Natural Resources Committee on Sept. 25th, 2017

[The Chair, Liberal, James Maloney]

Mr. Schmale.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Thank you, Chair.

Thank you both for coming.

I would like to reiterate both of your comments and my support for Canada moving to sources of non-emitting energy. I think that's a positive step. I am quite pleased that we are looking to phase out coal, and in Ontario, we have done so. That's a huge step. I'm very supportive of that.

Mr. Hornung, I don't know if you were here for the last part of the committee meeting when we talked about sources of energy, such as wind turbines. I mentioned that wind turbines have started to spring up in my area. It's pitted neighbour against neighbour, mostly blamed on the Green Energy Act here in Ontario.

One question that's come up repeatedly was mostly asked on the provincial level and through my provincial counterpart, but since I have you here, I'm going to quickly ask this question regarding wind turbines and birds. According to your website, in 2014, we had about 5,500 wind turbines in Canada. It says here, according to Environment Canada, that lands at approximately 45,000 bird deaths a year.

This was an issue that people in my community brought up as they were fighting the wind turbines coming into their community. They were basically steamrolled, but that's no fault of yours. That's an issue I have with the provincial government. Other industries are taking measures to help the health of wildlife. As of yet, I have seen nothing in our area. Could you update us on what your industry is doing, please?

[Robert Hornung]

I have a couple of comments.

First, in terms of numbers, I think it's always important to put these numbers in context. You will also find that Environment Canada has data that's very clear in stating that the contribution of wind turbines to bird fatalities in Canada is minimal, relative to all sorts of other sources of fatality including transmission lines, cellphone towers, buildings, automobiles, house cats, etc. That's not a reason not to take action.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

I was going to say that. Thank you for getting there.

[Robert Hornung]

First, I think provincial regulators have very strict provisions in place in requirements for both monitoring interactions with birds and then taking action if any significant impacts are noted.

The industry itself, I think, has been quite proactive in working with various sectors in doing that. We have worked with university researchers. You'll find that a lot of the research that is drawn on to assess bird migration patterns, etc., is coming from the industry. They're required to do this as part of their environmental approval process.

This is also true of bats, where wind energy has worked with NGOs through the Bats and Wind Energy Cooperative to fund and support a research program looking at mitigation measures to help reduce impacts on bats. We have partnerships between organizations like TransAlta and the University of Calgary that are doing research on bat mitigation.

We've tried to be proactive. Fundamentally, it's in everyone's interest that we seek to minimize any impact. We strive to do that.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Sure.

One thing I want to touch on again is that a lot of the issues I have aren't with you and your organization, so I want to start with that. The problem I have is with the provincial government. Although you did say that you support putting a price on carbon.

[Robert Hornung]

Yes.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Putting a price on carbon basically means increasing the price of almost everything. The fact that your industry is heavily subsidized, which is taking more money out of the pockets of people and business, pushing out manufacturing, how do you stand on that position when your hand's out on the other side?

[Robert Hornung]

First, I would argue that wind energy in Canada is not subsidized, in the sense that I think is most commonly understood.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

How much is it? Do you know per kilowatt hour?

[Robert Hornung]

Right now, we're seeing that Ontario has moved to a competitive tendering process.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Well, we trust the Ontario government.

On average, what do you think it is per kilowatt hour?

[Robert Hornung]

The most recent procurement in Ontario was in the range of 8¢ a kilowatt hour, in Quebec it was 6.3¢ a kilowatt hour, and we're confident the procurements you're going to see in Alberta and Saskatchewan are going to be significantly below that. We've seen the cost of wind energy decline by 66% in the last seven years in the United States. Those costs are going to be reflected in new projects coming forward in Alberta and Saskatchewan. I would argue and feel quite confident in saying that if you want to build new non-emitting generation in Canada today, you would be hard pressed to do anything cheaper than wind.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Here I have nuclear at 5.6¢, solar at 50¢, and wind at 13.5¢. I do agree technology is a way to increase competitiveness. My issue again is with the provincial government. When the government gets involved at this level, you are stifling investment and crippling the market. You're not letting the free market take place, and that's what a lot of my issue is with.

Where do you see the future going? Do you see more public-private partnerships? Where do you see your industry going?

I do have a couple of questions for Mr. Cronkhite, too.

[Robert Hornung]

I'll be brief.

In Canada today every jurisdiction has moved to a competitive tendering process, which requires intense competition. Alberta is looking to procure 400 megawatts of wind and has 29 companies bidding projects into that. You can be very sure you're going to get very competitive prices coming out of that. The 13.5¢ you talk about is the old feed-in tariff in Ontario, which was put in place several years ago. As I said, the most recent wind in Ontario was procured for 8¢.

I think you will find that wind energy is extremely cost-competitive today versus any new generation. The nuclear generation you spoke to is existing generation, not new generation. I guarantee you new wind is cheaper than new nuclear.

[The Chair, Liberal, James Maloney]

Thank you.

