Improving Energy Performance in Canada – Report to Parliament Under the Energy Efficiency Act For the Fiscal Year 2006-2007

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Chapter 7: Renewable Energy

RENEWABLE ENERGY USE

In 2005, renewable sources accounted for approximately 61 percent of the Canadian installed electricity capacity (see Table 7-1). Most of the renewable energy used in Canada comes from either hydro-electricity or thermal energy from biomass such as wood-waste sources.

Hydro-Electricity

Hydro-electricity is a renewable form of electricity that is generated from a system or technology that uses a mechanical method to capture and convert the potential energy of water.

Hydro is the main source of electricity in Canada, accounting for approximately 60 percent of the electricity generated in 2005. Canada's hydro supply is dominated by large-scale projects that were developed by electric utilities. Of the 72 000 megawatts (MW) of installed hydro capacity, approximately 3200 MW comes from small hydro sites (less than 50 MW), about 2.7 percent of Canada's total installed electricity capacity. Significant potential remains for additional hydro-electric development in Canada, in most provinces and territories.

Biomass

Bioenergy is a renewable source of energy derived from the conversion of materials of either living organisms or metabolic by-products. Canada has an abundant supply of many types of biomass, which is important in the production of energy, biofuels, materials and chemicals. The two largest sources of biomass supply in Canada come from forestry and agricultural operations.

The typical biomass supply is derived from

• forestry – mill or pulp and paper residues, black liquor from the pulping process, forest residue, forest management thinnings and short rotation crops
• agriculture – agricultural crops, crop residue, processing residues, algae and aquatic biomass
• other organic waste – animal waste such as manure from feed lots, municipal solid waste and industrial wastes

Canada is using approximately 6 percent of its energy demand from bioenergy. This amount of renewable bioenergy ranks second to hydro power (which generates 11 percent of Canada's energy). Most of the bioenergy being produced is in the form of industrial process heat, electricity, steam and residential space heating.

TABLE 7-1

Electricity Generation Capacity from Renewable Sources (Includes Hydro-electricity)

Year	Renewable electricity generation capacity (megawatts)	Percent of total capacity
1990	59 557	58
1991	61 116	58
1992	62 895	58
1993	63 114	56
1994	63 175	56
1995	66 542	57
1996	67 101	59
1997	68 202	61
1998	68 340	62
1999	68 686	62
2000	69 005	62
2001	68 734	61
2002	70 895	62
2003	72 160	62
2004	72 783	62
2005	74 373	61

Source: Statistics Canada catalogue 57-206-XIB

TABLE 7-2

Renewable Energy Markets and Technologies Used in Canada

Electricity	Thermal Energy
Hydro-electricity	Biomass (e.g. roundwood, pellets, wood chips)
Tidal power	Ground-source heat pumps (e.g. earth energy)
Biomass (e.g. wood waste)	Solar air-heating systems
Biogas (e.g. methane from landfill sites)	Solar hot water systems
Wind turbines
Photovoltaic systems
Mechanical Power	Transportation
Wind water pumps	Biodiesel
	Ethanol from biomass

The pulp and paper industry is Canada's major producer and user of bioenergy. Heat and electricity produced by industry, electricity generated by independent power producers, and residential wood heat are all considered commonplace in Canada's energy mix. As an example, approximately 3 million Canadian households use wood for home heating. Roundwood is typically used but alternatives include wood chips and pellets. Home heating with wood usually takes the form of stand-alone wood stoves, wood furnaces with hot-water or forced-air systems, fireplaces with advanced combustion inserts, high-efficiency fireplaces or high-thermal-mass masonry heaters.

Biogas and landfill gas (methane rich gases that are derived from manure, animal processing wastes, other agricultural residues and municipal waste) for energy production is just emerging and contributed just over 100 MW of power in 2006.

Biomass also shows potential as a feedstock for liquid fuels. Approximately 200 million litres of fuel ethanol are produced annually in Canada from cereal grain and corn. Biodiesel is also produced in small quantities but production is increasing. It is accepted that Canada has potential to increase its bioenergy production in a sustainable manner.

