ecoEnergy Initiatives and Provincial Policies Drive Renewable Energy in Canada

Monday 7 October 2013, Amsterdam

Strong Local Policies Drive the Development in the US and Canada
The US and Canada are global leaders in terms of renewable power generation. The growth momentum of the renewable industry in the US and Canada has primarily been facilitated by the support mechanisms provided by the federal and state governments. Although both countries have federal regulations in place for renewable industry, states with strong policy frameworks have been the major contributors to renewable installed capacity in both countries. The development patterns for the renewable industries in these countries have been largely dependent upon the level of support mechanisms provided by the state governments. In the US, the growth of the renewable energy industry has been led by the state-level Renewable Portfolio Standard (RPS), combined with other tax incentives and subsidies. California and Texas, which have been providing policy support to the renewable energy industry for more than a decade, are the leaders in terms of renewable capacity in the country. The Canadian government is supporting renewable energy with the ecoENERGY program. Among the provinces in Canada, Ontario, with its comprehensive feed-in tariff (FiT) program, is the leading state in terms of renewable power capacity.

Extension of Production Tax Credit with Change in Clause to Stimulate US Wind Power Installations in the Near Future
The growth of the wind industry in the US has primarily been facilitated by the support mechanisms provided by the federal and state governments. The Production Tax Credit (PTC) is credited as being one of the most important policies involved in driving the wind industry in the US to new heights. The PTC provides an income tax credit for facilities placed in service before the expiry date. Since its inception, the PTC has expired seven times, and each expiry has led to a sharp decline in annual installed capacity. However, in 2012, when the PTC was due to expire, the tax credit was extended for one more year for wind power facilities. The current extension also changed the scope of the projects that are eligible for PTC. All wind power projects for which construction had started by the end of 2013 will be eligible for PTCs once the facility becomes operational. The change in scope of PTC eligibility is expected to stimulate the construction of projects by the end of 2013 and annual wind power capacity over the next two to three years compared with the decline in annual capacity observed when the PTC expired in the previous instances.

ecoEnergy Initiatives and Provincial Policies Drive Renewable Energy in Canada
Canada is one of the leading countries in terms of the utilization of renewable energy resources for electricity generation and heating. In 2012, renewable energy, including small hydro, accounted for 9.3% of electricity generation in Canada. Wind power is the most prominent source of renewable energy in the country, generating around 50% of Canada’s renewable electricity, including hydro, in 2012. The Canadian government is using both ecoENERGY and FiTs to develop the renewable energy sector and promote the use of renewable energy in the country. ecoENERGY is the umbrella program in Canada. Under this program, various federal incentives are in place to promote renewable energy production in Canada. The Canadian government has invested approximately $5 billion of funding in ecoEnergy initiatives. Under the ecoEnergy initiative, the Canadian government has provided FiTs, funded renewable energy projects, financed technology initiatives, and has also supported energy efficiency in various sectors. Canada does not currently have a federal target in place for the production of power from renewable energy technologies, as the federal government has authorized each province to develop their renewable power markets individually. Each province has its own policy framework for its renewable power market, supporting the growth of renewable sources of energy. The Ontario FiT program is the region’s first comprehensive price guarantee system for renewable power generation. Renewable Energy Standard Offer Program (RESOP) and the sales tax rebate initiative are other programs supporting the development of the solar power market in Ontario. In addition, the net metering offered by Ontario, Quebec, British Columbia and Nova Scotia is also supporting solar power generation in Canada.

Mexico's National Energy Strategy to Boost Renewable Power Capacity
Mexico possesses substantial reserves of coal, oil and gas and the country’s power sector is dominated by these sources. Fossil fuels account for more than 90% of the country's power capacity. Renewable power capacity