Renewable Grid Power – Endnotes
Case Study on Renewable
Grid-Power Electricity
ENDNOTES
1
Separate case studies are being prepared for the other
two sectors.
2 This category includes biomass and excludes trash
and non-renewable waste.
3 Department of Energy Strategic Plan, “Protecting
National, Energy, and Economic Security with Advanced
Science and Technology and Ensuring Environmental Cleanup,”
Draft, August 6, 2003.
4 The International Energy Agency (IEA) maintains the
Renewable Energy Policies & Measures Database for
IEA member countries, available at http://library.iea.org/dbtw-wpd/textbase/pamsdb/re_webquery.htm.
The Database of State Incentives for Renewable Energy
(DSIRE) in the United States is available at http://www.dsireusa.org.
5 Adapted from M. Tampier, Promoting Green Power
in Canada, prepared for Pollution Probe, November 2002,
p. 2.
7The
analytical framework is based on an analytical model,
which is then translated into a numerical model using
historical data and forecast information. It is the
numerical model that generates the analysis used in
the case study to asses the relative environmental and
economic implications of the fiscal instruments.
8 In particular, the study team would like to thank
the following for their timely contributions to this
work: Robert Hornung (CanWEA), Dan Goldberger (CEA),
Rob McMonagle (CanSIA), Martin Tampier (Environmental
Intelligence), and Lynne Patenaude and Alain David (Environment
Canada).
9 Source: National Energy Board (NEB) http://www.neb.gc.ca/energy/SupplyDemand/2003/index_e.htm.
10
These installed capacities are for grid-power electricity
and potentially could be ECP-certifiable.
11 Includes many existing small hydro sites that
may not be EcoLogo-certifiable.
12 This contrasts with efforts in the U.S. to compile
a highly detailed wind atlas to assist in wind farm
siting (see http://rredc.nrel.gov/wind/pubs/atlas).
13
The Canadian Electricity Association (CEA) has proposed
that the eligibility of small hydro be expanded to 50
MW under Class 43.1 of the Income Tax Act.
16 Personal communication with Robert McMonagle,
Executive Director, Canadian Solar Industry Association,
February 19, 2004.
19 Offshore is not included due to a lack of independent
estimates. See Appendix B for more details.
20
It is widely recognized that issues related to grid
access, grid capacity and the costs of grid extension
will be particularly influential in determining the
amount of grid-power RETs that can be practically developed.
While these issues are beginning to be addressed in
some regions, they are far from being resolved at this
time. Further consideration of these issues is well
beyond the scope of this case study.
21 Cost estimates are for all OECD countries; the
wide range of values shown reflects both the diversity
of conditions experienced and the high levels of uncertainty.
22 It is recognized that NRCan is preparing a new
baseline forecast using NEMS; however, at the time of
completion of this case study the new forecast was not
available.
23 The scenarios are the EFR managed instruments;
they are assessed against the baseline that is defined
in this report.
24 Further information on the IPM model is available
on Environment Canada’s website.
25 ICF Kaiser, Analysis of Electricity Dispatch in
Canada – Final Report, Environment Canada, August
19, 2003 (available on Environment Canada’s website).
26
Note: the EC study attributes zero GHG emissions to
U.S. imports. While this is consistent with the approach
to be used within PERRL, the actual number is greater
than zero. Consequently, the results presented are conservative.
27
Current natural gas market conditions suggest that these
values are probably low. However, the ICF value was
used to ensure consistency with other study outputs
that are used in this case study.
28 Statistics Canada, Industrial Research and Development:
2003 Intentions, Cat. No. 88-202-XIE.
29 NRCan, Renewable Energy in Canada – Status
Report 2002.
30 International Energy Agency, R&D Database
(http://library.iea.org/dbtw-wpd/Textbase/stats/rd.asp).
31 Fossil fuel includes coal, gas and oil in the
CEOU99.
32 National Energy Board, Canada’s Energy Future:
Scenarios for Supply and Demand to 2025, Appendix 3:
Demand, 2003 http://www.neb-one.gc.ca/energy/SupplyDemand/003/English/
SupplyDemandAppendices2003_e.pdf.
33 While it is of course not strictly true that fossil
fuel technologies will experience no further technological
advances, incorporation of a positive, but slower relative
rate of advance in fossil fuels would complicate the
analysis without adding substantial additional insights.
34 The assumption of a single fossil energy technology
is admittedly strong and requires some caveats. As long
as the marginal technology exhibits constant marginal
costs, the equilibrium effects on the market price and
surplus are the same. The exceptions involve policies
with an emissions price when emissions intensities vary
across fossil technologies. For example, if coal is
used by the inframarginal technology and natural gas
turbines are the marginal technology, an emissions price
will raise costs more for coal, but the market price
will only reflect the cost increase for natural gas
(unless coal becomes no longer inframarginal), implying
a loss of producer surplus for coal. Policy effects
on average emissions intensity will also vary, and those
without an emissions price will tend to displace the
lower-emitting marginal technology. We feel that this
simplification allows us to capture the key qualitative
results; a richer modelling is only likely to exacerbate
the welfare differences of the policies.
35 Longer-term convexity of the renewable cost function
is attributable to decreasing quality of available land
for wind and biomass generation. Input scarcity is not
a substantial longer-term issue for fossil-based production,
however, justifying the simplifying assumption of constant
marginal costs (i.e., constant returns to scale).
36 Note therefore that we are assuming here that firms
have perfect foresight, that there are no knowledge
spillovers, and that firms internalize any future returns
to investments in R&D and learning by doing (LBD).
For the present purposes we also assume that the costs
of R&D and LBD are fully reflected in the market
prices faced in making these investments. These assumptions
are not meant to necessarily reflect reality, but rather
to model a simplified situation upon which intuition
can be developed and further modelling extensions can
be built.
37 See e.g., Milliman and Prince (1989), Biglaiser
and Horrowitz (1995), Jung et al. (1996), Fischer et
al. (2003), Requate and Unold (2002). Dynamic problems
are also treated in Petrakis et al. (1999) and Kennedy
and Laplante (1999).
© 2013