Home / 6.3 Regional Stakeholder Engagement: Detailed Regional Opportunities

6.3 Regional Stakeholder Engagement: Detailed Regional Opportunities

Framing the Future: Embracing the Low-Carbon Economy

The following summaries of regional opportunities were developed based on a series of stakeholder convening sessions held by the NRT together with its regional partners in November and December 2011. The statements herein reflect the views of the participants about the low-carbon strengths and opportunities in their respective regions.

Western Canada

Western Canada’s low-carbon opportunities vary provincially; however, when looked at in aggregate, common themes emerge. As is often the case, sources of great challenge (e.g., fossil-fuel resources, transportation, etc.) also represent great opportunity. Western Canada has a number of strengths on which its low-carbon opportunities can be built:

// LOW-CARBON ENERGY RESOURCES: western Canada is replete with low-carbon energy resources including hydropower, biomass, solar, wind (on- and off-shore), geothermal power, and uranium. A significant portion of electricity generated in Manitoba and British Columbia is already low-carbon.

// ENERGY EXPERTISE: as the centre of Canada’s oil and gas extraction industry, western Canada has a large capital base which provides a strong platform for research and innovation. For the same reason, western Canada has strong energy sector and related expertise including project financing capacity and broader energy markets expertise.

// INNOVATION ENVIRONMENT: the presence of many energy sector head offices in Calgary and the large number of energy exploration and production start-ups provides an ideal environment for starting up innovative energy-related endeavours.

// ENTREPRENEURIAL SPIRIT: western Canada is home to an entrepreneurial spirit not typically seen elsewhere in Canada.

Key low-carbon opportunities identified in western Canada include the following:

// FURTHER DEVELOPMENT OF LOW-CARBON ENERGY RESOURCES: biomass, passive solar and waste-to-energy were noted as particularly viable low-carbon energy sources for Manitoba, along with further development of its hydropower resources. One participant noted that Alberta and Saskatchewan received more solar energy than either Texas or Germany.^k In fact, Alberta is noted as having some of the best solar resources in the country with its average solar resource measuring between 1,100 and 1,400 kilowatt hours of electricity per kilowatt of installed photovoltaic (PV) capacity per year.¹⁶⁰ Comparatively, Germany receives on average less than 1,000 kWh/kW/year.¹⁶¹ Significant wind capacity (on- and off-shore), biomass, biofuels and non-biofuel low-carbon fuels were noted in British Columbia. Geothermal energy was noted in both Alberta and British Columbia as having significant potential. It is clear that there is extensive opportunity for low-carbon energy resource development across Canada’s west.

// GEOTHERMAL RESOURCE DEVELOPMENT: due to western Canada’s significant experience in oil and gas and the broader energy and resource sectors, Canada has significant expertise in exploration, extraction and production, including drilling, large project staging and operating in harsh environments. This experience is directly applicable to the development of deep geothermal energy resources and is marketable the world over.

// CARBON CAPTURE AND STORAGE TECHNOLOGY (CCS): offers a significant opportunity for western Canada to exploit its substantial natural fossil-fuel endowments in a manner that is substantially less carbonintensive than current extraction methods. As the global economy becomes more carbon-constrained, CCS also has the potential to assure the ongoing viability of this commodity as a source of prosperity for Canada. Expertise and intellectual capital developed around CCS is also expected to offer opportunities in global markets. In 2011, Canada was ranked third in the world (behind the U.S. and Europe) in terms of the number of CCS projects and fourth in the world in terms of the volume of CO₂ potentially stored.

// ENERGY EFFICIENCY: there remains significant opportunity to improve energy efficiency, both at the community level with respect to transportation and urban planning, and in buildings. It was noted that governments have significant sway in setting direction — for example, they could decide tomorrow that capital projects should target energy efficiency, and efforts would follow. Furthermore, it was noted that while even more efficient technologies will no-doubt be invented, significant progress can be made using existing technology and knowledge. It was further noted that significant opportunity is presented in the context of urban growth (such as is being experienced in some parts of Alberta and Saskatchewan), both for putting in place high-efficiency buildings and for planning the growth in such a manner as to maximize efficiency and enable more efficient transportation options (e.g., urban transit).

