Natural Resources Committee on Jan. 29th, 2013

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

You mentioned that basic information, such as wind currents and stuff, is missing. How can the federal government play a role in helping?

[Tom Levy]

The pan-Canadian wind integration study is an initiative we've been championing since 2009. That study examines wind on a national level using our widely integrated, interconnected system. The provinces up until now have taken this upon themselves. They have studied it within a vacuum.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

You need the federal government to play as an integrator, in a way.

[Tom Levy]

Exactly. The federal government's role is quite clear in that regard.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

All right.

I'm interested in Helmholtz's work in terms of the development of renewable energy sources, particularly geothermal energy. Could you address how we can advance advances in the field of geothermal energy and their use for oil sands pre-heating at in situ sites?

[Dr. Murray R. Gray]

One of our theme areas under the Helmholtz initiative at the University of Alberta is working with German researchers on exactly that question of how to use geothermal energy.

The Germans have been leaders in setting up some pilot facilities at which they actually have drilled wells we can use to collect data and do simulations. One of the results we expect to see over the next one to two years is a much clearer assessment of what the cost and benefit of applying geothermal energy in oil sands and other energy-recovery areas would be. That's an example of—

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Sorry, Mr. Gray. I know that two researchers, Mr. Moore and Mr. Majorowicz, said in 2008 that the federal government should get involved in getting basic information on the geothermal facts of the fields in Alberta. It's five years later now. What has stalled this progress? Why hasn't the federal government gotten involved in looking into this?

[Dr. Murray R. Gray]

I can't comment on that specific question. All I can say is that the University of Alberta has been actively filling that gap.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Nicholls. Your time is up.

We go now to Mr. Allen for up to five minutes.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you very much, Mr. Chair.

Thank you to our witnesses for being here.

My first question is for Mr. Whittaker from SDTC. Can you comment about the relationship that you just signed with EDC in October with respect to cleantech innovation and companies from a global perspective, Canadian companies competing globally? Can you talk a little bit about some of the innovation and some of those companies that you believe you are going to be able to help innovate and be players in the global sector?

[Rick Whittaker]

It's no surprise that most of our companies, 90% of our small and medium-sized companies, are export-oriented. You make a business out of the global economy, not out of the local one necessarily.They are all export-oriented. So it was essential that we provide a mechanism and linkage to other federal programs and initiatives that would allow them to access some of those markets and access some of that financing to make it happen as they graduate beyond SDTC and now move out into the market. That MOU we signed with EDC spells out exactly how that relationship can work in a two-way fashion, as our companies need export expertise and as they need to draw on SDTC's expertise on due diligence. It's a little bit of a two-way street that way.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you. I appreciate that.

Mr. Levy, I'd like to ask you a few questions about wind energy. Can you talk about the trends in wind power installed cost over the last 10 years? I know there has been a little bit of an uptick, and now it has gone back, and in the last couple of years we've started to see the technology cost per kilowatt go down. Can you talk a little bit about that, and can you talk about where you think it's trending?

[Tom Levy]

Sure. There have been a few studies. We've undertaken one ourselves. Notably, however, I'll start with one from the department of energy in the U.S.

Lawrence Berkeley National Laboratory does wind technology updates every year, and those consistently show that in the past few years it has been trending down in terms of the installed cost per kilowatt. It is subject to raw material costs, and so as raw material prices go up, then certainly some aspects of the cost of wind can also increase. Coupled with improved efficiencies are improvements in technology, which are also highlighted in these reports, and largely a drop in costs. A study we commissioned in British Columbia showed similar trends.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

I'm looking at your chart in which you talk about national R and D budgets. Obviously, national R and D budgets are going to be influenced by the fact that energy policy is provincial in Canada, so obviously they would be spending money on that as well, so it's an apples to oranges comparison.

I find it interesting that Sweden shows installed-cost dollars per megawatt at 5,000, and in Canada it's 1,473, yet they spend more in R and D. Go figure. How can you explain that?

[Tom Levy]

I can't. At the end of the day, the information was pulled from the IEA report. They obtained their details from various government departments. I understand that one comes primarily from Natural Resources Canada. I would agree that certainly the provinces also make investments, and I don't have that information in front of me. That was what I pulled from their latest report.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

If I understand it right, in wind-power production the penny-per-kilowatt hour is going out until 2020 or more, so incentives are still being paid to these wind-power operations until 2020, correct?

[Tom Levy]

Yes. They'll continue to get paid for the projects that came in prior to, I think the end date was March 1, 2009.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Okay.

What is the industry doing with respect to this NIMBY syndrome, which is coming up with respect to wind power now too? How are you innovating with respect to trying to deal with some of those energy supply issues that are happening at the local level because we don't want wind power in the area because of infrasound and all those kinds of things?

What are the major innovations in those areas that you're accomplishing to prevent that?

[Tom Levy]

There's no real silver bullet. At the end of the day it boils down to community engagement and respect for responsible community engagement. Certainly, many other industries are facing similar aspects in terms of local response but then also recognizing an overall need for a certain technology. The aviation industry has been undergoing those types of responses; we need to fly people around, but then people don't want to live next to airports for one reason or another.

In the seventies they undertook a lot of work around community engagement. We've produced a best-practice guideline that has been viewed around the world as a significant document that underscores the need for that community engagement, to get that local community support to be equally translated to that regional support that is consistently shown in polls around the world.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen. Your time is up.

We will now go to Ms. Liu for up to five minutes.

Go ahead, please.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you.

Welcome back, everyone.

My question is for Mr. Whittaker.

You said that you received a budget allocation of $40 million from the current government. I know that you also participated in the pre-budget consultations of the Standing Committee on Finance.

How much extra money are you asking the government to invest?

[Rick Whittaker]

Right now the request that we've got in front of the government paints a number of different scenarios. Our investment in the Canadian economy today is about $100 million per year for these promising companies. The status quo or the existing mode of operation sees about $100 million per year.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

I reread the evidence and I know that you asked for $110 million a year over five years.

In which sustainable development sectors will those funds be invested?

[Rick Whittaker]

The question around sectors is very consistent with what we're doing today. We see a need across the Canadian economy. I will refer to the slides that were presented earlier that show that jobs are created across all the primary economic sectors in Canada whether it's oil and gas, aerospace, mining, forestry, or what have you. I anticipate none of that changing and that we will continue to support all those important sectors.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you.

You have already commented on the SR&ED tax credit. I would now like to ask Mr. Levy this question.

What do you think about the tightening of the rules that govern those tax credits?