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Ontario government announces details of feed-in tariff program, including domestic content rules

TORONTO, ON – Local and international environmental and renewable energy groups congratulated the Ontario government yesterday for four new programs that aim to make the province a global leader in clean, green, renewable energy. The aim of the new regulations introduced yesterday is to create thousands of jobs in the new green economy under Ontario's Green Energy Act.


September 25, 2009
September 25, 2009
By Energy Management

The major components of Ontario’s Green Energy Act as announced on Thursday include:
•    A Feed-In-Tariff program, which allows individuals and companies to sell renewable energy — like solar, wind, water, biomass, biogas and landfill gas — into the grid at set rates.
•    Domestic content requirements, which would ensure at least 25 per cent of wind projects and 50 per cent of solar projects be produced in Ontario — requirements for solar will increase by January 1, 2011 and wind will increase by January 1, 2012.
•    A streamlined approvals process and a service guarantee to bring developers greater certainty.
•    Regulations for setting wind turbines certain distances from houses, roadways and property lines.
•    A new Ontario Renewable Energy Facilitation Office — a one-stop shop to help renewable energy projects get off the ground faster.

The province estimates that more than 50,000 direct and indirect jobs will be created under the Act. Investments in new renewable energy projects already in place or under construction in Ontario since 2003 exceed $4 billion.

Feed-in Tariff Program

The Feed-in Tariff (FIT) program offers long-term price guarantees for renewable electricity generators, which will increase investor confidence and make it easier to finance projects. Ontario’s FIT program will encourage investment to help Ontario’s energy supply mix become one of the cleanest in North America. The FIT has several key features:
•    allows all sizes of generators, from homeowners to large developers to participate;
•    has prices that are intended to cover total project costs and provide a reasonable rate of return over a 20-year contract (40 years for waterpower);
•    is open to various renewable energy technologies: biogas, biomass, landfill gas, solar photovoltaic (PV), wind and waterpower;
•    provides incentives for Aboriginal projects;
•    provides incentives for community-based projects;
•    provides a straightforward way to obtain a contract for renewable electricity generation;
•    has different prices for different technologies and different project sizes; and
•    includes domestic content requirements.

FIT payments can range from 10.3 cents per kilowatt-hour (c/kWh) for landfill gas projects larger than 10 MW to 80.2 c/kWh for residential solar rooftop projects 10 kW or smaller. The FIT also includes a “price adder” for Aboriginal and community projects to encourage participation.

Domestic content
Developers will be required to have a certain percentage of their project costs come from Ontario goods and labour at the time they reach commercial operation.
•    For wind, the requirement will start at 25 per cent and increase to 50 per cent on Jan. 1, 2012.
•    For micro solar PV (10 kW or smaller), the requirement will start at 40 per cent and increase to 60 per cent on Jan. 1, 2011.
•    For larger solar PV, the requirement will start at 50 per cent and increase to 60% on Jan. 1, 2011.

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The Ontario Power Authority will begin accepting FIT applications on Oct. 1, 2009 and expects to sign the first contracts in early December.

Ontario will direct the OPA that there is to be no ground-mounted solar procurement above 100 kilowatts on class 1 and 2 or Specialty Crop Areas to provide continued protection of those lands. Some ground-mounted solar procurement, up to 500 megawatts, will be allowed on Class 3 lands, allocated on a regional basis.

The challenge in this particular area is the question of whether there is sufficient current local capacity to support the development of projects today. However, a statement from the Ontario Sustainable Energy Association (OSEA) Thursday afternoon, demonstrates that its members don’t feel that the local content rules go far enough.

The statement noted that there was “only a modest local requirement for wind developments, the industry with the highest potential for jobs in manufacturing in Ontario. The 25 per cent is only expected to promote local construction jobs and transmission components, not the turbines themselves as hoped.”

“We are disappointed that the domestic content requirement is only 25 per cent until 2012,” said Ken Delaney, United Steelworkers Canada, in the same statement. “If you want wind turbines manufactured in Ontario you need higher domestic content. I am afraid this policy leaves a lot of green jobs on the table.”
 
