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(Background context for Renewable Energy and Energy Efficiency: Commencing a Comprehensive Strategy) The Green Budget Coalition believes that the most important requirement to accelerate growth in renewable energy and energy efficiency is the development, funding, and commencement of a comprehensive strategy. The adoption of such a strategy would steer Canada onto a sustainable energy path. The implementation of this strategy should begin by setting world-class targets, enhancing regulatory actions, and building the capacity to empower citizens and businesses. The government can play a leadership role by ensuring federal procurement practices are based on lowest life-cycle energy cost, by transferring targeted funds for sustainable energy projects, by raising Bio-fuel content targets, and by actively participating in international partnerships. The Green Budget Coalition believes a national strategy should incorporate each of the following six elements:
The following elements are based largely on recommended strategies of the Canadian Renewable Energy Alliance (CanREA)(1) and the Clean Air Renewable Energy (CARE) Coalition(2). 1. Leadership and foundation building - Setting world-class targets Energy Efficiency Energy efficiency comes under many jurisdictions. The federal government should provide leadership by making energy efficiency into a national priority - working in collaboration with the provinces and other stakeholders to develop national world class targets and action plans, and making the necessary directives to departments responsible for different aspects of energy efficiency policy. European countries are setting targets that will see two-thirds or more of new demand growth met through improved efficiency, with a recent EU directive to reduce demand by 20% (3). The Green Budget Coalition recommends that in 2006-2007 the federal government set ambitious short and long range targets for energy efficiency, working with multi-stakeholder forums including the Council of Energy Ministers steering committees and working groups, the Energy Sustainability Sector Table, and The National Advisory Council on Energy Efficiency (NACEE). We also recommend that the federal government use these same stakeholder groups to develop a national 10-year plan for supporting energy efficiency. The Green Budget Coalition also recommends that the federal government develop and implement a national sustainable transport action plan in collaboration with provinces and territories, and set up appropriate collaborative coordinating bodies. Canada has a natural advantage for renewable energy. The significant, undeveloped potential for low-impact renewable energy in Canada can play a central role in our economic development, energy security and climate change action plans. Based on the experience of other countries, Canada could reasonably produce 50,000 MW of wind power, enough to represent 20% of our electricity needs (4). Green heat could displace combustion of 1 billion cubic meters of natural gas by 2020 (5). Bio-fuels can be produced in large quantities by Canada’s farmers and waste producers. The Green Budget Coalition recommends that the federal government follow its G8 partners and develop a national renewable energy strategy, setting ambitious targets for all forms of renewable energy, including power, heat and fuels. To develop these targets, the Green Budget Coalition urges the government to work with multi-stakeholder forums such as the Council of Energy Ministers steering committees and working groups, and Energy Sustainability Sector Table. Where appropriate forums are not in place, such as for the small-scale renewable energy and green heat sectors, the government should establish collaborative forums to recommend targets and implementation strategies. 2. Raising the bar through regulatory actions and higher performance standards Energy Efficiency Higher minimum performance standards for equipment and best in class labeling together increase the average level of efficiency and ensure continual improvement. The Green Budget Coalition recommends that the federal government use the Energy Efficiency Act to raise existing minimum performance standards for equipment to the best levels found in North America, and extend legal standards to all other energy using equipment, including cars and light trucks. The International Energy Agency “1 Watt” initiative, an international program to harmonize efficiency of standby power of equipment, should also be adopted by the federal government under the Energy Efficiency Act. The Green Budget Coalition also recommends that the federal government support provincial energy code regulations by regularly updating the National Model Codes for Houses and Buildings, and incorporating these requirements into the National Building Code by 2008. The federal government should, further, continue to expand best in class (e.g. Energy Star) labeling protocols for equipment, buildings, and vehicles. A permanent body should be used to review and update standards, model codes and labeling codes regularly, with adequate funding provided for enforcement and standards development. All standards, code and labeling work should be coordinated with provincial actions through Council of Energy Ministers energy efficiency/DSM collaboratives. The federal government should issue directives to all departments concerned with building code and standard setting requiring the removal of all barriers to the inclusion of energy efficiency requirements in building codes, and the regular upgrading of codes and standards to high efficiency levels in coordination with capacity building and incentive initiatives (see 3 below). Renewable Energy The Green Budget Coalition recommends that performance standards be developed for renewable energy and renewable fuel technologies, removing all institutional barriers to their use. This includes rapid certification of power and heat meters for use by renewable energy technologies, inclusion of solar access rights and solar readiness into building codes, and development of a model code for interconnection of on-site power systems similar to those in force in the UK and other European countries. Importantly, adequate resources should be provided for rapid action and proper enforcement of these regulations. The Green Budget Coalition recommends that, in consultation with the Provinces and Territories, national Renewable Energy Portfolio Standards (RPS) should be used to set legal requirements for renewable power and heat sources in all Provinces. To allow utilities to meet these requirements at least cost, Canada should introduce a renewable energy tradable certificates (REC) program, harmonized where possible with other North American REC programs. Class 43.1 provides an accelerated write off for many renewable energy technologies. However the qualifying restrictions placed on solar energy in Class 43.1 eliminates approximately 90% of the applications for solar. The Green Budget Coalition recommends that the size restrictions for solar PV systems in Class 43.1, and the restrictions on applications for solar hot water systems and solar air heating systems, should be removed. The Green Budget Coalition recommends that the government allocate sufficient resources to expand its committed level of ethanol and bio-diesel content from 5% by 2010 to 10% by 2015, and use the Canadian Environmental Protection Act to make these requirements legal across Canada. In order to maximize environmental benefit, the Green Budget Coalition recommends that the government embed in its regulations that only fuels with the lowest life-cycle greenhouse gas and criteria air contaminant (CAC) emissions be utilized. For example, cellulose ethanol and bio-diesel have lower overall GHG emissions than starch ethanol. In order to achieve these targets it is critical that fuel efficiency standards be increased and that flexible fuel vehicles further penetrate the marketplace. 