Wednesday, February 27, 2013

Canada appeals WTO ruling on renewable energy feed-in-tariffs in Ontario: Canada argues GATT government procurement exclusion and "no actual market" in Ontario

Canada has appealed a recent World Trade Organization (WTO) dispute panel finding that local content requirements for renewable energy generation in Ontario violate international trade rules. Despite the favourable outcome, the EU and Japan - who had tabled the WTO challenge - responded last week with cross-appeals of their own, aimed at other aspects of the panel report with which they disagree.

The province’s feed-in tariff (FIT) scheme aims to support renewable energy by guaranteeing electricity generators above-market rates on certain renewable sources of energy, such as wind and solar. The global trade arbiter on December 19, 2012 announced that the local content requirement of the scheme - obliging participants to source up to 60 percent of their equipment from Ontario - was a trade barrier that discriminated against foreign companies.

Canada focuses on procurement argument

In its appeal, Canada insists that the Ontario scheme qualifies for an exemption from certain trade rules relating to government procurement under the General Agreement on Tariffs and Trade (GATT).

Under the government procurement exclusion, a country can exempt itself from GATT requirements if the regulation or program involves a government making purchases for its own needs and not for commercial resale.

The panel had found that the program does involve government procurement, but that because the Government of Ontario buys and then sells the electricity in the consumer market, it was “with a view to commercial resale.” This means that the program is not exempt from the other trade rules at issue.

Canada argues that the resale of electricity through the FIT program is not commercial in nature, challenging the panel’s characterisation of the electricity market and its program. According to the panel, however, Ontario purchased electricity that was fed into the grid and sold on the market in competition with private sector retailers of electricity. This effectively means Canada is not purchasing electricity solely for government purposes, even if Ontario is not profiting directly from the resale of the electricity.

One argument that Canada is relying on is that Ontario’s electricity system should not be thought of as an open competitive market where supply and demand freely meet. Instead, a functioning and stable electricity market in Ontario relies on government subsidies and regulations. Thus, Ottawa argues, there is no commercial resale because there is no actual market in the Ontario electricity system.

Canada also insists that electricity purchased through the FIT programme is not resold because it is directly injected by way of renewable energy generators into the grid and pooled with other sources of electricity. It has asked the WTO’s Appellate Body to reconsider this argument, which was rejected in the initial panel report.

Japan, EU cross-appeal

The panel found that the FIT program also violated the Trade Related Investment Measures (TRIMs) Agreement and that Ontario did not qualify for the government procurement exception.  However, the EU’s cross-appeal contends that the government procurement exception should never apply to the TRIMs Agreement, and that regardless of whether the programme qualifies as government procurement, Canada is responsible for bringing the program into alignment with the TRIMs Agreement by eliminating the local content requirement.

While the panel found that the local content requirement violated certain WTO rules, it separately found that the FIT programme was a subsidy under the Subsidies and Countervailing Measures (SCM) Agreement, but that it did not violate the agreement because Japan and the EU failed to establish that the program conferred a benefit to electricity producers.

In order to determine whether a subsidy is illegal, the recipient of the subsidy must be measurably better off than without the subsidy. This measurement requires a benchmark to establish the position of the recipient without the subsidy.

The panel did not accept the heavily subsidised and regulated Ontario electricity market as an appropriate benchmark because it is not an open, competitive market. However, Japan and the EU both argue that without the subsidy, these FIT generators would not exist, and that this should count as a measureable benefit under the SCM Agreement.

The legal status of Ontario’s FIT program will remain unclear until the Appellate Body issues its ruling. The Appellate Body will be able to revise aspects of law - such as legal interpretation - but may not revisit the facts of the case.

Source: International Centre for Trade and Sustainable Development, Bridges Weekly Trade News Digest - Volume 17 - Number 6 - February 20, 2013

Tuesday, February 26, 2013

Finnish Fennovoima selects Toshiba as sole proponent to build 1600 MW nuclear reactor - tough loss for Areva

Finnish nuclear consortium Fennovoima said on Monday it had selected Toshiba as sole candidate to build a large nuclear reactor, dropping Areva.

Hours later, the Czech competition regulator ruled that utility CEZ had not broken public procurement law by excluding Areva from a contract last year.

That decision leaves Toshiba’s U.S. unit Westinghouse vying with a consortium led by Russia’s Atomstroyexport, and Areva with another key European contract slipping through its fingers.

Earlier this month Teollisuuden Voima – another Finnish utility, for which Areva is building its first European Pressurized Reactor (EPR) – announced further construction delays. The many delays and cost overruns have led to open conflict between Areva and Teollisuuden Voima.