Earth Energy

As a result of the sun heating the surface of the planet, the temperature of the earth that is 1 or 2 metres (m) below the surface remains fairly constant – between 5°C and 10°C. This temperature is warmer than the air during the winter and cooler than the air in the summer. A ground-source heat pump takes advantage of this temperature difference by using the earth or the ground water as a source of heat in the winter and as a "sink" for heat removed from indoor air in the summer. For this reason, a ground-source heat pump is known as an earth energy system (EES).

During winter, EES installations remove heat from the earth using a liquid, typically an anti-freeze solution or water, that circulates within an underground loop. The EES then upgrades the heat with a conventional heat pump and transfers it to indoor space or the water-heating system. During summer, the system reverses this process to operate as an air conditioner. EES installations supply less than 1 percent of the market for space and water heating and cooling in Canada.

Wind Energy

Wind turbines convert the kinetic energy of wind into electrical or mechanical energy. Canada's land mass and coastal waters combine to provide a wind resource with potential estimated at more than 100 000 MW. As of December 2006, a total of 1460 MW of wind power were installed in Canada, making it the thirteenth country that has reached the 1000 MW milestone and the twelfth largest nation in terms of installed wind energy capacity. 2006 was a record year for Canadian wind power with an increase of 776 MW from last year's level of 683 MW, which is a 113 percent increase. Recent policy developments have spurred record growth in the Canadian wind generation industry (see Figure 7-1). Wind energy currently accounts for approximately 0.7 percent of Canada's total electricity generation, up from 0.4 percent in 2005.

Wind energy also provides mechanical power. Several thousand wind-powered water pumps are used throughout Canada, mostly in the Prairie provinces. As well, Canadians use small, residential-sized wind turbines to power cottages and remote houses.

Solar Energy

Three main technologies use energy from the sun:

• passive solar technologies – Buildings are designed and located to maximize their reception of solar energy.
• active solar thermal systems – Solar radiation is converted into thermal energy for heating air or water in residential, commercial and industrial applications.
• solar electric (photovoltaic) systems – Solar radiation is used to produce electricity.

The Canadian solar thermal installed capacity in 2005 was 419 000 m² or 290 MW_thermal. The domestic market increase has averaged 17 percent annually since 1998. In 2005, the solar thermal collector market in Canada was 61 500 m² compared with 53 600 m² in 2004.

The Canadian total photovoltaic (PV) installed capacity in 2006 was 20.5 MW with a sustained domestic market growth that has averaged 22 percent annually since 1992. In 2006, the PV module market in Canada was 3.75 MW compared with 3.68 MW in 2005.

Module prices declined from $11.09/W in 1999 to $5.36/W in 2006. This is an average annual price reduction of 9 percent. Twelve manufacturers in Canada reported revenues from manufacturing operations related to system sales of $137 million and the addition of 55 jobs in 2006. The PV business in Canada is valued at $205 million and employs 1030 people.

Natural Resources Canada (NRCan) delivers several initiatives to increase the use of small-scale renewable energy in Canada. The following is the array of NRCan renewable energy programs.

RENEWABLE ENERGY PROGRAMS:
Wind Power Production Incentive

Objective: To support the installation of 1000 MW of wind energy capacity or the production of 2.6 terawatt hours by March 31, 2007.

Under the Wind Power Production Incentive (WPPI), electric utilities, independent power producers and other stakeholders could qualify for an incentive averaging $0.01/kilowatt hour (kWh) on electricity produced from wind over a 10-year period. The commitment period for new wind energy projects under the program came to an end on March 31, 2007.

Key 2006-2007 Achievements

• Three wind energy projects were commissioned in fiscal year 2006-2007: two are in Ontario and one is in Alberta. These projects represent approximately 173 MW of wind energy capacity and a financial contribution of more than $51 million over 10 years.
• Since WPPI's introduction in 2002, the program has supported 924 MW of new capacity, which included 22 projects and a financial commitment of approximately $314 million.

