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Energy Systems and Technologies for the Coming Century ...

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Source: Ontario Power Authority, 2010To be eligible to benefit from <strong>the</strong> preferential feed-in tariff from <strong>the</strong> FIT program, windprojects must use wind turbines that meet certain “made-in-Ontario” requirements.The Ontario province sets minimum local content requirements <strong>for</strong> wind <strong>and</strong> solarequipment used in local wind <strong>and</strong> solar power projects as it strives to create localjobs (see Table 2).Table 2. Local Content Requirement under <strong>the</strong> FIT ProgramMinimum domestic Milestone date <strong>for</strong> commercial operationcontent levelWind (>10 kW) 25% Be<strong>for</strong>e 1 Jan 201250% After Jan 1, 2012Solar (>10 kW) 50% Be<strong>for</strong>e 1 Jan 201260% After Jan 1, 2012Source: Ontario Power Authority, 2010There are also price adders of up to 1.5 ¢ /kW <strong>for</strong> aboriginal <strong>and</strong> community-basedprojects. Wind <strong>and</strong> solar projects less than 10kW are subject to <strong>the</strong> MicroFITProgram, which does not have specific local content requirements.If Japan wins <strong>the</strong> trade dispute, Canada needs to withdraw its WTO-rule violatingrules, or offer compensation, o<strong>the</strong>rwise Japan can take countervailing measures in<strong>the</strong> similar sector. It will be a blow to <strong>the</strong> first ambitious state feed-in tariff program inNorth America.To submit a complaint to <strong>the</strong> WTO <strong>and</strong> requests <strong>for</strong> WTO help settle a trade dispute,countries need to demonstrate that ano<strong>the</strong>r country violating its WTO obligations <strong>and</strong><strong>the</strong> violation causes damages to <strong>the</strong> important interests of <strong>the</strong> plaintiff country. Inreality, <strong>the</strong>re may be o<strong>the</strong>r political <strong>and</strong> economic considerations.It may take a long time to solve this trade dispute as according to <strong>the</strong> WTO rule,Japan will carry out consultation with <strong>the</strong> federal government of Canada, which hasno jurisdiction to regulate <strong>the</strong> renewable energy supporting policies of one of itsprovinces.Even though <strong>the</strong> results of this trade disputes may not affect <strong>the</strong> LCR requirements in<strong>the</strong> renewable energy supporting policies of o<strong>the</strong>r countries, this trade dispute maymake o<strong>the</strong>r countries think it imprudent to include LCR in <strong>the</strong>ir new renewable energypolicies. Moreover, it may also make investors doubt about <strong>the</strong> duration <strong>and</strong> extent<strong>the</strong>y can benefit from such requirements. In a study about <strong>the</strong> wind supporting policy<strong>for</strong> <strong>the</strong> Canadian province British Columbia, Hao et al (2010) recommended that dueto <strong>the</strong> uncertainty caused by <strong>the</strong> Japanese against Canada trade dispute, LCRshould not be included in <strong>the</strong> wind energy supporting policy packages of BritishColumbia. 22.2 Canada’s wind energy supporting policiesDue to its long coastal line <strong>and</strong> large open area, Canada is a country with abundantwind energy resources. However, it is also rich with o<strong>the</strong>r energy resources. It is also<strong>the</strong> biggest uranium producer in <strong>the</strong> world <strong>and</strong> producers 13% of <strong>the</strong> hydropowerworldwide. It has also significant production of coal, oil <strong>and</strong> natural gas.2 Local Content Requirements in British Columbia’s Wind Power Industry, May Hao, Matt Mackenzie,Alex Pomerant <strong>and</strong> Kate Strachran, December 2010Risø International <strong>Energy</strong> Conference 2011 Proceedings Page 90

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