Good afternoon, Mr. Chairman and honourable committee members.
Thank you for letting Canadian Solar participate in today's committee meeting. My name is Michael Carter. I'm the manager of business development for Canadian Solar's energy group. I'm going to speak about solar energy projects and how we can support increased adoption in the natural resources sector.
Canadian Solar was founded in 2001. We are a global energy provider with successful business subsidiaries in 20 countries and over 9,000 employees worldwide. We were a number one ranked global module supplier in 2016. We have a dedicated Canadian-based project team with development experience in northen Canada and remote communities. We employ the latest solar module inverter and storage technologies in our projects, and integrate with existing infrastructure, such as backup generators and remote diesel systems. We are a leading manufacture of solar PV modules and other solar energy solutions, with over 70 million PV modules shipped to date. We have a nine gigawatt global pipeline of utility-scale projects that we are in the process of developing as well.
Today I want to quickly run through how we look at the questions that were sent to us.
Canadian Solar believes that renewable energy provides environmentally and economically viable energy but is yet to be utilized to its potential in the Canadian natural resources industry. We're working with international mining companies on project development opportunities that include solar and storage technologies.
From our experience, there are various risk components that we see as issues, which hopefully the Government of Canada can assist with. We've broken it down into four major risk areas: project, financial, operational, and environmental. Project risk is the risk to the renewable energy developer. Financial risk is the risk to the lender, which includes the Government of Canada. Operational risk is the risk to the end-user, the actual mining developer or mining resource developer. Environmental risk is obviously the risk to the local environment.
We see the natural resource industry as a commodity-driven business, with success based on variable forward pricing, exploration, operational costs, access to capital, and competition. The renewable energy project risks are partially tied to the success of the natural resource facility. These risks can be minimized through government intervention and support, which can include facilitating offtake agreements with the local utility for generation over the original contract, and the acquisition of the mining or resource product at a price that allows for payment of the electricity PPAs that we might be looking to secure.
The government could also support funding renewable projects for natural resource facilities that are at a late stage, with a visible cash-flow stream and an identified post-production energy need. These could be a community need or end-of-mine-life obligation, such as environmental obligations. We see as being a good fit. Lastly, the government could support the energy projects by backstopping long-term contracts through an insurance or guaranteed-type product, which I'll get to a bit later.
In addition, there's an opportunity where we could take the mining industry and the renewable developers and pair them together. Mines have upfront bonding requirements. Any new mine that's going to be opened up has a closure agreement, which is typically in the form of a bond. It could be upwards of $100 million. In some cases, we're talking hundreds of millions of dollars. We think that maybe there's a way we can tie low-cost, long-term renewable energy electricity sources to ensure that the perpetual obligations of a mine closure are not impacted by the external risks associated with cost increases in fuel and complex equipment, as well as the environmental risks associated with trucking and shipping fuel to these remote sites.
We think that mining companies investing in long-life renewable electricity assets should not only reap the benefits of the long-term secure energy that they're offsetting, but also be rewarded through offsetting the upfront costs associated with bonding requirements for these mines. We think that maybe there's a win-win associated with the potential of encouraging renewable energy developments with new mines.
The risk to the lender, the Canadian government, is in part based on the success of the renewable energy project, but it is also tied to the health of the resource company, the resource itself, and the economic viability of the renewable energy projects.
We think the government can support de-risking by funding these projects directly, especially with resource projects that are at a later stage with a visible cash flow stream and identified post-production energy needs. Those include local community needs, end-of-life operational requirements, and potentially science—i.e., weather stations and other kinds of monitoring facilities—and military interests. So it would be basically having energy centres potentially throughout rural areas. We also think we would recommend the potential reintroduction of ecoENERGY for Renewable Power, a program that was successful in supporting 4,500 megawatts of renewable development in Canada.
Separately, with regard to the financial risk, we think that the government can support or encourage favourable streamlined permitting processes to decrease the high-risk upfront costs and time associated with building both mines and renewable energy projects. We believe that the government can support streamlining interconnection and electrical permitting processes, and decrease the cost of interconnection, to assist with improving project viability. We look at this as maybe coordinating with the various provincial safety authorities as well as engaging local utilities and provincial regulatory bodies to support the goal of adopting more renewables.
With regard to the end-user, national resource companies need to ensure that they have a reliable, firm energy source for continued operations. Historically the intermittent nature of renewable energy dissuaded the utilization of renewable generation as a primary, stand-alone energy source. We see that advancements in technology and decreases in installed costs are allowing for the development of resilient renewable energy systems that enable end-users to meet their normal operational needs even during grid outages.
We believe that the Canadian government can assist in de-risking the operational risk by incentivizing the further development of resilient energy systems. We've had some support for the development of a micro-grid test facility, which we've recently commissioned in Guelph, Ontario. It's one example where that has worked for us. We are actively developing projects in the north and investigating other opportunities to develop the remote micro-grid type of facilities.
For the environment, we see that solar and other renewable energy resources can mitigate the environmental risks and help meet the statutory requirements under the sustainable development act. We believe that solar's locational versatility can allow it to be located in every jurisdiction in Canada. It can be deployed in and around tailings infrastructure and on brownfield lands. It can be easily relocated. Previously developed lands can be remediated to their prior state, if that is so chosen. The components can be recycled and are also permitted for landfill use. That's not the plan, but they are inert and can be put in landfill. However, we feel there's a long-term potential to incorporate reuse programs for renewable components due to their long, useful life. This would be after their contract life.
We see modules still on display in Toronto that are generating power with over 70% efficiency after 40 years. A lot of people look at solar as a 20-year product, but it has value far beyond that life. As a result, we describe it as a societal heritage asset with an ongoing positive terminal value. We believe that the repurposing programs can be incorporated into end-of-life programs to relocate our projects if there's a relocating plan to support local indigenous communities and other communities in the areas.
Turning to my last page, the impact mitigation includes the siting of projects on impacted lands, as I've already said. Separately, we think incorporating renewable energy into existing natural resource projects supports the cumulative environmental net benefit, or is a cumulative environmental net benefit, to a natural resource project.
We believe that solar as well as other technologies improve the environmental footprint from an emissions and polluting offset perspective. They offset costly and potentially disastrous remote fuel transport, which is becoming a larger and larger concern in the north with ice roads not necessarily having the amount of time they need to supply fuel to operations, and supporting electricity needs for long-term water monitoring, treatment, and other compliance-related obligations associated with end-of-life mine closure commitments.
We believe that these potential environmental benefits need to be recognized as positive adders in the natural resource permitting process early on.
How is my time? I've probably run my course.