Ontario Sustainable Energy Association

Ontario SustainableOntario SustainableEnergy AssociationEnergy AssociationOntario SustainableOntario SustainableEnergy AssociationEnergy Association

Presentation to thePresentation to the

Board of Directors; Ontario Power AuthorityBoard of Directors; Ontario Power Authority

June 14, 2007June 14, 2007

Presentation to thePresentation to the

Board of Directors; Ontario Power AuthorityBoard of Directors; Ontario Power Authority

June 14, 2007June 14, 2007

AgendaAgenda

Who Is OSEA?

Advanced Renewable Tariffs

The Standard Offer Program

Comparison & Critique

Intent of the SOC Program

Moving Forward

Who Is OSEA?


The Standard Offer Program

Comparison & Critique

Intent of the SOC Program

Moving Forward

OSEA ARTs SOP Critique Intent Future

WHO IS OSEA?WHO IS OSEA?

About OSEAAbout OSEA

A province-wide non-profit organization founded in 1999

A member-based organization

Currently 30 Member Organizations actively pursuing locally owned projects (Farmers, First Nations and Cooperatives)

A province-wide non-profit organization founded in 1999

A member-based organization

Currently 30 Member Organizations actively pursuing locally owned projects (Farmers, First Nations and Cooperatives)


About OSEAAbout OSEA

• Education and Training

• Policy Development• Initiation of new

community power organizations and projects

• Technical Assistance

• Education and Training

• Policy Development• Initiation of new

community power organizations and projects

• Technical Assistance


Current OSEA MembersCurrent OSEA Members

Manitoulin

Lion’s HeadTiberton

Kincardine

Bervie Toronto

Mount Forest

MelancthonWaterloo

Kitchener

Hamilton

Caledon

Orangeville

Dufferin

Newmarket

BarrieMidland

BobcaygeonOttawa

Milford

KingstonPerth

Temagami

WalfordMoCreebecThunder Bay


OSEA’s GoalsOSEA’s Goals

500 MW Community Power by 2012 100% renewable energy supply in

Ontario Minimum 50% ownership by

landowners, farmers, community organizations, local utilities, municipalities of all renewable energy generation within the Province

500 MW Community Power by 2012 100% renewable energy supply in

Ontario Minimum 50% ownership by

landowners, farmers, community organizations, local utilities, municipalities of all renewable energy generation within the Province


OSEA AccomplishmentsOSEA Accomplishments

SOC Program Community Power Fund WWEA Conference Awards Grants

SOC Program Community Power Fund WWEA Conference Awards Grants


Community Drives Renewable EnergyCommunity Drives Renewable Energy

85% of wind in Denmark; 65% in the Netherlands, and 50% of wind in Germany is locally owned Total installed Capacity of Wind in Germany is

20,600 MW Germany is 1/3 size of Ontario and has similar

wind resources Ontario has ~ 400 MW of wind Ontario has over 30 community power co-ops and

groups Ontario’s community power sector represents ~

500 MW by 2012

85% of wind in Denmark; 65% in the Netherlands, and 50% of wind in Germany is locally owned Total installed Capacity of Wind in Germany is

20,600 MW Germany is 1/3 size of Ontario and has similar

wind resources Ontario has ~ 400 MW of wind Ontario has over 30 community power co-ops and

groups Ontario’s community power sector represents ~

500 MW by 2012


Advanced Renewable Tariffs:The Origin of ARTs in OntarioAdvanced Renewable Tariffs:The Origin of ARTs in Ontario

OSEA’s ARTs CampaignOSEA’s ARTs Campaign

2004 - OSEA launched campaign for Advanced Renewable Tariffs

Fall 2004 - Liberal Party Endorses ARTs

Winter 2004 - MoE Hires OSEA for SOC Study

2004 - OSEA launched campaign for Advanced Renewable Tariffs

Fall 2004 - Liberal Party Endorses ARTs

Winter 2004 - MoE Hires OSEA for SOC Study


OSEA’s ARTs CampaignOSEA’s ARTs Campaign

Fall 2005 - MoE issues directive to OPA to develop recommendations on a SOP for Ontario

March 2006 - Premier announces SOC Program

March-October - OPA&OEB Stakeholder Workshops

November 2006 - SOP rules issued

Fall 2005 - MoE issues directive to OPA to develop recommendations on a SOP for Ontario

March 2006 - Premier announces SOC Program

March-October - OPA&OEB Stakeholder Workshops

November 2006 - SOP rules issued


Why ARTs?Why ARTs?

