Prince Edward Island Energy Strategy - Securing our Future: Energy Efficiency and Conservation - Government of Prince Edward ...

Prince Edward Island Energy Strategy - Securing our Future: Energy Efficiency and Conservation - Government of Prince Edward ...
P r i n c e E d w a rd Island Energy Strate gy
                                          S e c u r i n g o u r F u t ure:
               E n e r g y E ff i c i e n c y a n d C o n s e r v a tion

one island community                          one island future
Prince Edward Island Energy Strategy - Securing our Future: Energy Efficiency and Conservation - Government of Prince Edward ...
Securing our Future; PEI Environment and Energy Policy Series

        - Volume 1: Prince Edward Island Wind Energy

        - Volume 2: Prince Edward Island Energy Strategy

        - Volume 3: Prince Edward Island Climate Change Action Plan

        For more information contact:

        Department of Environment, Energy and Forestry
        Jones Building, 4th Floor
        11 Kent Street, Charlottetown, PE, C1A 7N8

        Telephone: (902) 368-4000

        Printed on Recycled Paper
Prince Edward Island Energy Strategy - Securing our Future: Energy Efficiency and Conservation - Government of Prince Edward ...
Prince Edward Island Energy Strategy - Securing our Future: Energy Efficiency and Conservation - Government of Prince Edward ...
Ta b l e o f C o n t e n t s

     1 . 0 I N T R O D U C TION                        6
          Background                                    6
          Energy Strategy V ision                       6
          Energy Strategy Objectives                    7

     2 . 0 E N E R G Y O VER VIEW                      8
          World Energy Markets                          8
          Canadian Context                              8
          Regional Perspective                          8
          PEI’s Current Energy Profile                  9
          Energy Prices and Trends                      9
          Prince Edward Island’s Energy Future         10
          By 2013                                      10
          By 2018                                      11

          Overview                                     12
          Why Energy Efficiency?                       13
          The Potential for Energy Efficiency on PEI   13
          Office of Energy Efficiency                  14
          Energy Efficiency Challenges                 14
          Appliances and Equipment                     14
          Demand Side Management                       15
          Demand Side Resources                        15
          Least Cost Procurement                       15
          Building Code and Energy Standards           16
          Space Heating Efficiency                     17
          Transportation Efficiency                    18
          Gover nment Leadership                       20
          Energy Efficiency Advisory Committee         20
          Public Outreach and Education                20
Prince Edward Island Energy Strategy - Securing our Future: Energy Efficiency and Conservation - Government of Prince Edward ...
Ta b l e o f C o n t e n t s

     4 . 0 R E N E WA B L E ENERGY                         22
         Overview                                          22
         W ind                                             22
         Small W ind Developments in PEI                   24
         Role of Gover nment in Future W ind Development   24
         Solar Technologies                                24
         Earth Energy                                      25

     5.0 BIOFUELS                                          26
         Overview                                          26
         The Biofuel Potential in Prince Edward Island     26
         Inter-Departmental Biofuels Committee (IDBC)      27
         Biomass                                           27
         Biomass Challenges                                28
         Liquid Biofuels                                   28
         Pure Plant Oils                                   29
         Biodiesel                                         29
         Ethanol                                           29
         Liquid Biofuel Challenges                         30
         Renewable Fuel Standard                           30
         Biogas                                            31

     6 . 0 E C O N O M I C DEVELOPMENT                     32
         Overview                                          32
         Green Technology Cluster                          33
         Community-Based Renewable Energy Projects         34

     7 . 0 PAT H F O R WARD                                35
Prince Edward Island Energy Strategy - Securing our Future: Energy Efficiency and Conservation - Government of Prince Edward ...
Prince    Edward        I s l a n d   E n e r g y   S t r a t e g y
    In t ro d u c t i o n

           1 . 0 	INTRODUCTION

                            Background                                        The outcome of this consultative approach
                                                                              to the Island’s energy policy development was
                            The Province of Prince Edward Island has          a list of 19 action items for the government
                            developed a North American, if not global,        to pursue. Today, nearly all of these items
                            reputation in the development of renewable        have been accomplished with significant
                            energy. PEI has always been viewed as an          advancements made towards the incorpora-
                            innovator in developing, demonstrating and        tion of renewable energy (wind power) into the
                            deploying renewable energy systems with due       provincial energy mix. With the increasing costs
                            regard for the environment. PEI has a strong      of fossil fuel and the significant impact these
                            reputation as a leader in the development of      costs hare having on all Islanders, the timing
                            its wind resources with the highest per capita    for a renewed vision and Provincial Energy
                            penetration of this renewable energy in its       Strategy with specific actions is now.
                            provincial electricity portfolio. PEI has been
                            a leader in the use of biomass resources          Fossil fuel energy use is having dramatic con-
                            converting waste into thermal energy to heat      sequences for global warming and severely
                            municipal buildings. Despite these and other      impacting the environment. The Government
                            accomplishments, the Province does however        of Prince Edward Island has, in parallel with
                            continue to rely heavily on off-island sources    this new Energy Strategy, developed a Climate
                            of imported fossil fuel-based energy. Rising      Change Strategy that will help serve to protect
                            energy costs are having a negative impact on      the Island’s environment and lead to a more
                            all Islanders, businesses and institutions and    sustainable and economically robust future.
                            new measures must be put in place now to
                            secure the Island’s future prosperity.
                                                                              New Energy Strategy
                            In June 2004, the Prince Edward Island
                            Department of Environment and Energy              Maximizing the potential for the development
                            released its Energy Framework and Renewable       of the Island’s indigenous renewable energy
                            Energy Strategy. Integral to the production of    assets and ensuring they are developed wisely
                            this document was input received from             requires long-term planning. The Provincial
                            interested stakeholders and the general public.   Government has developed a renewed Provin-

Prince Edward Island Energy Strategy - Securing our Future: Energy Efficiency and Conservation - Government of Prince Edward ...
P r i n c e   E d w a rd   I s l a n d   E n e r g y   Strategy
                                                                                                             Intro d u c t i o n


