At a critical time for climate policy worldwide, one Canadian province has killed a popular renewable energy program that supported wind farms and other small-scale projects.
Nova Scotia announced recently it will nix the small-scale feed-in tariff, arguing it put "pressure" on power rates in the small Atlantic province that is struggling economically.
Dubbed the first initiative of its kind in the world when it launched in 2010, the Community Feed-In Tariff Program, or COMFIT, mostly encouraged wind power projects, according to a list on the government website.
Like other feed-in tariffs, COMFIT guaranteed a rate of return for electricity generated from a renewable energy project. But this program was different in that it was specifically targeted at projects that were 50 percent owned by communities, such as First Nations, municipalities, schools, and co-ops.
By guaranteeing a rate of return higher than the average electricity rate, the feed-in tariff helped pay off small-scale renewable projects more quickly.
A review of the program that began in January found it had "exceeded expectations" as an economic catalyst and as an energy generator. It's projected to generate 125 MW by the end of the year — well over its 100 MW of renewable power goal.
As a rule of thumb, according to Climate Central, a typical two-megawatt wind turbine can provide enough electricity for around 400 houses.
Local environmentalists say it was an effective policy tool that supported modest renewable initiatives — and they're not impressed with its cancellation.
"The fact that it has overachieved both on energy production and on contribution to economic development in communities is a cause for celebration, not cancellation, right?" the Ecology Action Centre's energy coordinator Catherine Abreu told VICE News over the phone from NS.
Even as the government scrapped COMFIT, the province's energy minister Michel Samson simultaneously praised the initiative: "This is the right time to bring COMFIT to a close, it has achieved its objectives," he said in a release, adding that the review found "no new generation is needed to meet electricity demand."
Darcy MacRae, a provincial government spokesperson, told VICE News COMFIT put "upward pressure" on rates.
It generated 5 percent of electricity in the province, but 15 percent of the utility's cost, he said.
"Nova Scotians have been clear with us about their support for greener sources of energy, but not at any cost," MacRae wrote in an email.
However, when VICE News asked him for clarification, he acknowledged that by itself the program does not increase rates, but it could hike rates when combined with other factors. With other costs coming down, MacRae said residential customers can actually expect rates to decrease by 0.4 percent.
The decision to cut COMFIT comes in the lead up to this fall's international climate summit in Paris, where world leaders are expected to hammer out new environmental pledges. Canada's federal government has committed to reducing emissions by 30 percent under 2005 levels by 2030 but has been widely criticized for taking a backseat approach to climate policy, leaving the provinces to cobble together their own local strategies, including cap-and-trade, carbon taxes, and feed-in tariffs.
The COMFIT closure comes at a precarious time for Nova Scotia's economy, and Abreu doesn't dispute that household energy poverty is an issue for many people who live in the struggling province.
And she also agreed that the feed-in tariff could make power rates more expensive and unpredictable.
But, she said, the idea behind subsidizing renewable energy is to get the new technologies to a point where they can compete with fossil fuels on a level playing field.
"Fossil fuels benefit from a century of subsidies," she pointed out. "The International Monetary Fund estimates that Canada spends about $1.2 billion every year subsidizing the fossil fuel industry, and there are indirect subsidies that the fossil fuel industry benefits from because we have a whole energy and electricity system where the infrastructure is predicated on fossil fuels, and so transitioning that system costs money. It's going to cost money upfront."
MacRae agreed that "there will be some cost pressures" as the province makes the transition to renewable energy. "The important factor is to manage these costs carefully," he said.
Almost 70 percent of the electricity consumed by Canadians comes from renewables — a high number compared to the US, which generates about 13 percent of its electricity from renewables, and Germany, where that number is about 28 percent. About 97 percent of Norway's electricity came from renewables, according to a 2013 report, while Iceland was 100 percent renewable.
Moving water accounts for the vast majority of Canada's electricity generation, with wind, biomass, and solar making much smaller contributions to the grid.
According to Clean Energy Canada — an initiative of Simon Fraser University — Canada placed seventh out of the G20 nations for renewable energy investment in 2013, with both investment and jobs in the clean energy sector growing rapidly in the last few years. However, most of that growth can be attributed to provincial leadership and private investment, the majority of which the CEC says are wind and solar projects from Ontario and Quebec.
In Quebec, wind and hydro power provide almost every watt of electricity in the province.
Ontario's energy grid, meanwhile, is supported by "a robust feed-in tariff" that launched in 2009, according to the CEC. Abreu calls Ontario's current FIT program "comprehensive," but noted the province did face initial backlash for the program due to lack of local benefit — a problem Abreu says NS solved with the community-targeted COMFIT.
She argued the economic benefits of the COMFIT program went further than NS realized. The east coast province is struggling with mass out-migration, especially to the lucrative Alberta oil sands. The small-scale energy projects supported by COMFIT could have employed some of those workers who migrated west, Abreu said.
Now that oil prices have dropped, there is a chance to tempt them back.
Matt Ward, a Nova Scotian who moved out west for high-paying oil sands work, struggled to find work when the price per barrel dropped. He's a machinist with skills that could easily be applied to build wind turbines.
Ward, who currently works in Fort McMurray, Alberta, told VICE News if there were two energy jobs that paid the same, he would pick wind power over oil "because there's a future in that, and the oil sands are controversial at best."
He said he ultimately wants to be back in Nova Scotia working a job in his field, but it's difficult to find work due to the current economic climate.
Though it killed COMFIT, the Nova Scotia government plans to release an electricity plan that includes renewables this fall. The province has a goal of transitioning to 40 percent renewable energy by 2020, an aim MacRae says is on target.
Follow Hilary Beaumount on Twitter: @hilarybeaumount
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