Renewable Grid Power – Power
Case Study on Renewable Grid-Power Electricity
3. Renewable Grid Power in Canada
3.1 Introduction
This section provides an overview of Canada's renewable grid power sector and sets out the technology resource and cost data that are necessary to construct the renewable power supply curves that are used in subsequent stages of the case study analysis. The discussion is organized into the following subsections:
- Current status: What is the current status of each technology in terms of installed Canadian grid electricity generating capacity, technical maturity and costs? Future potential in Canada: What is considered the long-term "upper limit" capacity for each technology, and how much of this upper limit is "practically achievable" by 2010 and 2020?
- Renewable technology costs: What are the current and projected future costs for the targeted technologies?
Given the scope of this case study, this discussion is necessarily "high level." The issues affecting future growth of renewable power technologies are complex, and a detailed analysis is beyond the scope of the paper. The discussion therefore draws on recent studies from credible sources, and on input provided by members of the study review committee.8 It is important to note that the data provided in this section for potential (both technical and practical) are estimates only; in several cases, the research results showed a very wide range of estimates. This variation reflects both the current state of "hard resource data" and the fact that different studies and individuals have different interpretations of technical and practical potential.
3.2 Current Grid-Power RET Status in Canada
Consistent with the discussion of terms presented in Section 2, any estimate of the current installed base of grid-RETs in Canada requires agreement on the definition of which technologies are included. Exhibit 3.1 shows the current total installed electricity generation capacity in Canada as well as the total share of electricity generated by each source in 2003. As illustrated, if the estimate includes large hydro and all biomass installations, then Canada's total installed base of renewable electricity generation capacity is over 70,000 MW, or about 60% of the total; virtually all of this capacity is large hydro. As also illustrated in Exhibit 3.1, fossil fuel based electrical facilities accounted for about 29% of Canada's total installed capacity and about 26% of total electricity generation in 2003. Coal (19%) and oil (2%), which are particularly carbon intensive, accounted for approximately 21% of Canada's total electricity generation in 2003. For the purposes of this study, it is also notable that a large share of these coal- and oil-fired electricity generation facilities, which are the primary focus of this case study, is expected to reach the end of its useful life over the next 20 years.
Exhibit 3.19
Installed Electricity Capacity and Annual Electricity Generation in Canada (2003)|
Source |
Installed Capacity |
Generation |
||
|---|---|---|---|---|
|
MW % GWh |
% |
|||
|
Hydro 68,100 58 346,000 |
59 |
|||
|
Nuclear 12,600 11 81,700 |
14 |
|||
|
Coal 16,600 14 109,400 |
19 |
|||
|
Oil 7,500 6 14,200 |
2 |
|||
|
Natural gas 11,000 9 29,100 |
5 |
|||
|
Wind and biomass 2,200 2 9,100 |
2 |
|||
|
TOTAL 118,000 100 589,500 |
100 |
|||
If the more stringent low-impact environmental criteria defined by the Environmental Choice Program (ECP) are used, then large hydro and some of the biomass facilities are excluded. Canada's current installed capacity of grid-RETs that meet ECP's low-impact criteria is estimated to be about 2,300 MW, or about 2% of Canada's installed electricity generation capacity. A breakdown of the estimated current (2003) installed base of "ECP certifiable" grid-RETs is shown in Exhibit 3.2. In 2003, these renewable technologies generated an estimated 12,100 GWh of electricity, or about 2% of Canada's total electricity generation.