                                                    To ensure a prosperous future for residents and
                                                    businesses of Prince Edward Island based on the
cial Energy Strategy that will build and expand     objectives of energy security, environmental
on the success of the 2004 Strategy. In devel-      sustainability and economic development.
oping this new five and ten year energy vision
for PEI, a discussion document was released
in April of this year to stimulate and solicit
feedback from the general public. Input from        Energy Strategy
interested stakeholders was solicited and a
series of public meetings were conducted
across the Island in May. This new Strategy
                                                    To support this vision, the Province of Prince
helps identify the role of the PEI Government
                                                    Edward Island has developed clear, long-term
in implementing energy efficiency and con-
                                                    and comprehensive objectives (5 and 10 years)
servation measures, promoting renewable
                                                    with specific Government Actions. Emphasis
energy and the use of biofuels, encouraging
                                                    will be placed on developing a flexible policy
new economic and development opportunities,
                                                    framework that will provide the best options
and raising public awareness and education.
                                                    for maximizing our energy independence,
This Strategy also outlines key actions for
                                                    becoming environmentally sustainable and
Government in creating a flexible energy
                                                    contributing to future economic development
policy framework that is capable of adapting and
reacting to market and technological chang-
es and protecting the environment. While the
above reflects the role of government, each and           Energy Se curity
every Islander has a responsibility and role to
play in becoming more sensitive to, and aware                  • Greater Self Sufficiency
of our energy and environmental future here in                 • Improved Price Stability
Prince Edward Island. The ultimate success of                     • Diversity of Supply
this Strategy will be dependent on the actions
of Islanders and our ability to make fundamental
changes in our attitude, behavior and approach              Envir onmental
to the use of energy resources.
                                                            Sustain ab ility
                                                            • Increased Energy Efficiency
E n e rg y Strategy Vision                                   and Reduced Consumption
                                                          • Renewable Energy Development
As an Island community, PEI has unique needs         • Reduced GHG Emissions and Other Polluants
and challenges in the field of energy. The Vision
of this new Energy Strategy is to address the
dangerous dependence on imported oil, which
threatens the future social, economic and envi-
ronmental prosperity of the Island, its residents
                                                              d evelopment
and businesses. PEI’s Leaders are committed               • Support Growth of Local Industries
to pursuing a self-sustaining energy system                   and New Job Opportunities
based on achievements in energy efficiency,                    • Research, Development
conservation and renewable energy develop-               & Demonstration of New Technologies
                                                       • Strengthen and Diversify Local Economy

Prince Edward Island Energy Strategy - Securing our Future: Energy Efficiency and Conservation - Government of Prince Edward ...
Prince   Edward      I s l a n d   E n e r g y   S t r a t e g y
    E n e rg y   O v e r v iew

          2 . 0 	ENER G Y O V ER V IE W

                        World Energy M arkets                              Regional Perspective

                        World energy markets are facing several            Through the Council of Atlantic Premiers (CAP),
                        unfavorable conditions: increasing demand,         the Atlantic Energy Ministers’ Forum (AEMF)
                        dwindling supply, and rising costs. As econo-      and the Conference of New England Gover-
                        mies develop and populations grow, particularly    nors and Eastern Canadian Premiers (NEG/
                        in countries such as China and India, energy       ECP), the Atlantic Provinces have been working
                        supply is struggling to keep pace with rising      together on energy issues for several years.
                        demand. This, along with global terrorism,         Most recently, in January 2008, the Atlantic
                        instability in the Middle East, geopolitical       Premiers released the Atlantic Energy Frame-
                        pressures, and commodity speculation, has          work for Collaboration. The document highlights
                        resulted in rising energy prices. Large energy     three priority areas for regional collaboration:
                        consumers such as Canada are especially              • Enhancing energy efficiency programming
                        vulnerable to the effects of rising energy costs
                        and decreasing supply.                               • Increasing renewable energy development
                                                                             • Assessing biofuel potential

                        Canadian Context                                   The Atlantic Energy Ministers will guide the
                                                                           implementation of this framework with a prog-
                        Energy is an important part of the Canadian        ress report expected later in 2008. The NEG/
                        economy in terms of both production and            ECP have expressed increased emphasis on
                        consumption. Canada is one of the largest per      energy in recent years and in June of 2007
                        capita users of energy in the world and ranks      adopted a series of recommendations for
                        second in the world in terms of oil reserves,      the promotion and development of energy
                        behind Saudi Arabia. Like other countries          efficiency, energy trade, renewable resources,
                        around the world, Canada is experiencing           and improved transportation initiatives.
                        a number of energy challenges including
                        high and volatile energy prices, decreasing
                        conventional reserves, the need to diversify
                        supply, an ageing and constrained delivery
                        infrastructure, and growing environmental

Prince Edward Island Energy Strategy - Securing our Future: Energy Efficiency and Conservation - Government of Prince Edward ...
P r i n c e     E d w a rd     I s l a n d       E n e r g y     Strategy
                                                                                                                                        E nergy          O v e r v i e w

PEI’s Current Energy Profile                                                Ten percent of energy in PEI is supplied by
                                                                            biomass, which includes fuel wood, sawmill
Without a local supply of natural gas and oil                               residue and municipal waste. PEI Energy
resources, Prince Edward Island is heavily                                  Systems in Charlottetown uses municipal waste
reliant on imported sources of energy. Imported                             and wood biomass to supply thermal energy to
oil accounts for 76 percent of PEI’s total energy                           commercial, residential and institutional build-
supply, with 46 percent of our dollars spent on                             ings in the city. Developed in the 1980s and
transportation fuels and a further 30 percent on                            early 1990s by the PEI Energy Corporation,
petroleum-based heating fuels. The economic                                 the Charlottetown District Heating System is
impacts of the Province’s reliance on imported                              another example of the Province of PEI leading
energy are significant considering that roughly                             in the development of renewable energy.
half a billion dollars is spent on off-Island
energy resources annually, and this continues
to climb.                                                                   Energy Prices and Trends

The current energy mix (Fig 1.) in Prince Edward                            As shown in Figure 3, energy prices have steadi-
Island consists of petroleum products, electric-                            ly increased in recent years. Electricity prices
ity and biomass.                                                            have increased over 60 percent from 2000 to
                                                                            2008 while gasoline prices and home heating
                     Figure 1:                                              costs increased 101 percent and 172 percent,
      Prince Edward Island Current Energy Mix                               respectively, over this time period. Much of
                                                                            the increase in fuel costs can be attributed to
                                    Petroleum Product
  10%                                                                       increasing oil prices, which has experienced
  14%                               Electricity                             a near seven fold increase over this time
                                                                            period, and a combination of increasing demand
                                                                            and decreasing supply of conventional energy
                                                                            resources. While the price of oil has been
                       Figure 2:                                            subject to recent fluctuations and its future
           PEI Electricity Sales Breakdown                                  prices cannot be fully ascertained, many
                                                                            experts suggest that price volatility will become
               1%                   NB Syste                                the norm over the longer term.
                  49%                                                                            Figure 3:
     18%                            Wind                                      Prince Edward Island Energy Costs, 2000 – 2008
        19%                         Dalhousie                         155                                                                                           17
                                    MECL                              135                                                                                           16

Fourteen percent of the Island’s energy mix                           105                                                                                           14
is electricity. Wind resources meet approxi-                           95
                                                                       85                                                                                           13
mately 18 percent of the province’s electricity
supply with the remainder tied primarily to oil                        65
and nuclear power supplied by the New Bruns-                           55                                                                                           11
wick Power Corporation and imported via two                            45
                                                                       35                                                                                           10
submarine cables connected to the mainland.
                                                                              2000      2001   2002     2003      2004      2005       2006      2007    2008

