Canada has a relatively unique mix of a small population combined with a wealth of natural resources. This makeup also drives our energy consumption; due to our northern climate and geographic size, about 40% of the energy we produce is used for heating, and 30% for transport (www.centreforenergy.com). Canada is a global energy leader, and energy exports make up the fourth largest contributor to Canada’s GDP ($81.7 billion in May 2011).
Currently in Canada we use fossil fuels as almost the exclusive source of energy to for transportation, and a mix of hydro, fossil fuels and nuclear power for generating electricity.
According to the Energy Information Administration, when fossil fuels burn, they emit greenhouse gases like carbon dioxide (CO2), that contribute to global warming (98 % of atmospheric CO2 comes from the combustion of fossil fuels (www.eia.gov).
Depleting global reserves, a desire to reduce emissions, economic stability through stable sources, and the economical benefits of research and development are putting attention on renewable, sustainable, sources of energy, particularly electricity, as a way to energize Canada in the future.
Energy Consumption and the future
Electricity costs vary by region, and overall tend to be higher for residential consumers rather than commercial and industrial. Rates vary due to the varying composition of generation and transmission/distribution costs and include a ‘regulated’ rate of return on costs. Most of Canada uses a mix of provincial and municipal regulators, with Alberta having a wholesale market, and Ontario a mix of the two.
In Canada, prices tend to be lower in provinces with large hydro capabilities, (BC, MB, QC), some of these generating stations are decades old, and have largely been paid off (neb-one.gc.ca).
According to a recent study by the Canadian National Energy Board electricity costs are expected to be about 40% higher in 2035, due to the costs of sourcing new generation and planned improvements to transmission systems.
Power and Energy – Demand and Consumption
A discussion on electricity usage and conservation needs to include a review of electrical power and energy, especially to prevent conversion calculation errors. Electricity is generally measured in kilowatt-hours (kWh). One kWh is the amount of energy needed by a 100 watt light bulb turned on for ten hours. One kWh can also run a hot shower for three minutes. Two kWh is a load of laundry. An average house in North America uses about 11 000 kWh per year (nearly double some European averages).
The kilowatt (kW) is equal to one thousand (1 000) watts
The megawatt (MW) is equal to one million (1 000 000) watts
The gigawatt (GW) is equal to one billion (1 000 000 000) watts
Energy and power are related to each other by time. A kWh is a measure of energy, a measure of the total energy used over time. A kW is a measure of power, the rate of use of energy per time.
Electrical utilities need to think in terms of demand and consumption. A common analogy is a water hose, and filling a bucket. Suppose you want to fill a 10 L bucket with water. You can use a garden hose that provides 1 L per minute to fill, and it will take 10 min. Or if you had a bigger (more expensive) water pipe and hose, that could supply 10 L per min, it would fill in only 1 min.
In this example, filling both buckets has the same consumption, but different demands on the utility. Electrical rates for residential, commercial, and industrial are determined on a historical mix of consumption and demand (with regulatory oversight).
About Renewable Energy
Renewable energy means power from natural resources that are sustainable, meaning they can be replenished in a reasonable period of time. Hydro, wind, and solar power are, of course, constantly renewable. Biomass can be as well, so long as regeneration keeps ahead of consumption.
Canada is a leader on the world stage of renewable energy. According to Natural Resources Canada (www.nrcan.gc.ca), renewable energy sources currently provide almost 17% of Canada’s total primary energy supply. Total electrical capacity in Canada was 133 GW in 2010. Of these sources, hydro supplied 59% of Canada’s electricity, wind is next with 1.6%, followed by biomass at 1.4%. Overall, wind and solar photovoltaic energy are the fastest growing sources of electricity in Canada. To help put it in perspective, one newer full size wind turbine can generate 3 MW, compared to 600 MW for one reactor at the Pickering Nuclear Generating Station in Ontario.
Commercial development for various renewable sources is at varying stages, sometimes due to technological development. Under different conditions, wind, hydro, biomass, and solar thermal can be economically viable.