Community power proponents are precluded from participating in the RFP process for renewables

ARTs allows for broad based participation and ownership of renewable power generation

Simplified administrative process for government and suppliers

Markets with ARTs have more players, stronger local economies, more manufacturing, more jobs, more renewable energy generation

ARTs are a proven policy mechanism for the rapid deployment of renewable energy – Denmark, Germany, Spain, France, California

Community power proponents are precluded from participating in the RFP process for renewables

ARTs allows for broad based participation and ownership of renewable power generation

Simplified administrative process for government and suppliers

Markets with ARTs have more players, stronger local economies, more manufacturing, more jobs, more renewable energy generation

ARTs are a proven policy mechanism for the rapid deployment of renewable energy – Denmark, Germany, Spain, France, California


OSEA’s Goals (Past and Present)OSEA’s Goals (Past and Present)

Encourage Broad Participation Eliminate Barriers to DG Provide a Stable Market for RE Stimulate New Investment in RE Provide a Rigorous Pricing Model Create a Program for All Renewables Provide a Simple, Streamlined, Cost-

Effective Application Process

Encourage Broad Participation Eliminate Barriers to DG Provide a Stable Market for RE Stimulate New Investment in RE Provide a Rigorous Pricing Model Create a Program for All Renewables Provide a Simple, Streamlined, Cost-

Effective Application Process


Key Components OSEA ProposedKey Components OSEA Proposed

Size (up to 10 MW) suggested cap Open to all players 20 year contracts Price

set to encourage project development where there is community support and sufficient resource (e.g. wind = or > 5.6 m/s)

specific to production and technology Guaranteed access to grid Pilot 2005-2010 (no cap), review in 2007

Size (up to 10 MW) suggested cap Open to all players 20 year contracts Price

set to encourage project development where there is community support and sufficient resource (e.g. wind = or > 5.6 m/s)

specific to production and technology Guaranteed access to grid Pilot 2005-2010 (no cap), review in 2007



OSEA’s Proposed Prices


OSEA’s Proposed PricesInitial Price ($CAD/kWh)

Average Price (Teq) ($CAD/kWh)

Wind 1-5 (T1) 0.133

High Wind (T2) 0.069 0.091

Medium Wind (T2) 0.09 0.105

Base Wind (T2) 0.133 0.133

Solar PV 0.83 0.83

Solar PV (Soft Loans) 0.67 0.67

Biomass 0.133 0.133

Small Hydro 0.133 0.133

Paul Gipe, wind-works.org


OPA-OEB Program GoalsOPA-OEB Program Goals

Be Simple Remove Barriers to RE Generation Balance RE Generation with Value to

Ratepayers Build on the Efforts of OSEA

Be Simple Remove Barriers to RE Generation Balance RE Generation with Value to

Ratepayers Build on the Efforts of OSEA


What We Got: The Ontario Standard Offer

Program

What We Got: The Ontario Standard Offer

Program

What We Got: Ontario’s SOPWhat We Got: Ontario’s SOP

Size (0 up to 10 MW) cap Open to all players Not a pilot program – no cap on program capacity 20 year contract between generator and OPA Standardized Prices

11 cents/kWh base price (wind, hydro, bio-gas) 42 cents/kWh solar PV biogas and small hydro +possible 3cents for

dispatchability Guaranteed (Our wording or theirs – check rules)

(within reason and established safety guidelines) access to the distribution grid (< 50MW? 44 kV)

Size (0 up to 10 MW) cap Open to all players Not a pilot program – no cap on program capacity 20 year contract between generator and OPA Standardized Prices

11 cents/kWh base price (wind, hydro, bio-gas) 42 cents/kWh solar PV biogas and small hydro +possible 3cents for

dispatchability Guaranteed (Our wording or theirs – check rules)

(within reason and established safety guidelines) access to the distribution grid (< 50MW? 44 kV)


Ontario’s SOP/ARTs

Wind, Hydro, & Biomass: $0.11/kWh

Hydro & Biomass $0.0352/kWh on peak

Solar PV: $0.42/kWh

Inflation Adjustment: 20%, Except Solar PV (Punitive?)

