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Opportuni)es through the FIT Program Shawn Cronkwright Ontario Power Authority

Energy Ma8ers Summit

May 28, 2012

Disclaimer

•  This presentation is intended as a high level overview of the draft FIT rules and contract. Any information provided herein is not legally binding on the OPA.

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Agenda

• • • • • • •

Ontario Power Authority overview Transforming to a cleaner electricity system FIT Program benefits and success FIT review FIT 2.0 prices Application processes For more information…

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Ontario Power Authority • Mandate: – Ensure reliable, costeffective, sustainable electricity supply for Ontario

• Key activities: – Long-term power system planning – Coordinating conservation efforts – Procuring new supply • Credit-worthy counterparty to long-term contracts 4

A cleaner electricity system • Phasing out coal by 2014 – 75 percent reduction in electricity sector’s carbon footprint

• Replacing coal with clean, renewable energy resources – FIT Program is helping to bring on more renewable generation 2010 Capacity (MW) Non-­‐ Hydroelectric Renewables

2015 Capacity (MW)

Demand Response

Demand Response Non-­‐ Hydroelectric Renewables

Nuclear

Nuclear

Hydroelectric

Hydroelectric

Coal

Gas

Gas

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Feed-in Tariff (FIT) Program • Launched in 2009 • First comprehensive FIT program in North America • Open to various renewable energy supply technologies

– Solar Photovoltaic (PV) – Wind – Waterpower – Bioenergy technologies (biogas, biomass, landfill gas) • Different prices for different technologies and project sizes • Long-term contracts (e.g. 20 years) 6

FIT Program Impact

• Has encouraged billions of dollars of investment • More than 30 companies have already invested or plan to invest in Ontario – manufacturers/generators/related services • Created thousands of direct and indirect clean energy jobs 7

FIT Program a Success • Tremendous response – high volume of applications from across the province • As of May 13, 2012: – FIT: > 10,200 applications – microFIT: > 49,600 applications – high level of interest and participation from: • homeowners, Aboriginal communities, farmers, community groups, churches and schools

• About 2,000 signed FIT contracts across Ontario – (> 4,600 MW, enough electricity each year to power 1.2 million homes)

• More than 12,000 microFIT projects across the province, totalling over 100 megawatts, connected and generating clean electricity 8

FIT Program Review • Objective – Ensure the long-term sustainability of the program

• Consultation process – October 31 to December 14, 2011 • More than 3,000 Ontarians contributed their views

– April 5 to 27, 2012: Draft rules and contracts posted for comments • Approximately 400 detailed submissions

• Ministry of Energy and OPA continue to refine FIT 2.0 material considering comments received

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Results of FIT Review • Ontario’s Feed-in Tariff Program Two-Year Review Report: Building Ontario’s Clean Energy Future released on March 22, 2012 • Six strategic areas of recommendations: – Continue commitment to clean energy – Streamline processes and create jobs – Encourage greater community and Aboriginal participation – Improve municipal engagement – Reduce prices to reflect lower costs – Expand Ontario’s clean energy economy

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FIT 2.0 Highlights • • • • • • • •

Reduced prices for solar and wind Annual price review – review October/November; effective January 1 of the following year Initial procurement limit of 200 MW for small FIT (≤ 500 kW) (Minister’s directive) Prioritization of applications based on criteria points Application security required for all projects Additional siting restrictions for ground-mounted solar No Economic Connection Test (ECT): connections based on existing capacity Small FIT projects now subject to TAT/DAT

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microFIT 2.0 Highlights

• Reduced prices for solar and wind • Annual price review – Review October/November; effective following January

• Initial microFIT Program procurement limit of 50 MW • Limit of one contract per individual/farmer • Residential, commercial and industrial land restrictions for ground-mounted solar (≤ 10 kW), and wind < 3 kW – Prohibited on residential and abutting lands – Secondary use only on commercial and industrial lands

• No conditional offer; replaced by application approval notice 12

Treatment of Existing Applications • Transition windows will be provided for existing applications – – – –

microFIT applications submitted on or after September 1, 2011 Small FIT (capacity allocation exempt or CAE) Large FIT (capacity allocation required or CAR) Details on timing to be announced shortly

• Following transition periods, applicants that choose not to reapply will have their applications discontinued – timestamp will be lost • All existing FIT applicants will have their application fee and security returned • Large FIT projects that wish to reduce their capacity to 500 kW or less can resubmit their application during the small FIT transition window • Large FIT projects that wish to maintain their capacity can re-submit during the large FIT window, and will retain their time stamp 13

Prices • OPA undertook a comprehensive review of tariff prices – – – –

Examination of project cost inputs Project cost modelling and analysis Global jurisdictional scan Review of detailed stakeholder submissions

• Review of prices reflected – Project size tranche updates to reflect economies of scale – Ranges of prices reflecting various levels of project efficiency

• Recommendations from FIT Review reflected – Prices decreased for solar, wind; held constant for water and bioenergy – Annual price review going forward; contract price set at time of contract award – Escalation percentage calculated from January 1 price schedule closest to commercial operation 14

FIT 2.0 Price Schedule for 2012

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FIT 2.0 Price Schedule (continued)

• FIT Price Adders Aboriginal Participation Community Participation Projects Projects Participation Level (Equity)

>50%

>15% ≤50%

>50%

1.5

0.75

1.0

>15% ≤50%

Price Adder (¢/kWh)

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0.5

Priority Points System PROJECT TYPE Community Participation Project

A co-op having a minimum 15% direct economic interest in the project, and Small FIT: minimum 35 members of the co-op are property owners in the host municipality Large FIT: minimum 50 members of the co-op are property owners in the host municipality

PRIORITY POINTS1 3

Aboriginal Participation A First Nation “band”, Métis Nation of Ontario or other approved aboriginal community having a Project minimum 15% economic interest in the project

3

Education or Health Participation Project

2

Publicly funded schools, public colleges, public universities, hospitals and publicly owned longterm care homes having a minimum 15% economic interest in the project NON-PROJECT TYPE

PRIORITY POINTS1

Municipal Council Support Resolution

Resolution from council or other governing body of local municipality in which the project is located, demonstrating support for the project

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Aboriginal Support Resolution

Resolution from any aboriginal community band council or Métis Local Community that holds rights, or may holds rights, to the land on which the project is located, demonstrating support for the project

2

Project Readiness2

• Projects on Aboriginal land, federal Crown land or private land: title to the site or a legally enforceable lease or option to lease for the site • Rooftop solar PV: ownership of the host building/site, or legally enforceable lease or option to lease for the host building/site

2

Education or Health Host

Publicly funded schools, public colleges, public universities, hospitals and publicly owned longterm care homes who host a project

2

System Benefit

Water and bioenergy projects

1

Notes: 1. All projects need one point to be eligible for a contract 2. All projects need sufficient space

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FIT Application and Contracting Process

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microFIT Application Process

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Details are on FIT and microFIT sites

http://fit.powerauthority.on.ca

http://microfit.powerauthority.on.ca

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Questions?

• Questions about your application: FIT@powerauthority.on.ca microFIT@powerauthority.on.ca • Questions about your FIT contract: Please contact your OPA contract management representative at FIT.Contract@powerauthority.on.ca microFIT.Contract@powerauthority.on.ca

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