For more information:
canren.gc.ca/wppi

RENEWABLE ENERGY PROGRAMS:
Initiative to Purchase Electricity From Emerging Renewable Energy Sources

Objective: To purchase electricity from emerging renewable energy sources (ERES) certified by a third party as having low environmental impact, with the objective of reducing GHGs and other air pollution emissions associated with federal electricity consumption.

Between 1998 and 2001, NRCan entered into three pilot projects to purchase electricity from ERES for federal facilities in Alberta, Saskatchewan and Prince Edward Island. The Government of Canada pledged to purchase 20 percent of its electricity from ERES by 2010.

Key 2006-2007 Achievements

• Approximately 90 gigawatt hours (GWh) of electricity were generated from ERES in Ontario through an agreement with Energy Ottawa.
• Approximately 57.4 GWh of electricity are generated annually from ERES for federal facilities in Alberta, Saskatchewan and Prince Edward Island. As a result, GHG emissions were reduced by approximately 50 000 tonnes.

For more information:
http://ecoaction.gc.ca/ecoenergy-ecoenergie/power-electricite/index-eng.cfm

RENEWABLE ENERGY PROGRAMS:
Renewable Energy Deployment Initiative

Objective: To stimulate the demand for renewable energy systems by helping the supply industry with its marketing and infrastructure development, including the provision of financial incentives.

The Renewable Energy Deployment Initiative (REDI) targets four systems: solar water heating, solar air heating and cooling, earth energy, and high-efficiency, low-emission biomass combustion. REDI promotes these systems in the business, federal and industrial markets through various means: a financial incentive, industry infrastructure development, a partnership with a utility coalition, market assessment, and information provision and awareness-raising activities.

Key 2006-2007 Achievements

• The program experienced a record level of interest, completing 298 projects at the end of fiscal year 2005-2006 and receiving over 1000 applications (see Table 7-3). Two market documents were published: The REDI Strategic Business Plan to March 2007 and A Survey of Active-Solar Thermal Collectors, Industry and Markets in Canada.
• REDI supported a solar domestic hot water system. It was the first packaged system of its type to receive Canadian Standards Association certification in Canada.

For more information:
http://ecoaction.gc.ca/ecoenergy-ecoenergie/heat-chauffage/index-eng.cfm

TABLE 7-3

REDI for Business Projects Completed,1998 to 2005

Fiscal year	Number of projects completed	Estimated GHG reduction (tonnes CO2/yr)	Client investment ($)	Federal incentive ($)
1998	10	2 909	1,428,063	176,392
1999	70	329	689,633	189,910
2000	131	6 370	2,170,918	327,078
2001	51	23 465	6,708,120	1,362,399
2002	50	7 643	5,048,607	956,600
2003	119	33 975	25,060,504	3,226,694
2004	65	47 446	11,200,943	2,250,421
2005	298	18 987	21,494,497	2,920,750
Total	794	141 124	73,801,285	11,410,244

RENEWABLE ENERGY PROGRAMS:
Photovoltaic and Hybrid Systems Program

Objective: To support the development and application of solar photovoltaic technologies in Canada.

The Photovoltaic and Hybrid Systems program contributes to increasing the use of photovoltaic (PV) energy technologies in Canada by developing technologies and by facilitating the development of a Canadian-based globally competitive solar industry. It also contributes to the development of policies and programs. In collaboration with Canadian industry and universities as well as international energy research organizations, the program undertakes research and development (R&D) activities and fosters information exchanges. This leads to the adoption of PV-hybrid systems that produce electricity from solar energy and another energy source; validates the performance and safety of utility-interactive inverter products; supports the development of building-integrated PV technologies and systems; and facilitates the development and adoption of harmonized standards and codes for micropower systems in Canada.

