canada: November 09, 2009

In the opinion of many, the renewable energy sector has the potential to become a significant economic engine for any country that embraces it; however, it would appear Canada is falling behind.

Our woefully inadequate strategy for this sector was underlined when the US recently unveiled its support to just one small segment of renewable energy – geothermal power.  The US Department of Energy is funding $338 million in exploration and development of geothermal technology.  This funding is on top of hundreds of millions of dollars of low cost loans, tax incentives and capital cost grants the government has already provided for geothermal projects in the later stages of development.  Ironically, about 10 percent of the new money will go to companies, either based in Canada or traded on the Canadian stock exchange, which have projects in the US.

Currently, the Canadian government’s support for the geothermal industry is so meager that there is not a single such power generating project in country, despite Canada’s good geological potential in the western part of the country.

Canada has been supporting its renewable industry in a program called the Eco-Energy Fund.  This fund subsidizes low impact power projects such as wind, solar, biomass, wave, hydro and geothermal to the tune of one cent per kilowatt hour.  Unfortunately, the fund has proven so popular that it is expected to run out of money by year end and the government has made no move to renew the subsidy.

Some provinces have taken bolder moves such as Ontario having a “feed in tariff” that pays for very high rates for power generated from renewable sources.  The program has created a lot of interest attracting foreign investors and manufacturers to locate in the province.