// ELECTRIFICATION: the potential for using electricity to displace fossil fuels where there is significant low-carbon electricity potential was noted. One specific example noted in Manitoba was the potential for using electricity (hydropower) to power oil and gas extraction operations in the province rather than diesel. This concept has broader application in the residential and commercial sectors in the context of a significant shift toward a low-carbon economy and has been identified as a necessary measure for deep carbon reductions in previous NRT work.¹⁶²

// TRANSPORTATION: was noted as providing opportunities on a number of fronts — from improved vehicular efficiency to fuel substitution (e.g., biofuels) and/or electrification, to reduced transportation requirements as a function of urban design. It was put forward that 61% of oil is consumed for transportation purposes.^l In addition to the fuel-switching (biofuels and non-biofuel low-carbon fuels) and electrification potential around personal transportation, the use of natural gas engines for heavy-duty trucking and the opportunity for increased long-haul freight fuel efficiency resulting from the standardization of load limitations between Canadian provinces and with U.S. states were noted as specific freightrelated opportunities.

// INNOVATION: western Canada is host to significant low-carbon innovative potential, and the focus of that innovation should be “building on our strengths.” As the centre of the oil and gas industry in western Canada, Calgary was put forward as having the potential to host the creation of an energy cluster with the opportunity to become a centre of energy technology innovation, exporting expertise and intellectual capital across the world. Innovation was also highlighted in discussions in Saskatoon both with respect to nuclear energy and agriculture. The University of Saskatchewan is host to the Canadian Centre for Nuclear Studies. The centre encompasses six research clusters: innovation; northern development; nuclear medicine and health; mineral research and environmental science; neutron, radiation and nuclear science and engineering; and, nuclear, hydrogen and novel fuel energy.¹⁶³ Agricultural innovation both with respect to new varieties that reduce the overall energy inputs for crops, and specific development of biodiesel feedstocks, was also noted in Saskatchewan. Discussions in British Columbia highlighted the presence of an emerging clean technology cluster with a strong focus on low-carbon technologies and the potential for this sector to provide continued growth and prosperity to the province.^m

// NETWORK EFFICIENCIES: it was noted that increased connectivity between provincial electricity transmission networks, allowing increased east-west / west-east flow of electricity could provide greater opportunities for Canadian jurisdictions to benefit from excess low-carbon electricity from their neighbours. In particular, it was noted that Alberta’s electricity grid is an island, and that increased connectivity with British Columbia could assist in providing much-needed hydro-based storage capacity as well as providing the possibility for interprovincial flow of Canadian low-carbon electricity. It was suggested that an east-west grid is required to allow Canada to benefit more broadly from its own natural low-carbon advantage.

Ontario

Several strengths upon which Ontario’s low-carbon opportunities depend were noted:

// LOW-CARBON ENERGY RESOURCES: a significant fraction of Ontario’s current electricity generating capacity is already low-carbon (in 2011, electricity generation supplied was 56.9% nuclear, 22.2% hydro, 2.6% wind, 14.7% natural gas, 2.7% coal and 0.8% other — greater than 80% low-carbon) . In addition, Ontario was noted as having strong biomass energy potential.

// FINANCIAL RESOURCES & EXPERTISE: Ontario has significant pools of capital that can, in the right environment (i.e., in a supportive context), be brought to bear for the commercialization of low-carbon technology. As a major financial centre in Canada, Ontario also has significant banking expertise which can be employed to address the barriers currently slowing access to these resources.

// INNOVATION CAPACITY: Ontario hosts a highly educated workforce and intellectual thought-leaders with strong post-secondary and research institutions. It is also host to a high concentration of innovation clusters and supporting organizations.

// STRONG LOW-CARBON REGULATORY ENVIRONMENT: while it has its supporters and detractors, the Green Energy and Green Economy Act was noted as providing a strong regulatory framework in support of lowcarbon electricity and renewable energy technologies. The Integrated Power System Plan (IPSP), which provides a mid-term supply-side outlook, was also cited as strengthening the regulatory and planning framework for Ontario’s electricity system.

// NUCLEAR EXPERTISE: Ontario is the centre of Canada’s nuclear industry and home to significant sector-specific expertise. This provides a strong base for the potential development of advanced nuclear reactor designs.