Exhibit 3.2
Current (2003) Installed Base of (ECP) Grid-Power RETs in Canada10|
Grid-Power RET (Environmental Choice certifiable) |
Current Installed Base |
|||
|---|---|---|---|---|
|
Cap Factor Capacity [MW] Supply [GWh/yr] |
% of Total Grid-Power RET Supply |
|||
|
Wind (Onshore) 35% 316 970 |
8% |
|||
|
Hydro11 60% 1,800 9,460 |
78% |
|||
|
Solar PV 14% 0.092 0.1 |
0% |
|||
|
Landfill Gas (LFG) 90% 85 670 |
6% |
|||
|
Biomass 80% 128 900 |
7% |
|||
|
Wave 35% 0 0 |
0% |
|||
|
Tidal 35% 0 0 |
0% |
|||
|
Geothermal (Large) 95% 0 0 |
0% |
|||
|
TOTAL |
2,300 12,100 |
100% |
||
3.2.1 Wind
Wind power is currently the fastest-growing energy source in the world. Worldwide, wind power capacity doubled three times during the 1990s, and with each doubling the power production cost of wind projects has fallen 15%. Wind energy has grown steadily in Canada within the last five years. In 2003, Canada had about 316 megawatts (MW) of installed wind generation, producing over 900 gigawatt-hours (GWh) of electricity per year. Canada has utility-scale wind turbines installed in Alberta, Saskatchewan, Ontario, Quebec, Prince Edward Island and the Yukon. The majority of this supply is produced by large-scale wind farms in Quebec and Alberta (102 MW and 171.5 MW, respectively). The potential for wind energy in Canada is substantial. As an indication, the federal government's recent $260 million Wind Power Production Incentive (WPPI) drew 23 letters of intent to install 1,050 MW, ranging from 9 MW facilities in Quebec to a 200 MW wind farm in Ontario. The most preferable wind regimes (greater than 200 W/m2) are found in coastal areas, Newfoundland and Labrador, the St. Lawrence River and Great Lakes regions, southern Prairies and coastal British Columbia. It is important to note, however, that wind power feasibility is highly site-specific - with proper siting and with towers of adequate height, wind farms may be viable in most parts of the country, even those with apparently marginal wind regimes. At present, no comprehensive, high-resolution wind resource atlas exists for Canada, although Environment Canada currently has an initiative under way. The lack of a usable wind atlas is currently a considerable barrier to further development.12
An emerging area of note is the development of offshore wind farms. Although there are no offshore wind farms in Canada, some companies are working toward developing such projects (notably in British Columbia and Nova Scotia). Internationally, offshore wind farms are technically and economically feasible. In particular, offshore wind farms are planned or operating in the United Kingdom, Denmark and Germany.
3.2.2 Low-Impact Hydro
The environmental impact of hydroelectric sites varies as a function of many site-specific factors. The Environmental Choice Program (ECP) guidelines provide a detailed definition of "low impact hydro" based on protection of indigenous species and habitat, requirements for head pond water levels, water flows, water quality and several other factors.
Theoretically, any size installation may meet this requirement, although the general threshold is approximately 10 to 20 megawatts.13 One of the most important criteria involves the length of time that water is retained upstream of the installation (which generally must be less than 48 hours). There are currently 42 sites in Canada that have applied for and received Environmental Choice certification for low-impact hydro electricity generation. The majority of the Environmental Choice certified sites are in Ontario, with other installations in Quebec, Alberta, British Columbia and the Atlantic provinces. Many more sites could be eligible for the Eco-Logo, but have not yet gone through the certification process. To date, no exhaustive inventory has been completed of these sites.In terms of future potential, a recent Natural Resources Canada study identified over 3,600 potential sites for small hydroelectric plants, many of which would be considered eligible for Environmental Choice certification. The total potential of these sites was assessed at about 9,000 MW. However, under current market conditions NRCan estimated that only about 15% of this (approximately 1,300 MW) can be considered to be economically feasible. Future technological improvements should be able to reduce capital costs by 10% to 15%, which would allow a further 1,800 MW of capacity to become economically viable.
3.2.3 Grid-Connected Solar Photovoltaic (PV)
Photovoltaic technologies have, similar to wind, experienced double-digit annual growth worldwide in the past decade. The current total installed PV capacity in Canada is estimated to be 7.2 MW;14 this compares with just 1 MW in 1992.15 However, to date, most PV applications have been in off-grid applications, with actual grid-connected applications estimated to be about 0.092 MW.