Key 2006-2007 Achievements

• Published the PV and solar resource maps for Canada. These "on-line" Web maps were unveiled on November 3, 2006, at the Canadian Solar Industries Association annual conference in Ottawa. The maps give estimates of the electricity that can be generated by PV arrays and of the mean daily global insolation for any location in Canada. The maps are complemented by a municipality database that gives PV potential data for more than 3500 municipalities. The maps and database are important new tools that allow users to rapidly assess the potential of PVs throughout Canada and to examine how this potential varies with location, time of year and PV panel orientation.
• A research partnership with universities and industry has been established to optimize the use of renewable energy in buildings in Canada. This Solar Buildings Research Network is headquartered at Concordia University and brings together top Canadian researchers in solar energy and buildings to develop the solar-optimized homes and commercial buildings of the future. The network will also develop and implement a strategy to effectively transfer this knowledge to architects, manufacturers and home builders and utilities. See www.solarbuildings.ca.
• The first Canadian interconnection standard was adopted in 2006. This new national standard of Canada (CAN/CSA-C22.2 No. 257-06) was issued by the Canadian Standards Association under Part II of the Canadian Electrical Code and specifies the electrical requirements for safe interconnection of inverter-based micro-distributed resource (micro-DR) systems connected to 600 volt (nominal) or less distribution systems (single or three phase). Program support and expertise in the area of PV inverter-based interconnection established the technical foundation for the national standard.

For more information:
cetc-varennes.nrcan.gc.ca/en/er_re.html

RENEWABLE ENERGY PROGRAMS:
Bioenergy Technology Program

Objective: To support efforts by Canadian industry to develop bioenergy technologies.

Technologies supported by the Bioenergy Technology program include combustion, biochemical conversion of biomass to ethanol, thermochemical conversion of biomass to bio-oil and biogas, and biomass preparation and handling. Activities are directed toward improving the reliability and lowering the cost of technologies, disseminating information on technology feasibility and economics to potential users, and helping industry commercialize its products in domestic and foreign markets.

Key 2006-2007 Achievements

• BIOX Corporation of Oakville, Ontario, completed the construction and commissioning of a biodiesel production facility in Hamilton, Ontario, that will produce 60 megalitres (ML) annually. The facility is now in continuous full commercial production. This innovative technology was developed at the University of Toronto and licensed to BIOX with technical and funding support from NRCan, including the demonstration of a 1-ML per year pilot plant. The technology is unique in that it can convert low quality oils and greases into a high quality biodiesel fuel with lower capital and operating costs than competing technologies. Sustainable Development Technology Canada provided funding support to this facility, which is the largest biodiesel production facility in Canada, and one of the few in the world capable of running on multiple triglyceride feedstocks.
• In February 2007, the United States Department of Energy announced that it would be investing US$385 million in six biorefineries over the next four years. The six successful consortiums were selected after rigorous technical and economic reviews. Iogen Corporation of Ottawa, Ontario, was one of the six companies chosen. Iogen technology makes it economically feasible to convert biomass into cellulose ethanol by using a combination of thermal, chemical and biochemical techniques.
• NRCan has played a key role in a gasification project in Kamloops, British Columbia. A gasification technology developed by Nexterra Energy was installed at a plywood mill in Heffley Creek, British Columbia, that is owned by Tolko Industries. This energy plant is the first application of its type in the North American forest industry to make use of green technologies that can convert hog fuel waste produced at mills to a renewable energy source that can replace natural gas in lumber kiln drying applications. As a result of this successful commercial demonstration, Nexterra has announced that other projects such as Dockside Green in Victoria, British Columbia, will be utilizing its technology.

For more information:
nrcan.gc.ca/es/etb/cetc/cetc01/htmldocs/Groups/
Research%20Programs/program_bioenergy_e.htm

RENEWABLE ENERGY PROGRAMS:
Science and Technology in Renewable Energy

Objective: To promote energy diversity and support efforts by Canadian industry to develop renewable energy technologies.

Working in partnership with associations, government and industry, the CANMET Energy Technology Centre (CETC) aims to improve the economics and efficiency of renewable energy technologies, including wind energy, small and low-head hydro, ocean energy, solar thermal and energy storage. It is actively involved in R&D to support the growth of the renewable energy industry in Canada. Growth will be achieved by

• identifying and accelerating strategic R&D
• fostering the commercialization of new technologies
• identifying and developing opportunities for renewables integration
• developing infrastructure to support innovation, such as codes, policies and standards
• developing links between utilities, industry and academia
• conducting resource assessments
• supporting training and education
• disseminating results and findings
• supporting policy and programs
• engaging in international cooperation through the International Energy Agency

