When it comes to renewable energy, Canada should be on top of the world.
Canadians are gifted with substantial natural resources that can be used to produce clean energy, from rivers to wind, biomass to solar, geothermal to ocean energy. Several Canadian cities have become a hotbed of innovation technology start-ups. And Canada is mostly free from the skepticism surrounding climate change and greenhouse gases that pervades American politics. Simply put, Canada is in a perfect position to harness these resources and be a world leader in renewable energy.
However, renewable energy sources only provide about 18.9% of Canada’s total energy supply. And according to a new report, Canada is falling behind in the world of clean energy tech.
Christopher Barrington-Leigh, an assistant professor at the School of Environment at McGill University, says Canada is in a renewable energy paradox.
Though the land is rife with valuable resources, most of it lies in distant territories that are not connected to the electrical grid or near population centres. Keep in mind that 90% of Canadians live within one hour of the United States/Canada border. In other words, much of Canada’s potential renewable energy sources are out of sight and, for many, out of mind.
At the same time, Canada is what the assistant professor describes as an “energy hog.” We consume the most energy heating our homes throughout the winter months. This is an inevitable fact of living in Canada, and it puts a great deal of pressure on our electrical grid. The argument for shifting away from powerful-but-polluting energy sources to lighter renewable resources is difficult in this context.
That’s the world within which Canada’s clean tech sector operators. On top of that, this sector is having its own problems right now.
The heart of the problem is this: researching and developing innovative green technology is expensive.
According to Analytica Advisors, most Canadian green energy firms are stuck in unprofitable markets without access to financing that would enable them to meet demand. This industry pays comparatively high interest rates. Debt markets, including Canada’s big banks, are not open to most clean-tech firms.
While the government committed to investing in clean energy tech in the 2017 federal budget, the money won’t start flowing until 2019. This cleans Canadian clean energy firms in a tough spot.
The report concludes with the suggestion that the government focus not only on attracting centure capital to Canada’s clean energy sector, but to ensure that the government sets the stage for a successful clean energy market and supports infrastructure that takes full advantage of these innovations.