Wind Power and Clean Renewable Energy Adoption in Canada

Wind power is in the midst of extreme market growth. The advancement of technologies, in addition to rapidly changing legislation from governments, are helping to fuel strong growth rates year-over-year in North America and around the world.

Wind technologies present a significant opportunity for businesses across the world. Technology development companies are rapidly researching ways to make the technology more efficient, while almost all businesses worldwide can benefit from the generation of their own power to bypass electrical grid use.

To help the wind power technology industry grow at an even faster rate, federal, provincial, and state governments are even offering grants and other incentives for businesses. Canadian government funding is providing a critical source of investment to this industry and is accelerating the development and adoption of wind power technologies. Businesses should consider the clean technology opportunities available to them to reduce expenses and increase their energy efficiency.

How the Global Wind Power Industry is Growing

The Global Wind Energy Council (GWEC) reports that 2015 was an unprecedented year for the global wind power industry. Annual installations were over 60 GW, the highest annual installation rate in history. Total global investment in the clean energy sector overall in 2015 reached a record $433 billion (CAD), a year-over-year increase of 4% from 2014. Global installed capacity now totals over 432 GW, with the market growing 22% in 2015 alone.

CanWea reports that wind power is one of the fastest growing sources of electricity globally, growing in over 90 countries worldwide at an average annual rate of 22%.

The Development of North America’s Wind Power Industry

North American installed capacity per-year will grow from 10.8 GW installed in 2015 to 14 GW in 2020, according to forecasts by the Global Wind Energy Council (GWEC).

Cumulative installed capacity in North America is expected to grow from 88.8 GW total in 2015 to 148.8 GW by end-of-year 2020.

United States’ Wind Power Industry

The U.S. is North America’s largest wind power market, representing strong export growth opportunities for Canadian manufacturers of wind turbine technologies. The American Wind Energy Association reports that 20 million American homes are now powered through wind energy, and this sector is experiencing strong growth. 41% of all electricity generation capacity added in 2015 was supplied by new wind power installations. U.S. investment in new wind projects in the past 10 years has totalled over $128 billion (USD).

Overall, 74.6 GW of wind energy has been installed in the U.S. (Windpower Monthly), including 8.8 GW added in 2015 alone (77% more than in 2014, bringing the total number of operational wind turbines to 52,000). The Energy Information Administration reports that wind power comprised 4.7% of the U.S.’s electricity supply in 2014. Make Consulting forecasts 7 GW will be installed in 2017, and 10.5 GW in 2018.

37 U.S. states and territories have tax credits for renewable energy production in general, or specific tax credits targeted at wind power generation. 2 states lead the way in terms of incentives for expanding wind power generation capacity:

  1. California passed an aggressive 50% renewable portfolio standard in 2015, supporting the expansion of wind power generation capacity in the state from 11 GW today to 21GW by 2030.
  2. New York passed a 50% renewable portfolio standard in 2015, also aimed at making 50% of the state’s electricity generation be provided through renewable means by 2030.

On a federal level, in December 2015 Congress voted to phase out the $0.023/kWh production tax credit for wind power producers, as well as the 30% investment tax credit, over the next 5 years. Though this leaves uncertainty as to the long-term incentives offered to wind power producers in the U.S., this legislation also creates the longest uninterrupted stretch with secured federal government incentives for wind power producers since 1998. The new policy extends the production tax credit and investment tax credits to at least 2019 for U.S. based installations, at rates of 80% in 2017, 60% in 2018, and 40% in 2019-2021.

Canada’s Wind Power Industry

Wind power now supplies about 5% of Canada’s electricity demand. CanWea reports that clean wind energy grew by 23% in Canada in 2015, representing $3 billion in investment and creating 10,500 jobs. Canada’s installed capacity totals 11.2 GW, with 1.5 GW installed in 2015. Ontario is the national leader in adoption of wind power, and the fastest growing provincial market for installations, with 871MW installed in 2015, followed by Quebec at 397MW.

Canadian Government Grants Supporting Wind Power Development and Commercialization:

Canadian businesses have may access a variety of government funding programs aimed at the research, development, and commercialization of clean technologies. Some of the most popular programs companies use include:

Industrial Research Assistance Program (IRAP) Grants for Research

  • IRAP Mid-Size Projects Research Grants: Offers research grants to Canadian businesses specifically for the internal development and improvement of innovative technologies, products, and processes. This particular research and development funding program is part of the IRAP funding umbrella and is often used towards the labour costs associated with product development projects. Covers up to 65-80% of eligible internal technical labour costs.
  • IRAP ARP Projects Research Grants: Offers research grants to Canadian businesses to support research focused on software implementation, productivity improvements, and production design or marketing projects. IRAP ARP offers up to a $50k non-repayable grant, with coverage of 80% of direct labour and 50% of sub-contractor costs.

SD Tech Fund Research Grants

Sustainable Development Technology Canada’s (SDTC) SD Tech Fund subsidizes expenses related to late stage development or pre-commercialization strategies of clean technologies. Covers cost of capital items, goods and services, personnel labour costs, and depreciation expenses. Prepares business for downstream financing. Covers 33% of project costs.

IESO Conservation Fund Small Business Grants

The Independent Electricity System Operator (IESO) created the IESO Conservation Fund to provide support for significant advances in new conservation and demand management programs, practices and technologies that impact Ontario’s initiative to reduce electricity consumption by 2030. Funding under this program is provided to projects that impact residences, businesses and/or institutions in Ontario. Funding amount is a percentage of project costs, dependent upon type of project, to a maximum of 100% of costs, or a maximum of $1,000,000.

Natural Sciences Engineering and Research Council (NSERC) Funding

NSERC Collaborative Research and Development (CRD) is a longer term research or development project (up to 5 years), usually following a 4-6 month NSERC Engage funded research project with the same faculty partners for projects up to 5 years in length to solve a larger R&D issue. Projects are typically funded up to $200,000 per-year for up to 5 years, however funding above this amount can be requested from the NSERC Selection Committee.

Canadian Small Business Grants and Loans

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Written by

Matthew is a Business Funding Analyst with Mentor Works, working to connect businesses with Government funding initiatives. He graduated from the University of Waterloo with a BA focused on Business.

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