Clayoquot Green Economic Opportunities Project

Green power is a growing sector of the economy. While it is still in its relative infancy in British Columbia, it is clear that there will be an increase in the number of opportunities that present themselves in the region as government policies are clarified, regulatory frameworks streamlined and technology tested.

As the industry grows, it will be important to ensure a comprehensive approach to planning a sustainable resource mix. It will also be important to ensure that communities adjacent to these sites are organized to negotiate effectively for direct benefit.

It is not possible to predict the number of jobs that will be created through the development of green power alternatives since the size and scale of these projects can vary so considerably. However, it is possible to predict that where they exist, community wealth can be generated by the development of thoughtful and thorough structures for financing, management and leadership. For instance, share ownership for projects occurring on First Nations traditional lands will be imperative, as will the negotiation of direct power benefits to Ucluelet should a wind generation system be established in Barkley Sound.

Overview: Status and trends in the industry

The term "green power" is used to define power generated from renewable energy sources, such as wind and solar power, geothermal, hydropower and various forms of biomass (see below for further detail on each). As with all new 'sciences' there is some controversy about what does and does not constitute green energy, based on differing definitions of sustainability and au courant debates about what 'renewable resources' really means and how community impacts can be measured. In the absence of an official international designation, BC Hydro has adopted the following 'criteria' against which it measures the viability and validity of its green power projects[1]:

• Renewable - this means the resource must be replenishable by natural processes within a reasonable length of time -- at the longest, within about one average human life span. Hydroelectric generation relies on water, which is a renewable resource. Natural gas electrical generation relies on a fossil fuel, a resource that is not renewable.
• Environmentally responsible - this means that the project avoids any significant environmental impacts (ed note: in Canada, environmental impacts are sited by standards established under national and provincial legislation)
• Socially responsible - this means that the energy is not generated in a way that conflicts with key community values. (ed note: a consistent way for measuring this component of a project has not been determined)
• Licensable - this means that the project meets all relevant regulations and standards.

Unfortunately a system of alternative energy will not be developed overnight. The green power industry is still highly experimental and in the industrialized countries that have relied on nonrenewable coal, oil, and natural gas to fuel their economies, skeptics abound. There is a combination of factors that will combine to make the shift to renewable energy a formidable task. These factors include: high levels of capital investment required for R&D; the complexity of international and national policy frameworks related to energy production and use; the economic power of energy conglomerates; and the mercurial pace of changes in public opinion and practices. Political pressures are being applied to governments from both sides of the issue.

None the less, power generation giants like British Petroleum and Royal Dutch/Shell are investing heavily in renewal sources of energy and industrialized countries are beginning the process of experimentation by streaming at least some portion of their power supply requirements towards green alternatives. Their rationale, as multi-billion dollar industries, is less that we are running out of fossil fuels per se, but rather that we are running out of liquid fuels that are cheap to produce. There are still significant oil and natural gas reserves, but they are diminishing and will be more costly to extract. Geologists caution that in the next couple of decades, the planet's petroleum and natural gas supplies will reach their high-point of production and decline forever after.[2] There are also coal reserves that could be exploited (huge deposits still remain on Vancouver Island), but, at this time, coal is commonly viewed as a gross polluter and no technologies have been developed that allow it to be burned without damaging the environment. Climatologists warn of rapid climate change and global warming caused by increasing concentrations of greenhouse gases in the atmosphere caused by burning. Nuclear fission is uneconomical when capital investment, radioactive waste management, and long-term storage of hazardous materials are factored in.

Hence, all signs point towards the need to move away from traditional power sources towards alternative energy systems. Renewable energy will play a major role in the energy industry of the 21st century and beyond. Industry experts predict that over the next half century, renewables may grow to supply half the world's energy.[3]

Successfully generating electricity by harnessing the perpetual power of the sun, wind and water is not only a dream for the future, it is technologically feasible and to a small degree already a reality. The US Department of Energy (whose citizens use 25% of the annual power generated world-wide) established the Renewable Energy Production Incentive (REPI) as part of an integrated strategy in the Energy Policy Act of 1992 to promote increases in the generation and utilization of electricity from renewable energy sources.[4] Several projects focussed on biomass energy, wind and solar power are being developed and power is being sold on a limited basis in Oregon and Washington States.

Significant research and development funds have been allocated to new technology development. In Canada, the Ministry of Natural Resources (NRCan), announced in 1996 a Renewable Energy Strategy for the country. Minister-of-the-day Anne McLellan stated, "This strategy will be a blueprint for NRCan's participation in the renewable energy sector. In particular, it will help the renewable industry grow and become more self-sustaining. A dynamic industry will contribute to economic growth and new jobs for Canadians while also helping reduce greenhouse gas emissions."[5]

The Canadian Renewable Energy strategy is based on cost-shared, voluntary and economically sound initiatives, in partnership with a broad range of stakeholders, including the renewable energy industry. Through this strategy, NRCan serves as a catalyst to encourage commercial opportunities for renewable energy by.

