Promoting Green Power in Canada - Centre for Human Settlements

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Promoting Green Power in Canada Pollution ProbeTable 4.5 — Income for Renewable Electricity Producers from Allowance Trading inOntarioEmission Value per ton Gross Value per kWh Value after TaxNOx C$1,200 0.14¢ 0.084¢/kWhSO 2C$300 0.11¢ 0.066¢/kWhTotal C$1,500 0.25¢ 0.150¢/kWhNote: US prices for short tons are applied to metric tons as US prices are likely to be the upper price capfor Canadian allowances.Corporations). This reduces the potentialrevenue from trading to a great degree (seeTable 4.5).Since the after-tax benefits from emissionstrading for renewable electricity producersare small, producers will likely opt to selltheir renewable energy in green powermarketing schemes, assuming a higher greenpremium.4.3 System Benefits ChargesA system benefits charge (SBC) is an addedfee on electricity use and can be used tosupport renewable power. In the US, SBCsraise between 0.05 and 0.3 (US) ¢/kWh,resulting in funds of between (US) $15million (Rhode Island) and $540 million(California). From 1998 to 2012, roughly$3.5 billion will have been collected by the15 states that have implemented systembenefits charges. 21 The benefits flowingtowards renewable power projects out ofthese funds has amounted to between 0.11and 6.75¢/kWh [BOLIN 2001, p. 18]. AnSBC to finance investment in renewablepower sources has been proposed for Ontarioby the Select Committee on Alternative FuelSources. This charge would amount to 0.1¢/kWh and would be used to subsidizeequipment manufacturers, utilities andenergy users [SCAFS 2002, p. 16].The money raised through SBCs can bedirected towards green energy generatorsthrough: investments (cheap loans, grants orequity investments, which may allow for thefund to become self-sustaining over time);production incentives, such as the 1.2¢/kWh 22Wind Power Production Incentive in Canada[FINCan 2001]; or renewable power projectsthrough support programs for marketing,R&D, education and demonstration projects(see Table 4.6 for their current use inCalifornia). The funds are administered bydifferent bodies, including state energy,commerce or environmental agencies, quasipublicbusiness development organizations,or independent third party organizations.While distributed generation policies arepopular among states, programs establishedto date have often experienced a more modestdegree of success than programs targetingTable 4.6 — Proposed Spread of SBC Fundsin California (2002–2006) [CEC 2002e]Account Million % of totalU.S.$ budget($675million)Existing Renewable 135 20ResourcesNew Renewable 337.5 50ResourcesEmerging Renewable 101.25 15ResourcesCustomer Credit 67.5 10Consumer Education 33.75 578
Promoting Green Power in Canada Pollution ProbeElectricity Retail Price [US cents/kWh]utility-scale projects. Buy-down programsallow for those acquiring distributedgeneration equipment to recover a largepercentage (often 30–50%) of their investmentthrough the program “buying down” part oftheir initial investment. But California, forexample, has not been able to attract enoughinterest in its emerging renewables buydownprogram after three years to exhaustthe funds in the first and most lucrative offive funding blocks for smaller project sizesFigure 4.4 — Requests for Funds from the EmergingRenewables Buydown Program [CEC 2002a, p. III-4-7]18161412108642019801982198419861988199019921994Figure 4.5 — California Electricity Retail Prices[CEC 2002b]19961998200020022004200620082010(< 10 kW). Rhode Island and New York havealso met with disappointing results [BOLIN2001, p. 20], and the picture does not changefor New Jersey and Illinois, which are statesoffering some of the highest buy-downincentives of up to (US)$6 per watt [ibid., p.37]. The limited success of customer-sitedsystems is attributed to the high installationprice of the (mainly PV) systems, and tolimited awareness among private and smallbusiness customers (14% and 9%, respectively,were aware of the program inCalifornia, two years after itsinception). To overcome theinvestment barrier, Pennsylvania hasstarted developing a leasing programfor PV systems, and other alternatives,such as supporting the PVmanufacturers with marketing orthrough equity investments, bulkpurchases and working with greenbuilding initiatives [BOLIN 2001, p.39]. The lack of awarenessconcerning renewable power systemsand the possible savings frominstalling them was confirmed in theevaluation of Wisconsin’s DSARE2012pilot program, which highlightedthe need for consumer information,workshops and training programs[DSARE 2002]. The second phase ofthe program was re-designed toinclude low-interest loans (4% interestrate) for home installations and wasdeemed successful during the firstevaluation period [DSAREII 2002].Demand for funding from theCalifornia Energy Commission’sEmerging Renewables BuydownProgram increased more than 1,000percent from the third quarter of2000 to the third quarter of 2001(see Figure 4.4), which coincidedwith a steep increase in electricitycost in the same year (see Figure 4.5).79
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Promoting Green Power in Canada - Centre for Human Settlements

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