A Presentation to the New Brunswick Energy Policy Commission, Woodstock Public Consultation
by The Woodstock Sustainable Energy Group
February 15, 2011
Introduction
Thank you for the opportunity to make a presentation at this hearing. We previously prepared a 15 page submission which was provided to the Energy Policy Commission in January.
We will speak here to the core issues of our submission: electricity system planning for renewable energy infrastrucure and distributed generation, a systems approach to financing renewable energy infrastructure and distributed generation.
Electricity Generation as Infrastructure
Electricity systems got started with central generators producing and selling electricity as if it were a commodity.
New technology is changing this. It is now feasible to generate electricity on-site almost anywhere and it is becoming increasingly affordable to do so. These new technologies are dramatically altering the options for generating electricity and changing the way we think about electrical service.
System designers at the forefront of the industry now point out that electricity is not a commodity in the usual sense. Electricity is a system condition that exists everywhere simultaneously in a given network. A network can be as small as a house or as large as a regional grid. Electricity can now be generated at any scale and networks of various scales can be linked together providing flexibility, optimum efficiency, and security of service.
With the coming transition to distributed generation, the costing of electricity will shift from kilowatts to infrastructure. The cost of electrical service will be more and more embedded in infrastructure at the level of individual buildings and community and regional generation facilities.
Like many other innovative technologies that have progressively improved modern life, on-site, renewable electricity generation will surge to the forefront of desirable, affordable, and sought after options.
A Thirty Year View
What would the electricity system in New Brunswick look like after several decades of distributed generation development? Most residences, farms, and businesses would have their own generation facilities hooked up interactively with the grid. Some may be totally off the grid. On-site and community based back-up generation would consist of several types of renewable energy generating technologies to provide efficiency and reliability regardless of weather conditions.
Networks would interconnect the on-site generators to allow for the two-way flow of electricity. Backup generation facilities would be established at the community level. This high level of interactive connection, along with the use of efficiency monitoring and control, describes a fully developed “smart grid.”
A distributed generation system would be environmentally secure, fiscally sustainable, and a positive force for economic and social development in every community province wide.
In particular, we want to emphasize the employment creation factor of a distributed generation system. The scale of business development in energy technology fabrication, installation, and maintenance would be large enough to provide a new, long-term stabilizing platform for employment in New Brunswick. The expansion of this business and employment platform could occur in every region, thus helping to equalize income and living standards across the entire Province.
Most of the jobs created by moving toward a distributed generation system would be accessible to workers with construction and mechanical skills. The specific training needed could be readily provided by the Community College system.
As this sector expands, employment will expand across the Province. The jobs created will not require relocation or the importation of workers from away. They will be community and region based jobs.
Creating good, long term, community based jobs may be one of the most significant benefits for New Brunswick of beginning the transition to a distributed generation electricity system.
Taking A First Step
The Woodstock Sustainable Energy Group urges the Energy Policy Commission, the NB Power Commission, and the Provincial Government to take a critical first step toward securing New Brunswick’s energy future by opening a path for the development of distributed generation.
We urge that a policy path be established that opens the door for New Brunswickers to the best innovative, renewable energy technologies, even while the old centralised system continues to be used in the near term.
It is critical to take this first step now in order that momentum can gradually build into a full transition.
We acknowledge there is a tension between the old technology and the new, between the economics of centralised generation and the economics of distributed generation. This tension should not be seen as a conflict. It should be seen as an opportunity to facilitate the transition to an updated, highly innovative, and more efficient electricity infrastructure.
It is our fervent hope that by the year 2040 the people of New Brunswick will be the operators of a highly secure, intricately interconnected network of autonomous and community based generation facilities. We see small businesses in every community employing many workers in the renewable energy installation, service and fabrication industries. This future could result from steps taken now by the Energy Policy Commission, NB Power, and government. Such a future, we believe, will best serve our children, grandchildren and generations beyond.
Financing Renewable Engergy Infrastructure and Distributed Generation
A new approach for financing renewable energy infrastructure, currently known as Energy Financing Districts (EFDs), should be implemented in New Brunswick in order to help launch our province into the renewable energy future and lay the foundation of a smart green power grid. EFDs are a common sense combination of good public policy and private initiative.
The first step toward a distributed generation and smart grid system is for property owners to make their homes and commercial buildings more energy efficient and to install renewable energy generation features that can become part of the smart grid’s two-way flow. However, the upfront costs are a barrier. The EFD programme, effectively removes this barrier.
What is an Energy Financing District?
EFDs enable local governments to secure the financing needed to fund on-site distributed generation technology by issuing bonds or other methods. The financing is repaid over a set number of years through an extra “assessment” on the property tax bill of only those property owners who choose to participate in the program by installing energy efficiency improvements and/or renewable electricity generation to their facilities.
The financing is secured by the property, and, like taxes, is paid before other claims against the property in the case of foreclosure. There is little or no up-front cost to the property owner. If the property is sold before the end of the repayment period, the new owner inherits both the repayment obligation and the financed improvements.
Establishing an EFD programme in NB
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- The New Brunswick Government determines if the province as a whole should be an EFD or whether to permit individual municipalities or districts that financing authority. The Legislative Assembly then creates the appropriate legislation.
- Identify lead staff and advisors to set up the provincial programme and/or community level programs.
- Design the programme(s) to meet specified goals, with input from stakeholders. Identify energy efficiency and electricity generation projects that will qualify for funding. Much of this work has already been done as part of the existing Efficiency New Brunswick programme. Also, interest rates and payout periods must be determined.
- Secure funding through a bond issuance or other methods.
- Formally create the tax assessment district(s).
- Launch the programme(s).
Benefits of EFDs
EFDs offer many advantages to property owners such as reduced utility bills, a long repayment period, potentially lower interest rate, tax-deductible interest payments, and an easier application process than applying for a second mortgage or home equity loan. Unlike most other financing options, the repayment obligation transfers when the property is sold, allowing homeowners to invest in improvements that will pay back over a longer time frame than the owner may intend to retain the property.
For local governments, an EFD provides an opportunity to address climate change, to support residents’ environmentally friendly building improvements at little cost to the government, and to strengthen the local economy in energy efficiency retrofitting and in renewable energy technology installation. Because the loans are secured by the property, an EFD programme provides virtually no risk to the local government’s general fund.
The Importance of EFDs
With the introduction of EFDs, real energy security and resilience can emerge in each community laying the foundation for distributed generation and green grid system. A provincial energy policy that includes distributed generation and ,EFDs will assist communities to remain healthy even as fossil fuels become increasingly expensive and less accessible, and as the global economy becomes subject to increasing disruption.
The concept of EFDs should be seriously considered as part of a new energy policy for the province. It should be introduced as a unifying policy element, thoroughly articulated in a new policy document, and in promotional material.
The province wide implementation of EFDs could begin an historic transformation of electricity generation, distribution, and management in our province. EFDs would help get us on the road to a truly secure, self-sufficient, renewable energy system.
For further information on EFDs go to http://rael.berkeley.edu/node/683
Woodstock Sustainable Energy Group contact: Sam Arnold