Key low-carbon opportunities identified in Ontario include the following:

// BIOMASS FOR POWER GENERATION: biomass for electricity generation was noted as a significant opportunity for Ontario in that it would make use of existing renewable resources (forestry and agricultural biomass resources), use existing transmission infrastructure, and provide instantaneously dispatchable power capable of balancing the introduction of other renewable energy technologies that are subject to variability (e.g., wind), significantly reducing the need for backup / peaking natural gas-fired electricity generation capacity.

// ENHANCED GEOTHERMAL: enhanced geothermal was noted as a significant opportunity for Canada. It was noted that while the technology remains in its early stages and needs to be de-risked to fund further R&D and commercialization, the resource potential across Canada is significant.

// BIOGAS: was noted as an “energy orphan,” not being included in the provisions of Ontario’s Green Energy and Green Economy Act, but having significant potential particularly for agricultural and food processing facilities. Another participant noted that biogas is a proven technology and that Germany produces large quantities of biogas and expects it to ultimately represent a significant portion of its total energy supply.ⁿ The potential in Ontario remains largely untapped due to regulatory hurdles and disincentives (e.g., it does not meet the requirements for inclusion in the feed-in tariff program, and is disadvantaged by consumer price indexing). This potential includes the displacement of propane in rural Ontarian communities through the use of combined heat and power (CHP) generation technology.

// NEXT GENERATION NUCLEAR POWER: in addition to being home to three nuclear power generating stations (Pickering, Darlington, and Bruce), Ontario is home to Canada’s nuclear industry housing a large portion of Canada’s nuclear power expertise including academic training and research centres, applied research facilities and laboratories, fuel processing, manufacturing and conversion service companies and related manufacturing facilities. While there remains some uncertainty around the plans of CANDU Energy (wholly owned subsidiary of SNC-Lavalin Group Inc.) to pursue the development of new CANDU reactor designs since their acquisition of AECL’s commercial division in 2011, Ontario has significant supporting expertise, supply chains and infrastructure that positions it well to pursue this work. Discussion is ongoing around the development of four new reactors at Ontario Power Generation’s Darlington site.

// EXPORT OF “INTELLECTUAL CAPITAL ”: it was noted that there are a number of low-carbon and renewable energy technology companies in Ontario and that these companies are successful primarily in developing new technologies and innovative adaptations of existing technology — intellectual capital. Due to relatively low uptake in Canadian and North American markets (Ontario being an exception with the introduction of its generous feed-in tariff), these companies frequently target international markets. In addition, they tend to outsource the majority of manufacturing to jurisdictions with lower-cost economic inputs. It was noted that where Ontario excels and where it should focus, is on the development and export of intellectual capital.

// OFF-GRID RETS: it was noted that investment in power supply for aboriginal communities represents an ideal opportunity for exploring the deployment of off-grid renewable energy technologies. Many aboriginal communities are self-contained and remote, and are currently under-serviced or serviced by diesel generators which are carbon-intense, operationally expensive, and subject to price-volatility. Development of technologies for such off-grid, remote application has worldwide applicability. It was further noted that a number of Aboriginal organizations have access to capital and are actively making investments.

// ENERGY EFFICIENCY: was noted as a significant opportunity that continues to exist despite years of efforts. The energy efficiency discussion primarily focused on building energy efficiency. Specific examples included:

// Less than 1% of new commercial buildings are LEED or BOMA Best certified;
// The National Energy Code of Canada for Buildings requires a maximum energy usage of 38 kWh / ft² / year while participants suggested Canada could easily achieve 20 kWh / ft2 / year;
// Ground-source heat pump (GSHP) technology is highly underused; and
// Phantom load was estimated as representing between 12 and 15% of electricity costs.

// TRANSPORTATION: given the concentration of Ontario’s population in major urban centres, more efficient mass transportation and urban planning represent significant opportunities for GHG emissions reductions. It was noted that transportation and buildings are the big two emissions reduction opportunities in Ontario once coal-fired electricity is phased-out (2014).

// AWARENESS & EDUCATION: it was suggested that increased awareness, education and literacy around energy and emissions would in itself yield efficiencies and reductions in consumption. One example is the potential of the “virtual world,” the “gamifying” of energy efficiency and the development of new technology solutions. This potential is premised on the development of smart-grid infrastructure in Ontario that would permit the increased use of information and communications technology (ICT) in managing household and business energy profiles.

