true? Those budgets will be growing in expenditures over the next number of years, while wind is being plateaued and ended.
There are choices being made. I understand budget constraints and all the rest of it. That's fine. That's somewhat out of your hands. But you're advocating certain programs to the minister, I suppose, saying this one worked and that one is not so good.
From appearances, wind, while not exhausted, is probably fully subscribed. The wind energy companies are coming to us and saying they are leaving Canada because the investment climate is much poorer here than it is south of the border, which is an easy transference for them.
I'm concerned that this is hurting our competitiveness on the renewable energy front, which is the green economy that folks talk so much about and have so much hope for. It is the only industry that did well during the recent recession. That must be of some note to the department and the government, that while so many industries tanked, this one did well. Yet we are ending the funding for it and we're continuing with CCS and biofuels, which are both much less productive, if I can say that.
Conservative
Director General, Office of Energy Efficiency, Department of Natural Resources
Thank you.
I'll just build on my colleague's comments to respond to your question on, comparatively, biofuels or carbon capture and storage.
With respect to biofuels, the government support for biofuels is in a fairly similar position as its support for wind. We have 21 agreements with companies to support biofuels production and we have applications from a number more that we will not be able to satisfy. So we're in a similar position of having applications in hand that will exhaust our remaining budget in the next couple of months and insufficient funds to fund orders of magnitude more than that.
To me, it's in a fairly similar position in terms of allocating the budgets that we have available to us.
Conservative
Director General, Energy Resources Branch, Department of Natural Resources
Yes. With respect to wind, when the original ecoENERGY for renewable power program was started, the incentive structure in Canada was mainly federal. Over the last few years, every province has taken some sort of programs and measures, different ones, that support wind.
For example, in the Atlantic provinces, most of them have done renewable portfolio standards, which require a certain amount of electricity to be generated through renewable sources, often wind; and Ontario has introduced a feed-in tariff, which provides an incentive of 13.5¢ per kilowatt.
NDP
Director General, Energy Resources Branch, Department of Natural Resources
The provinces are coming in.
Director General, Energy Resources Branch, Department of Natural Resources
It requires a reassessment of the role of the federal government.
Director General, Energy Resources Branch, Department of Natural Resources
For example, in Ontario currently, with the incentive of 13.5¢ they get, they are ineligible for the federal program, because the view was that over 12¢ it wouldn't be increasing any incremental power. In addition, in the province of Quebec the provincial government provides very generous contributions, but in their program conditions, 75% of the money that they would have received from the federal program is reduced by the provincial program, because they also don't want to be providing money that's not providing incremental benefits.
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. Cullen.
We go now to the government side, to Mr. Harris, for up to seven minutes.
Go ahead.
Conservative
Dick Harris Conservative Cariboo—Prince George, BC
Thank you, Mr. Chair.
If you'll pardon the pun, I would like to just kind of clear the air on the wind power generation.
I'm not an expert in this field, but it's my understanding that of all the clean power sources, wind energy, from the point of view of cost efficiency and return on your investment, ranks very low on the scale of what you're getting, the bang for your buck. I've never seen a report yet that showed that investment in wind power can be sustained without massive and continuing subsidies from either the federal, regional, or provincial governments.
When Mr. Cullen points out that America and China are investing far more in wind power than we are, which may or may not be correct—I am assuming it is—it appears to me that they've made a decision to subsidize to a greater extent an alternate energy source that is not efficient, where Canada perhaps is putting more money into biofuels and development of more efficient types of clean energy.
Am I on the right track here, talking about the efficiency of wind power and of—I hate to phrase it like this—how bad an investment it really is by comparison to where we can put our money in other forms of clean energy development?
Director General, Energy Resources Branch, Department of Natural Resources
Thank you for the question.
The answer is, yes, compared to conventional sources of electricity generation, wind power is relatively expensive. It does require some sort of benefit—either through an incentive through the tax system, through the program system, or just a straight requirement that it be produced—for it to compete with conventional sources of energy, in particular coal or natural gas. Among the renewable power sources, however, it is the least expensive currently, based on the state of technology.
Conservative
Dick Harris Conservative Cariboo—Prince George, BC
I've seen numbers where it indicates that wind energy generation is somewhere in the neighbourhood of only 30% efficient, and not much higher than that in most every case that we have going right now in Canada. Were it not for the continuing subsidies it would just simply be a bad investment; we could do better investing in other forms of clean energy technology.
Director General, Energy Resources Branch, Department of Natural Resources
The 30% you're referring to is what's called the capacity usage, which is a big issue in terms of wind power. When the wind's not blowing, the windmill is not generating power.
Conservative
Dick Harris Conservative Cariboo—Prince George, BC
I understand that, and from a business point of view it's like having a product that only sells part of the year. It's a pretty bad investment. It's better to have something that's producing a return year-round. Anyway, let's leave that for a minute.
In the energy-efficient initiatives, have there been any truly independent assessments of how our programs are doing? I imagine you have your in-house assessments, and on the political side they have their assessments, but is there anybody outside the political realm that has looked at what we've been doing and given it some sort of a grade?
Director General, Office of Energy Efficiency, Department of Natural Resources
Thank you, Mr. Chair.
Indeed, before we can get program approval on an area of activities that has already existed in the past, we have to have a third-party independent evaluation. As I mentioned earlier, there are five third-party independent evaluations under way right now in the energy efficiencies suite of programs, for the equipment, industry, buildings, housing, and transportation programs. All of those evaluations are being done by professional evaluators who do not work for the programs. They work for consulting companies, or they are from the evaluation branch of Natural Resources Canada. They are undertaking these evaluations, and the results will all be publicly available in a couple of months.
Conservative
Dick Harris Conservative Cariboo—Prince George, BC
The other thing I wanted to ask is about leveraging. I'll just take the example of the ecoENERGY energy retrofit for small and medium-sized organizations. I guess our money into that program was $60 million, and I see that the stimulation factor was $161 million. So that's about 2.6 times our investment. Is that ratio about average throughout most of the programs? Are there some in which we might have had a one-to-four, or one-to-five ratio, or even one-to-three on leveraging?