December 01, 2007
As political and popular opinion turn against fossil fuels, researchers are finding ways to derive energy from sources that, just a few decades ago, would have seemed unthinkable.
The renewable-energy boom is creating a fascinating new practice area for lawyers across Canada. Investors are increasingly eyeballing the renewable energy sector and sizing up projects whose aim is to develop energy sources that are homegrown, renewable, less damaging to the environment, and profitable. At the same time, Canadian businesses of all sizes are competing to develop and commercialize green energy projects across the country.
Industry Canada expects Canada’s renewable energy industry to expand significantly over the coming years, while Pollution Probe predicts that with sustained determination over the next several decades, green power has the potential to supply half of Canada’s current annual electricity generation.
The Ontario Power Authority (OPA) is already on board, having filed an application in August with the Ontario Energy Board for approval of its Integrated Power System Plan (IPSP). Krista Hill says that part of the IPSP calls for a 6,400 MW increase in renewable energy resources by 2025 (to reach a total of 16,000 MW). That’s a “very significant” increase, says Krista. (Four nuclear reactors at the Pickering Nuclear Generating Station near Toronto can collectively produce about 2,000 MW.)
It appears that the green-energy train has left the station. Legal experts who act on green energy projects work with businesses of all sizes on a range of matters, from real estate to financing to joint ventures and tax structuring. Krista, for example, helps some of her clients to complete mergers and acquisitions. Other clients seek her assistance with power-purchase agreements, financing or real estate deals, which can mean shepherding them through permits, environmental assessments, First Nations issues, construction contracts and manufacturing agreements. “Even four years ago, there was not a lot of wind power development in Canada," says Krista. "Now it’s exploded and there’s no end in sight.”
There are currently about half a dozen green energy technologies being developed in Canada. Wind and run-of-river hydro are two of the most significant emerging sources of power, followed by solar. Nuclear power remains a strong, though not a new, contender. And a handful of more obscure energy sources are also being developed in Canada, including wave (also known as ocean or tidal), fuel cell and biomass energy.
The significance of each of these alternative energy sources depends to some extent on the part of the country considered. Ocean power, for example, is the domain of maritime provinces like Newfoundland & Labrador, Nova Scotia and British Columbia. According to the Ocean Renewable Energy Group, numerous ways of harnessing wave and tidal energy are currently in various stages of research and development or demonstration in Canada. Here’s how it works: radiation from the sun warms up the ocean’s surface, creating wind. In turn, the wind creates waves, a source of energy. The strongest waves are typically found in regions that lie within 40 to 60 degrees of latitude.
Fuel cell technology involves using a chemical reaction between hydrogen and oxygen to produce electricity—with emissions that are minimal to non-existent—and has the potential to revolutionize the automotive and airline industries. Fuel-cell vehicles—also known as zero-emission vehicles, or ZEVs—are cars of the future that would likely store hydrogen in fuel tanks as a pressurized gas. Such vehicles are unlikely to appear on the mass market anytime before 2010, but most major auto manufacturers are reportedly working on demonstration models.
Biofuel—also called biomass energy—is another ecofriendly energy source currently under development. Biofuel is extracted from the solar energy stored in organic materials, such as plants, wood or straw, or in waste from the forest, agricultural and industrial sectors. It can also be derived from municipal solid waste and sewage sludge. The beauty of biomass energy is that it can be derived from easily renewable materials. Decomposing organic waste in landfill sites, for example, produces methane gas that can be converted into heat or electricity.
With all their promise, new energy technologies are posing challenges to lawyers, legislators and policy makers. A solid knowledge of the industry as a whole is required, suggests Krista. "You have to understand how the field works, and know the important components and how they interact with one another. It is also critical to be able to identify the risks associated with a project."