Details on Transfer Payment Programs (Exceeding $5 million during the reporting year)

Name of transfer payment program: Clean Energy Fund (Voted)

Start date: April 23, 2009

End date: October 31, 2016

Description: In support of Canada’s commitment to reduce greenhouse gas (GHG) emissions, the Clean Energy Fund provides $795 million over six years for clean energy demonstration and research and development (R&D), delivered in three components: (1) large-scale carbon capture and storage (CCS) demonstration projects undertaken by external recipients, (2) renewable energy and clean energy demonstration projects undertaken by external recipients, and (3) clean energy R&D to be carried out in federal laboratories.

The Clean Energy Fund was originally announced as part of Budget 2009 – Canada’s Economic Action Plan, as a $1 billion program. In December 2009, in response to unprecedented demand for the ecoENERGY Retrofit – Homes program, the Government of Canada allocated $205 million from the Clean Energy Fund to finance up to 120,000 additional home retrofits, leaving $795 million for the Clean Energy Fund.

Transfer Payments for Demonstration Projects are not intended to allow recipients to generate profits or to increase the value of their business. If a transfer payment to a project leads to a profit, the recipient will be required to repay the transfer payment. The requirements that may trigger repayments are detailed in the contribution agreement, along with the process for repayment.

Strategic outcome: 2) Natural Resource Sectors and Consumers are Environmentally Responsible

Results achieved: The Clean Energy Fund continues to show progress on 19 announced or committed small- and large-scale projects. Two Clean Energy Fund wind projects began the process of commissioning their turbines in 2012-13. These projects will add 10.8 megawatts of clean electricity generation at the Wind Energy Institute's research site in Prince Edward Island and at a First Nation in Saskatchewan.

Two small-scale projects supported by the Clean Energy Fund have been identified by KPMG as some of the 100 most innovative and inspiring urban infrastructure projects in the world (Infrastructure 100: World Cities Edition, 2012). The two projects are the University of British Columbia’s Bioenergy Research and Demonstration Facility (Vancouver, British Columbia), which will be the world's first biomass-fueled, heat-and-power generation system operating on a scale suitable for communities, and Harvest Power’s Energy Garden (Richmond, British Columbia) which is Canada’s first high-efficiency system for producing renewable energy from food scraps and yard trimmings.

In addition, more than $253 million was leveraged from proponents and collaborators of two large-scale CCS demonstration projects (Shell Quest and Enhance Energy's Alberta Carbon Trunk Line) in 2012-13. The construction of both projects is progressing as planned. It is expected that about 3 megatonnes of CO2 will be captured annually, starting in 2015. These CCS projects will help demonstrate the feasibility of integrated CCS schemes in Canada, and translate into a tangible reduction of CO2 emitted from large industrial point sources, such as oil sands operations and fertilizer plants.

Comments on variances: The cancellation and delays (resulting in a financial reprofile to future years) of large-scale demonstration projects accounted for the majority of the variance. In addition, a portion is attributable to various slippages in small-scale demonstration agreements.

Audits completed or planned: Two recipient audits of the Shell Quest project have already been conducted. One was completed on the Enhance Energy’s Alberta Carbon Trunk Line project as well.

In 2012-13, the Clean Energy Fund small-scale demonstration component completed four full audits (FORCE, Hydro Québec, SSQ Immobilier, and Fraser Richmond Soil and Fibre) and 10 desk audits*. All audits were performed by an external auditor, Raymond Chabot Grant Thornton. Overall, the audits showed positive results. Some minor issues were uncovered that the program is addressing.

The program plans to complete 8-10 full audits and 3-5 desk audits or follow-on procedures resulting from the 2012-13 audit results. At the end of 2013-14, all 17 small-scale projects will have been audited at least once.

*Borealis Geopower, City of Colwood, Ecologix, Electrovaya Corporation, Great Northern Power, Manitoba Hydro, NB Power, Power Measurement, University of British Columbia, Wind Energy Institute of Canada

An audit of the program was completed in 2010-11.

Evaluations planned: The Clean Energy Fund will be evaluated in 2013-14.

Engagement of applicants and recipients: NRCan solicited project proposals through announcements on its website. There is no current call for proposals, and the department does not expect that there will be any further calls.

The program engages recipients through quarterly, annual and end-of-project financial reporting and annual and end-of-project non-financial reporting, progress updates on project activities, technical and environmental site visits, and recipient audits.