                                                                             Gasoline Prices          Home Heating                 Oil Diesel            Electricity Prices

Prince Edward Island Energy Strategy - Securing our Future: Energy Efficiency and Conservation - Government of Prince Edward ...
Prince   Edward      I s l a n d   E n e r g y   S t r a t e g y
     E n e rg y   O v e r v iew

                         With the price of crude oil peaking near $150           By 2013
                         US/barrel, the need to aggressively pursue
                         alternatives to traditional fossil fuel based           Within five years of applying significant resourc-
                         sources of energy has never been more                   es and policies to the development of the ener-
                         apparent for PEI. Decreasing the Island’s               gy sector, the Province of Prince Edward Island
                         dependency on imported fossil fuel based                will be less dependent on imported energy and
                         energy sources will help to mitigate the effect         will be well on the way to a sustainable energy
                         of rising prices, improve the diversity of supply,      future. The successful implementation of new
                         and increase PEI’s future energy security.              programs and initiatives in energy efficiency
                         Pursuing and promoting energy efficiency,               should lead to a 10 percent increase in effi-
                         conservation, renewable energy development              ciency across all sectors. A goal has been set
                         including additional wind development and               to bring a total of 500 MW of wind power on
                         utilization of biofuels, will provide a hedge           line by 2013, of which 100 MW will be for
                         against rising energy costs and maintain the            domestic use. A renewable fuel standard for
                         Island’s reputation as a leader in alternative          gasoline (E5) and light fuel oil and diesel fuel
                         energy development.                                     (B10 or B10 renewable equivalent) would also
                                                                                 be introduced. The environmental impacts of
                                                                                 renewable fuel development will be addressed
                         Prince Edward Island’s                                  with a concurrent low carbon fuel standard.
                         Energy Future                                           Developing the Province’s abundant biomass
                                                                                 resources should result in a 50 percent increase
                         Achieving the objectives of energy security             in biomass use and lead to 10 MW of new
                         and environmental sustainability while creating         electrical generation capacity for Island
                         economic development opportunities will                 utilities.
                         require a variety of new policies, programs
                         and initiatives directed at public education and
                         awareness, energy efficiency and renewable                                        Figure 4:
                         energy development. The following Sections of                               PEI Energy Mix 2013
                         this Energy Strategy outline different courses
                         of Government Action that will be undertaken.
                         The execution of these actions should lead to a                    Renewable            10%
                         number of anticipated outcomes.                                     Electricity        Energy
                                                                                         (Wind & Biomass)      Efficiency
                                                                              and Oil-fired

                                                                                          15%                           59%
                                                                                        Biomass                       Products

                                                                                        Liquid Biofuels

P r i n c e     E d w a rd       I s l a n d   E n e r g y   Strategy
                                                                                                                    E nergy         O v e r v i e w

By 2018                                                     ing of policies and programs across all sectors.
                                                            Incremental wind developments will also be
All indications suggest that the costs for                  possible, most likely through community-based
fossil fuel-based energy sources will contin-               projects, and will be determined by domestic
ue to climb. It is difficult to predict how high            load growth. Renewable fuel standards could
energy prices will be in ten years. As such,                be increased to help achieve the Island’s
the Provincial Government will continue to                  environmental goals and GHG reductions (E10
aggressively pursue opportunities to increase               and B20 or renewable equivalent). Further
the efficient use of PEI’s energy resources. It is          developments in the effective utilization or
expected that an additional 10 percent increase             biomass resources could result in a 25 percent
in overall efficiency is an attainable goal and             increase in use and an additional 10 MW of
will be achieved through the constant updat-                electrical generation capacity.

                                                                                  Figure 5:
                                                                            PEI Energy Mix 2018

                                            Renewable                       20%
                                             Electricity                  Energy
                                         (Wind & Biomass)                Efficiency                    42%
                                               5%                                                     Products
                                           and Oil-fired              20%
                                            Electricity              Biomass               10%

Prince   Edward     I s l a n d   E n e r g y   S t r a t e g y
     E n e rg y   Eff i c i ency       and    Conservation

           3 . 0 	ENER G Y EFFICIENCY
           	AND CONSER V ATION
                         Overview                                             Improving the efficiency in the way energy is
                                                                              consumed on the Island will have direct ben-
                         Energy efficiency refers to programs, initiatives,   efits to individuals, businesses, governments,
                         products, technologies and systems with the          institutions and the environment. Energy ef-
                         goal: to reduce the amount of electricity and/       ficiency covers a broad spectrum of improve-
                         or fuel required to perform the same job or          ments in:
                         better than conventional means. Energy                 • Building practices:
                         efficiency is considered to be the least costly,         residential, commercial and institutional
                         most reliable, locally abundant energy resource        • Energy-saving appliances and equipment
                         with the greatest potential to reduce green-
                         house gas (GHG) emissions and protect the              • Lighting & space heating
                         environment. Energy efficiency can generally           • Industrial & agricultural processes
                         be procured cheaper than producing or                  • Transportation
                         purchasing energy. For these reasons, energy
                         efficiency will be a key component in PEI’s          There are extensive opportunities in every
                         transition to a sustainable low-carbon energy        community across the Island to develop our
                         future. Conservation of energy is equally impor-     energy efficiency resources. During the public
                         tant and this will involve changing our behaviors    consultations, it was expressed by most
                         and using less energy. We all have a role to play    participants that individuals, businesses,
                         and must do our part to protect the environ-         institutions, government and utilities all need
                         ment and decrease our reliance on fossil fuels.      to devote more attention and support to fully
                                                                              exploit these opportunities if PEI is to achieve
                                                                              a more sustainable and more cost-effective
                                                                              energy portfolio. With the ever-increasing
                                                                              cost of fossil fuels, energy conservation must
                                                                              become a priority for all Islanders.

                         T h e l e a s t c o s t l y energy
                                                    i s the energy we don’t use.

P r i n c e   E d w a rd    I s l a n d   E n e r g y   Strategy
                                                                             E nergy         Efficiency              and          Cons e r v a t i o n

        W h y E n ergy Efficiency?                                be attained through energy efficiency initiatives,
                                                                  was the primary objective of this study. By
        The potential for energy savings through                  2017, if implemented, the proposed programs
        increased energy efficiency and conservation              in the Residential and C&I sectors would reduce
        have far-reaching benefits for all Islanders and          forecasted electricity use by 11 percent and

        the environment:                                          non-electric use by 8 percent. This translates
                                                                  into a cost savings of $148 million over the
          • Reduces residential, commercial and institutional
            energy bills, and in particular, reduces the impact   ten-year implementation time frame and would
            of high energy prices on low income families and      reduce GHG emissions by nearly 132,000
            individuals                                           tonnes by 2017. This study also suggests that
          • Reduces environmental footprint of our                investing in cost-effective energy efficiency
            communities and Province- lowers emissions            initiatives could offset all forecasted electricity
            of GHGs and other pollutants associated with          load growth, over the next decade. VEIC also
            energy production and consumption                     noted that in 2017, the annual peak demand
          • Stimulates the PEI economy by reducing outflow        savings would be equal to 17.8 MW, roughly
            of consumer energy dollars                            8% below 2007 peak demand. This translates
          • Increases local economic development                  to nearly $1 million in capacity savings for the
            opportunities and employment creation                 utility and its ratepayers.

