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

Name of transfer payment program: ecoENERGY Innovation Initiative (Voted)

Start date: June 23, 2011

End date: March 31, 2016

Description: The ecoENERGY Innovation Initiative (ecoEII) provides $268 million over five years to support innovation in the clean energy sector. Research and development (R&D) and demonstration (collectively RD&D) projects will be funded. The Initiative advances the Government of Canada’s commitment of reducing Canada’s total greenhouse gas (GHG) emissions by 17 % from 2005 levels by 2020.

The ecoENERGY Innovation Initiative also advances the competitiveness of Canada’s clean tech industry through a comprehensive suite of RD&D activities in the areas of clean energy and energy efficiency. Proposed investments build on Canada’s strengths and competitive advantages, supporting next generation technologies that target the country’s energy profile and needs, while maximizing future GHG reductions. Activities are in five strategic priority areas: energy efficiency; clean electricity and renewable streams; bioenergy; electrification of transportation; and unconventional oil and gas.

The ecoENERGY Innovation Initiative has two components: one for research and development projects, and a second for demonstration projects. More than 200 projects have been selected and will be supported over the duration of the program.

For R&D projects, transfer payments will not be repayable. For demonstration projects, it is not expected that transfer payments will lead to recipients generating profits or to increasing the value of their business. If a transfer payment to a project leads to a profit, the recipient will be required to repay a portion of the profits up to the value of the transfer payment. The requirement that may trigger repayments is detailed in the contribution agreement, along with the process for repayment.

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

Results achieved:

Expected results relate directly to knowledge and technology development. In 2012-13, the ecoENERGY Innovation Initiative undertook 123 RD&D projects. Two of these projects are highlighted below:

• ecoEII supported research conducted by Environment Canada to characterize the emissions from and fuel efficiency of medium-duty trucks. Emissions characterization covered oxides of nitrogen, particulate matter, carbon monoxide, hydrocarbons, and greenhouse gases. Through the Transportation Division of Environment Canada, this information supports Environment Canada with its ongoing development of GHG regulations for heavy-duty vehicles. Specifically, the results of this program will be used to support validation of a certification tool: the Greenhouse Gas Emission Model.
• NRCan signed a contribution agreement with CO2 Solutions Inc to develop an enzyme-based approach for low-cost carbon dioxide capture from industrial effluent emissions in the Alberta oil sands and elsewhere. CO2 Solutions and its partners will optimize and validate the technology at large bench and pilot scale facilities with a view to capturing 90% of CO2 from oil sands in situ production and upgrading operations. This is expected to result in cost savings of at least 25 % compared to conventional carbon capture technology.

Comments on variances: Changes to the program terms and conditions were necessary to address new NRCan policies related to transfer payments. This resulted in delays in the signing of contribution agreements and identification of eligible costs. The ecoEII surplus is also related to the denial by Treasury Board of a reprofiling request in the 2013-14 Annual Reference Level Update exercise. Finally, a portion of the observed variance is related to the return of R&D funds from various demonstration and external R&D projects. For example, a project returned $689K due to an inability to purchase a piece of equipment by year-end deadlines.

Audits completed or planned: An audit of the program is planned in 2013-14.

Evaluations planned: An evaluation of the program is planned in 2014-15.

Engagement of applicants and recipients: Stakeholders are engaged at several points during the ecoEII management process. NRCan engaged key stakeholders through a series of Leader’s Fora, during which the focus of subsequent calls for projects under the five strategic priorities was refined. General guidance, such as clarification to the Applicants Guide, was provided to all applications during application review. Extensive discussions with proponents have taken place to incorporate and address their needs to the extent possible within the framework of the ecoEII program terms and conditions and Treasury Board guidelines. Also, regular interaction, such as quarterly or semi-annual monitoring meetings, and informal conference calls have begun and will continue over the administration of the program.