• Enhancing Investment Conditions through improvements to the tax system;
• Supporting Technology Initiatives in the area of research and development; and
• Encouraging Market Development Initiatives to reduce market barriers and to create a demand pull for renewable energy technologies.

The International Energy Agency in the USA predicts the use of non-hydro renewables in Canada and the U.S. will increase from 2% in 2000 to 12% in 2030 under a 'pro-environment' policy scenario.[6] It suggests that Canada obtained 16.8% of its primary energy from renewables in 2000; 12.3% if biomass and EFW are excluded. The Canadian government has notably avoided, to date, the declaration of any national targets for wind and renewable energy development. However advocates of renewable energy are confident that the recent signing of the Kyoto agreement will have an immediate impact on the seriousness with which they move to implement their 1996 policy statement and establish targets for the rate and type of growth to be achieved in the sector.

In the interim, even in the absence of any national targets or strategy, Canada has committed $260 million under the Wind Power Production Incentive, provided financial support to Reno$ense, a promotional program to assist retailers to merchandise energy efficiency and home improvement products and made money available for provincial-level research and development activity.

In British Columbia, the focus of renewable 'green energy' production has been focussed primarily around the work of BC Hydro. In 2000, the Corporation committed to meet 10% of increased demand for electricity by 2010 through a variety of new green energy sources.

To help chart the provinces potential for green power development, a study was commissioned through the Canadian Chartographers in 2002 to develop a spatial map of potential sites suitable for small hydro, biomass, wind, solar, geothermal, ocean wave and tidal current power generation[7]. In April 2000, BC Hydro invited independent power producers to submit proposals for new Green Energy projects and subsequently signed power purchase agreements with 23 proponents. One subsequently withdrew, leaving 22 projects. Of these, 7 are hydroelectric projects on Vancouver Island and 1 is a biogass project. The combined capacity of these 8 Island projects, once completed, is estimated to be 6-8 MW by 2005.[8]

In October 2002, BC Hydro invited IPPs to submit qualification documents for more Green Energy projects. Of the 70 proposals received, 17 were on Vancouver Island. The Table below identifies those projects that have been short-listed to proceed to the next stage of the process - permitting, financing and construction. The combined installed capacity of the short listed Vancouver Island projects is expected to be about 140 MW with an expected 'dependable capacity' of 28-60 MW.[9]

On-Island Green Energy Proposals - 2002 Green Call

Project Name	Location	Technology	Developer	Short Listed
Tahsish River Hydroelectric Project	Woss	Hydroelectric	Axiom Power Ltd
Gabriola Wind Generation Project	Gabriola	Wind	Clyde Coats & Off The Grid Energy Systems
Great Central Lake Pumped Storage	Port Alberni	Hydroelectric	Earthgen Co
First American Cowichan Biomass Power Plant	Duncan	Biomass	First American Power Corp
Nanaimo Reservoir 1	Nanaimo	Hydroelectric	Greater Nanaimo Water District	X
China Creek Small Hydroelectric Project	Port Alberni	Hydroelectric	Hupacaseth First Nation	X
Cruickshank River Hydro Project	Courtenay	Hydroelectric	Innergex II
Kokish River Hydro Project (East Fork)	Port McNeil	Hydroelectric	Innergex II
Kokish River Hydroelectric Project	Port McNeil	Hydroelectric	Northern Utilities Inc.
Port McNeil Power Project	Port McNeil	Biomass	Northland Power Inc	X
Zeballos Lake Hydro Facility	Zeballos	Hydroelectric	Pacific Rim Power Corp.	X
Piggott Creek Power Ltd.	Campbell River	Hydroelectric	PacWest Hydro Partners One Inc
Palmerston/Mt. Brandes Wind Farm	Holberg	Wind	Stothert Power Corp/Global Renewable Energy Partners Ltd	X
Cypress Creek Hydroelectric Project	Gold River	Hydroelectric	Synex Energy Resources Ltd	X
Ucona River Hydro Power Project	Gold River	Hydroelectric	Synex Energy Resources Ltd
Vancouver Island Offshore Wave Power Generation Project	Ucluelet	Wave	Ucluelet Wave Energy Plant
Ucona River Hydro Project	Gold River	Hydroelectric	Ucona River Joint Venture	X

The structure of the agreement with BC Hydro for independent power producers is two-fold. First projects must be located in areas that are able to access the existing Hydro grid system, second that BC Hydro will pay a premium for every MW hour that is produced, providing the financial incentive for large capital investments. To date, all the projects pre-approved for a partnership with BC Hydro involve commercial (well-established) technologies utilizing resources such as small hydro and biomass. Wind energy, micro hydro (systems with an installed capacity of less than 2 MW), tidal current, geothermal and Building Integrated Photovoltaic Solar options are being researched.