          • Enhances the reliability of our energy system
                                                                  There is considerable cost-effective energy
          • Improves energy supply security and helps             savings potential that could be pursued on PEI.
            mitigate fluctuating energy prices                    Several programs have been recommended for
          • Avoids or defers capital expenditures for upgrades    consideration in PEI and developed with the
            to the electrical transmission and distribution       following considerations:
                                                                    • Promote the benefits of energy efficiency
                                                                      to all Islanders

        T h e P o t ential for Energy                               • Provide opportunity for all residential customers
                                                                      to participate
        E ff i c i e n cy on PEI
                                                                    • Minimize barriers to participation for low income
        In 2008, PEI’s Department of Energy, Environ-
        ment and Forestry released a study by the                   • Include all fuels initiative- electricity, transportation
        Vermont Energy Investment Corporation (VEIC)                  and home heating fuels
        that examined the potential of cost-effective               • Strengthen relationships with on-Island product
        energy efficiency initiatives that could substan-             retailers, builders and contractors
        tially reduce energy use and lower greenhouse
        gas emissions in PEI by 2017. The study exam-             Developing comprehensive programs to ad-
        ined the potential in the following sectors:              dress the different market and non-market bar-
                                                                  riers to adopting energy efficient products and
          • Residential
                                                                  services has led to the formation of a dedicated
          • Commercial and Institutional (C&I)                    agency for program delivery with regular review
          • Transportation                                        cycles to quantify the resource and update its
                                                                  contribution. Dedicated agencies are able to
        The analysis of achievable potential, defined as          provide a “one-stop-shop” for energy efficiency
        the amount of energy cost savings that could              information and programs.

Prince   Edward     I s l a n d   E n e r g y   S t r a t e g y
     E n e rg y   Eff i c i ency       and    Conservation

                         Office of Energy Efficiency                                   • The lack of energy efficiency information available
                                                                                         to individuals and businesses
                         The Office of Energy Efficiency (OEE) was                     • The availability of energy efficient products
                         established in early 2008 to assist Islanders in                and services in the PEI marketplace
                         reducing their energy consumption and mini-                   • The lack of experienced and qualified trades
                         mize the environmental footprint of our daily                   persons and professionals
                                                                                     Despite these apparent obstacles, it has been
                         The mandate of the Office of Energy Efficiency              demonstrated in many other leading North
                         Program is to provide Islanders with advice and             American jurisdictions that to save a unit
                         programs that will promote sustainable energy               of energy is always more cost effective than
                         use and reinforce the importance of sound                   purchasing that same unit of energy. Partici-
                         energy management for the economic, so-                     pants at the public meetings easily understood
                         cial, and environmental well-being of Island                this concept and there was significant support
                         residents and businesses.                                   expressed for Government to devote additional
                                                                                     resources towards energy efficiency programs
                         The Office of Energy Efficiency is also a one-              and initiatives in PEI.
                         stop center for provincial and federal energy
                         efficiency programs and services. In addition
                         to a number of current and recently announced               Appliances and Equipment
                         residential programs, the OEE and the Depart-
                         ment of Environment, Energy and Forestry are                The use of energy efficient appliances and
                         developing new programs to cover the C&I and                equipment saves money and can help save the
                         transportation sectors.                                     environment. Using less energy by selecting
                                                                                     energy efficient products means burning fewer
                                                                                     fossil fuels and therefore reducing GHG emis-
                         Energy Efficiency Challenges                                sions. By choosing the appliance or equipment
                                                                                     with the highest rating, Islanders can reduce
                         While there are clear benefits to pursuing en-              their energy consumption and help curb the
                         ergy efficiency and conservation, achieving                 effects of climate change. Energy rating labels
                         these gains has its challenges. Energy is con-              and minimum energy performance standards
                         sumed to produce a huge variety of products                 for domestic appliances and industrial and
                         and services, heat homes and businesses,                    commercial equipment help the consumer in
                         generate electricity, and power the transporta-             making a more environmentally and cost effec-
                         tion sector. Therefore all new energy efficiency            tive decision when making a purchase for new,
                         initiatives will attempt to address some of these           or replacement products.
                           • The required coordination among diverse
                             stakeholders- energy suppliers, utilities,              Government Action
                             governments, regulators, builders, equipment
                             suppliers, and consumers (individuals and businesses)
                                                                                     The Provincial Government, in consultation
                           • The associated costs for implementing energy            with the OEE, will adopt minimum energy
                             efficient products and services
                                                                                     efficiency standards for appliances, equip-
                                                                                     ment and other energy consuming devices.

P r i n c e   E d w a rd   I s l a n d   E n e r g y   Strategy
                                                                E nergy        Efficiency             and       Cons e r v a t i o n

