Canada's clean tech growing despite decline in clean energy investment

Canada is maintaining strong growth and innovation in the clean technology sector, despite a recent decline in investment – Alberta being the notable exception – in clean energy projects.

Clean tech will continue to attract public and private investment as the country and the world shifts to a low-carbon economy, representatives in academia, government and the professional services industry told RE$EARCH MONEY.

“Clean energy is just one slice, an important one, of the clean technology opportunity,” says Stewart Elgie, professor of law and economics at University of Ottawa and chair of the Smart Prosperity Institute. “The clean tech opportunity exists all across the economy and it’s growing rapidly, and that’s going to continue for the next few decades.” Canada’s clean tech sector grew at about 10% per year from 2012 to 2016, outperforming the economy overall, Elgie notes.

“Year-on-year, you look at the numbers and the clean technology sector is thriving,” says George Kondopulos, partner with KPMG who leads the clean tech practice in the Greater Vancouver Area. However, he adds: “Alberta is one of the only places right now that’s still taking investment in renewable energy projects.”

Canadian investment in clean energy rose to US$3.3 billion in 2017, compared with US$2.3 billion the previous year, but is less than half the peak of US$7 billion in 2014, according to a report by Bloomberg New Energy Finance.

Elgie and Kondopulos say that downturn is due mainly to the end of some government incentives to ‘green’ provincial electrical grids. The federal Wind Power Productive Incentive Program ended in 2016. Also that year, Ontario, which rapidly phased out coal-fired power, ended its feed-in tariff program.

But the decline in clean energy investment is “temporary,” Elgie says. “There will be an increase again in the future as we need more electricity to feed electrically powered (and heated) homes and transportation.”

Alberta seeing robust investment in clean tech, clean energy

Alberta expects to attract about $10 billion in investment through its Renewable Electricity Program, to develop 5,000 megawatts of renewable electricity while creating more than 7,000 jobs, says Robert Savage, assistant deputy minister at Alberta’s Climate Change Office.

Alberta also is investing $1.4 billion over seven years through its Climate Leadership Plan in the Energy Innovation Fund, to support development of new technologies to reduce carbon emissions, upgrade facilities and reduce energy use. The fund includes $400 million in green loan guarantees to attract further investment, Savage says.

The government’s $50-million Oil Sands Innovation Challenge is focused on technologies that reduce greenhouse gas emissions and increase global competitiveness in the oilsands industry. The $35-million Industrial Efficiency Challenge offers large industrial emitters the opportunity to improve cost competitiveness and reduce emissions.

Along with installed wind energy capacity of 1,479 megawatts, Alberta now invests in more solar power programs than any province. They include the Residential and Commercial Solar Program, which has seen some 770 installations and about $4.9 million in rebates. The Municipal Solar Program has 50 projects completed or being built in 25 municipalities, resulting in $2.7 million in rebates.

“We need to be the best we can be in the energy systems we have today, as we invest in the energy systems of tomorrow,” Savage says.

Through Emissions Reduction Alberta’s (ERA) BEST Challenge, the province is investing $70 million in the biotechnology, electricity and sustainable transportation sectors.

The government’s investment in clean tech and clean energy “is central to the future of our economy,” Savage says. “It positions us well going forward, it saves Albertans dollars, it adds to GDP, it adds to economic growth and diversification of the economy.”

B.C. set to launch new Clean Growth Strategy

In British Columbia, the number of clean tech companies increased 35% to 273 from 2010 to 2016, and the amount of equity raised grew by 25% to Cdn$6 billion, according to a report by KMPG. “I don’t see that declining,” Kondopulos says.

The B.C. government is poised to launch a new Clean Growth Strategy this fall, focused on clean transportation, clean and efficient buildings, and a clean growth program for industry. The strategy will continue to advance the #BCTECH Strategy and also identify opportunities for renewable energy producers, says Tim Lesiuk, executive director of the Clean Growth Strategy in the Ministry of Environment & Climate Change Strategy.

Clean tech “has the potential to grow significantly” and is “a logical next step” in diversifying the province’s economy, Lesiuk says. “We want to make sure that it is linked to the traditional resource industries that we’ve got in B.C. . . . there’s a huge synergy there that we can advance.”

B.C. just increased building code requirements to progressively move buildings toward net-zero energy by 2032. The Clean Growth Strategy released this fall will include components such as retrofit programs, upgrades and energy fuel switching for existing buildings.

Lesiuk says the Clean Growth Strategy is building on B.C.’s energy and economic strengths and climate leadership. “We’re bringing those together to demonstrate how we can grow the economy and achieve our climate goals.”

Analysts expect the global market for clean tech to grow to $3 trillion by 2020. The innovation and technologies required, to enable Canada to achieve a 50-per-cent reduction in carbon emissions by 2050, “will be a massive economic opportunity,” Elgie says. “Government has a vital role to play in supporting the development and early commercialization of those technologies.”

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