// WASTE CO₂: a participant noted that the top twelve GHG emitters in Ontario produce 80% of the emissions. It was further suggested that innovative processes and approaches could substantially reduce emissions from industrial and manufacturing facilities. There is a need to turn problems into opportunities. How can Canada use waste CO₂ to benefit society? In addition to sourcing renewable energy technologies for electricity generation, there is significant opportunity for using low-carbon fuels in Ontario’s industrial and manufacturing sector. Innovations on this front include the use of biomass-based fuels and the development of carbon absorption technologies which create useful products from the waste CO₂ stream.

// LOW-CARBON / ZERO-EMISSION VEHICLE MANUFACTURING: Ontario is home to an established automobile manufacturing industry with integrated North American supply chains, existing talent pool and infrastructure. It was noted that this opportunity remains mostly latent as Ontario has yet to become home to any low-carbon vehicle manufacturing lines.

Québec

Québec is noted to have a number of low-carbon strengths on which it can build:

// LOW-CARBON ENERGY RESOURCES: Québec’s electricity supply is already completely low-carbon with hydropower, wind and nuclear making up 97%, 1% and 2% of its supply, respectively.¹⁶⁵ Electricity accounts for approximately 38% of Québec’s overall energy consumption. There is strong potential for increased wind and solar as well as potential for geothermal power generation. Uranium resources and tidal power are also highlighted in the Plan Nord as having potential in Québec’s north.

// PEOPLE / INNOVATION CAPACITY: Québec has significant innovative capacity. Home to strong research institutions, Québec has a highly educated workforce with a focus on manufacturing and information and communications technology. It is also host to a nascent cleantech cluster.

// PUBLIC SUPPORT: it was noted that a recent survey indicates that 80% of the Québec population is in favour of provincial energy independence and supports measures to reduce dependence on fossil fuels. Expenditures on imported petroleum products currently costs Québec in the range of $20 billion per year.¹⁶⁶

Key low-carbon opportunities identified in Québec include the following:

// FURTHER DEVELOPMENT OF LOW-CARBON ENERGY RESOURCES: it was noted that Québec has significant remaining hydropower, wind and biomass resources. Also, Québec’s regulatory framework for the management of residual materials provides significant opportunity for energy recovery from residual materials.¹⁶⁷

// ENERGY TECHNOLOGY DEVELOPMENT: a recent report on Québec’s cleantech sector highlighted significant potential for Québec in technology development related to hydropower, energy efficiency, biomass and residual materials.

// LOW-CARBON MANUFACTURING: Québec has a competitive advantage in manufacturing certain products due to their energy intensity and the ability to employ low-cost, low-carbon electricity in their manufacturing (e.g., aluminum). More broadly, due to Québec’s low-carbon electricity, most manufactured products compare favourably to their competition with respect to carbon footprint. This presents an advantage and opportunity for Québec’s manufacturing industry to position itself.

// TRANSPORTATION EQUIPMENT MANUFACTURING: given Québec’s existing transportation equipment manufacturing base, well-developed supply chains and depth of expertise, there is significant potential for Québec to develop and manufacture low-carbon large-scale transportation equipment e.g., electric buses. Several projects are currently underway including a collaboration between universities and research centers in partnership with government and leading firms to develop and test new low-carbon aircraft concepts.

// LOW-CARBON FOREST PRODUCTS: it was noted that with the historic presence and strength of the forest products industry in Québec, there is significant potential for the reorientation of sector activities toward the production of low-carbon products. In particular a forest biorefinery project was noted, the focus of which is to support the development and demonstration of new products derived from forest biomass.

// LOW-CARBON INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT): Québec’s strong information and communications technology sector offers a strong base for the development of new ICT products and/or systems that foster reduced energy consumption.

// ENERGY EFFICIENCY: there remains significant opportunity for improving energy efficiency in Québec’s building sector. It was noted that the low cost of electricity in Québec has historically made capturing these opportunities more challenging.

