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Ontario Launches Comprehensive System of Feed-in Tariffs

Posted on Friday, September 25th, 2009 at 12:28 pm by Paul Gipe

First System of Advanced Renewable Tariffs in North America

Follows from the Continent’s Most Aggressive Climate Change Policy

September 24, 2009

By Paul Gipe

(Toronto, Ontario) Ontario today launched the province’s long-awaited program of feed-in tariffs in response to its ground-breaking Green Energy Act.

Ontario Premier Dalton McGuinty, Minister of Energy and Infrastructure George Smitherman, and Minister of the Environment John Gerretsen made the announcement against the iconic backdrop of Toronto’s cooperatively-owned wind turbine.

This was the last in a series of announcements on implementation of the Green Energy Act this week by Energy Minister Smitherman.

The announcements began with Minister Smitherman opening the Canadian Wind Energy Association’s annual conference in Toronto. At the conference’s plenary session on Monday, September 21, Smitherman revealed a $2.3 billion (CAD) plan to build new transmission and distribution lines in the province to rapidly develop Ontario’s renewable energy potential.

On Wednesday, September 23, Smitherman announced a special fund to aid development of renewable energy projects by First Nations (Ontario’s indigenous people), community groups, and cooperatives.

Today’s announcement culminates a months-long series of public consultations on the feed-in tariff program. The program now goes live October 1, 2009.

In contrast to several other North American jurisdictions with weak feed-in tariffs, Ontario’s policy follows successful practice in Europe. Ontario’s system of feed-in tariffs is based on the cost of generation from each different technology, the cornerstone of successful European programs. For example, there are different tariffs for solar photovoltaics (solar PV) and wind energy.

The tariffs are precedent setting in North America not only for the number of different technologies listed, but also for the prices offered. Solar energy advocates will be particularly pleased. Ontario’s proposed tariffs, if implemented, will be the highest in North America. For rooftop solar they will be comparable to those offered in Germany and France.

Ontario is expecting a boom in rooftop solar installations as a result of the program. The province will pay $0.80 CAD/kWh ($0.69 USD/kWh; €€0.51/kWh) for electricity from small rooftop solar systems less than 10 kilowatts for a period of 20 years.

Through the feed-in tariff program, Ontario will also pay the highest prices for wind energy, and biogas in North America. The tariffs represent the best estimates by engineers and economists of what it costs to develop renewable energy under Ontario’s climatic conditions.

Unlike programs in the United States, there are no subsidies from either the federal or local government used in the feed-in tariff program.

In a first for North America, the new program includes feed-in tariffs specifically for offshore wind energy: $0.19 CAD/kWh ($0.16 USD/kWh; €€0.12/kWh). Ontario borders all the Great Lakes except Lake Michigan.

In the run up to the G20 in Pittsburgh and the Copenhagen climate conference later this year, Smitherman has stressed the theme that Ontario’s new feed-in tariff program is just one part of what is North America’s most aggressive climate change policy.

Ontario plans to close all its coal-fired power plants by 2014. It is the only jurisdiction in North America to make such a commitment. As a result, Ontario has embarked on an ambitious plan to become a leader in renewable energy development to make up the difference in lost power generation.

At one time coal made up nearly one-quarter of Ontario’s electricity generation. In a previous announcement this past summer, Minister Smitherman accelerated the closing dates for two coal-fired units. This was seen as a sign that the government is making progress on its commitment.

At the press conference, Minister of the Environment Gerretsen introduced new regulations governing the siting of wind turbines and solar power plants. Wind turbines will have to comply with a minimum setback of 550 meters from a non-participating residence. He also announced that solar power plants may not be built on prime agricultural land, designated Class I and Class II. However, Minister Garretsen said that a number of pre-existing proposals comprising several thousand acres will be allowed to go ahead on Class III lands.

Restricting solar PV development to Class III or greater lands is not expected to have any significant effect on the solar potential of the huge province.

Ontario is the second largest province in Canada. Ontario is also Canada’s most populous province.

Toronto, the provincial capital is Canada’s largest city and one of the largest in North America. The Canadian Solar Energy Industries Association (CanSIA) estimates there are several thousand megawatts of potential solar-electric generation on Toronto’s rooftops alone.

In early 2009, CanSIA suggested that solar PV alone could make up 10 percent of Ontario’s electricity supply by 2025. Such a contribution, about 16 TWh per year, would require the installation of 16,000 MW of solar PV under Ontario’s climatic conditions.

In a survey earlier this year, the Ontario Power Authority (OPA) found huge interest in the feed-in tariff program. OPA estimated there was as much as 15,000 MW of potential projects being weighed by project proponents.

To tap that potential, Ontario has embarked on an ambitious program of developing new transmission and distribution lines, including so-called “enabler” lines. The enabler lines will be built in areas where there is more renewable energy potential than the current system can transport. The province will also build enabler lines to areas with a concentration of renewable energy potential that is not currently served by the existing system.

Minister Smitherman revealed in his September 21st announcement the approximate location of 20 new transmission projects.

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