Harper government announces $230-million energy technology R&D program

Program details promised by April

A new $230-million fund for energy R&D and the demonstration of clean energy technologies is being established as part of the Harper government's hastily assembled environmental policy. The Eco Energy Technology Initiative (ETI) targets both alternative and traditional, carbon-based energy sources and will be administered out of the Office of Energy R&D (OERD) at Natural Resources Canada (NRCan).

The ETI is being billed as an "integrated approach built on key priorities" including clean coal, clean oil sands production, carbon dioxide sequestration, advanced vehicles (fuel cells, plug-in electric cars), renewable energy and "next generation nuclear bioenergy".

Although the details of the fund won't be released until after the forthcoming Budget, the government says it will emphasize public-private partnerships and establish priorities through further consultation with the provinces and industry.

In announcing the initiative — the first of three environment-related announcements with a total commitment of more than $2 billion — the Harper administration acknowledged the input of the recently released report of the National Advisory Panel on Sustainable Energy, Science and Technology. Created by the previous Liberal administration and chaired by Dr Angus Bruneau, the Panel recommended that the government take a systems approach to energy S&T. The Bruneau report also called for the federal and provincial governments to double their respective investments in R&D energy within 10 years, and that the private sector boost its R&D outlays to 1.5% of revenues by 2016 (R$, November 27/06).

Since the federal government currently spends approximately $250 million annually on energy R&D, the new fund appears to be a major step towards doubling R&D outlays. But several key energy R&D programs are also sunsetting. Within a year, at least two programs — the interdepartmental Technology Early Action Measures (TEAM) program and the Canadian Transportation Fuel Cell Alliance — will be wound down.

By taking a systems or integrated approach to energy S&T, the ETI is an obvious attempt to tap into the considerable R&D being done across Canada by various public and private players, often already in collaboration.

In the west, Energy INet is a consortium that has launched several research projects in the areas of alternative and renewal energy sources, bitumen upgrading, clean coal and clean carbon, CO2 management, water management and increased recovery of conventional and unconventional oil and gas resources.

"Industry can do much but not all of the necessary S&T ... It falls to the federal government to take the lead in medium- to long-term S&T that (1) carries a higher investment risk, (2) is essential to the public good and (3) would not otherwise be done."

— Government press release

Energy INet was launched in early 2005 with $8 million in start-up funding and is angling to play a larger role in energy R&D (R$, March 30/05). It has forged links with other organizations such as the Kingston ON-based BIOCAP Canada, which is exploring the use of biomass through a number of joint academic-industry partnerships. BIOCAP's federal support of $10 million is nearly depleted with no word on renewed funding.

Within the federal government, the CANMET Energy Technology Centre (CETC) — a research arm of NRCan — is conducting several long-term R&D projects in conjunction with industry and other partners in broad thematic areas of sustainable buildings and communities, clean electric power generation, industry innovation and the hydrogen economy and transportation energy. In has facilities in Ottawa, Devon AB and Varennes QC.

Specific technology R&D includes clean fossil fuel technology and clean electric power generation; energy-efficient technologies for industry; high temperature process technologies for industry; catalytic and membrane process technologies for industry; bio-energy technologies for industry; wind, solar and small hydro technologies; transportation energy technology; hydrogen and fuel cell technologies; and CO2 capture technologies.

In recent years, NRCan has released a series of road maps for clean coal technology, CO2 capture and storage, hydrogen systems and nitrogenous fertilizers. It is also working on a sustainable energy S&T strategy which is slated for release in the coming months.

The strategy and a review of existing programs was announced in the March/05 Liberal Budget along with $200 million for implementation. That funding was subsequently withdrawn by the Conservative government (R$, November 27/06). It's unclear whether the ETI is intended to replace it since the strategy has yet to be released. NRCan did not respond to a request for an interview.

After NRCan, the largest initiative focusing on clean technologies is Sustainable Development Technology Canada. SDTC received a total of $550 million under the previous Liberal government, which it uses to leverage two-to-three times the amount it invests in industry-led projects. It's unclear how ETI will interact with SDTC, if at all, although there are clear overlaps in both their focus and multi-sectoral approach.

In addition to the ETI, the Harper government made two more environment-related announcements and shifted John Baird into the environment minister's position. The Eco Energy Efficiency Initiative pledges $300 million over four years to promote more efficient energy consumption and reduction of CO2 emissions. The bulk of the funding ($220 million) will go towards a retrofit program for homeowners, with the remainder targeting building construction and industry.

The largest amount of funding ($1.5 billion over 10 years) is for an Eco Energy Renewable Initiative. The renewable power component of the program — wind, biomass, small hydro and ocean energy — will receive $1.48 billion. The remainder will target clean, renewable thermal technologies for water and space heating in buildings.

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