Even where Areva is not the main contractor, the EPR has had bad press.

From a cash flow perspective, these disappointments are not life-threatening for Areva, a diversified group which owns uranium mines (here in Saskatchewan), enriches uranium, builds and maintains nuclear reactors and manages nuclear waste.

Reactor sales and services generated sales of 3.45 billion in 2012, just over a third of its 9.34 billion euro total revenue, and most of the division’s sales come from maintenance to its installed base of more than 100 reactors, nearly a quarter of the world’s total.

Between 2009 and 2011 nuclear newbuild revenue ranged between 741 and 876 million euros per year.

But if Areva wants to maintain its lucrative reactor maintenance business, it needs to sell reactors, and it has not sold a new one since 2007, when it sold two EPRs to China Guangdong Nuclear Power Corporation in Taishan. Areva also hopes for a share of a mega contract in Saudi Arabia, which is considering building the equivalent of 10 EPR reactors. The French government is lobbying intensively on Areva’s behalf.

But the parliamentary faction of France’s green party – part of President Francois Hollande’s socialist-green coalition government – said on Monday it will demand the creation of a parliament committee to investigate the troubles with the EPR.

“The failure of the EPR on export markets is patently obvious: the United States, Great Britain, the Emirates, and now Finland,” said green party MP Denis Baupin.

Source: Reuters

Monday, February 25, 2013

Wind power expert proposes turbines for City of Saskatoon

James Glennie, MBA CFA, a renowned wind power expert says the Saskatoon area is the right place to built a $43 million CAD wind farm he says could be funded by individuals without costing city taxpayers.

"I've known for a number of years that there is enormous wind resource stretching from Texas all the way up to Saskatchewan," said James Glennie, the founder of Saskatoon Community Wind.

"When I arrived here a lot of people were talking about energy and people ask me why can't we get more power from renewables?"

Glennie's idea is to set up a 10 turbine wind farm roughly 15 to 30 kilometers outside the city and sell the electricity the farm generates back to the city of Saskatoon. The multimillion-dollar project would be entirely funded by interested individuals in Saskatoon who not only want to see more renewable resources, but also want to see a good return on their investment, he says.

"The wind industry is a relatively mature business and it's very low risk and it's a good reliable resource. I know that $43 million sounds like a lot, but when you put it in the context of $2,000 each from between 20,000 people, it's not that much," Glennie said.

Glennie moved to Saskatoon last summer. Before moving to Canada, he headed up large-scale wind power non-profits and lobby groups in New Zealand, the United States and United Kingdom.

He also previously worked for the Wind Energy Institute of Canada and says Saskatoon's wind power resources are undeveloped.

Glennie estimates the project could create clean electricity for 16,000 people and the greenhouse gas reductions would be the equivalent of taking 10,000 cars off the road.

Saskatoon has had a troubled history with wind turbines. The wind turbine proposed atop the Saskatoon landfill died after the city's administration said it will cost too much. The landfill wind project also raised the ire of many area residents, who said the turbine would be too loud and would pose health risks.

Glennie said his community initiative would avoid many of those pitfalls. It would be built outside of the city, away from any residential development, and because it would be financed by community members, there would be more accountability when it comes to environmental concerns.
Glennie says the idea is still in its infancy and he is in the process of gauging public support, but as a trained financial analyst he believes the economics of the project are sound.

"Wind energy is growing really rapidly around the world today and it's doing that because it works. I am very confident that it can work here," he said.

Glennie said that if they get a good response from the community, they’ll start wind testing and applying for permits.

Sources: Charles Hamilton, The StarPhoenix, February 23, 2013, CTV News

Full article:

Friday, February 15, 2013

Is Ethiopia the new geothermal energy hotspot?

The World Bank recently granted $40 million USD to Ethiopia in order to spur renewable energy projects. For geothermal projects now under way, that money is being used mainly for exploration -- if it shows promise, private investors will be invited to develop geothermal facilities. Success could lead to more grants from the World Bank.

Only about 20 percent of the population of Ethiopia has access to electricity.
It’s not that Ethiopia is particularly low on energy -- in fact, the country is an energy exporter thanks to its smart investments in hydroelectric power over the past several years. The real challenge involves expanding infrastructure so that the spoils of Ethiopia’s rapidly growing economy can reach the far-flung regions that were left behind while urban areas -- especially the capital, Addis Ababa -- have thrived.