Demand Side Management                                the utility for the government department or
                                                      agency responsible for the delivery of energy
The 2004 Renewable Energy Act required                efficiency programs. It provides a consistent
Maritime Electric Company, Ltd (MECL) to file         source of funds to support energy efficiency.
an electrical energy efficiency plan and demand       Generally speaking, there was relative opposi-
side management strategy with the Island              tion expressed during the public meetings in re-
Regulatory and Appeals Commission (IRAC).             gards to the notion of implementing an SBC in
Demand Side Management (DSM) refers to                PEI. For a smaller population, the introduction of
the planning, implementation, and monitoring          an SBC may establish an artificial funding ceil-
of utility activities designed to encourage           ing and may limit the reach and effectiveness
consumers to modify patterns of electricity           of energy efficiency programming. To overcome
usage, including the time of day and level of         this potential barrier and to institutionalize ener-
electricity demand.                                   gy efficiency in a utility’s resource procurement
                                                      process, a least-cost procurement mandate will
MECL’s Demand Side Management and                     be evaluated and pursued as an alternative.
Energy Conservation Plan was first filed in 2006
and consists of six programs with elements
designed to address barriers limiting market          Least Cost Procurement
transformation, public education and aware-
ness, community-based initiatives, energy             The concept of least cost procurement was in-
efficient product retailers, and research and         cluded in recommendations adopted in Resolu-
evaluation of program effectiveness.                  tion 31-1 by the Governors and Premiers at the
                                                      2007 Conference of New England Governors
                                                      and Eastern Canadian Premiers (NEG-ECP):
Demand Side Resources
                                                      The Governors and Premiers instruct regulators and
Demand side resources such as energy effi-            crown corporations to prioritize energy efficiency
ciency are widely viewed as reliable, low-cost        through planning and acquisition processes that let
energy resources. Repeatedly during the public        efficiency compete with supply and capacity and ensure
consultations, there were comments and sug-           that cost-effective and practical energy efficiency
gestions directed towards government to re-           opportunities that are cheaper than prices bid for
quire utilities to increase investment in energy      conventional supply or capacity are procured.
efficiency and demand side resource programs
for all customers. There was an expressed de-         A least cost procurement mandate establishes
sire to see government mandate the utilities to       a minimum target for electric energy efficiency
procure all cost-effective demand side resourc-       savings that can be met through a flexible re-
es and energy efficiency when proven cheaper          source planning process aimed at securing
than conventional supply options. It was also         all cost-effective electric efficiency resources.
noted that if energy efficiency competes with         Once a budget is established to capture all cost-
traditional supply options to meet demand then        effective energy efficiency, typically through an
these programs should be ratepayer funded.            open stakeholder process, the corresponding
                                                      amount can be assessed in utility rates to fund
System Benefit Charges (SBC) are one way to           the efficiency programs. The utilities could ad-
fund efficiency programs. A small fee is added        minister the energy efficiency programs and/or
to consumers’ electricity bills, it is collected by   a portion of the monies could be placed in a

Prince   Edward      I s l a n d   E n e r g y   S t r a t e g y
     E n e rg y   Eff i c i ency        and    Conservation

                         dedicated fund to be used by the provincial             For electric energy efficiency programs to be
                         Office of Energy Efficiency. Regardless of              successful, it is imperative that they have the
                         administration, it will be critical to develop an       full cooperation from the utility. In order to align
                         accountability framework to ensure that the             utility incentives with the goals of this least-cost
                         funds are spent in an effective manner.                 planning and procurement process, the prov-
                                                                                 ince will consider reforms to the way utilities
                         An essential underlying element of all of the           are compensated for the services they provide.
                         above components for successful electric                Unless utility profits are decoupled from their
                         energy efficiency policies, programming and             volumetric sales, successful efficiency pro-
                         planning is a consistent and accurate means             grams, and any provincial policy that reduces
                         of measuring and verifying the realized savings         electricity use, will hurt utilities. If customers are
                         from the activities designed to increase energy         using less energy, utilities’ profits will decrease.
                         efficiency. The absence of establishing clear           The implementation of a decoupling mecha-
                         and accurate measurement and verification               nism may be helpful in aligning utility incen-
                         protocols has been the subject of much criti-           tives with the opportunity to increase energy
                         cism in energy efficiency initiatives. The utilities,   efficiency investment and lower customers’ bills.
                         analysts and policy makers must have confi-             This will be further explored in consultation
                         dence in predicting the energy cost savings             between government and the individual utilities.
                         associated with their programs and initiatives
                         if energy efficiency is to be recognized as an
                         energy resource and compete with convention-            Building Code
                         al supply options.                                      and Energy Standards

                                                                                 Prince Edward Island is one of only two juris-
                                                                                 dictions in Canada without a province-wide
                                                                                 building code. The municipalities of Charlotte-
           G o v e r n ment Actions                                              town and Summerside do require new build-
                                                                                 ings to comply with the National Building Code,
           The Provincial Government will establish a planning                   but they do not attach an energy standard to it.
           process in consultation with Island utilities and IRAC                The implementation of a province-wide build-
           that prioritizes energy efficiency and encourages local               ing and energy code would ensure that all new
           utilities to procure all cost-effective energy efficiency,            buildings meet minimum standards for energy
           through investment in electricity energy efficiency                   efficiency. A region’s building stock accounts
           programs, when it is cheaper than conventional supply                 for a tremendous amount of energy consump-
           or capacity resources.                                                tion and greenhouse gas emissions. A large
                                                                                 percentage of PEI’s current building stock is old
           The Provincial Government will provide the legislative                and inefficient and contributes significantly to
           and regulatory framework that will encourage utilities                the Island’s energy appetite and environmental
           to implement a least cost procurement mechanism.                      footprint. In each of the Public Meetings con-
                                                                                 ducted across the province, a recurrent theme
                                                                                 emerged with Islanders appealing to govern-
                                                                                 ment to consider the adoption of a Provincial
                                                                                 Building Code with Energy Standards. Building
                                                                                 to a high standard of energy efficiency during
                                                                                 initial construction will help ensure that the

P r i n c e   E d w a rd   I s l a n d   E n e r g y   Strategy
                                                              E nergy        Efficiency             and       Cons e r v a t i o n

province is not adding to the number of inef-
ficient buildings that make up the current stock.   There is a tremendous opportunity for PEI to re-
High efficiency buildings experience reduced        duce energy consumption and GHG emissions
operating costs that will translate into savings    associated with its residential and commercial
over the entire lifespan of the building and help   buildings through the implementation of a Pro-
mitigate the effects of future energy price in-     vincial Building Code with Energy Standards. It
creases.                                            was pointed out by several participants during
                                                    the Consultations that this will require a coordi-
                                                    nated and comprehensive effort to educate the
G o v e r n ment Actions                            public, the building community, the appropriate
                                                    municipal and provincial divisions, train and
The Provincial Government will be adopting          hire inspectors, as well as to implement sup-
energy codes and standards as part of               porting administration and policing. It was also
the process towards the adoption of the             felt that the introduction of a provincial building
National Building Code throughout the               code with energy standard would provide addi-
province. The code, with some exemptions            tional opportunities and build capacity in PEI’s
for small buildings, will provide unified           trades sector and stimulate local economic de-
building standards across the province,             velopment.
which will compliment standards for
energy efficiency in buildings.                     The Consumers Council of Canada recently re-
                                                    ported that 86% of those surveyed supported
Building standards and an implementation            mandatory levels of energy efficiency for homes
timeline will be set with escalating targets        and responded that energy efficiency is an im-
for energy efficiency over the next 5-10            portant factor in their decision to purchase a
years.                                              new home. In light of these findings and vola-
                                                    tile energy prices, it is timely for the provincial
Administration, inspection, education and           Government to be pursuing the introduction of
ensuring compliance will be addressed with          energy efficient building code policies.
the roll out of the new Provincial Building
Code and Energy Standards.
                                                    Space Heating Efficiency
The Provincial Government will consider
mandating the energy consumption                    Next to the transportation sector, space heat-
labeling of houses and buildings with               ing is the largest user of energy in the province,
special recognition of best practice and            consuming approximately 30 percent of our
best-in-class.                                      total energy requirements. Improvements to
                                                    existing homes and buildings to reduce energy
The Provincial Government, through the              consumption for space heating include:
OEE, will continue to develop programs
                                                      • Improved efficiency of the heating source
for increasing energy efficiency for                    (furnaces, boilers, etc.)
Islanders that include direct incentives,
loan programs, grants and rebates.                    • Improved efficiency of the home or building
                                                        structure (insulation, windows, etc.)