Key 2006-2007 Achievements

• Construction began in 2005 on the Drake Landing Solar Community, a 52-home subdivision in Okotoks, Alberta, south of Calgary. This seasonal project stores solar thermal energy. It was designed and led by CETC to capture solar energy in the summer and store it for use in the winter. The solar district heating system will meet 90 percent of the community's needs for residential space heating. This result is unprecedented anywhere in the world. In 2006-2007, all homes were sold and 40 homes were occupied, with 25 percent of solar collectors online and the remainder installed. The final commissioning is scheduled for September 2007.
• CETC works to improve Canadian standards for renewable energy technologies. In 2006-2007, CETC helped form the Canadian National Technical Committee for Wind Turbine Standards. The committee worked on adopting and adapting a set of International Electrotechnical Commission (IEC) standards for Canadian use. The existence of these standards will significantly improve the Canadian wind regulatory framework and facilitate the commercial transactions between Canada and other countries. In addition, CETC represents Canadian interests (such as cold climate requirements) internationally in the development of future IEC standards for wind energy. CETC also led the development of Canada's first certification program for solar domestic hot water systems (SDHW), which will allow these systems to be installed anywhere in Canada. The first SDHW system has been certified.
• CETC was the Canadian Executing Agency for the Canadian International Development Agency's Canada Climate Change Development Fund ($2 million) contribution to a small hydro project that was completed in China. The project used automation equipment to improve the operational efficiency of small hydro plants. The project maximized river basin power production by using optimized equipment and hydrological modeling. It also increased energy efficiency and power production by using a new and enhanced turbine design. On average, a 10 to 12 percent increase in energy production from the small hydro generating plants was achieved. That increase now serves approximately 18 000 additional households.
• A Vanadium-Based Redox Battery System with a 3.3-kW, 3-hour storage capacity was purchased by the National Research Council and installed at CETC. CETC has been operating the battery and developing testing programs with partners to assess the performance of the system. Work is progressing towards application-specific testing (e.g. wind/storage simulations).
• Canada's ocean energy resources are among the largest in the world. A new feasibility study was started to assess the viability of a tidal power plant demonstration, located on the northeast coast of the Queen Charlotte Islands in British Columbia.

For more information:
sbc.nrcan.gc.ca

RENEWABLE ENERGY PROGRAMS:
Canadian Biomass Innovation Network

Objective: To develop sustainable and cost-effective technologies in bioenergy, biofuels, bioproducts and industrial bioprocesses for market acceptance, utilizing biomass resources in a sustainable and responsible way.

The Canadian Biomass Innovation Network (CBIN) supports strategic R&D in the areas of bioenergy, biofuels, bioproducts and industrial bioprocesses to displace Canada's fossil fuel energy consumption; directly or indirectly reduce GHG emissions; and seed the sustainable development of Canada's bio-based economy.

CBIN is a horizontal program developed and managed by five federal departments: Agriculture and Agri-Food Canada, Environment Canada, Industry Canada, National Research Council and NRCan.

Key 2006-2007 Achievements

• Polylactide, a rigid and transparent polymer made from lactic acid, is presently not cost-competitive with petroleum-based polymers and is too brittle for many packaging applications. During the year, the network demonstrated that the addition of starch in a blend leads to a much more homogeneous product, with highly improved ductility, leading to potential new applications.
• A single window, interactive, Web-based biomass information portal is being completed. It will provide resources and tools that can be used by investors, policy makers and the research community to learn more about the industrial uses of herbaceous and woody biomass.
• In February 2007, Tembec announced that the Anaerobic Digester they installed on their mill effluent with assistance from NRCan and Technology Early Action Measures is now operating at full design capacity. They emphasized that the system has three benefits. The system provides methane gas that displaces 90 percent of the natural gas in the mill's pulp driers, the quality of the mill effluent is drastically improved, and the amount of sludge that goes to landfill is significantly reduced.
• The life cycle and impact assessment methodology was adapted to the Canadian pulp and paper industry for continuous environmental improvement, strategic planning and forest biorefinery assessment.

For more information:
cbin.gc.ca

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