Industry representatives have indicated that there is a growing trend toward on-grid applications; they indicated that Canadian growth in off-grid applications has likely peaked, and that future growth will follow international industrialized market trends where new installed PV capacity is 90% on-grid.16 In terms of future growth, the largest solar resources in Canada are in Ontario, Quebec and the Prairie provinces.
3.2.4 Landfill Gas (LFG)
Landfill gas is produced by the anaerobic decomposition of organic wastes in a landfill site. LFG consists of methane (ranges from 40% to 60% by volume) and carbon dioxide (also 40% to 60%) with trace concentrations of other compounds (e.g., hydrogen sulphide, volatile organic compounds) that can create nuisance odours, reduced air quality and adverse health effects. The quality and quantity of gas varies greatly from one site to another, depending on factors such as waste composition, cover method, precipitation levels and the age of the landfill. In certain cases, the gas can be used directly as a fuel while in others the LFG must be treated to yield a "clean" high energy content fuel.
Landfill gas may be used in an engine or turbine generator set to generate electricity. The system may also be set up as a cogeneration unit if the waste heat from the set is used for process or space heating applications. Common systems include reciprocating engines (the least expensive and most common form of LFG power generation equipment), turbines (including steam turbines and combustion gas turbines) and microturbines (small-scale combustion gas turbines that operate at very high speeds).
The cost of these systems is a function of the system size, and of the equipment required to treat the LFG. Under the Environmental Choice guidelines, electricity generated from landfill gas sites is acceptable as long as emissions of airborne pollutants such as CO, NOx, particulate matter and SOx do not exceed specified limits, and the site has a leachate management program in place.Current installed LFG generating capacity is estimated to be approximately 85 MW. Canada's major LFG sites have been studied and, as would be expected, future potential tends to be concentrated around Canada's major urban centres.
3.2.5 Biomass
Electricity generation from biomass is relatively common in Canada, although the majority of installations are used to provide heat and power in the pulp and paper industry. The vast majority of Canadian biomass electricity is generated by the pulp and paper industry - most of which is suspected to be uncertifiable - with the remainder from independent power producers. It is unknown what percentage of the former are grid-connected or used in stand-alone (off-grid) applications. For the purpose of this study, only growth in on-grid applications is considered.
In terms of potential, it is estimated that more than 7% of Canada's annual consumption could be produced by electricity generated from biomass.17 However, competing demands on limited biomass resources (including the use of biomass to produce ethanol, heat and hydrogen) may reduce this potential capacity.
3.2.6 Wave
Wave power involves the onshore conversion of wave energy to grid electricity. Although no installations currently exist in Canada, the technology has been commercialized and several installations exist worldwide. A number of potential sites have been identified on Canada's west coast, and an east coast company is in the process of developing a wave energy converter. It is estimated that wave technologies are more than 15 years behind wind and are five years behind even tidal power, indicating that widespread wave energy use before 2020 is unlikely.
3.2.7 Tidal
Tidal power uses daily water level variations to drive a turbine. One design type involves a barrage or dam that is used to hold back tidal waters, which are subsequently released through conventional hydro turbines to generate electricity. Although no commercial installations exist in Canada, the Annapolis Royal Tidal Power Generating Station in Nova Scotia has been developed to test the technology. A second design uses underwater devices to convert tidal currents to electricity, much as wind turbines use air currents. This technology has been pilot tested in Nova Scotia since the mid-1980s and is expected to be commercially available soon, as a number of Canadian companies are currently developing their own technologies.
3.2.8 Geothermal
Geothermal plants utilize heat from ground sources to generate electricity. While no installations exist in Canada, there are several in the United States, including one that produces electricity at 1.5 cents US per kWh. British Columbia is considered to have the most feasible resources in Canada. One site under investigation is estimated to be capable of producing electricity at 3.9 to 4.1 cents US per kWh.18
3.3 Future Potential for Grid-Power RETs in Canada
This section provides an estimate of the future potential for grid-power RETs in Canada. Consistent with the discussion presented earlier in Section 2.4, the estimates of future potential are presented in two steps: technical potential and practical potential.