Prince   Edward     I s l a n d   E n e r g y   S t r a t e g y
     E n e rg y   Eff i c i ency       and    Conservation

                         It is important for Island residents and busi-        meets these requirements. The idea of imple-
                         nesses to understand the most cost-effective          menting California-like vehicle emission stan-
                         approach to increase space heating efficiency.        dards was also suggested.
                         Increasing the efficiency of the heating source
                         does not necessarily lead to energy savings           The Provincial Government operates hun-
                         if the structure is drafty and poorly insulated.      dreds of vehicles in their fleet and purchas-
                         Greater savings can be achieved by reducing           ing more fuel-efficient vehicles has been part
                         the energy demand of the building and main-           of their strategy to reduce fuel costs and cut
                         taining the existing heating system i.e. seal-        greenhouse gas emissions for the past several
                         ing drafts, adding more insulation, replacing         years. The Government’s own Transportation
                         inefficient systems and equipment, etc. Resi-         Efficiency Standard requires that fuel efficiency
                         dential and commercial energy audits, per-            be part of vehicle procurement considerations
                         formed by qualified professionals, can provide        for all future leased or purchased vehicles for
                         valuable information to consumers on the best and     public use.
                         most cost-effective solutions for space heating
                         efficiency. For more information on these             Public transportation, in some jurisdictions, has
                         audits and associated programs, please refer          been shown to be an effective means to improve
                         to the Office of Energy Efficiency website            air quality, relieve traffic congestion, and reduce
                                            fuel consumption and greenhouse gas emis-
                                                                               sions. A public transit system was launched in
                                                                               Charlottetown in 2005 and currently operates
                         Transportation Efficiency                             seven different routes across the city with plans
                                                                               to expand into Stratford this year. Two hydro-
                         Historically, Prince Edward Island has been           gen-powered buses were added to the fleet in
                         more dependent on automobiles than any other          2007. Several submissions in response to the
                         province. The Island has the most extensive           Public meetings suggested the need for a sus-
                         network of roads and highways, limited urban          tainable province-wide public transportation
                         transit, an automobile dependent tourism indus-       system. It was purported that such as system
                         try and a heavy reliance on the trucking industry     would further reduce greenhouse gas emissions
                         to move goods in, out and around the province.        from personal vehicles, promote economic de-
                         As such, the transportation sector consumes           velopment as well as address issues of social
                         43 percent of our energy and is the single            equity and isolation.
                         largest source of greenhouse gas emissions.
                         Over 80 percent of registered vehicles on the         Invariably, transit systems are a highly subsi-
                         road in PEI are considered light duty vehicles.       dized public service. The costs of implementa-
                         In addition, the number of annual kilometers          tion and ongoing annual operation can be signif-
                         traveled has increased by nearly 20 percent           icant. In the absence of a critical mass of transit
                         since 1990.                                           users in PEI and relevant market research data
                                                                               concerning the number of daily users, it is dif-
                         The Provincial Government introduced a hybrid         ficult to quantify what effect, if any, an expand-
                         tax incentive in 2004 to encourage the purchase       ed transit system would have on meeting the
                         of hybrid vehicles. Participants in May’s Public      Island’s energy and environmental objectives.
                         Meetings encouraged the Government of PEI             The results of the VEIC analysis suggest that
                         not to limit this incentive to hybrids only, but to   from an energy and environmental perspective,
                         set minimum fuel economy standards and ex-            expansion of the public transit system would
                         pand the program to include any vehicle that          not have a positive impact on meeting GHG or

P r i n c e   E d w a rd   I s l a n d   E n e r g y   Strategy
                                                             E nergy       Efficiency             and       Cons e r v a t i o n

other environmental goals. This does not how-       Several suggestions also emerged from the
ever undermine the social issues and argument       public around the need to implement smart
surrounding an expanded system. As time goes        growth policies in municipal land-use planning.
on and energy prices continue to rise, more         Land use decisions can significantly impact
Islanders may opt for public transportation at      GHG emissions and promote more sustainable
which time the overall environmental impacts        transportation practices. For example, new
may improve.                                        developments that are pedestrian-oriented,
                                                    transit accessible and designed with active
According to the VEIC Study on the potential        transportation in mind will encourage resi-
for energy efficiency in the transportation         dents to make more environmentally friendly
sector in PEI, there are many initiatives that      decisions about their transportation needs.
could be implemented, and are currently under       This does not only impact transportation, care-
consideration by the Government of PEI:             ful urban planning and land use policies may
  • Anti-idling and speed reduction campaigns       lead to more energy efficient development
  • Telecommuting and compressed work weeks
  • Traffic signal synchronization
  • Efficient traffic signal and highway lighting
    technologies                                    Government Actions
  • Public outreach and education                   Government is currently reviewing the feasibility and
                                                    cost of the transportation initiatives with a view to
G o v e r n ment Actions                            implementing and introducing several new efficiency
A review of the Provincial Hybrid Tax
Incentive will be conducted to expand the           The Provincial Government will support a review of
program and set minimum fuel economy                current land use and development policies and attempt
standards.                                          to encourage sustainable options for future land
                                                    developments that are tailored to maximize energy
The adoption of California-like vehicle             efficiency and promote GHG reductions.
emission standards was announced in
2007. The PEI Government will work with
neighboring provinces and states to
encourage adoption.

A review of the effectiveness of the
Transportation Efficiency Standard, with
a view to more stringent government
wide enforcement, will be undertaken.

Government will continue to evaluate the
feasibility of a province-wide public transit
system and determine the effectiveness of
the current system in reducing greenhouse
gas emissions and meeting provincial
energy and environmental targets.