At the present time there is only one short listed project for a small run of the river hydroelectric project in Port Alberni. A considerable amount of research went into the development of a wave energy proposal in Barkley Sound but this project was not short-listed. Other companies are involved in researching the potential for wind power generation on the West Coast. These include:

• Sea Breeze Energy Inc., proceeding with plans to erect a test site on Chrow Island (Barkley Sound) to collect the data needed to determine the feasibility of a wind energy farm.
• Hesquiaht Wind Farm Ltd., who has submitted a request to the province for an investigative permit that will allow them to establish up to four wind testing towers on crown land in the vicinity of Hesquiat Lake.
• Port Albion Wind Farm Ltd. (the same proponent as for the Hesquiaht site) who have submitted a request of a two year investigative permit to investigate wind turbine power generation on unsurveyed Crown land between Port Albion and the Maggie River.
• AquaEnergy Group Ltd., an American company who have been trying to identify a partner in the Region interested in a joint venture wave-power project. Ma-Mook has been approached for discussion.

Biomass Energy: Biomass is defined as organic material derived directly from plants. It is produced through photosynthesis, the process used by plants to convert the sun's energy into chemical energy. This chemical energy can then be extracted from the biomass through combustion, to produce energy that can be used as heat or power. In B.C., wood residue - material left over from forestry operations - is the most abundant and readily available source of biomass, and represents the largest opportunity for electricity generation. (See also Waste Management and Recycling sector analysis.)

Small and Micro Hydro Energy: Small and micro hydroelectric developments have significant potential for contributing to B.C.'s energy mix. For example, BC Hydro has signed electricity purchase agreements for 20 green small hydro projects to be owned, built and operated by independent power producers.

In addition to these new projects, a number of small hydroelectric generators (one on the Ucuelet/Port Alberni Highway) have been supplying power to the BC Hydro grid for many years. These existing facilities operate with small dams or run-of-the-river diversion structures to divert water from smaller rivers and streams through pipes to the generating station. There are also a number of micro hydro plants in areas where there is no access to the electric power grid.

For small and micro hydro developments, 1 MW of installed capacity will supply enough power for about 550 homes - more than enough, for example, to power the new residential development proposed by Ahousaht for Flores Island.

Hupechaset First Nation has been shortlisted by BC Hydro to develop a small run of the river project, diverting water from China Creek, putting it through a turbine system and then returning it to the river further downstream. This 2-3 MW system, costing 1.5-2 million/MW to develop is anticipated to generate $600K per year in revenue for the Nation.[10] The feasibility study to prepare this application to BC Hydro was funded by NEDC.

Various studies have identified more than 600 potential small and micro hydro sites in British Columbia. This information has been used to publish the Inventory of Undeveloped Opportunities at Potential Micro Hydro Sites in British Columbia. Hydro has also developed a Handbook for Developing Micro Hydro in British Columbia, describing issues that need to be considered including criteria for interconnecting to Hydro's grid.

Digester Gas and Landfill Gas: When trash is buried it creates an oxygen-free environment under the capping soil layer. With relatively dry conditions, landfill waste produces significant amounts of gas as it decomposes -- mostly methane. If these gases are released to the atmosphere, they add to global climate change problems. They are also potentially a fire or explosion hazard. So, a good solution to the landfill gas problem is to collect it and burn it to produce electricity. The gas can be collected by a collection system, which typically consists of a series of wells drilled into the landfill and connected by a plastic piping system. The gas is saturated with water, refined and used to run gas turbines and fuel cells.

There are two known households in the Region operating on privately developed digester gas systems with good success for at least part of their power requirements.

Fuel Cells: Fuel cell technology is "space-age technology" brought down to earth. Fuel cell technology dates back to the 1800s, but it was not until the end of the 20th century that it was used successfully in spacecraft to provide electricity and water. The technology can be used to make electricity to power vehicles, homes and businesses. And if you use a renewable energy source as the main source of hydrogen, a fuel cell can be considered a renewable energy source

Fuel cells are being designed for use in stationary electric power plants to provide reliable, clean, high quality electricity for distributed power generation. These small systems can provide primary or back up power to commercial and industrial customers such as hotels, hospitals, manufacturing facilities, and retail shopping centers. Eventually, smaller fuel cells will be sold for use in homes, most of which will connect to natural gas supplies

The new Cedar Corners development in Tofino will include photovoltaic cells for energy production and will hopefully become the first commercial establishment to sell power back into the BC Hydro grid.