Ethiopia is situated along the East African Rift, a zone of high tectonic activity where the African Plate is in the slow process of splitting into two. The long East African Rift Valley, which runs from Jordan down to Mozambique, is visible evidence of this split. So are the numerous volcanoes in the region, including the famous Mount Kilimanjaro -- technically a dormant volcano -- in northern Tanzania.

The region is a prime location for massive geothermal energy -- and Ethiopia has a precedent right next door. Kenya has found great success with its own geothermal projects -- it is the biggest geothermal producer on the continent with an installed capacity of more than 212 megawatts, according to Bloomberg.

Ethiopia will follow suit with help from the World Bank and the African Development Bank, which are working together to boost geothermal research and production all across the East African Rift Valley.
Renewable energy in particular is an arena where sub-Saharan African countries have a chance to shine. Widespread underdevelopment gives the region a paradoxical advantage, since alternative energy initiatives can start from scratch in many cases, skipping the retrofitting that industrialized states will have to undergo in order to modernize.

Sources: International Business Times, Bloomberg, World Bank

Wednesday, February 13, 2013

EDF's 350 MW wind project in Canada gets approval: REpower to supply 175 two MW turbines

Canada’s largest wind project to date is moving forward after the Quebec provincial government issued a decree authorizing the construction and operation of EDF EN Canada’s 350 MW Rivière-du-Moulin wind project.

Suzlon Group’s subsidiary REpower Systems SE has signed a contract with EDF EN Canada Inc., a subsidiary of EDF Energies Nouvelles, for the delivery of 175 2 MW wind turbines of the REpower MM82 and MM92 type for a project in Quebec, Canada. With a total rated output of 350 MW the Rivière-du-Moulin wind farm will be the biggest project in the history of REpower.

The project, located in the unorganised territories (UT) of Lac Pikauba and of Lac-Ministuk, north of the City of Quebec, will be developed in two phases: Construction of the first 150 MW starts in 2013, commissioning is set for December 2014. The second phase of 200 MW is scheduled for commissioning in December 2015.

The contract is part of the framework agreement of up to 954 MW signed between EDF EN and REpower in 2009. In less than one year, REpower delivered, installed and commissioned a record of 190 REpower MM82 and MM92 turbines aggregating 380 MW in a special cold climate version for three EDF EN Canada wind farms: Massif du Sud, Phase 1 of Lac Alfred and Saint-Robert-Bellarmin. Two of them – Massif du Sud and Phase 1 of Lac Alfred – just recently went into commercial operation.

Sources: CANWea, EDF and REpower Press Releases

Tuesday, February 12, 2013

Global hydropower growth slows: Canada continues to add significant new generation

The Worldwatch Institute released a report today authored by Evan Musolino examining global consumption and installed capacity of hydropower and geothermal energy sources.

Highlights of the Report follow below:

  • In 2011, global installed capacity of hydropower reached 970 gigawatts (GW), a 1.6 percent increase from the previous year, while geothermal cumulative capacity reached 11.2 GW, slowing to below 1 percent for the first time since 2002.
  • Hydroelectricity accounted for almost 6 percent of primary energy consumption among members of the Organisation for Economic Co-operation and Development (OECD).
  • On a regional basis, South America and Central America are most dependent on hydroelectricity relative to total energy use. 
  • Although hydropower plays the least important role in the Middle East, the region experienced the greatest growth in hydroelectricity consumption in 2011, at almost 22 percent. North America was next, with an increase slightly under 14 percent. In contrast, usage fell by almost 9 percent in Europe and Eurasia and by 0.6 percent in the Asia Pacific region.
  • Although some 150 countries produce hydropower, half of the global capacity was concentrated in just five nations at the end of 2011. China remains the leader, with 212 GW installed, followed by Brazil (82.2 GW), the United States (79 GW), Canada (76.4 GW), and Russia (46 GW).
  • Hydropower continues to be one of the most cost-effective renewable energy generation sources. Typical costs are in the range of 2-13 U.S. cents per kilowatt-hour for existing grid-connected hydropower plants and 5-10 cents per kilowatt-hour for new plants. Micro-hydropower installations (0.1 kilowatt to 1 megawatt), which are typically used in rural communities not connected to the national grid, generate at 5-40 cents per kilowatt-hour.
  • Global consumption of hydropower continued to increase in 2011, reaching 3,498 terawatt-hours.
  • A total of 25 GW of new hydropower capacity was added in 2011, less than in previous years, with China, Vietnam, Brazil, India, and Canada responsible for 75 percent of the added capacity.

Monday, February 11, 2013

What are the top 10 wind power capacity countries in the world?

