CanREA

Canadian Renewable Energy Alliance

Ontario’s Renewable Power Transition Under Threat

Ontario’s feed in tariff program is nearly two years old. Introduced under the Green Energy and Economy Act in 2009, the tariffs have led to record breaking installation of wind, solar, hydro and biomass power capacity and already created hundreds of jobs. They have received praise and awards from all around the world. Yet they are currently under threat.

First the good news. Over 3500 MW of new renewable power capacity has been installed or approved for connection since 2009. As early as April 2010, the Ontario Power Authority (OPA) had awarded contracts totally 2500 MW for solar, wind and hydro power under the FIT program. This was in addition to 112 MW of small scale (<10 KW), mostly solar, MicroFIT projects announced in March, 2010.  Forty (40) more new FIT contracts for more than 872 megawatts (MW) were awarded in February 2011. These new contracts include 257 MW of solar projects and 615 MW of wind projects and are located across the province. 

FIT and MicroFIT applications amounting to an additional 3500 MW are in the OPA pipeline awaiting connection capacity.  See our Ontario pages for more information.

Ontario’s solar PV capacity is now second only to California in North America with a total 215 MW installed or about 10% of North America’s total. This will rise again in 2011 as new approved capacity comes on line – from households, commercial shopping chains, and rural ground mounted solar farms. 

While manufacturing and installation companies are still setting up to meet demand from the FIT and MicroFIT programs, several hundred new jobs can already be attributed to the Green Energy and Economy Act. These include many at new solar PV manufacturing plants. Grid upgrades are underway to absorb higher amounts of renewable power. Smart grid and storage research could make renewable power a viable base load source. A recent report by the Pembina Institute showed that investment in renewable energy and energy efficiency creates far more jobs than nuclear or coal with carbon capture.

The Community Energy Partnership Program (CEPP) has been established to provide grants, loans, and capital resources for community owned power systems. For those who would rather invest in community power instead of owning their own systems, renewable energy coops are springing up in  Toronto, Burlington, Waterloo, MilvertonOttawa, North Bay, and other cities across Ontario. 

While the Liberal Government that introduced the Green Energy and Ecomomy Act still stands squrely behind it, a number of unfortunate political decision by the government has undermined investor and public confidence in renewable energy. Opposition Tory and NDP parties have taken advantage of this and are wrongly blaming renewable power for electricity price increases and encouraging local opposition to new wind farms.

The Liberals began by allowing the Ontario Power Authority to tinker with FIT and MicroFIT rates and rules instead of waiting for the full two year review period. This included changing the tariff for small ground mounted systems and disqualifying non-property owners from owning MicroFIT systems. Then came a reversal of a previous decision to include off shore wind systems in the FIT program and the cancellation of a large number of MicroFIT contracts because of perceived grid capacity limitations. This has gradually reduced overall confidence in the FIT program, as well as provided opposition parties with ammunition to criticize the Green Energy Act itself.

All this has occurred in a period of rising electricity prices due to grid upgrades, nuclear power plant refurbishment, time of use rates, and an 8% HST sales tax added to all energy sales. The Tory and NDP opposition parties have been quick to blame renewable energy for these increases even though they were approved before the new capacity came on line. Gordon Miller, Ontario’s environmental commissioner, recently illustrated on TV Ontario that renewable energy and energy conservation account for only 0.4 cents per kWh of current power costs. In Germany, after over a decade of using feed-in tariffs, new renewable power sources now provide over 16% of the country’s power supply, yet contribute only 15% to electricty prices. This capacity has also made a net positive economic impact on the German economy.

Supporters of the Green Energy and Economy Act and the feed-in tariff program are now mobilizing to make sure the public gets the truth about the Province’s power system, and that debate during next fall’s provincial election campaign is not based on half truths and mis-information. Active supporters include Stand Up for Solar, the Green Energy Act Alliance, and the Ontario Clean Air Alliance.

Here are some of the basic truths about current power development in Ontario:

  • The feed in tariff policy has already created hundreds of jobs and is helping to wean Ontario off of coal power.
  • The Green Energy and Economy Act has made Ontario a leader in North America in renewable power deployment and the province is poised to become the centre of the North American solar manufacturing industry. 
  • This leadership will allow Ontario to be one of the first states or provinces to deploy energy storage and smart grid technology that will make base load renewable power a reality.
  • Renewable power development is entering a crucial phase as the limiting factor becomes grid capacity. A stable investment environment and grid development strategy is essential for at least the next 5 years.
  • Any new power source, including new nuclear or coal with carbon capture, will cost as least as much as renewable power.
  • The only practical way to limit future electricity costs to consumers is through major efficiency and conservation gains.
  • Properly installed off-shore wind and acceptable set backs for on shore wind will not affect peoples health, livelihoods or enjoyment of their property.
  • The feed in tariffs for solar appear very high, but they are still less than the Province pays for power during the summer peak - just when solar is delivering its power. The feed-in tariff policy is also driving the cost of solar down through economies of scale so that the tariff can be gradually decreased over time.
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2 Comments

  1. Excellent article – thanks!

    The erosion of the program is a significant concern. The program is not without its contoversial requirements such as the domestic content requirements. But, the bigger issues, as underscored by solar industry execs very early on, was that the program be consistent and transparent.

    A point of clarification, were a large number of microFIT contracts cancelled? I had thought some had been unable to connect, while all pending applications now have the retroactive ‘Connection Impact Assessment’ requirement. In total, 85% of microFIT applications have not been implemented the the majority of these have received Conditional Offers from the OPA.

    The biggest challenge at the moment appears to be Hydro One and the grid constraints. The CIA appears to have put the microFIT on virtual standstill.

    A complementary article to this one can be found at: http://d-bits.com/is-ontario-fit-program-losing-momentum/

    Regards, David

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