3. Building capacity to deliver technology and services, and empowering citizens and business to acquire them Energy Efficiency Experience has shown that to accelerate the pace of energy efficiency requirements in codes and standards, it is of the utmost importance that an industrial capacity to deliver higher efficiency technologies and building be built up before a standard or code is raised to this level. The objective is to use industrial support incentives, training and other measures to achieve at least a 50% market share of the new technology or building level before the new standard or code takes effect. Consumers and businesses also need to be made aware of the new technologies and encouraged to choose them through a combination of best-in-class labeling like Energy Star and some form of incentive. This assistance or encouragement must be present at the precise time that a decision is made, for example to buy or replace equipment, or to buy or renovate a building. The federal role in these “market transformation” programs includes maintenance of national quality assurance; provision of financial incentives to manufacturers, distributors or users; and support of training and certification. These initiatives can help build industrial capacity to meet new standards, provide a skilled workforce, and permanently change consumer and business decisions. The Green Budget Coalition recommends that the federal government provide these capacity building and national quality control programs for:
Training should include builders, designers, manufacturers, installers, trainers, and community managers. Sufficient resources should be allocated to these programs in order that, with help from government, industry and NGO partners, these markets are transformed to be the most efficient in North America. Renewable Energy The federal government should provide support for training and certification, technical assistance, and industry capacity building programs to deliver, install, finance, operate and maintain small scale and community owned renewable energy technologies and systems. Training should include builders, designers, manufacturers, installers, trainers, and community managers. We recommend that the federal government provide these capacity building and national quality control services for:
Sufficient resources should be allocated to these programs such that, with help from government, industry and NGO partners, these markets are developed to a self-sustaining level. 4. Federal procurement of efficient technology Energy Efficiency Direct procurement of energy efficient products and services by federal departments based on lowest life cycle cost can play a key role in building new energy efficient markets. The Green Budget Coalition recommends that the government immediately implement an efficient technology procurement strategy for all owned and leased buildings, focusing in year 1 on the purchase of best-in-class high efficiency lighting, air conditioning, and vehicles. Renewable Energy Federal procurement of goods based on lowest life cycle cost can provide a spark to small-scale renewable energy markets. The Green Budget Coalition believes the government should commit the funds necessary to:
5. Direct Investment and Financing Energy Efficiency In many cases, direct federal investment or transfers to provinces and municipalities for new energy efficiency infrastructure can leverage private and community investment. The Green Budget Coalition recommends that the federal government make direct transfers to provinces and municipalities for:
The federal government should also provide financial incentives and tax measures that shift freight to the most energy efficient mode and minimize freight movement. Renewable Energy Financial incentives for large-scale renewable energy should be continued and expanded, starting by expanding support for low-impact renewable electricity generation in Canada from the current 4,000 MW (WPPI) and 1,500 MW (RPPI) to a total of 12,000 MW by 2013 (6). In addition, investment targeted for small-scale renewable energy development (e.g. solar water heating, ground-source heating) should be coupled with strategies to empower citizens and build capacity in industry. In its recent report the National Roundtable on the Environment and the Economy points out that limiting production incentives through WPPI and RPPI to wind and biomass will “preclude solar energy technologies from benefiting from the learning by doing and economies of scale that will help make them more competitive. Production incentives should be broadened to enable a wide choice of emerging technologies, with different levels of subsidy set for each technology according to the cost difference that must be overcome.” The Green Budget Coalition therefore recommends that a new comprehensive production incentive program for renewable electricity and heat technologies be implemented. The program would:
For large projects the support should be in the form of a production incentive paid on the basis of measured production of renewable power or heat. For smaller projects a single capital manufacturers or distributors incentive should be paid based on the standard performance of the equipment and coupled with capacity building programs (see above). 6. International cooperation At the 2006 G8 summit in Russia, governments including Canada agreed to make “wider use of renewables and to develop and introduce innovative technologies throughout the entire energy sector”, and to activity promote energy efficiency. The Green Budget Coalition believes that the government should honour these commitments by providing adequate resources for full participation by Canadian governments, businesses and non-governmental organizations in this global initiative. Canada will benefit significantly from global cooperation on energy efficiency and renewable energy. Canada has the opportunity to demonstrate leadership and foster international cooperation through participation in collaborative international partnerships and bodies that specifically support energy efficiency and renewable energy deployment in industrialized and developing countries. Examples include the Renewable Energy and Energy Efficiency Partnership (REEEP), the Global Village Energy Partnership (GVEP), the Council for Environmental Cooperation (NAFTA) Renewable Energy and Green Buildings Experts Committees, and the Renewable Energy Policy Network for the 21st Century (REN21). To effectively participate in these forums, the Green Budget Coalition believes that the federal government must allocate adequate funds and resources. Participation in these forums fosters international action on renewable energy, and ensures Canadians can develop domestic programs based on the best practices of international partners. There are also many ways that Canada can help developing countries meet their energy needs through efficiency and renewable energy while reducing poverty. The Green Budget Coalition recommends that Canada commit significant funds to the Renewable Energy and Energy Efficiency Partnership (REEEP) to assist developing countries adopt energy efficient and renewable energy practices. The Coalition also recommends that the federal government increase the development assistance budget of the Canadian International Development Agency to support small community scale renewable energy projects. Finally the Coalition recommends that Canada re-instate its commitment to financially support the Clean Development Mechanism and commit resources to help development agencies access this valuable new source of development financing. Contacts:
1. http://www.canrea.ca - Back to text |