Clark Wilson LLP's highly informative blog Megawatt, recently published a posting that raised ten lessons that British Columbia could take from the Ontario feed-in tariff.
Clean West applauds these informed suggestions and agrees that British Columbia can learn numerous energy policy and leadership lessons from Ontario. But it can similarly take ideas from the US and other geographies.
Clean energy developers will question Why BC? As will investors. Ontario offers higher off-take prices (and therefore investor returns) and substantially lower developer risk (feed-in tariff vs clean call) than BC. The US offers substantial financial incentives (that boost returns and lower risk). In the absence of compelling ties to BC, or material sunk costs in BC projects, then developers and investors will simply choose other geographies over BC. Clean West sees this trend in the marketplace.
Ontario's feed-in tariff is as bold as it is controversial. The related power acquisition cost for clean power is high (utility wind prices escalate from 13.5c/kWh versus 10c in BC SOP, solar rooftop up to 80c/kWh). Yet, the provincial content requirements are very strict and escalate further in time. As a result then Ontario will create jobs across the clean energy equipment and service value chains and also stimulate clean energy production. From engineer installers that put solar panels on residential rooftops to manufacturers of wind turbine blades and gears, then jobs will be created and a new industry will be born. Ontario has learned from its RESOP challenges and make better policy. Clean West celebrates the Ontario feed-in tariff.
BC relishes technological innovation. It has abundant talented people with highly creative ideas. And supportive policy. This is absolutely fantastic. No question. But if BC has the intent to meaningfully produce clean energy, in addition to simulate cleantech IP, then it needs to demonstrate to developers and institutional investors that BC is worth their attention. Policy makers should reflection on the Ontario / BC items in the list per Clark Wilson LLP, and also consider the US and other geographies (e.g. offshore wind in Europe).
Yet there is a silver lining. BC policymakers can learn from the successes and mistakes of their peers elsewhere. As my old business school professor, Costas Markides, advocates in his corporate strategy book Fast Secondthen second-movers have the luxury of speed and cost over their first-mover cousins. Second-movers can avoid the tardy processes and expensive budgets inherent in creating something from scratch.
BC is blessed with significant resources, both natural and people. It has the fortuitous opportunity to steal great ideas, avoid pitfalls and race to be a clean energy leader. Or not.
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