In a report released today by the Global Wind Energy Council, there were 44,700 megawatts of wind power capacity added around the world in 2012, putting the total at 282,500 MW. That is almost a tenfold increase over the past decade.

The top 10 wind countries at the end of 2012:
  1. China 75,600 MW
  2. U.S. 60,000 MW
  3. Germany 31,300 MW
  4. Spain 22,800 MW
  5. India 18,400 MW
  6. U.K. 8,400 MW
  7. Italy 8,100 MW
  8. France 7,200 MW
  9. Canada 6,200 MW
  10. Portugal 4,500 MW
Out of 243 countries, Canada ranks 228 in terms of population density - one of the lowest population densities in the developed world. Many of the 8 countries exceeding Canada in wind power capacity are near the top of the list in terms of population density.

Wednesday, February 6, 2013

EDF commissions 300 MW of wind projects in Quebec

EDF EN Canada Inc., a subsidiary of EDF Energies Nouvelles, announced the commercial operation of the Massif du Sud Wind Project (150 MW) and the first phase of the Lac Alfred Wind Project (150 MW) both located in Quebec.

Massif du Sud and Lac Alfred represent two of the seven wind energy projects in total awarded to the company in 2008 and 2010 through Hydro-Quebec Distribution calls for tenders. By the end of 2015, EDF EN Canada will have developed and built a total of 1,003.2 MW in the province.

The Lac Alfred Phase 1 project is located in the municipalities of Saint-Cléophas, Sainte-Irène, Saint-Zénon-du-Lac-Humqui and the unorganized territory (UT) of Lac Alfred in the MRC de La Matapédia and in the municipality of La Rédemption and UT Lac-à-la-Croix in the MRC de La Mitis. Massif du Sud is located in the municipalities of Saint-Luc-de-Bellechasse and Saint-Magloire in the MRC des Etchemins and in the municipalities of Notre-Dame-Auxiliatrice-de-Buckland and Saint-Philémon in the MRC de Bellechasse. Both projects are comprised of 75 wind turbines each supplied by REpower and made with regionally manufactured blades, towers and converters.

With a combined investment (Massif du Sud and Lac Alfred Phase 1) of close to $700 million, the projects together created more than 600 jobs during the construction phase, and will provide 20-30 permanent operations and maintenance jobs. Enbridge Inc. participates in both Massif du Sud and Lac Alfred (phase 1 and phase 2) as a co-owner through a 50 percent investment.

EDF EN Canada Inc.'s operation and maintenance affiliate, EDF Renewable Services Canada Inc., will provide long-term operations and maintenance (O&M) services. Hydro-Quebec will buy the power under 20-year power purchase agreements (PPA).
“We are happy about the ongoing excellent cooperation with EDF EN Canada and the team effort displayed in the projects we have realized together so far. Our common projects resulted in a record of Canadian installations in 2012 and the wind turbines of the MM82 and MM92 type in a special cold climate version were delivered, installed and commissioned within less than one year. As the business in Quebec and other provinces grows, so does our dedicated and highly skilled team of local employees,” said Helmut Herold, Managing Director of REpower’s Canadian subsidiary, REpower Systems Inc.

EDF EN Canada commissioned its first wind project, Saint-Robert-Bellarmin (80 MW), in October 2012 and is currently constructing Lac Alfred Phase 2 (150 MW) with an expected operational date of December 2013. In total, the Company has placed into service 380 MW in the last four months in Quebec which created employment opportunities for nearly 750 people in the development and construction phase.

Source: EDF Press Release

Friday, February 1, 2013

5 places that were colder than Saskatchewan yesterday – electricity demand in province peaks at highest ever

Yesterday, temperatures across Saskatchewan were in the -30s (Celsius for my friends South of the border). Here are five notable temperatures, at around the same time yesterday, noted elsewhere:
  1. Alert, Nunavut, Canada: -41
  2. The North Pole: -39
  3. Dzalinda, Russia (in Siberia): -51
  4. Vostak Station, Antarctica: -36
  5. Mars: -55
The cold weather has led to record energy consumption in Saskatchewan. The province's electric utility, SaskPower, said usage peaked Wednesday night, around the supper hour. That's when 3,379 MW of energy were running into homes and businesses. SaskPower fortunately has the capacity to generate 4,100 MW at peak.

Not only the cold weather, but the rapidly growing population and large industrial projects in the province are seeing significant increases in electricity demand. SaskPower is committed to meeting the demands of a growing (and cold…) province by investing in considerable new generation in the future.