Prince   Edward     I s l a n d   E n e r g y   S t r a t e g y
     E n e rg y   Eff i c i ency       and    Conservation

                         Government Leadership                                 land. The committee will exist in an advisory
                                                                               capacity only and all regulatory approval issues
                         The demonstrated leadership of the Provincial         will remain with the Island Regulatory Appeals
                         Government in recognizing energy efficiency as        Commission (IRAC). In New England, Massa-
                         a priority resource is a crucial step in the devel-   chusetts just announced such a stakeholder
                         opment of energy policy. The government is in a       council and they are underway in Rhode Island,
                         unique position and will seek to develop closer       Connecticut and Maine where they are proving
                         ties between the diverse stakeholders involved        to be a highly effective means for advancing
                         in the administration and implementation of           energy efficiency goals.
                         energy efficiency in PEI. There was a strong
                         desire expressed during the public meetings to
                         have government lead by example and position          Government Action
                         the province at the forefront of energy efficien-
                         cy performance for publicly funded buildings          Recognizing the range in diversity of energy
                         in PEI.                                               efficiency stakeholders and the need to
                                                                               raise awareness and educate the public,
                                                                               the Government of PEI will seek to develop
           G o v e r n ment Action                                             a multi-representational Energy Efficiency
                                                                               Advisory Committee.
           Government will adopt advanced energy and
           environmental standards for all publicly funded

                                                                               Public Outreach
                                                                               and Education
                         Energy Efficiency Advisory
                         Committee                                             There are a variety of common practices and
                                                                               tools to market to and educate consumers
                         The suggestion of creating an energy efficiency       concerning energy efficiency and conserva-
                         multi-stakeholder advisory board was con-             tion. Several participants and submissions at
                         tained in several submissions to government.          the Public Meetings called for more resources
                         Recognizing the range in diversity of energy          devoted to public outreach and education. The
                         efficiency stakeholders and the need to raise         Province is planning to work with the above
                         awareness and educate the public, the Govern-         Advisory Committee to develop and pursue a
                         ment of PEI will seek to develop a multi-rep-         number of the following strategies:
                         resentational Energy Efficiency Advisory Com-           • Point-of-purchase materials
                         mittee. This committee will be composed of a
                                                                                 • Utility bill inserts
                         broad group of individual stakeholders from the
                         public, private, non-governmental and utility           • Direct mail campaign
                         sectors that will work collaboratively to identify      • Internet- central website
                         all cost-effective investments in efficiency as
                                                                                 • Booths at home shows
                         well as assisting to plan and design programs
                         for implementation. This committee will serve           • Public relations events
                         to increase transparency and accountability as          • Media outreach
                         well as raise awareness of energy efficiency
                                                                                 • 1-800 number for expert advice
                         needs and opportunities in Prince Edward Is-

P r i n c e   E d w a rd   I s l a n d   E n e r g y   Strategy
                                                             E nergy       Efficiency             and       Cons e r v a t i o n

In addition to these public awareness activities,
community-based outreach activities will also       Government Action
be considered to invoke real behavioral change
amongst Islanders. Large information-based          Government, through the OEE, will develop a number
campaigns are effective in promoting aware-         of comprehensive public awareness and education
ness but do not often result in sustainable be-     programs directed at energy efficiency for all residents,
havioral change. Recognizing that the majority      businesses and institutions in PEI.
of the commercial sector in PEI is comprised of
small to medium-sized enterprises, it will be im-
portant for the Province to promote communi-
ty- and workplace-based energy efficiency and
conservation measures to this targeted group
of stakeholders.

Prince    Edward     I s l a n d   E n e r g y   S t r a t e g y
     R e n e w a b l e   Energy

            4 . 0 	RENE W A B LE ENER G Y

                          Overview                                             Wind

                          Prince Edward Island is the only Canadian            As a percentage of domestic use, PEI is a North
                          province without substantial resources in fos-       American leader in the development of wind
                          sil fuels, hydroelectric or nuclear energy. As a     energy. The Provincial Government, through
                          result, the province imports nearly 85 percent       the PEI Energy Corporation, developed Atlantic
                          of its energy needs from mostly petroleum-           Canada’s first utility-grade wind farm in 2001 at
                          based off-Island resources. This heavy reliance      North Cape when the economics of large-scale
                          on out-of-province suppliers makes PEI con-          wind within the region was not fully understood.
                          sumers and residents particularly vulnerable         Since that time, the PEI Energy Corporation has
                          to fossil fuel price volatility and supply disrup-   expanded its North Cape facility and developed
                          tions. Pursuing renewable energy development         the East Point Wind Farm that has resulted in
                          offers an alternative to conventional sources        the Province owning and operating 40.56 MW
                          and will provide greater control on the Island       of wind power. Now that electrical genera-
                          of energy prices, security, and diversity of sup-    tion from wind has been demonstrated to be
                          ply. Promoting renewable energy development          competitive with non-renewable sources, there
                          will address many environmental issues, par-         are private wind developments that have been
                          ticularly climate change and the reduction of        completed. Several more private wind farms are
                          greenhouse gases.                                    in the planning stages. In the April 2008 Speech
                                                                               from the Throne, Premier Ghiz announced that
                          In 2004, the Department of Environment, Ener-        the Province of Prince Edward Island will be
                          gy and Forestry oversaw the development and          developing up to 500 MW of wind generation
                          implementation of the Renewable Energy Act,          capacity in the province over the next five years
                          which provided a number of policy instruments        in partnership with Maritime Electric Company
                          (e.g. net metering, feed-in tariffs, designated      and private developers.
                          development zones, and a renewable portfolio
                          standard) to increase the development of re-         In addition to demonstrating the economic fea-
                          newable energy. A Renewable Portfolio Stan-          sibility of utility-grade turbines, the Province
                          dard (RPS) was introduced requiring utilities to     has promoted wind development through regu-
                          acquire at least 15 percent of electrical energy     latory measures. Under the Renewable Energy
                          from renewable sources by 2010.

P r i n c e   E d w a rd   I s l a n d   E n e r g y   Strategy
                                                                                                   Renewabl e              En e rg y

Act, utilities on PEI must meet at least 15 per-     Maritime Electric Company, Ltd. has drafted
cent of their electrical energy sales from procur-   an Open Access Transmission Tariff (OATT)
ing power from renewable resources by 2010.          that remains before the regulator, the Island
Presently, almost 18 percent of the electricity      Regulatory and Appeals Commission. The
on PEI is acquired from wind power meaning           OATT will provide nondiscriminatory access for
the renewable portfolio standard has been met        wind developers and other potential users at a
by Island electrical utilities. Government feels     regulated rate for service. MECL has proceed-
it is now appropriate to establish a new renew-      ed with a process to determine transmission
able portfolio standard                              requirements for future large-scale wind projects
                                                     in PEI that will lead to increased transmission
                                                     capacity for wind power developers. Both these
                                                     initiatives will provide future wind developers
G o v e r n ment Action                              limited transmission capacity for their exported
                                                     power. Maximizing wind potential will require
The Provincial Government will double its
                                                     additional cable capacity between PEI and the
renewable energy portfolio standard from
15% to 30% by 2013.
                                                     Wind energy is PEI’s most prospective renew-
                                                     able energy resource. Given its intermittent
                                                     nature, it is a challenge to incorporate a high
Prince Edward Island has a world-class wind          percentage of wind into the electricity grid. The
resource and there continues to be strong in-        scheduling of wind energy is also problematic
terest in locating wind farms in the province.       due to the intrinsic variables of weather fore-
Most of the future development of wind must          casting. Research and development (R&D)
be marketed off-Island and may be sold at a          groups, particularly the Wind Energy Institute
premium to offset electricity from traditional       of Canada (WEICan, formerly the Atlantic Wind
sources that release harmful air and green-          Test Site) at North Cape, advance wind tech-
house gas emissions. The benefits to PEI for         nology through various projects and initiatives
exported wind power are mainly accruing from         with other private and government agencies.
lease payments for landowners where the tur-         Pursuing a high integration of wind on PEI
bines are situated, the economic stimulus from       provides R&D opportunities for WEICan that
short-term construction opportunities, a limited     have application in other provinces, remote parts
number of operations and maintenance jobs,           of Canada and other parts of the world. Given
and provincial revenues from the environmental       our unique situation in PEI, energy storage R&D
attributes associated with green power produc-       initiatives involving hydrogen fuel are also being
tion. There is an opportunity to maximize these      developed to address the intermittent nature of
benefits through the promotion of additional         wind power generation.
large-scale wind farm developments. During
the Public Meetings there was concern voiced
around the tangible benefits to individual
Islanders for further large-scale wind devel-
opments occurring on PEI. Islanders also
questioned why local utilities were not buying
more wind energy to meet local requirements.

