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How will Ontario’s feed-in-tariff review affect renewables development?
When it comes to the development of renewable energy in Canada, many Canadian provinces and territories (if not all) looked to Ontario’s Green Energy Act and, more specifically, its FIT (feed-in-tariff) and microFIT programs for successes and failures. Depending on where you fit into the social fabric, your opinion will range anywhere from resounding success to complete and abysmal failure, never to repeated.
Proponents of the program steadfastly maintain that, especially for a have-not province, Ontario needed to do something to stimulate the economy. Meantime, detractors have always maintained the program is unsustainable. Which is why industry stakeholders waited with baited breath for the results of the government’s two-year FIT Program Review, which came out last month, and considered issues such as:
April 11, 2012 By Anthony Capkun
• Ensuring the long-term sustainability of clean energy procurement.
• Continuing to build on the success of Ontario-based manufacturing and clean energy job creation.
• Consideration of new technologies and fuel sources.
• Local consultation and the renewable energy approval (REA) process.
• Application process rules.
“Feed-in tariffs have consistently been found to be the most cost effective policy tool to develop renewable energy globally,” said Tim Weis, director of the Pembina Institute’s renewable energy and efficiency policy program. “Today’s announcement by the Ontario government is consistent with international best practices to regularly review and reduce prices, which is a reflection of continued technological improvements.”
With the review recommendations formally adopted, the Ontario Power Authority can complete draft Program Rules and draft Contracts to implement the report recommendations. These materials will be posted on the microFIT and FIT websites shortly for review and comment.
Meantime, what are some of those recommendations? The review makes strategic recommendations in six areas:
1. Continue commitment to clean energy
Beginning this year, the province will conduct an annual review of FIT prices, setting and publishing prices each November, effective January 1 the following year. As the program moves forward, Ontario expects to procure its target of 10,700 MW of non-hydro renewable energy generation by 2015.
At the end of 2013, the government will review Ontario’s electricity supply and demand forecast to explore whether a higher renewables capacity target is warranted.
2. Streamline processes and create jobs
To see these projects produce jobs and investment in local communities, Ontario should improve the regulatory approvals process while maintaining the “highest environmental protection standards”. The province will create a new Renewable Energy Committee to help regulatory ministries reduce duplication, improve service standards and streamline the process. They expect this will reduce the application process by up to 25%.
“CanSIA members, through our Working Group structures, will be working closely with government to streamline the process and create the efficiencies that are needed to ensure we have a sustainable industry that is creating jobs in this province,” said Michelle Chislett, CanSIA (Canadian Solar Industries Association) chair.
The Ministry of Natural Resources will review and update its approach to renewable energy development on Crown land to align the release of Crown land with provincial energy supply needs and transmission availability.
3. Encourage greater community and Aboriginal participation
To ensure that projects are rooted in the community and investment remains in the community, the province will reserve a minimum of 10% of the remaining FIT contract capacity for projects with significant community and Aboriginal participation. The new program will also prioritize large and small FIT applications using a point system that will award additional points to projects that have significant local and/or Aboriginal involvement.
4. Improve municipal engagement
Under the new rules, large FIT projects will require a contract launch meeting with the municipality, proponent, project developer, government, utility and agency to facilitate early discussion, share information and define expectations. Projects with municipal support will be prioritized through the new point system during the application review process.
The province will clarify project-siting rules by removing all exemptions and strengthening the protection of prime agricultural lands. The Association of Municipalities of Ontario (AMO) will work with the Ministry of Energy to revise the municipal consultation form in the REA process.
5. Reduce prices to reflect lower costs
To balance the interests of all Ontarians while continuing to encourage investment, FIT prices will be reduced by more than 20% for solar and about 15% for wind. Prices for water, biogas, biomass and landfill gas will remain at current levels.
“The price cuts to the FIT program are very aggressive,” said Chislett. “We are confident in our industry’s ability to adapt and innovate, but the government will have to ensure the efficiencies in the application and approvals process announced today are implemented appropriately. This is especially true for the microFIT segment.”
“As FIT contracted projects move forward, we expect there to be some attrition”, added Valerie Helbronner, chair of the Ontario Waterpower Association (OWA) board. “Coupled with transmission investments in Northern Ontario, I am confident that new waterpower will make a more significant contribution to our energy and economic objectives.”
6. Expand Ontario’s clean energy economy
The Ministry of Energy and the Ministry of Economic Development and Innovation will develop a Clean Energy Economic Development Strategy that will build on Ontario’s strengths and leverage its experience as a leader in the sector. Future international expansion by the most innovative and competitive companies in Ontario will be the key to long-term industry growth.
“It’s clear Ontario’s clean energy sector is evolving and the province is positioned to become a global leader in clean energy knowledge and products,” said Chris Bentley, Ontario’s energy minister.
Where to learn more?
To learn more, plan on attending CanSIA’s Solar Ontario 2012 annual regional conference and tradeshow, being held May 14-15 in London, Ont.
Chris Bentley will be attending the opening reception and the mayor of London, Ont., Joe Fontana has also been invited to come out and meet delegates. The goal is to gather as many government officials and decision makers together for the vital assessment of the industry, said organizers.
This year’s conference themes focus on Understanding Ontario FIT Program 2.0 and Implementation of Ontario FIT 1.0 Projects.
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