Mr. Cannings, we'll move over to you.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you, and thank you both again for being here.

Thank you, Mr. Schmale, for bringing up birds. I'm a bird biologist, so I was interested in hearing your answer on that. I have a lot of colleagues, including my son, who have worked on wind projects, and I'm confident that your industry will bring those numbers down. As you say, they're small in relation to other issues.

I just wanted to start by talking about these interties. You were mentioning, Mr. Hornung, that they're important for allowing renewables to gain access to other markets to help. You mentioned the Massachusetts situation. I used to live on the island of Newfoundland, and it struck me that there's a huge wind resource there. Of course, Newfoundland and Labrador get most of their electricity from hydro in Labrador, but we heard last week about the new interties between the island of Newfoundland and Labrador and Nova Scotia.

Can you comment on how that might perhaps open up a market for wind on the island of Newfoundland so that they could then sell that into other jurisdictions?

[Robert Hornung]

The more isolated a grid is, the more challenging it is to integrate variable renewables, and Newfoundland has truly historically been an isolated grid. With the new developments that are under way, certainly Nalcor, for example, has spoken about the possibility of accompanying its hydro development in Labrador with new wind development as well, and to have that, again, look like a blended product in that regard.

At the end of the day, the more flexibility you have within the system, the greater opportunity you have to integrate and bring in variable generation. It's not just a story about wind, it's all sorts of different generation that is coming forward. We see the electricity system diversifying almost daily at this point, and flexibility is going to be a very important characteristic for it going forward.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

You also mentioned you were asking for a level playing field and open access to these interties. I'm just wondering if you could expand on that and explain exactly what you mean. Where hasn't the playing field been balanced or been level? We talk about big utilities. I don't know, maybe I'm wrong, but it strikes me that it's those big utilities that are making the investments in these interties. Perhaps that's not the case. How would you like that playing field balanced?

[Robert Hornung]

I think if you look at a situation, for example, where there's a lot of reflection on the possibility of building an intertie between British Columbia and Alberta, you see that we have two very different systems. You have a British Columbia system, which is a crown utility. In Alberta, you have essentially a fully competitive market. At the end of the day, if you're looking at having B.C. Hydro, for example, compete for access to that intertie against TransAlta, or a small renewable company in Alberta, you see they work under very different financial models and have very different business structures, which makes it challenging for them to compete on a level playing field in that regard.

That's what we're asking people to be sensitive to and to be thinking about, because as I said, interties can provide opportunities on both sides of the line for development, and we think that's something we should be striving to do.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Mr. Cronkhite, New Brunswick is very famous for tides. I wondered how this whole conversation might be tied in with the future of renewables in New Brunswick in tidal energy, and in particular how new interties, a better grid, would help that along. What's the timeline we're looking at there?

[Keith Cronkhite]

I'll say certainly within Atlantic Canada, particularly New Brunswick and Nova Scotia, there are considerable efforts relative to tidal energy and exploring different options.

What I can tell you is that with 28-foot tides you have a pretty harsh environment and very different conditions that exist. We've worked with some different companies. We're also monitoring the activities that are going on in Nova Scotia. It's really still on the cutting edge as it relates to the Bay of Fundy and the environment that exists there to have turbines that can withstand the environment that currently exists.

With respect to tidal or wind development, interties within our jurisdiction are absolutely critical to allow that flexibility because, as we know with these types of resources, they are intermittent so there does need to be sufficient availability on the transmission interties to allow that energy to move more freely.

It's also necessary to look at the other resources that exist within a region and to look at how you can match up those intermittent resources with other sources of energy. Hydro, as you mentioned earlier, particularly in Newfoundland and Quebec, is a great battery to complement wind and other intermittent renewables.

With the interties between those regions that have those resources available, ultimately by working together, you can get more intermittent renewables or more renewables into the system. It's absolutely critical; independently, not so much.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

We heard from a previous witness today about the problem with distance and interties, if you want to move electricity to New York or Massachusetts or between provinces. What's that conversation like? What are the things in play there when we talk about how far we can afford to build out?

Perhaps you could both comment.

[Keith Cronkhite]

Certainly with transmission interties there are AC connections and then there are HVDC or direct current connections. Long distances are more conducive to an HVDC or direct current. Your line losses are something you have to factor in on a go-forward basis because essentially that's a cost or a toll on the line from an energy perspective that is consumed in delivering the electricity to the end recipient.

It's important that if you can get your generation closer to load, obviously it's better, no surprise there, but advancements in those technologies are occurring as well, so we're seeing more efficient operation of those facilities.

We do recognize certainly in eastern Canada that new hydro resources, for example, are further away from the load than we might have had previously, so advances and working with neighbouring jurisdictions is critical in order to facilitate that movement of electricity.

[The Chair, Liberal, James Maloney]

Thank you.

I'm going to have to interrupt you and stop you there.

Mr. Amos, it's over to you.