North America’s First Feed-In Tariff: Understanding Ontario’s Green Energy Act Mike Layton Deputy Outreach Director Environmental Defence Canada Coordinator, Green Energy Act Alliance
Ontario’s Electricity Mix
Road to Green Energy Act
Electricity Market Deregulation Rise and Fall of Standard Offer Program (RESOP)
1998. The formation of Toronto Renewable Energy Co-op. Community-owned Toronto waterfront wind turbine.
Formation of Ontario Sustainable Energy Association.
Renewable portfolio standard through RFPs (2,500 MW) Barriers for community power.
2004 Paul Gipe comes to Ontario to promote FITs.
2006 Government introduced RESOP.
Road to Green Energy Act - 2
Promise to phase out coal power New Energy Minister goes to Europe Formation of Green Energy Act Alliance Introduction of Act Government Rollout – 10 Steps Feed-In Tariff Launch
Formed June 2008 – after RESOP hiatus Green Energy Act Alliance
Green Energy and Green Economy Act, 2009 „ 1. 2.
3.
Objectives
Make it easier to bring renewable energy projects to life Fostering a culture of conservation by assisting homeowners, government, schools and industrial employers to transition to lower and more efficient energy use. Create 50,000 green energy jobs
Key Elements
Streamlined approvals for renewable energy, while working with municipalities and ensuring strong protection for health, safety and community consultation. Developing a Feed-in-tariff system for renewable energy - focus on helping companies, farmers, Co-ops Opportunities for municipalities, First Nation and Métis communities to build, own and operate their own renewable energy projects Conservation added to mandate of ministry and agencies Includes regulatory and policy changes., e.g. smart grid Mandatory home energy audits prior to sale of homes (unless waived by buyer) .
FIT Features
Administered by Ontario Power Authority (OPA) Feed-in tariff as primary renewable energy procurement mechanism Priority Access for renewable energy Right of connection if meet economic tester or as designated by OPA FIT contract price is set based on technology cost + reasonable Return on Investment FIT applies to all behind the meter projects NO cap on program, project size or voltage 20% Inflation indexing, except for solar Two year iterative review process Costs recovery for utilities through universal adjustment and/or local rate base All projects under 500 kW pre-October 1st have been migrated to the micro-FIT
Eligibility and Fees Provisions for program launch Connection capacity awarded based on project readiness Eligibility criteria renewable energy projects located in Ontario Fees and securities Application fee $500 / MW of proposed contract capacity Application security $10,000 / MW for wind, waterpower, biomass $20,000 / MW for solar PV $5,000 / MW for >50% community-based or Aboriginal projects first and second completion and performance securities Required after contract is offered
FIT Price
Domestic Content FIT – RE Projects >10kW Wind projects over 10 kW Minimum Year of commercial domestic content operations
level
Solar projects over 10 kW Minimum Year of commercial domestic content operations
level
25 %
2009 to 2011
50 %
2009-2010
50 %
2012 and later
60 %
2011 and later
MicroFIT â&#x20AC;&#x201C; RE Projects <10kW Solar projects equal to or less than 10 kW Minimum domestic content level Year of commercial operations 40 % 60 %
2009-2010 2011 and later
Renewable Energy Approval
Integrates and streamlines existing approvals Replaces a patchwork of provincial and municipal regulations Regulatory certainty for developers and municipalities
Technology Specific Highlights Solar - Rooftop facilities and ground mounted solar facilities less than 10kw DO NOT require a RE approval. Wind – Mandatory Setback distances from homes and natural features Biomass - Varies depending on location Waterpower – Class Environmental Assessment NOT a RE Approval.
Complimentary Programs
Municipal Renewable Energy Partnership Program
Community Energy Partnership Program
Reimbursement for direct costs
soft costs
Aboriginal Energy Partnership Program
Community energy plans, soft costs, Aboriginal Renewable Energy Network
Progress Update – First 6 months
October 1, 2009 – FIT program begins accepting contract applications. www.powerauthority.on.ca December 16, 2009 – OPA announces it received 2,200 applications for FIT (1,000) and microFIT (1,200) contracts totaling 8,000MW. January 21st, 2010 – Ontario government signs deal with a Korean consortium lead by Samsung C&T Corporation to invest $7 billion to generate 2,500 megawatts of wind and solar power in Ontario and open four manufacturing facilities. March 1st, 2010 – OPA launches website for local renewable energy technology supplier vendors. March 8th, 2010 – OPA announces conditional offers to almost 2,000 microFIT applicants and over 6,000 microFIT applications have been received. Applications included: 6,114 solar PV (54 MW), 40 wind (305 kW), 11 biomass (93 kW), 6 landfill gas (53 kW), 4 water (16 kW) and one biogas (9 kW). March 10th, 2010 – OPA announces 510 mid-sized projects (up to 500kW) to receive FIT contracts.
Progress Update – Last 4 months
April 8th, 2010 – OPA announces 184 large-scale Projects to receive FIT contracts. OPA estimates total mid- and large FIT projects will generate $9 billion in private sector investment and will create 20,000 direst and indirect jobs. May 7th, 2010 – First two FIT contracted facilities came online. May 10th, 2010 – Minister of Energy and Infrastructure Announces Community Energy Partnership Program to assist community power projects with up to $200,000 of grants for project soft costs. May 10th, 2010 – More than 11,000 microFIT applications and 1,600 FIT applications received. July 2, 2010 – OPA announces more than 16,000 applications for microFIT contracts
Korean Consortium Deal
Announced January 21st, 2010 Consortium led by Samsung C&T Corporation and the Korea Electric Power Corporation (KEPCO) $7 billion investment generate 2,500 megawatts of wind and solar power 16,000 new green energy jobs (1,440 manufacturing and related jobs)