Term: 20 years


OPA-OEB & “Value to Ratepayers”OPA-OEB & “Value to Ratepayers”

Criterion Subject to Internal Interpretation

Not Part of OPA’s Mandate Not Part of OSEA’s Proposal Neither Spain, France, or Germany Use

“Value to Ratepayers” in Determining Tariffs

Criterion Subject to Internal Interpretation

Not Part of OPA’s Mandate Not Part of OSEA’s Proposal Neither Spain, France, or Germany Use

“Value to Ratepayers” in Determining Tariffs


Comparison and Critique of Ontario’s SOP - PG

Comparison and Critique of Ontario’s SOP - PG

Ontario’s Standard Offer ProgramOntario’s Standard Offer Program

“The Most Progressive Renewable Energy Policy in North America in

Two Decades”

“The Most Progressive Renewable Energy Policy in North America in

Two Decades”

Prices for Wind Energy in EuropePrices for Wind Energy in EuropePrices for Wind Energy in EuropePrices for Wind Energy in Europe

Feed Law-Germany

Feed Law-France

Feed Law-Spain

Quota-Italy

Quota-Britain

Feed Law-Ontario

Euro Cents/kWh

0 2 4 6 8 10 12 14


Prices Paid for Biomass in EuropePrices Paid for Biomass in EuropePrices Paid for Biomass in EuropePrices Paid for Biomass in Europe

Feed Law-Germany

Feed Law-France

Feed Law-France

Feed Law-Spain

Quota-Italy

Quota-Britain

Feed Law-Austria

Feed Law-Ontario

Euro Cents/kWh

0 5 10 15 20


Prices Paid for Solar PV in EuropePrices Paid for Solar PV in EuropePrices Paid for Solar PV in EuropePrices Paid for Solar PV in Europe

Feed Law-Germany

Feed Law-France

Feed Law-Spain

Feed Law-Italy

Quota-Britain

Feed Law-Austria

Feed Law-Ontario

Euro Cents/kWh

0 10 20 30 40 50 60 70


Ontario Solar Tariff Ontario Solar Tariff North American ComparisonNorth American Comparison

Ontario Solar Tariff Ontario Solar Tariff North American ComparisonNorth American Comparison

California Buy-Down

California Solar PBI

Washington State

New Jersey RPS

Wisconsin

Ontario Solar Tariff

$ CAD/kWh Over 20 Years

0 0.1 0.2 0.3 0.4 0.5


Ontario’s SOC’s: What’s Wrong?Ontario’s SOC’s: What’s Wrong?

Tariffs Too Low PV: 1/2 of What’s Needed Wind: Only Windy Sites Biomass: $0.17 CAD/kWh MoAF

Inflation Adjustment Too Low 20% vs 50%: -2.5% ROI Excluding Solar Punitive?

Tariffs Too Low PV: 1/2 of What’s Needed Wind: Only Windy Sites Biomass: $0.17 CAD/kWh MoAF

Inflation Adjustment Too Low 20% vs 50%: -2.5% ROI Excluding Solar Punitive?

Differentiation

Valuation

TransmissionCapacity

Price


Ontario’s SOC’s: What’s Wrong?Ontario’s SOC’s: What’s Wrong?

Wind Tariff Differentiation Not Enough at Less Windy Sites Too Much at Windy Sites

Fundamental Philosophical Shift Cost vs Value Debate Continues Minister of Energy--Yes OPA--Absolutely, Positively No!

Antiquated Grid 7 month Hydro One Backlog!

Wind Tariff Differentiation Not Enough at Less Windy Sites Too Much at Windy Sites

Fundamental Philosophical Shift Cost vs Value Debate Continues Minister of Energy--Yes OPA--Absolutely, Positively No!

Antiquated Grid 7 month Hydro One Backlog!

Price

Differentiation

Valuation


Differentiation

Valuation


Hydro One Queue GamingHydro One Queue Gaming

www.hydroonenetworks.com

Total Generating Total Generating Capacity below red line Capacity below red line (will not be processed) (will not be processed) is over 1,200MW, or is over 1,200MW, or enough to cover ~5% of enough to cover ~5% of Ontario’s peak capacity Ontario’s peak capacity demand demand

Price

Differentiation

Valuation



Results of the of Ontario’s SOPResults of the of Ontario’s SOP


Ontario SOP/ARTs ResultsOntario SOP/ARTs Results

Residential PV: 150 kW?

Commercial PV: 50 MW?

~20 MW Hydro 230 MW Wind

Residential PV: 150 kW?

Commercial PV: 50 MW?

~20 MW Hydro 230 MW Wind

~50 MW Installed in 2007?