The energy can be used for electricity, transportation and/or heat. Hydro and wind are used for generating electricity, while other resources like biomass, geothermal and solar energy can be used to produce both electricity and heat.
Biomass fuels are derived from a variety of different types of renewable organic matter, including plants as well as forestry, agricultural or urban waste. Biomass energy can be used for heating, cooling, producing electricity, as well as transportation.
Biomass is not completely carbon free, but it is considered to significantly reduce greenhouse gas emissions. The CO2 given off when burned is balanced by the amount absorbed when the source plant was grown.
Newer, second generation biofuels, which use cellulose biomass, are being developed. These fuels are not reliant on food crops and can address ‘food vs. fuel’ issues.
Biomass and Pulp and Paper
According to the National Energy Board, biomass currently accounts for about eight per cent of industrial energy fuel use in Canada. Almost all of this is attributable to the pulp and paper industry.
Pulp and paper is the biggest user of energy for manufacturing in Canada, using 14% of the total and, perhaps understandable given their power needs, they are also big users of Combined Heat and Power (CHP). This cogeneration involves the simultaneous production of multiple forms of energy, for example heating and electricity, from a single setup.
On-site use is the primary reason for electricity production with pulp and paper. Manufacturers, however, can also sell excess power back into local grids. Some mills such as Kruger have taken it a step further and created separate divisions whose focus is to create energy projects with a sustainable focus.
Kruger Energy (www.krugerenergy.com) extends beyond bioenergy and includes hydro and wind power. They currently operate over 30 production sites, with a combined capacity of over 400 MW.
Clean and quiet, solar energy can be harnessed to supply heat and electricity.
Two methods are used to create electricity from solar: photovoltaic (PV) cells, which convert light directly into electricity, and concentrating solar power (CSP), which uses parabolic collectors to focus the light on a single point, creating heat, which then powers a steam turbine.
The attractiveness of solar varies across the country, considering the cloud cover on the coasts, compared to sunnier skies in the prairies. However, Natural Resources Canada indicates that about half of Canada’s residential electricity needs could be generated from rooftop panels. In 2011, the installed capacity for solar photovoltaic power in Canada reached 495 megawatts (www.nrcan.gc.ca).
Wind power is generally considered to be one of the fastest-growing sources of energy in the world. It is, however, relatively underdeveloped in Canada. It has significant potential due to thousands of kilometres of available shoreline, from both inland lakes and oceans. According to figures from the David Suzuki Foundation, “it [could] be possible to develop at least 30,000 MW of wind power in Canada in the near future.” (www.davidsuzuki.org).
According to the Canadian Wind Energy Association, Canada added about 1,200 megawatts of wind power capacity in 2012, the second consecutive year that more than 1,000 MW has been added. The total capacity by the end of 2012 will be about 6,400 MW, enough to power close to 2 million homes.
The power generated by wind turbines depends on the wind speed, air density, and the size of the turbine. The growth of wind power generation in Canada and elsewhere has prompted some opposition, with concerns surrounding noise and esthetics, and impact on property values.
Hydro-derived power is produced through the movement of water, which is used to drive turbines. Canada is the third largest producer of hydroelectricity in the world, with a total of 348 million megawatt hours in 2010.
Hydro is sorted into two camps; large scale projects, considered to have significant environmental impact, and ‘low impact’ hydro, which are meant to have less.
Hydro dams effectively store potential energy, holding water back and releasing it to meet demand for electricity. Ecologically they can have negative impacts through flooding and the creation of additional greenhouse gases: the submerged organic matter decomposes and releases methane.
Low impact hydro refers to less impact on the local ecosystem, both with set up and ongoing operations, using ‘run of the river’ with water diversion and no impoundment.
Geothermal heat is not new, and has been used for centuries for bathing and heating water. In Canada, heat pumps are used to transfer heat between the ground and a water based circulation system. In Canada, aside from a few demonstration projects, it is primarily used for heat, not electricity.
