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CUTTING THROUGH THE GREEN TAPE

Monday, June 1, 2009

CUTTING THROUGH THE GREEN TAPE

By Erica Butler

You’d be hard pressed to find anyone that doesn’t agree,” says Halifax Chamber of Commerce Vice President of Membership Brian Ro se. “Everyone’s got good intentions – to reduce our dependence on foreign oil, to increase energy security and to look after our environment.”

“But,” says Rose, “we’re stuck. We talk the talk, but we fail to walk the walk and get to that last step. We always find something that gets in the way.”

What gets in the way of progress toward sustainable practices and innovation in Halifax? If we’re all on the same page, what’s the hold up? The problem, says Rose, can be anything from a legislation that can’t seem to keep up with environmental innovations, to the inability of policy- makers and politicians to make decisions that look beyond the next election.

Rose points to two current examples, a failed attempt to set up a residential wind turbine in the village of Waverley and the fight over carbon taxes in BC, where the progressive new policy may just get dumped before it’s been tested for the sake of an election victory. “[The government] could have lost the  election on that one issue,” Rose says. “What does that tell any other politician? That a carbon tax is political suicide.”

Rose sees the need for politicians to lead with an eye to long-term benefits, rather than react to potential short-term gains.

“All of those people who know what needs to be done have to become better communicators and just do it,” he says. “These aren’t 100 year problems. These are 15 to 25 year problems.” And, he adds, only half jokingly, “Around here that could be as many as 12 and a half elections.”

An election won’t help or hinder Mike Spurr, a Waverley resident interested in erecting a 40-foot wind turbine on a hillside near his home. Trouble is, Spurr’s property is in a planning zone that won’t allow structures more than 15 feet high, whether it’s a two-story garage or a wind turbine.

HRM planning bylaws are confusing when it comes to wind turbines, explains Jeff Larsen of MaManna Renewable Energy, the company Spurr hired to install the turbine on his property.

“Some specifically permit wind, some specifically exclude it and some don’t speak to it. So you’re left trying to figure out what to do,” Larsen says. “We’ve put up wind turbines both residentially and commercially in HRM, but we’ve also been denied. There’s one not too far from [Spurr’s property], in what I would consider a more controversial place than his, but it was permitted.”

HRM has conducted public consultations on developing specific regulations to govern the location or installation of wind turbines, though there’s no sign of when those regulations will be completed or put in place. In the meantime, Spurr will be deciding whether to negotiate a development agreement with HRM, or to give up on his wind energy dream.

When it comes to producing renewable energy on a small scale in Halifax, Larsen says there are two main issues.

“The first is zoning in the municipality and the next is, can you net meter?”

Net metering allows small-scale residential or commercial renewable energy producers to feed their excess electricity into the grid for credit, to use at times when the wind isn’t blowing or the sun isn’t shining. Nova Scotia Power allows Nova Scotia residents to net meter, though with limitations that significantly delay the payback period of most small-scale projects. While customers can net meter up to 100Kw/h, which could power up to 20 homes, meters can’t be combined over several properties or several bills.

“You can put up your own turbine for your house or your business,” Larsen says. “but you can’t group a couple tog ether or service different locations.”

Ultimately Larsen would like to see not only a better and more flexible system of net metering, but also feed-in tariffs similar to those popular in Europe and recently introduce in Ontario.

A feed-in tariff sets a rate that a power utility will pay to anyone feeding electricity into the grid. So, instead of getting credit that’s redeemable only in energy consumption, feed-in tariffs mean people like Spurr – should he ever get permission to install his turbine – could make money from the power they generate but don’t use. Ontario’s feed-in tariff system pays a high premium for energy from renewable sources, though Larsen doesn’t think Nova Scotia would need to go as high to see positive effects.

“What people will say who want to delay it,” Larsen says, “is that if everybody did it then you’d have an issue with the grid. And if quarters fell from the sky, I’d have a lot of quarters, too,” he joke s. “We’re talking about such relatively modest amounts that it doesn’t impact the grid.”

Another worry is whether feed-in tariffs will increase rates. But research, says Larsen, “shows the impact on rates is actually negligible. And what you end up doing is creating a demand market where you have more engineers, electricians, businesses – all these people getting into renewable energy.”

Mike Magnus deals in renewable energy on a much larger scale than Spurr hopes to. Magnus is president and CEO of Shear Wind, a Halifax-based company with wind farm projects across Canada. Shear Wind is currently working on securing financing for Glen Dhu, a shovel-ready wind farm project in the Pictou/Antigonish area, which will produce up to 60 megawatts of electricity for Nova Scotia Power once it’s built.

The project is one of many under contract to Nova Scotia Power to help the private utility reach its greenhouse gas emissions reduction targets for 2010. Unfortunately, Magnu says, Nova Scotia Power may very well fall short of those targets.

“Under today’s economic scenario ,” he says, “the wind energy business is extremely challenged.”

Wind farms demand huge amounts of up front capital investment and contracts with Nova Scotia Power set a 20-year fixed price, which can restrict the availability of financing, Magnus says, especially in the midst of a recession.

“One of the things that happened here is because you’ve got a competitive bidding system, there were a lot of people that b id,” Magnus says. “You get into a bidding war, and companies probably bid foolishly. That’s not technically Nova Scotia Power’s problem. It’s the best process for Nova Scotia Power and Nova Scotia Power shareholders bar none. But at the end of the day, is it best for this industry, which is still in its embryonic stage here in Nova Scotia? I don’t know.”

Ontario uses an alternative to the competitive bid process by having a standard offer contract for any renew able energy producers, sort of like a larger scale feed-in tariff. In Alberta, wind and solar producers feed into a pool system that sets rates by the hour and minute.

“I wouldn’t even venture to guess which process makes more sense,” Magnus says. “If you really wanted to bring [renewable energy] on stream more effectively and more efficiently, you probably would get into something like a standard offer- style contract. That would probably work a little more effectively for government to meet its standards.”

But the main thing that governments can do right now, says Magnus, is to “offset the financial stress that’s on developers because projects are no longer feasible under today’s economic outlook. The government should be assisting manufacturers that have the lowest risk projects, that are shovel ready and that have made the investment.”

Initial capital investment is also an issue for smaller scale adoption of things like wind turbines and solar panels, even though the projects mean long-term savings.

“If you had to pay for eight or 10 years of use of your cell phone upfront,” Larsen explains, “but after that it was going to be free, it would make economic sense. But to come up with the money to do that would be difficult for a lot of people.”

Larsen looks to the United States’ recently announced 30 per cent tax credit program for households and businesses investing in renewable energy as a good example of what we should be doing in Canada and Nova Scotia.

“It gives people more control over their future costs from a business perspective,” Larsen says. “If in 10 years, you’ve got real good control over your energy costs because you invested in solar photovoltaic, wind or solar hot water for your business, you’re going to be at a competitive advantage to others. So if our policies in Nova Scotia can encourage as many businesses as possible to do that, we’re going to be a more competitive place to do business.”

“There’s a lot of very sophisticated analysis by economists that have compared feed in tariffs, rebates, carbon trading – all these types of things,” Larsen says. “I won’t pretend to k now for sure which is best. I think in general you need some combination. But clearly doing nothing is not the way to go.”