Clean Energy Fund maintains government's emphasis on carbon-based energy sources

Carbon capture and storage (CCS) demonstration projects account for the lion's share of the federal government's $1-billion Clean Energy Fund (CEF). Large-scale CCS demonstration projects will receive $650 million, followed by smaller-scale demonstration projects for renewable and alternative technology projects and $150 million for R&D projects ranging from basic research to pre-demonstration pilot projects.

The $1-billion, five-year CEF fund was announced last month at the Univ of Alberta by Natural Resources Canada (NRCan) minister Lisa Raitt and coincided with the launch of the $200 million demonstration fund.

The CCS portion of the fund will support two or three large scale integrated projects at or near full commercial scale with a minimum project cost of $100 million. Funding can also be used in collaboration with US funds through the Canada-US Clean Energy Dialogue. Details are pending.

For the smaller-scale renewable and clean energy demonstration projects, eligible projects can receive between $2.5 million and $50 million from the fund, which cannot exceed 50% of total demonstration project costs. Total Canadian government assistance (not including investment or funding from Crown and municipally owned utilities) cannot exceed 75% of total costs.

In addition to demonstrating technologies, the smaller-scale fund is intended to engage multiple stakeholders and receptors and deal with all issues such as code, permit and regulatory issues as well as technology capital cost reduction and technology reliability.

The deadline for full project proposals is September 14/09.

The aim is to accelerate the deployment of relevant technologies in power and thermal supply systems. Technology systems can include smart controls, diagnostic tools, sensors, demand response concepts, and renewable energy forecasting tools, plug-in hybrid electric charging infrastructure and associated charging control concepts.

The $150-million R&D fund targets four areas: renewable and clean energy such as :

* marine, wind, solar and integration into the electricity system and the "built environment";

* new technologies to address oil sands-related environmental challenges such as water use and tailings;

* hydrogen and fuel cells; and,

* technologies to lower CO2 capture costs and increase knowledge of CO2 storage.

It's estimated that Canadian coal-powered plants will emit 126 megatonnes of CO2 annually while the oil and gas sector will emit 180 megatonnes a year unless mitigation measures are implemented.

Collaboration is encouraged between government, utilities, universities and the private sector and funding can be leveraged through Canada-US collaboration. Details are pending

The CEF was announced earlier this year in the 2009 Budget as part of $2.4 billion in funding in support of the government's climate change and sustainable environment objectives. The Conservative government wants to reduce total greenhouse gas emissions by 20% by 2020 from 2006 levels and has a goal to produce 90% of electricity generation from non-emitting sources.

The heavy weighting of carbon-based energy projects follows an allocation trend which began under the EcoEnergy Technology Initiative (R$, April 16/08). Under that $230-million initiative, more than half ($125 million) was devoted to technology projects addressing so-called clean coal and oil sands CCS projects and $15 million for reducing the environmental impact of oil sands production.

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