|June 16, 2016|
Canada fell "out of step" with planet in 2015 as clean tech investment plunged
|Alberta's investment in clean technology dropped 89 per cent in 2015 as part of a 15 per cent dip in investment nationwide, according to a Clean Energy Canada (CEC) report released Thursday. |
The CEC report, A Pivotal Time for Clean Energy, found that Canada's clean energy industry saw a $2-billion dip in spending last year, and called the slow-down "out of step" with other developed countries that have invested heavily in solar, geothermal, and wind energy production.
Clean energy spending was on a three-year growth spurt until 2015. It grew 29 per cent in 2014 and 28 per cent in 2013 with much of that growth occurring in wind and solar generation.
They attributed the diminished spending to both the conclusion of clean energy expansion projects in provinces like Ontario and Quebec, and to the fact that new climate change regulation and plans to expand clean energy infrastructure have not come into effect.
Alberta falling behind
Alberta saw the most substantial decrease in year-over-year spending. The province --- which elected its first NDP government in 2015 --- built a single wind project and spent a total $78-million that year, an 89 per cent drop over 2014.
CEC Policy Director Dan Woynillowicz said Alberta's numbers "stand out as a really significant drop."
"It wasn't unanticipated by virtue of the fact that over the course of Prime Minister Harper's tenure in government, some of the federal support that had previously existed for wind power projects was rolled back," Woynillowicz said. "That wind-powered production incentive had actually spurred a lot of the early investment in wind power in Alberta."
Opportunities in the north
Other provinces saw decreases as well. Ontario invested more than $5.3-billion in 2015 --- by far the highest of any province --- but still saw spending drop by 15 per cent. Quebec, which spent around $1.9 billion (mostly on wind power infrastructure) saw a nine per cent dip.
And with $0 spent in Canada's north, CEC found that the region "remains a largely untapped opportunity for renewable energy."
"The reality is the North is never going to be a significant investment destination because it's a lot of remote, small communities. The numbers there are never going to compete with what we're seeing in a province like Ontario," Woynillowicz said.
While the $2-billion dip is significant, 2015's $10-billion total was still the second highest in Canadian history. And while many jurisdictions saw clean tech spending decrease, many increased.
Atlantic Canada's spending spiked by 58 per cent to $1.2 billion. Clean Energy Canada credited Newfoundland and Labrodor's Muskrat Falls hydro project and wind power investment in Nova Scotia with the region's marked increase.
Woynillowicz said that while Canada has a relatively clean electricity grid, provinces like Alberta and Saskatchewan haven't seen the same push toward cleaning theirs up prior to 2015.
"The net result of that is that we have a few provinces that are doing some good things --- which is leading to more investment in renewables. But when you wrap it up nationally and compare it with other jurisdictions, we're not seeing the same level of activity."
Prairie provinces changing their ways
But those jurisdictions are changing their ways. While the report fond that getting clean energy development back on track "will require new or improved policies across the country," CEC lauds Alberta and Saskatchewan's plans to "double or triple their respective renewable electricity capacity by 2030."
Saskatchewan's spending increased from "virtually nothing" in 2014 to $60 million in 2015. Manitoba also saw a substantial increase in clean tech spending, up 121 per cent to $704 million due in large part to the Keeyask hydroelectricity project. Saskatchewan's utility provider SaskPower aims to double their capacity for renewable energy, hoping to generate 50 per cent of their electricity from renewables by 2030.
Alberta's climate action plan will see the province phase-out coal-fired electricity generation by 2030, the same year the ruling NDP government said 30 per cent of all electricity will come from renewable sources. CEC said the plan will "significantly boost renewable energy development in the years ahead."
Woynillowicz said that if Alberta gets its policy right, it can become one of the most heavily invested-in clean tech provinces in Canada --- a "real turnaround story."
"There hasn't been any supported policy for renewable energy in Alberta before the announcement of the climate leadership plan last fall. To the extent that we saw any investment happening in Alberta at all was actually because renewable energy developers there were being very creative in terms of how they could actually develop a financially viable project."
CEC released its findings just days after an International Renewable Energy Agency report found that the average cost of solar and wind power could decrease between 26 and 59 per cent by 2025.
Woynillowicz said it's important to note that investment isn't the perfect metric to measure Canada's dedication to clean tech. As it gets cheaper to generate electricity from renewable sources, we need to look at both rate of investment alongside what Woynillowicz calls "the rate of deployment."
"Because of those decreases in technology costs, what you'll see is that over time, for every dollar invested you're getting more power generated," he explained. "Investment isn't a perfect metric, but it's something that we track in part because it's actually representative of dollars invested in the economy and jobs being created."
Despite the dip, Woynillowicz said that since Alberta and Saskatchewan are implementing clean tech policies now, the decrease likely isn't permanent.
"It may be a few years where spending kind of plateaus out," he told National Observer. "That's just a function of that fact that the next wave of real growth in Canada is going to be in Alberta and Saskatchewan. It's probably going to take a few years before we get the policies in place and you actually get to the point of those projects being built and generating power."
Of the $10 billion spent in 2015, $4 billion went toward wind energy generation, $3 billion to "large hydro" development and $2.7 billion to solar. And at four per cent, clean energy capacity also saw a slight increase over 2014's total.
The report found that federal efforts to institute nation-wide carbon pricing "could also have a significant impact on the years ahead." Following Canada's First Ministers meeting in March, the federal budget allocated $2.5-million over two years to "study regional clean energy cooperation."
CEC credits sound energy policy with attracting clean tech investment in Canada.
"From Ottawa to Edmonton to Saskatoon, governments are saying all the right things about climate leadership and the clean energy transition. That newfound resolve has opened the door to the prospect of significant growth in the years ahead," CEC executive director Merran Smith said in the report.