Ørsted last month exited an agreement with Canadian developer Naikun to jointly develop and build the 396MW Haida Energy Field project off the coast of British Columbia in Canada. It did so to pursue more mature markets, including the US.
This should be a wake-up call for Prime Minister Justin Trudeau as Canada’s 2019 federal election approaches: the offshore wind industry needs more attention.
Ørsted and Naikun set up their joint venture in September 2017 but, after a year, there hasn’t been much progress. The involvement of Ørsted seemed to take the project, which has been under development since 2009, a bit closer to reality. But the fact is that, after nine years, Haida Energy Field hasn’t moved on much at all.
And, in truth, not much has been happening for offshore wind in Canada either, even though the market has attracted some of the sector’s biggest global offshore players, including Ørsted and Copenhagen Infrastructure Partners. In 2016, CIP agreed to develop the 180MW St George’s Bay with Beothuk Energy off the Canadian western coast, but we haven’t heard much about this project since then either.
By contrast, the US offshore wind industry is getting into gear with a handful of states awarding support for projects, and interest from a crop of serious players.
There is some good news in Canada. The government took baby steps this year to encourage the development of offshore wind projects.
Canada’s Minister of Natural Resources Jim Carr announced in January the launch of a C$200m ($151m) expression of interest process for the Emerging Renewable Power Programme, which would aim to expand renewables, including offshore wind. The government is set to reveal six winning projects by spring 2019 and has gained applications so far for offshore wind, tidal and geothermal developments.
This initiative is part of a far bigger C$21.9bn ($16.5bn) programme to support new infrastructure projects. It goes without saying that C$200m is not much for innovative renewables sources out of a total budget of C$22bn. Hardly a show of support.
And let’s be honest, over the last three years the government led by Trudeau hasn’t done much to back renewables in general, despite being very vocal about doing so.
During his campaign in 2015, the charismatic Trudeau promised to shift the country to a greener future. After three years of his government, we can safely say that he is not that climate crusader he wants to appear as his government has so far approved a couple of oil pipelines and a liquefied natural gas plant.
However, there could be an opportunity for offshore wind now, as the 2019 elections approach. Trudeau knows that green is good for his campaign and with 11 months to go, he has already started campaigning for a carbon tax, for example.
Is offshore wind likely to feature in his campaign too? Maybe. If offshore projects win support in this Emerging Renewable Power Programme, there might be scope for central government to look seriously at ways to support investment in offshore wind.
We expect to see interest from established offshore firms too. Ørsted and CIP have been active in Canada, despite its very early stage, and we could see more players moving from neighbouring US further north to Canada. But that relies on the support of national or state governments too – or ideally both.
Ultimately, as we’ve seen in the US, the onus will fall on state governments to show their support. That could make a big difference.
For example, a report published in 2010 analysed the potential for offshore wind in Ontario and said, if the region could add 2GW of offshore wind capacity by 2026, it would create 4,000 construction jobs annually and add C$5.5bn to its GDP by 2026.
If Canadian provinces see the economic benefits of offshore wind then, with support from central government, the sector might well take off. For now, it’s a mixed outlook. Offshore wind has an opportunity to play a role in Trudeau’s campaign, and the talk sounds good – but we’re not sure he’ll actually deliver on that if re-elected.
The Inflation Reduction Act has sparked major optimism in the US renewables sector, but wind installations still fell 37% last year.