Renewable energy from the ocean can come in the forms of waves, tides or ocean currents, as well as relative differences in salinity and temperatures. One of the major attractions for ocean energy is that is that tides are more reliable than solar or wind.
Nova Scotia is home to one of the few tidal power plants in North America. It has a capacity of 20 megawatts and a daily output of roughly 80-100 megawatt hours, depending on the tides (www.nspower.ca).
Hydrogen and other fuel cells
Aside from some small-scale, on-site commercial setups, emission-free fuel cells generally are not used for generating electricity in Canada.
Future for Renewables
Renewables are attractive for the diversity of energy sources with predictable costs and supplies, when compared to fossil fuels, but with less emissions. As well, research and development in the renewable energy technology sector is growing, providing jobs and positive local economic impact.
In Canada, capacity increase is driven by two key factors. First, as existing power facilities age, they will need to be replaced for reliability, economic and/or environmental reasons. Second, sufficient capacity will need to be constructed to meet growing demand while maintaining sufficient reserve margins.
Alexis Esseltine, a Sustainability Manager in Toronto, outlines that companies concerned about their energy use should start first with a program to identify, measure, and minimize their energy consumptions.
This can be as straightforward as a walk-through of a facility or a formal energy audit conducted by an auditor to identify energy uses. Measurement can happen through utility bills, individual machine requirements, or equipment metering. Minimizing includes techniques such as lighting only occupied areas, replacing light bulbs with new energy efficient varieties, maintaining the building envelope by sealing holes and caulking windows and ensuring that heating and cooling systems are regularly maintained and running efficiently.
Jeff Swenerton, Communications Director with Resource Solutions in San Francisco, agrees. He explains that organizational awareness around environmental footprint is still a relatively new thing. The first thing companies should work toward is conservation by investing in energy efficiency. “Do it right, save money, and pay investments in a year or two.”
After conservation, purchasing energy from renewable sources is a logical step for companies concerned with future energy needs.
Renewable Energy Certificates (Green-e)
Electricity needs to be generated relatively near to where it is consumed, due to the high cost of transmission. As well, large-scale electrical energy can’t be stored – it is generated as needed and used immediately, or dumped.
With the electrical grid all sources get mixed. As Swenerton explains, “you can’t route power from a generator to a specific location.” The grid is ‘brown power’, however people and organizations want to buy ‘green power’ for a variety of reasons: environmental, impact on local jobs, health reasons and global warming.
Renewable Energy Certificates (RECs) were developed in the late 1990’s as a method to both address green concerns and help support green energy generators, by giving providers an additional economic incentive. Swenerton indicates that growth has “boomed over the 15 years.”
RECs are an abstract concept that can take a bit of getting used to, in brief they separate the renewable, or green, ‘attributes’ of renewable power generation from the actual electrical energy produced. The cost of a REC does not include the cost of the actual power; a REC is an additional cost to help economically support the generation of renewable energy.
A REC also allows developers to build power infrastructure where the resources are – where there’s the most wind or sun. It’s the “lowest cost way to build renewable,” Swenerton continues, “if your business operates where you can’t get green power, you can buy a REC and still support green power. RECs are not limited by geographic boundaries or transmission constraints.”
One REC is issued for each megawatt-hour unit of renewable electricity, and these RECs are then sold. Once split, the electricity itself no longer can be considered ‘green’ or ‘renewable’, and whoever buys only the power cannot claim they are green, unless they buy the REC as well.
Also known as “green tags” or “green certificates”, each REC includes how the power was generated, physical location, as well as year of manufacture (“vintage”).
RECs are tradable instruments, with two markets. The first is ‘compliance’, where electrical utilities have been legislated to have specific amounts of power from renewable sources. There is also a ‘voluntary’ market for organizations (and consumers) supporting green power.