// TRANSPORTATION: transportation (road, air, marine, railway, off-road) is Québec’s most significant GHG challenge accounting for 44% of provincial GHG emissions. Road transportation alone accounts for more than 70% of transportation-related emissions or 33% of all GHG emissions. This also represents a significant opportunity for reducing emissions through increased vehicular efficiency, more extensive use of mass transportation / transit options, and community development and re-development using more energy efficient urban designs that promote alternative transportation options over the use of personal vehicles. In addition, due to the low-carbon nature of its electricity supply, Québec presents an ideal context for the deployment of electric vehicles.

Atlantic Canada

Discussions in Atlantic Canada highlighted several key strengths that underlie its low-carbon opportunities:

// LOW-CARBON ENERGY RESOURCES: while their distribution across the region is not even, Atlantic Canada is home to abundant and diverse low-carbon energy resources including hydropower, on- and off-shore wind, marine (wave and tidal) and biomass.

// PROXIMITY TO NORTHEASTERN U.S. MARKETS: Atlantic Canada’s proximity to the New England states has historically provided its firms with access to a much larger market into which to sell its goods and services. While recent natural gas prices have reduced the viability of the New England states as an export market for low-carbon electricity in the near term, this market proximity was consistently cited as an advantage of the region.

// INNOVATION CAPACITY: Atlantic Canada’s high-quality education system and numerous educational and research facilities produce a highly educated and talented labour force and represent significant innovative capacity. There are a several examples of programs / approaches to furthering the development of innovative technology which speak to this strength (e.g., FORCE) as well as a large number of postsecondary institutions relative to the population.

// START-UP ENVIRONMENT: the business environment for start-ups was noted as excellent in Atlantic Canada, being very supportive and collaborative.

// QUALITY OF LIFE: in the competition for talented labour, Atlantic Canada was noted as having an advantage, providing a high quality of life (including short commutes) at relatively low-cost.

Key low-carbon opportunities identified in Atlantic Canada include the following:

// FURTHER DEVELOPMENT OF LOW-CARBON ENERGY RESOURCES: Atlantic Canada has significant low-carbon energy resources at its disposal; however, it currently has one of the most carbon-intensive electricity supplies in Canada due to a significant historical reliance on coal and oil-fired electricity generation in Nova Scotia, New Brunswick and Prince Edward Island.¹⁶⁸ The further development of Atlantic Canada’s low-carbon energy resources has the potential to significantly reduce the carbon-intensity of electricity production in the region. In particular, the proposed development of the Lower Churchill Falls hydropower generating stations (Muskrat Falls and Gull Island) has the potential to contribute a combined capacity of 3,074 MW to Atlantic Canada’s electricity system, and would include provision for transmission capacity between Labrador and Newfoundland and also between Newfoundland and Nova Scotia, and through Nova Scotia to New Brunswick and P.E.I. Atlantic Canada is also home to significant additional smaller scale hydropower resources, on-shore and off-shore wind resources, and in the long term, significant wave and tidal energy capacity.

// OCEAN TECHNOLOGIES AND THE “SALT WATER HINTERLAND ”: marine resource development (offshore oil, gas, wind, tidal and wave energy) and the development of associated marine / ocean technologies (e.g., remote sensing technologies) represent a significant long-term economic opportunity. While some of these resources are high-carbon, the spinoff technology and expertise can be employed in the pursuit of low-carbon opportunities. It was noted that the rest of Canada has expanded in terms of land mass post confederation and that this expansion into the “hinterland” has provided significant resource opportunities; however, Atlantic Canada has not expanded, and its hinterland is the ocean. While there is global competition and Atlantic Canada is a relatively small player, as one participant put it, Atlantic Canada is “no further behind than anyone else” in the development of marine energy technologies and expertise. In addition, experience in developing and regulating offshore resources and expertise in developing technologies for use in offshore exploration and development, position Atlantic Canada (and in particular, Newfoundland and Labrador) well as a launch-pad for the development of Arctic offshore resources. To the degree that carbon reduction technologies (e.g., CCS) become viable, this resource has greater potential in a future low-carbon context.

// OFF-GRID RETS: Newfoundland and Labrador’s remote communities and mining sites provide ideal conditions for the piloting of off-grid low-carbon technologies. Many of these sites currently use diesel generators and connection to the grid is prohibitively expensive. Nalcor, Newfoundland and Labrador’s energy crown corporation, is already piloting a project in the remote island community of Ramea with the ultimate objective of using wind generation with hydrogen storage as the primary backup (Ramea Wind-Hydrogen-Diesel Project)^o integrated with secondary diesel backup generation.

