Canada's cutting-edge energy model

Prince Edward Island aims to generate 30 percent of its energy needs from its own renewable resources by 2016.

If you want a glimpse of this province's energy future, drive the winding country roads to its eastern tip, take a left at the sign for the village of Elmira, and follow the red dirt track to the right.

You can't miss it.

Ten wind turbines stand along the trail, each 26 stories tall, with blades as long as 125 feet. When workers finish the last one this month, the new Eastern Kings Wind Farm will generate 30 megawatts of electricity – 7.5 percent of the province's power – by harnessing the strong winds that buffet the island's northern shore.

But more than an isolated project, the wind farm is part of an ambitious plan to enable Prince Edward Island (PEI) – which has no significant coal, petroleum, natural gas, or hydro resources – to meet most of its electricity and 30 percent of its total energy needs from its own renewable resources by 2016. If successful, government officials say, this remote rural province will find itself at the cutting edge of the world's fastest growing energy sector.

"Right now we have to bring almost all of our energy in from off-island at great expense" – $440 million a year (US$384 million and 11 percent of GDP), says Jamie Ballem, minister of environment and energy. "If we can produce a third of that right here from renewable sources that's going to help the local economy and the environment."

In addition to the Eastern Kings project, PEI's government is backing the creation of a hydrogen-powered village as well as expansions to existing wind farms on the northwestern tip of the island. Private companies, meanwhile, are building plants to produce ethanol from locally grown sugar beets and residential heat from forestry and farming waste. Hydrogen-powered buses and boats may follow, whisking passengers around the island with fuel cells charged by wind-power.

A province known for lobster, potatoes, and low-key vacations, PEI may seem an unlikely venue for an energy revolution. It's a tiny place, an island the size of Delaware, with fewer people than Arlington, Va., or Eugene, Ore.

But PEI's small size is exactly what makes it appealing for the emerging renewable-energy industry to conduct pilot projects, says Mr. Ballem. "If you're developing a new technology, we're able to provide something nobody else can: a self-contained province where, with two days notice, I can get you a meeting with the premier or the head of the university," he says. "We're small enough to be affordable and big enough to be commercial."

Energy policy analyst Scott Sklar of the Stella Group in Washington agrees. "Clean energy industries are expanding at about 30 percent a year, and they're looking for places to put down investments.... In PEI, they've got an excellent renewable resource base, a small population, and a great willingness to move boldly. There's no doubt that that all plays in their favor."

The electricity-generating potential of the island's greatest energy resource – the wind – was recognized decades ago, and in 1980 Canada built its national wind test center on the island's northwestern tip. When the provincial government adopted its renewable energy strategy in 2004, expanding wind power was the first priority.

Two years later, three new wind farms are nearing completion – two built by a private firm, the other by the public utility, PEI Energy Corp. When completed in the coming months, wind will provide 15 percent of PEI's electricity, reducing the province's carbon dioxide emissions by 90,000 tons each year. The island's overall wind potential is about five times that, according to the government.

The government is working on a range of incentives for a range of potential wind farm owners including guaranteed purchase prices for excess electricity fed back to the electricity grid by small farms owned by cooperatives, farmers, and small businessmen.

To convert some of that wind to other uses, PEI Energy Corp. and Ontario's Hydrogenics Corp. are overseeing the creation of a $10.3 million "wind-hydrogen village" at North Cape. The project, to be completed in 2008, will use energy from turbines of the Canadian wind test site to split hydrogen from water, store it in special tanks, and use it to power fuel cells.

When the wind isn't blowing, the fuel cells will be used to power area buildings, eventually to include the entire hamlet of Sea Cow Pond. Ultimately three hydrogen fueling stations are expected to be built – located to allow full island-wide coverage – serving three hydrogen-powered busses, a cargo truck, and an excursion boat.

"Hydrogen is a wonderful means of capturing natural energy sources and storing them for use in other applications," says Harvey Silverstein, a Halifax-based hydrogen economy consultant who was an advisor for the project. "You can produce a fuel that's 100 percent pollution free."

It is, however, a demonstration project, and the fuel cells will have little impact in terms of meeting PEI's 2016 energy target, particularly in regards to transportation, which accounts for about 40 percent of the island's energy consumption. Petroleum will clearly remain the primary fuel source for most vehicles, but Ballem hopes to supplement it with ethanol made from local sugar beets at a $2 million plant now being built by a local company. (Automobiles can burn gas mixtures containing 10 percent ethanol without modifications.)

Other plans include the construction of a biomass plant that will burn wood wastes from provincial forests, and treating used cooking oil and other waste fats so they can be used to power diesel-engine tractors.

"If they can make this strategy work, it will create a good blueprint for other places and countries to look at," says Jeff Deyette, an energy analyst with the Union of Concerned Scientists in Cambridge, Mass.

"It's the kind of leadership that's needed both here in the US and in Canada to move clean energy forward."