Ontario Power Authority mulls changes for large renewable projects

The Ontario Power Authority (OPA) on Sept. 19 released for comment a new report that outlines a revamped system for encouraging large renewable energy projects in the Canadian province.

On June 12, the Ontario Minister of Energy directed the OPA to make changes to the Feed-in-Tariff (FIT) Program, including removing large projects from the program and developing a new competitive procurement process that considers input from stakeholders, municipalities and Aboriginal communities to help identify appropriate locations and siting requirements for applicable projects.

This “Development of a New Large Renewable Procurement Process – Initial Engagement Feedback and Interim Recommendations” report was submitted to the Minister of Energy on Aug. 30 and is now up for review. The report summarizes the results of the OPA’s engagement and other research activities and provides the OPA’s interim recommendations.

As discussed in greater detail in the report, the OPA proposes the following interim recommendations for the Minister of Energy’s consideration:

Leading to the launch of the procurement

  • Continue and expand the municipal, First Nation and Métis, and stakeholder engagement activities in the fall of 2013;
  • The Long Term Energy Plan (LTEP) should advise on quantity and timing of new resources to be procured;
  • Generation procurement should follow the provincial and/or regional electricity system need;
  • Conduct multiple successive rounds of procurements (e.g., whether by technology, size or area of need);
  • Procurement need, goals and expectations need to be clearly set out and understood by all parties;
  • Municipal electricity generation preferences should be considered; and
  • Conduct local outreach prior to procurement commencement.

Components to be included in the procurement

  • Continue procuring through the Request-for-Proposal (RFP) model;
  • A project’s bid price should remain a key RFP evaluation factor;
  • Proponent experience and financial capability should be considered;
  • Continue to encourage community, Aboriginal, municipal and public sector entity participation through procurement incentive mechanisms;
  • Site due diligence evidence should be required;
  • Interconnection information and cost estimates provided earlier in the process;
  • Provide greater municipal control over land use and siting;
  • Require community engagement sessions and council deputations during the RFP phase;
  • Minimum community acceptance criteria should be considered;
  • Further clarity on Ontario Power Generation (OPG) participation is needed; and
  • Conduct further research on technology bundling.

The OPA said it will be undertaking additional engagement activities on the interim recommendations in the fall of this year to further inform the development of the new competitive procurement process and will also incorporate the feedback that is being received by the ministry as part of the ongoing LTEP review. This engagement activity information will be posted to the web page as it becomes available.

Thousands of megawatts of renewables developed in recent years

In the 2004-2008 period, the Ministry of Energy and the OPA competitively procured 1,565 MW of large renewable energy capacity through multiple phases of the Renewable Energy Supply (RES) procurement (called RES I, II, III). Concurrently, from 2006 to 2008 the OPA led the Renewable Energy Standard Offer Program (RESOP) and procured 862 MW of projects under 10 MW in size.

Following the conclusion of the final RES III phase and halting of RESOP, in 2009 the OPA moved entirely to a standard offer procurement for renewable facilities, under the FIT Program (and the ancillary micro-FIT program for very small projects). Through FIT, applicants who met standard eligibility and application requirements would receive project size specific guaranteed prices for the energy they generated. More recently, an application ranking system in the form of priority points and capacity set asides was established to encourage participation and engagement from Aboriginal groups, communities, municipalities and public sector entities.

As of July 1, 2013, the OPA had contracted 4,684 MW of capacity under the FIT/microFIT programs, 4,321 MW of which are Large FIT sized projects.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.