Prices vary, but RECs in compliance markets generally cost more than in those in voluntary markets. Factors directly influencing cost include buyer preferences for specific technologies (wind RECs can cost more than those from landfill gas). As well, local supply and demand impacts pricing. As Esseltine indicates, buyers tend to prefer RECs produced locally, or in their home province to support renewable energy production in the same grid from which they draw their energy. This can increase prices in regions with limited capacity.
An infrastructure has been designed to ensure that the market for RECs is reliable, that the certificates come from a verified source, they have a date stamp and are claimed correctly, and that once used they cannot be resold. Swenerton emphasized “it’s a sophisticated system… we can tell who generated the REC and bought it – it can never be claimed by another party.”
Numerous tracking systems exist, and are used in different jurisdictions, including the North American Renewables Registry (narecs.com). These are systems of record to perform transfers, but they are not trading exchanges.
Swenerton continues, however, “there is no such transparency in the REC trade market – there is no place where you can watch trades, or transparency into prices. It is a closed system, which is a real drawback, a lot of the deals are done with one generator and the utility – no one ever reveals prices, so we don’t know what the prices are in the market.” In the States, $3 is about the cheapest, but if you want something in high demand, like ‘California wind’, it can be $15. Some certificates in Canada have approached $20.
Price is important, but Esseltine explains it is important to buy RECs from entities that participate in independent third-party-sponsored programs, one that verifies its participant’s claims.
One of the largest of these programs is Green-e® Energy, administered by Swenerton’s company, the nonprofit Center for Resource Solutions. Green-e Energy requires participating renewable energy sellers (known as marketers) to meet eligibility requirements as well as undergo annual review audits.
Qualifying purchases of energy can apply to CRS to use the Green-e logo on their materials. Annual fees differ for corporate and non-profit organizations, and are tied to annual sales.
Companies can apply to one of the available certification programs for the ability to use a relevant logo, designed to help communicate their support for renewable energy.
Eco-logo (www.ecologo.org) is an organization started in Canada in 1988 and now managed by UL, a global safety science company (www.ul.com). Eco-logo certifies a wide array of products for sustainability, including electricity. Fees for logo use vary depending on the size of the organization.
Green-e Marketplace re:print
re:print is a separate CRS initiative, a renewable energy supply chain program that is designed to minimize the footprint of print projects. The program supports the use of the Green-e logo on print projects that are sourced from paper and printers that use 100% renewable energy. It is designed to complement other certifications, such as Forest Stewardship Council (FSC) or Sustainable Forestry Initiative (SFI), by including energy.
CRS has created an online marketplace that connects potential print customers with paper manufacturers and printers, who use 100% renewable energy in their manufacturing. Regular client projects such as reports, brochures, magazines, and books can be run with the Green-e logo, which can help demonstrate environmental leadership and awareness. CRS believes this can help create value for organizations.
Fees for printers and paper manufacturers to participate in the marketplace are tiered and tied to annual revenues, see www.green-e.org/reprint for more information.
Green energy is not tangible, Swenerton reiterates, “if you buy green power, you won’t get anything back… the lights don’t burn any brighter.” Companies need to have a reason, and often it is presented internally by a Sustainability Director as a way to differentiate from competition. It provides a story to marketing, the utilitarian motive can appeal to customers, “some studies have shown that, all things being equal, including price, 75% customers will choose the greener option.”
Going green is catching on. Donald Simard, Director MRO Procurement, Energy & Environment with TC Transcontinental says his company is “actively reviewing Green power options for some of our facilities in the near future.” Out west, Richard Kouwenhoven, President and General Manager of Hemlock Printers in British Columbia explained that Hemlock recently obtained Green-e certification, and combined with their carbon-offset initiatives, sustainability is an important area that has become a competitive advantage for the company: “our clients are coming to us with questions about carbon impacts of their print projects and our Zero program and Green-e help address those questions and reduce the impacts.”
Similar to the controversy around carbon credits, where there have been questions about effectiveness and voluntary offsets being used as a tool by some companies to claim environmental support when their actions don’t really support it, RECs may not be perfect, but today they are a great way everyone can help build Canada’s renewable energy future.