Canada Expands Support for Wind and Hydro Energy

The Canadian government wants to increase support for certain renewable energy technologies.

OTTAWA, Ontario, CA, 2001-12-19 [SolarAccess.com] The budget tabled by Finance minister Paul Martin proposes a new production incentive for electricity generated from wind turbines. An initial incentive payment of Cdn1.2 cents per kilowatt-hour of production, gradually declining to 0.8¢/kWh, will be introduced for qualifying projects commissioned between April 2002 and 2007. The proposed incentive will be available for the first ten years of power generation and will provide a long-term stable revenue source, which will result in more investment in wind energy in all regions of Canada, according to Martin. It will also address climate change and improve air quality. Provincial and territorial governments will be encouraged to provide additional support for wind energy investments to supplement the federal measure. The cost of the 15-year program will be $260 million. Final details, including eligibility criteria, will be announced before next April, following consultations with the industry. The budget also proposes to broaden eligibility for income tax incentives that apply to renewable energy projects under the accelerated capital cost allowance Class 43.1. The tax write-off was introduced to assist renewable energy and currently is allowed for hydroelectric facilities of 15 MW capacity, but the government wants to expand eligibility to sites of 50 MW. Class eligibility will be broadened to include equipment that generates from blast furnace gas and, due to changes in technology, the government will determine if additional improvements are required. Last year, the federal budget allocated $125 million to support energy and water efficiency projects through the Green Municipal Enabling Fund and the Green Municipal Investment Fund. The funds are managed by the Federation of Canadian Municipalities and have provided funding of $25 million for feasibility studies and $100 million in a revolving investment account, and the monies have supported 100 projects in energy and water savings, community energy systems, urban transit, waste diversion and renewable energy. The budget proposes to double those amounts.

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