3.3.1 Technical Potential
As noted previously, technical potential refers to the long-term upper limit of total installed capacity for a given technology. For example, if wind power has a technical potential of 100,000 MW, it means that this is the maximum total generating capacity that wind turbines could supply if they were installed in every technically feasible location across the country. Canada has poor resource maps and estimates compared with the U.S. and many European countries, which makes it difficult to generate reliable estimates of the technical potential for RETs in Canada. However, there have been a number of estimates generated by both government and industry associations over the past few years. In addition, Pollution Probe facilitated a series of cross-country workshops in 2003-2004 to discuss green power in Canada. These workshops have brought together much of the country's renewable energy expertise and have resulted in updated technical resource estimates that fit well with the needs of this case study. Exhibit 3.3 provides an indication of the estimated technical potential for each technology. In each case, a range is provided, which reflects the relatively high level of uncertainty that exists.
Exhibit 3.3
Technical Resource Potential of Grid-Power RETs in Canada|
Grid-Power RET (Environmental Choice Certificate) |
Cap Factor |
Technical Resource Potential (total, not additional) |
|||
|---|---|---|---|---|---|
|
Capacity [MW] |
Supply [GWh/yr] |
||||
|
Low High Low |
High |
||||
|
Wind (Onshore)19 35% 28,000 100,000 85,800 |
306,600 |
||||
|
Low-Impact Hydro 60% 11,000 14,000 57,800 |
73,600 |
||||
|
Solar PV 14% 9,800 100,000 12,000 |
122,600 |
||||
|
Landfill Gas (LFG) 90% 350 700 2,700 |
5,500 |
||||
|
Biomass 80% 6,800 79,300 47,700 |
555,600 |
||||
|
Wave 35% 10,100 16,100 31,000 |
49,400 |
||||
|
Tidal 35% 2,500 23,500 7,700 |
72,100 |
||||
|
Geothermal (Large) 95% no data 3,000 no data |
25,000 |
||||
3.3.2 Practical Resource Potential in Canada
This subsection provides estimates for the practical potential for grid-power RETs in the years 2010 and 2020. As noted in Section 2, practical potential is necessarily a subset of technical potential. It recognizes that the ability to capture the technical potential within any given period will be affected by factors such as grid access and capacity; zoning and permitting; technological advances; financing; market demand and acceptance; and design, manufacturing and installation capacity.20 Exhibit 3.4 provides the estimated practical potential. The estimates were developed based on a broad consideration of the factors noted above, complemented by consultations with industry and government personnel. As with all figures provided in this section, the estimates are given in ranges to reflect the high level of uncertainty.
Exhibit 3.4
Estimated Practical Resource Potential of Grid-Power RETs in Canada|
Grid-Power RET (EcoLogo Certifiable)Cap Factor |
Practical Resource Potential |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|
|
Annual Growth in Deployment to Fill Practical Potential [%] * |
Capacity [MW] |
Supply [GWh/yr] |
||||||||
|
2010 2020 2010 |
2020 |
|||||||||
|
Min Max Low High Low High Low High Low |
High |
|||||||||
|
Wind (Onshore) 35% 25% 64% 5,000 10,000 15,000 40,000 15,300 30,700 46 000 |
122,600 |
|||||||||
|
Low-Impact Hydro 60% 18% 27% 5,600 9,000 9,800 no data 29,400 47,300 51 500 |
no data |
|||||||||
|
Solar PV 14% 152% 347% 60 265 225 3,295 100 300 300 |
4,000 |
|||||||||
|
Landfill Gas (LFG) 90% 10% 17% 170 no data 250 no data 1,300 no data 2 000 |
no data |
|||||||||
|
Biomass 80% 42% 73% 1,500 2,000 no data 6,000 10,500 14,000 néant |
42,000 |
|||||||||
|
Wave 35% 0% infinite 0 20 4 no data 0 60 12 |
no data |
|||||||||
|
Tidal 35% infinite infinite 4 300 50 2,000 12 900 200 |
6,100 |
|||||||||
|
Geothermal (Large) 95% infinite infinite 100 600 1,500 no data 800 5,000 12 500 |
no data |
|||||||||
* Assuming logarithmic growth and based on practical resource potential numbers in 2010 and 2020. The growth rates are not forecasts of a base case of renewable supply, but rather the growth required on an annual basis to satisfy the practical potential. Refer to Appendix C for details on the data presented.
