The Energy Regulation and Markets Review - Stikeman Elliott

Canada
gas is increasingly being displaced by significant new investments being made to
develop the oil sands and shale gas reserves. Foreign investment in these projects is
rapidly accelerating through the proliferation of large joint ventures, financings and
acquisitions. This investment is fuelling rapid development of projects and of related
infrastructure. New pipeline proposals, such as Keystone XL and Northern Gateway and
the development of new facilities, such as LNG facilities near Kitimat, British Columbia,
promise access to new markets in Asia; if these come to fruition, they will significantly
alter the relationship between Canadian producers and markets in the United States.
These projects are likely to encounter regulatory challenges given their scale and the
issues they create with respect to the rights of First Nations, environmental impacts of
new oil pipelines, hydraulic fracturing and horizontal drilling and ‘dirty oil’. Initiatives
are underway to streamline Canada’s environmental review process and to address the
potential for regulatory log-jams; however, it remains uncertain how successful these
initiatives will be.
V
RENEWABLE ENERGY AND CONSERVATION
i Development of renewable energy
Several Canadian provinces have introduced policy initiatives to spur renewable
development in recent years. These policies include renewable energy funds, renewable
portfolio standards, renewable procurements and feed-in-tariff programmes.
Ontario’s green energy policies stand out as the most ambitious in Canada.
The Ontario government has mandated dramatic increase in renewable resources.
To meet this goal, the provincial government introduced legislation to dramatically
increase the contribution of renewable and conservation resources to Ontario’s supply
mix to encourage ‘green investment’ and ‘green jobs’ and to address climate change.
The centrepiece of the legislation is a feed-in tariff (FIT) programme, which provides
standard-offer prices and contracts for renewable generation, including wind, solar and
biomass. As part of promoting the ‘green economy’ objectives, the programme includes
domestic content requirements aimed at inducing wind turbine, solar panel and other
component manufacturers to locate in Ontario. The programme was launched in
late 2009 and promises to assist in meeting the government’s goal of 10,700MW of
non‐hydro renewable generation by 2015.
Other Canadian provinces have introduced more limited green energy initiatives.
Notably, Nova Scotia introduced a renewable portfolio standard to source 25 per cent of
its electricity from renewable sources by 2015 and is currently introducing a competitive
procurement to purchase approximately 300MW of renewable energy from independent
power producers. Similar standards also exist in New Brunswick and Prince Edward
Island. Quebec, despite significant untapped hydro resources, has mandated that 10 per
cent of its generation should be sourced from wind. It is expected that Quebec will issue
a call for further tenders for up to 700MW of wind in 2012 or 2013. Saskatchewan has
set up the ‘Go Green Fund,’ which will invest in results-based projects that contribute to
the reduction or avoidance of greenhouse gas emissions. Also, the Manitoba government
released ‘Green and Growing’, which provides a goal of developing 1,000MW of wind
power in Manitoba over the next decade.
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