“We need to look at all available opportunities to bring these green manufacturing jobs to the region,” Dr. Rick Smith, Executive Director of Environmental Defence. “It would be a shame if Ontario’s renewable energy revolution is not truly made in Ontario and all this great work does not truly benefit every Ontarian.”

Renewable Energy Approval (REA)
The Renewable Energy Approval (REA) process became law on Sept. 24, 2009, and is designed to ensure that renewable energy projects are developed in a way that is protective of human health, the environment, and Ontario’s cultural and natural heritage. While the FIT program simplifies the contracts and pricing for new projects, a streamlined approvals process makes it easier to bring renewable energy projects to life.

The REA:
•    Takes a cautious approach to setbacks and noise limits by establishing the largest setback requirements in Canada, the United States and eight European countries — a minimum setback of 550 metres for one to five wind turbines, with setbacks increasing with the number and the sound level rating of turbines
•    Integrates environmental approvals, providing clear provincial rules and requirements, transparent decision-making and certainty for stakeholders and proponents.
•    Integrates the former regulatory approval requirements, including: municipal planning approvals, Environmental Assessments, Certificates of Approval, Permissions to Take Water and other provincial approvals and permits.
•    Establishes consultation processes for municipalities and communities in relation to project site requirements and local infrastructure.
•    Encourages Aboriginal consultation early in the process with communities identified by the Crown.
•    Is coordinated with other provincial approvals to ensure a streamlined approach, providing a six-month service guarantee per project.

Renewable Energy Facilitation Office
The newly created Renewable Energy Facilitation Office (REFO) is a one-window access point for information on renewable energy project requirements, and can connect Ontarians with the appropriate resources to assist them in navigating through the approvals and Feed-in Tariff processes.

The REFO functions as a source of information for renewable energy developers, communities, and municipalities, and can act as a liaison between these parties and Ontario’s ministries and agencies. The REFO can assist in setting up a coordinated orientation meeting to discuss your project’s requirements. This meeting can help clarify various requirements related to your renewable energy project.

“We are thrilled that the government has followed through on its pledge to make Ontario a global leader in renewable energy,” said Deb Doncaster, Executive Director of the Community Power Fund and member of the Green Energy Act Alliance. “The new feed-in tariffs and approval process provide an excellent environment for the renewable energy industry, while new resources for the community power sector mean that individuals and communities will directly benefit from the government’s plans.”
 
“Ontario is quickly emerging as a global leader in renewable energy with policies that rival those of the renewable energy superpowers in Europe and elsewhere,” said Dr. Hermann Scheer, President of EUROSOLAR, General Chairman of the World Council for Renewable Energy and Member of the German Bundestag (Germany’s federal parliament). “The success of feed-in tariff programs in many European countries has shown they are the right choice for regions serious about renewable energy. Ontario has chosen wisely and will surely reap the rewards.”
 
“Ontario is breaking ground in North America and embarking on an important journey, one that we hope more governments will follow, including state and federal agencies in the United States,” said Denis Hayes, President and CEO of the Bullitt Foundation, Former Director of the US National Renewable Energy Laboratory and founder of Earth Day International.

Community involvement
To encourage community power, the government announced two funds to help communities develop renewable energy projects and municipalities deal with infrastructure costs associated with accommodating projects in their regions. This is in addition to the two funds announced last week to support the direct participation of Aboriginal communities in Ontario’s emerging green energy sector.

“This program and the feed-in tariffs are great incentives for people in communities throughout Ontario who want to generate clean energy, while the streamlined regulations should remove many of the barriers that have been preventing communities from developing green energy projects. We will be closely monitoring how effective the programs and regulations are and we welcome the opportunity to review them in two years time,” said Kristopher Stevens, Executive Director of the Ontario Sustainable Energy Association, which represents many communities developing power projects.

For detailed information about the Feed-in Tariff, click here.
For more information about the Ontario Sustainable Energy Association, visit www.ontario-sea.org/.