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THE ENERGY CRUNCH: Alternate currents present themselves

Providers of solar, wind energy benefit from electricity crisis, Wendy Stueck writes


Published Feb. 16, 2001


Ljubisav Stamenic is a believer.

In the misty city of Vancouver, Mr. Stamenic has gone sun-crazy. He wants to turn ordinary buildings into electricity-generating power plants by cloaking them in solar panels instead of glass or marble.

Thanks to the power panic in California, he now has new disciples.

"There has been tons of interest - we have received hundreds of calls," says Mr. Stamenic, who runs the Photovoltaic Energy Applied Research Lab at the British Columbia Institute of Technology in Vancouver. Founded in 1998 to promote building integrated photovoltaics, or BIPV, the lab was already working on several large projects when natural gas prices began to climb last year.

Since then, Mr. Stamenic has been scrambling to develop proposals for potential clients that include Burnaby, B.C.-based chip designer PMC-Sierra Inc., a university and an airport.

He can't say if any will lead to firm commitments. But he is convinced that this winter's experience, which left Californians in the dark and Canadians steaming over higher fuel bills, will increase demand for renewable energy of all sorts, especially solar systems that allow users to channel any surplus to their local electrical grid.

"My vision is that in 15 or 20 years, photovoltaic should be part of every new development. Because it's just natural - why would you want to waste your roof?"

Cynics will recall going down this road before. When oil prices shot up in the 1970s, wind and solar were hailed as North America's salvation. But the crisis passed, and "green" energy fell out of fashion.

Canadians, blessed with relatively cheap fuel with which to drive their cars and heat their homes, had little incentive to slap solar panels on their roofs or lobby for a wind farm next door.

This time, there is a sense that renewable alternatives may at last move from the virtuous fringe to the mainstream.

"We have a set of market conditions that are much more conducive to getting these technologies out there," says Robert Hornung, climate change program director for the Pembina Institute for Appropriate Development, an Alberta environmental consulting group.

Those conditions include declining costs for renewable technologies and growing evidence of global warming, says Mr. Hornung, who is based in Ottawa. Rolling blackouts in California have made many corporations more aware of the need for reliable, high-quality electricity.

But increased awareness doesn't necessarily translate into demand for green energy - or into adequate, competitively priced supply. In California, the energy crunch has resulted in a stampede of applications to build natural gas-powered plants, which are cleaner than coal-fired plants but still rely on a non-renewable fossil fuel.

And independent green electricity suppliers are struggling, slammed by the same increases in wholesale energy prices that have crippled conventional utilities such as Pacific Gas & Electric.

Green Mountain Energy Co. of Austin, Tex., and San Jose-based Preferred Energy Services Inc., which operates as, are no longer serving California customers, and along with other independents, have referred customers back to the generic grid.

Green suppliers typically obtain a greater percentage of their supply from renewable or clean sources than do conventional utilities.

But despite the problems with green options in California, there has been a surge of interest in renewable alternatives. Solar installation outfits in Canada and the United States are landing more, and larger, deals. Large industrial energy users such as greenhouses and pulp mills are hunting for systems that use plant or wood waste to generate heat or electricity.

Wind turbines, sleeker and more efficient than in decades past, are multiplying in Oregon, Alberta and California. Calgary-based generation company TransAlta Corp. recently announced plans to invest $5-million in Calgary wind-energy supplier Vision Quest Windelectric Inc.

But TransAlta also plans to spend $1.8-billion to add 900 megawatts of capacity to its Keephills coal-fired plant by 2005. Renewable energy advocates say such disparities show green options have a long way to go before they're mainstream.

"When we run into a crunch like this, there's still a tendency to look at the tried methods and the historical experience," Mr. Hornung says.

In modern times, renewable energy has been a bit player.

Worldwide, renewable energy accounts for 14 per cent of total final energy consumption, and just more than 12 per cent of total primary energy supply, according to the World Energy Council, an industry group based in London.

Because of their impact on surrounding lands and watersheds, large hydroelectric projects are not included in what the World Energy Council calls "new" renewables: modern biomass, solar, wind and geothermal.

Conventional use of biomass, such as burning materials including wood and animal dung, can lead to problems such as deforestation and toxic emissions. Modern biomass uses plant waste to produce energy with modern low-emission techniques.

About 62 per cent of Canada's total electricity comes from renewable hyrdroelectricity.

In its 2000 review, the World Energy Council said renewables had grown more slowly than expected since 1993, when the group began to work toward a more sustainable, and equitable, energy market.

But momentum is building. In a report published last year, California consulting firm Frost & Sullivan pegged the value of the North American renewable energy market in 1999 at $843.4-million (U.S.), up from $204-million in 1998.

Part of that jump came as U.S. corporations scrambled to invest in wind projects before a federal tax credit for such investments expired.

But the firm said the growth rate for renewables, after slowing in the near term, should pick up again by 2004.

Some players are not prepared to wait. Royal Dutch/Shell Group has predicted that renewable energy will make up 50 per cent of global energy demand by 2050, and earmarked $500-million over the next five years for renewable investments. Giant BP Amoco PLC is behind leading solar electricity supplier BP Solarex, which generated revenue of $179-million in 1999 and is aiming for $1-billion by 2007.

Venture capital firms and automotive manufacturers are pouring millions into hydrogen-powered fuel cells, which hold great promise to curb pollution and reduce dependence on fossil fuels. Los Angeles-based Oaktree Capital Management LLC, an investment firm with more than $15-billion under management, is one of the backers of the $454-million Power Opportunities Fund, which invests in companies that make products and services used to distribute, sell and supply gas and electricity.

Such services are expected to be in great demand in deregulated markets. When, and how, deregulation will kick in is open for debate - as is the question of how renewable energy can find its place in markets that often seem as changeable as the wind.

Some advocates, like Mr. Hornung and his colleagues at the Pembina Institute, say Canada needs to do more to encourage the use of renewable energy, and say that Canada lags countries such as Denmark, Germany and the United States in tax incentive and awareness programs.

Even the most ardent proponents of renewable energy admit that renewable energy costs more in the short term, when judging by conventional accounting methods that don't make allowances for saving the Earth.

Typically, Mr. Stamenic says, North American developers want to see a return on their investment in about five years. With today's more efficient photovoltaic systems, and the high cost of competing fuels such as natural gas and heating oil, such a time frame is now realistic.

But he has another, longer-term perspective.

"In Europe or Japan, they're talking about buildings that last 100 years, so a payback period of 20 or 30 years for a photovoltaic system is not that bad."

Changing sources of world energy*
Combustible renewables & waste11.2%11.2%
*excludes international marine bunkers and electricity trade
**other includes geothermal, solar, wind, heat, etc.
#million tonnes of oil equivalent
Source: Energy Statistics and Balances of non-OECD Countries

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