Geothermal Energy: Geothermal energy is produced by the heat of the earth. The constant temperature below ground can be tapped to warm and cool homes through a relatively simple and inexpensive ground-source heat pump. Surveys taken by utilities have found that homeowners using geothermal heat pumps rate them highly when compared to conventional systems. Figures indicate that more than 95 percent of all geothermal heat pump owners would recommend a similar system to their friends and family.

Pacific Sands Resort in Tofino plans to use a geothermal heat system to provide heating, cooling and hot water to its new 55 unit development slated for completion in 2004.

Solar Power: The sun's heat has been used for decades to heat water for homes and businesses. At the turn of the 20th century, solar heated water systems were common in Southern California. Today in the US more than one half million solar hot water systems have been installed, most in private homes. Some countries have made their use mandatory. For example, all homes in Israel have solar hot water systems.

Panels on a rooftop collect energy from sunlight and convert it directly into electricity. Encarta Encyclopedia, 2003

Typically, a homeowner relying on electricity to heat water could save up to $500 in the first year of operation by installing a solar water heating system. The savings over time increases due to increasing electricity rates. The average solar heating system pays for itself in four to seven years.

A water-pumping windmill in Spring, Arizona, provides water for agricultural use. Encarta Encyclopedia, 2003

Wind and Wave Energy: Wind technology has been used for thousands of years. These two renewable sources of energy have high potential on the West Coast. Two potential wave energy sites were identified by BC Hydro's Cartography study, the one with the greatest potential located in Barkley Sound near Ucluelet. An independent company, Sea Breeze Energy Inc. is proceeding with plans to collect data to determine the viability of this site.

The province has received an application for two year test licenses for two other sites in the Region - one near Hesquiaht Lake and the other near Port Albion.

Biodiesel: A final source of green power that has, incidentally, received some attention in Clayoquot Sound is the concept of biodiesel as an alternative to automobile fuel. Tofino Bus has been researching the viability of switching to a dual fuel system that will allow it to utilize 'green fuel' for at least part of its fuel requirements.

Biodiesel is an alternative fuel, produced from domestic, renewable resources. Biodiesel contains no petroleum, but it can be blended at any level with petroleum diesel to create a biodiesel blend. It can be used in compression-ignition (diesel) engines with little or no modifications.

The concept of using vegetable oil as a fuel is nothing new. Dr. Rudolf Diesel first developed the diesel engine in 1895 with the full intention of running it on a variety of fuels, including vegetable oil. Diesel demonstrated his engine at the World Exhibition in Paris in 1900 using peanut oil as fuel. In 1911 he stated "The diesel engine can be fed with vegetable oils and would help considerably in the development of agriculture of the countries which use it." In 1912, Diesel said "the use of vegetable oils for engine fuels may seem insignificant today. But such oils may become in course of time as important as petroleum and the coal tar products of the present time." Since Diesel's time, the design of the diesel engine has been modified so it can run on the cheapest fuel available: petroleum "diesel" fuel.[11]

Assessment of the Sector by SCED Criteria:

Using green resources to generate electricity supports sustainability because it creates many environmental, social and economic benefits.

Environmental Criteria: Environmentally, green energy generation results in low or no emissions of greenhouse gases, sulphur oxides and local air pollutants. The environmental "footprint" (area impacted) by green energy projects can vary, but overall impacts are less than those of conventional technologies. Because the sources are renewable, these projects do not deplete the Earth's resources.

Social Criteria: Some of the benefits of green energy - for example, lower environmental impacts and cleaner air - also result in social benefits, as they reflect key community values. Green projects can often comfortably co-exist with the community. Community energy projects that reduce energy costs for residents can have significant benefits, particularly for low income families whose energy bills constitute a high portion of their housing costs.

Economic Criteria: Economically, green energy projects can create employment opportunities and support the development of new industries (for example, suppliers of goods and services related to project development). Job creation is limited for many technologies and investment high but can result in good savings and returns in the medium to long term.

Opportunity for First Nations: Many of the terrestrial and marine sites that hold potential for green energy production are located in Nuu-chah-nulth traditional territory. As the purchase of green power from IPP's becomes more commonplace, opportunities for joint-ventures between First Nations and the private sector for power production may be significant.

______________________

[1] http://www.bchydro.com/environment/greenpower
[2] http://www.altenergy.org/ alternative energy institute
[3] ibid
[4] Alternative Energy International, 2002
[5] Natural Resources Canada. 1996
[6] Ibid, 1996
[7] Lou Skoda, 2002
[8] BC Utilities Commission, Staff Information Request No 1.3.4, March 2003
[9] Ibid
[10] Darren Willis, Ecotrust Canada, 2003
[11] The Veggie Van Foundation, 2002, http://www.veggievan.org/index.html

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