Prince    Edward     I s l a n d   E n e r g y   S t r a t e g y
     R e n e w a b l e   Energy

           G o v e r n ment Actions

           The Provincial Government will attempt to maximize
           the benefits of future large-scale wind developments
           for all Islanders, including developments built for both          Role of Government in
           the export and domestic markets.                                  Future Wind Developme n t
           The Provincial Government will work to secure                     The PEI Energy Corporation’s ownership of the
           additional cable capacity to facilitate the export of             North Cape and East Point wind farms is an in-
           commercial wind power.                                            valuable asset to WEICan. Provincial ownership
                                                                             means that data for research and development
           The Provincial Government will continue to provide                is accessible to WEICan and has enabled the
           support to WEICan and encourage R&D opportunities                 Corporation to be an active partner in under-
           for small-, medium- and large-scale wind developments.            standing and promoting wind energy develop-
                                                                             ments in PEI. Having access to actual public
                                                                             assets in the field is an important element to
                                                                             the success of research and development op-
                          Small Wind Developments                            portunities for WEICan and PEI. In addition to
                          in PE I                                            the above, significant wind farm revenues are
                                                                             now being generated by the PEI Energy Corpo-
                          A repeated theme during the public meetings        ration and flowing back to the province, thereby
                          was the need for the Provincial Government to      contributing to the diversification of supply and
                          consider the benefits and encourage smaller        stabilization of the cost of electricity. There was
                          wind developments in PEI. Several participants     a strong desire by most public participants to
                          felt that there was too much emphasis placed       see the Province of PEI continue to develop this
                          on large-scale projects and the benefits of        resource.
                          smaller, more community-focused wind energy
                          projects deserved attention. A growing trend in
                          Europe has been a shift away from large wind       Solar Technologies
                          farms to more community-based and distrib-
                          uted models, which has lead to significant local   Solar energy technologies capture the sun’s en-
                          economic development benefits.                     ergy for practical applications. There are many
                                                                             modern technologies for harnessing solar en-
                                                                             ergy to produce food, heat, light and electricity.
           G o v e r n ment Actions                                          Applications span the residential, commercial,
                                                                             industrial, agricultural and transportation sec-
           The Provincial Government will evaluate and develop               tors. The pervasive use of solar technologies
           appropriate policy mechanisms, such as net-billing                peaked in the 1970s and early 80s during the
           and the allocation of electrical capacity, to facilitate          first fuel crisis; government grants, incentives,
           the development of smaller community-based wind                   and demonstration systems caused an explo-
           and other renewable energy projects.                              sion of growth in Canada. PEI, at one time, had
                                                                             the highest per capita residential use of solar
           Government will continue to explore opportunities                 hot water units in the country.
           for economic development in the manufacturing,
           service and maintenance of small wind energy systems.             Passive solar design in new construction can
                                                                             provide practical lighting and comfortable tem-
           Government, through the PEI Energy Corporation,                   peratures by tailoring building orientation, pro-
           will consider developing additional wind capacity in              portion, window placement, and material com-
           PEI specifically for meeting on-island demand and                 ponents to the local climate and environment.
           increasing the Island’s energy security.

P r i n c e   E d w a rd   I s l a n d   E n e r g y   Strategy
                                                                                                  Renewabl e              En e rg y

Solar thermal applications make up the most        Earth Energy
widely used category of solar energy technol-
ogy. These technologies use heat from the sun      Earth energy systems, or geothermal systems,
for water and space heating, industrial process    are terms used to describe a renewable energy
heat, cooking, water distillation and disinfec-    alternative to traditional oil, propane, ventilation
tion.                                              and air conditioning (HVAC) systems. This tech-
                                                   nology transfers the heat located immediately
Electricity can be generated from the sun by       under the earth’s surface into a residence or
photovoltaic technology (PV). The primary ob-      building in winter, and is able to provide cool-
stacle to increased use of photovoltaic systems    ing functions in the summer when the outside
is their high initial cost. Continuous price re-   temperature is higher than ground temperature
ductions have been occurring. In some off-grid     (8-12°C). There were repeated calls from the
locations photovoltaic systems can be cost ef-     public for government to provide incentives for
fective versus the costs of running power lines.   geothermal heating systems during the public
With many jurisdictions now providing tax and      consultations.
rebate incentives, PV installations make up
the largest part of the solar residential market   Twenty percent of the average energy demand
worldwide.                                         in a residential home is for water heating, and
                                                   most geothermal units include a component to
With increased public concern over escalating      heat water for potable or sanitary use. Earth
fuel prices and regard for the environment, the    energy systems are ideally suited to meet the
use of solar technologies as a renewable fuel      HVAC needs of commercial, industrial and in-
source has regained momentum and is the fast-      stitutional (e.g. schools and post-secondary)
est growing sector in renewable energy. Solar      users. Natural Resources Canada (NRCan) and
technology maturation and the rising cost of       the US Environmental Protection Agency state
fossil fuels are making solar systems a more at-   that earth energy systems are the most energy-
tractive alternative to conventional sources of    efficient, environmentally clean, and cost-effec-
energy. Throughout the public consultation pro-    tive space conditioning systems available in the
cess, there was interest expressed by the public   market today.
for Government to promote the greater deploy-
ment of small-scale renewable technologies
like solar and geothermal heating systems.
                                                   Government Action

                                                   The Province of PEI will continue to support the
                                                   installation of small-scale renewable heating
                                                   technologies like solar and geothermal heating
                                                   systems through grants, loans, tax and other
                                                   financial incentives.

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