Exhibit 3.5
IEA Cost Reduction and Estimates for Targeted Grid Power RETs21|
Grid-Power RET (EcoLogo Certifiable) Cap Factor |
Cost Reduction |
Cost Estimates |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
|
Cost Reduction every 10 Yrs [%]* Annual Cost Reduction [%]* |
Levelized Cost Estimates [CDN cents 2000/kWh] |
|||||||||
|
Min Max Min Max |
2003 2010 |
2020 |
||||||||
|
Low High Low High Low |
High |
|||||||||
|
Wind (Onshore) 35% 25% 25% 3% 3% 3.8 15.1 3.0 11.3 1.9 |
8.5 |
|||||||||
|
Low-Impact Hydro 60% 0% 13% 0% 1% 2.5 18.8 2.5 16.3 2.3 |
15.2 |
|||||||||
|
Solar PV 14% 30% 50% 4% 7% 22.6 100.3 12.5 50.2 7.5 |
30.1 |
|||||||||
|
Landfill Gas (LFG) 90% 0% 20% 0% 2% 2.5 18.8 2.5 15.1 2.3 |
13.5 |
|||||||||
|
Biomass 80% 0% 20% 0% 2% 2.5 18.8 2.5 15.1 2.3 |
13.5 |
|||||||||
|
Wave 35% no data no data no data no data 4.4 7.6 no data no data no data |
no data |
|||||||||
|
Tidal 35% no data no data no data no data 4.7 9.6 no data no data no data |
no data |
|||||||||
|
Geothermal (Large) 95% 10% 25% 1% 3% 2.5 15.1 2.5 12.5 2.1 |
10.3 |
|||||||||
Source: IEA figures as cited by Pollution Probe, Background Document for the Green ower Workshop Series, Workshop #4. Feb. 2004.
http://www.pollutionprobe.org/whatwedo/GPW/calgary/ gpwbackgroundercalgary.pef, pp. 30-32. *Assuming logarithmic cost reductions.3.4 Technology Costs and Learning Trends
A summary of the expected levelized costs for each of the targeted grid-power RETs is presented in Exhibit 3.5. To ensure consistency among the technologies, all cost data are derived from recent estimates provided by the International Energy Agency (IEA) and, to reflect the cost uncertainties involved, the data are expressed as a range. Exhibit 3.5 also provides a summary of IEA estimates of the forecast levels of cost reduction for each technology over the study period. The forecast levels of cost reduction are based on learning theory. This theory, which is well supported by empirical data, defines the link between the increase in installed capacity and the rate of cost decrease.
3.5 Creation of Model's Grid-Power RET Supply Curve
The final task in this stage of the case study development involved the development of a grid-power RET supply curve within the RFF model. This curve, which is presented in Exhibit 3.6, combines the practical potential for each RET resource in the 2010 base year, as identified in the preceding discussion, with the levelized cost for each technology. Added to this levelized cost is a fixed transmission and distribution cost of $0.022 per kWh. As the curve is an aggregate of the RETs, the output is an estimate of the quantity of RETs that is available at each cost point.
Development of the renewable supply curve incorporates the ranges in cost and practical potential that were presented in the preceding discussion using a probabilistic method. The impact of accounting for uncertainty is to reduce the supply curve downwards; that is, when the ranges are accounted for in the cost curve, the curve is lower than it would be if just the central values were used.
Exhibit 3.6
Renewable Supply Curve Generation Costs in 2010
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