// TRANSPORTATION: represents a significant opportunity for reducing carbon emissions but also presents significant challenges. Atlantic Canada’s population is widely distributed with lower population concentration in urban centres than typical in the rest of Canada. This provides less opportunity for public transit solutions, and results in long trucking distances to supply the dispersed population. Several possible options were put forward in different consultation sessions including increased rail penetration (Nova Scotia), the potential of natural gas as a transition fuel for freight (Nova Scotia), and, fleet electrification (Newfoundland and Labrador was proposed as an “ideal test-bed” due to the significant hydropower capacity). Some participants noted that interprovincial collaboration on a regional transportation system could reduce the carbon-intensity of transportation in Atlantic Canada. It was further noted that regional supply chains are typically not well understood and that regionally coordinated efforts at optimizing supply chains could reduce the associated carbon footprint.

// ENERGY EFFICIENCY AND LOW-CARBON FUEL SWITCHING: there was consistent agreement across all convening sessions that there remains significant opportunity for energy efficiency improvements particularly in the residential and commercial sectors (building energy efficiency). Atlantic Canada has higher rates of fuel oil use for heating than the rest of Canada and it was suggested that there is significant potential for the increased use of natural gas for residential and commercial applications. It was noted that there is significant opportunity in the context of Newfoundland and Labrador’s high growth rates to build energy-efficient structures. It was also noted that industrial energy efficiency assists with building resiliency for energyintensive and trade-exposed sectors that have a significant presence in some parts of Atlantic Canada (e.g., oil and gas, mining, cement manufacturing).

// NETWORK EFFICIENCIES: as well as discussing the need to better link the Atlantic Canadian electricity supply network, participants across Atlantic Canada suggested that Canada should consider further developing east-west transmission corridors — in particular for hydroelectricity — rather than expanding existing north-south transmission capacity. They noted that power from the Lower Churchill Falls development would be instantaneously dispatchable, making it an excellent balance to other renewable energy development in the region. Significant co-operation and collaboraton is required from all Atlantic Provinces to fully realize the potential of this project. It was also noted that existing inter-regional processes such as the Atlantic Energy Gateway have proven almost as valuable in terms of their process as in their end result(s).

// TEST-BED: it was suggested that Atlantic Canada serves as an excellent test bed for small-scale modelling whether for regulatory processes or pilot projects, and that this presents an opportunity for Atlantic Canada to undertake projects that might not otherwise be pioneered in this region.

[k] This claim is supported by documentation elsewhere including a July 2011 submission by CanSIA to the government of Saskatchewan which claims that Saskatchewan’s solar potential is “significantly superior to Germany’s — the country with over 50% of the world’s operating solar technology” (Canadian Solar Energy Industries Association 2011b).

[l] According to Statistics Canada’s publication Energy supply and demand, by fuel type, in 2009 transportation accounted for 64% of total end use of net supply excluding producer consumption, or 73% of energy use final demand (Statistics Canada 2009a).

[m] The Cleantech Report Card for British Columbia, produced by KPMG on behalf of the B.C. Cleantech Alliance identifies 63% of cleantech survey respondents as developing energy-related technologies (KPMG 2011).

[n] Biogas is used extensively in a number of European countries for heat and combined heat and power generation. The European Biomass Association suggests that by 2020, biogas could provide more than 1/3 of Europe’s natural gas production or around 10% of the European consumption, and that the overall potential for biogas could reach between 15% and 25% of total bioenergy in Europe (European Biomass Association (AEBIOM).

[o] For more information see Nalcor Energy 2010; Natural Resources Canada 2009a.

[160] Bell and Weis 2009

[161] Bell and Weis 2009

[162] National Round Table on the Environment and the Economy 2009a

[163] University of Saskatchewan 2009

[164] Independent Electricity Systems Operator (Ontario) 2012

[165] Canadian Centre for Energy Information 2011

[166] Regroupement des conseils régionaux de l’environnement 2011

[167] Écotech Québec 2012

[168] Beale, Bergman, and Brannon 2012