~100 MW/month in Contracts

Rush for Connections

~50 MW Installed in 2007?

~100 MW/month in Contracts

Rush for Connections

(November-April 2007)


A Disconnect Between Intent, Policy and Implementation

A Disconnect Between Intent, Policy and Implementation

“Through renewable energy we are also opening up opportunities for communities and, moreover, for citizens to participate in our electricity future.”

Donna Cansfield, Minister of Energy16th National Energy Services Conference

February 6, 2006

“Through renewable energy we are also opening up opportunities for communities and, moreover, for citizens to participate in our electricity future.”

Donna Cansfield, Minister of Energy16th National Energy Services Conference

February 6, 2006


“Standard Offer will open up the opportunity for community-based projects to sell power to the grid.”

Donna Cansfield, Minister of Energy

16th National Energy Services Conference

February 6, 2006

“Standard Offer will open up the opportunity for community-based projects to sell power to the grid.”



February 6, 2006


“Standard Offer for small renewable energy projects is valuable from a range of perspectives. It adds to the energy supply, it opens up the market to smaller projects … to businesses, rural landowners or farmers.”



February 6, 2006

“Standard Offer for small renewable energy projects is valuable from a range of perspectives. It adds to the energy supply, it opens up the market to smaller projects … to businesses, rural landowners or farmers.”



February 6, 2006


“ Standard Offer is absolutely critical to smaller generators who aim to sell electricity to the grid, because it eliminates the complex bidding, assessment and quote-based competition that has discouraged investment in smaller projects.”


Integrated Solutions to Manure Management III

March 9, 2006

“ Standard Offer is absolutely critical to smaller generators who aim to sell electricity to the grid, because it eliminates the complex bidding, assessment and quote-based competition that has discouraged investment in smaller projects.”


Integrated Solutions to Manure Management III

March 9, 2006


“We’re giving Ontarians, whether they be farmers, cooperatives, or small businesses – the opportunity to help strengthen our energy system, reduce our reliance on coal, and clean up our air through Ontario’s Standard Offer Program,”

Dwight Duncan, Minister of EnergyFebruary 27, 2007

“We’re giving Ontarians, whether they be farmers, cooperatives, or small businesses – the opportunity to help strengthen our energy system, reduce our reliance on coal, and clean up our air through Ontario’s Standard Offer Program,”

Dwight Duncan, Minister of EnergyFebruary 27, 2007


“This represents a tremendous opportunity for farmers and our communities to build greater economic prosperity in our rural areas,” It is yet another example of how this government is acting to create jobs and a better future for rural Ontario.”

Leona Dombrowsky, Minister of Agriculture,

Food and Rural Affairs

February 27, 2007

“This represents a tremendous opportunity for farmers and our communities to build greater economic prosperity in our rural areas,” It is yet another example of how this government is acting to create jobs and a better future for rural Ontario.”

Leona Dombrowsky, Minister of Agriculture,

Food and Rural Affairs

February 27, 2007


“We’re taking a bold new step that will allow hundreds of small, local, renewable energy producers to get into the energy market – providing cleaner energy that will help meet Ontario’s needs today – and in the future”

Premier Dalton McGuintyMarch 21, 2006

“We’re taking a bold new step that will allow hundreds of small, local, renewable energy producers to get into the energy market – providing cleaner energy that will help meet Ontario’s needs today – and in the future”

Premier Dalton McGuintyMarch 21, 2006


“ Until now, it was too costly and complex for small, renewable power producers — such as farmers, rural landowners, community groups, First Nations, business owners or municipalities — to sell their energy to the grid.”

Premier’s Press Release

March 21, 2006

“ Until now, it was too costly and complex for small, renewable power producers — such as farmers, rural landowners, community groups, First Nations, business owners or municipalities — to sell their energy to the grid.”

Premier’s Press Release

March 21, 2006


“ Standard Offer contracts have been the fastest and most successful way of producing renewable energy throughout the world,”

Premier Dalton McGuinty

March 21, 2006

“ Standard Offer contracts have been the fastest and most successful way of producing renewable energy throughout the world,”


March 21, 2006


“ Encouraging communities to develop more renewable electricity will spur the kind of innovation in the energy sector that will help clean up our air, create jobs and contribute to our long-term prosperity.”


March 21, 2006

“ Encouraging communities to develop more renewable electricity will spur the kind of innovation in the energy sector that will help clean up our air, create jobs and contribute to our long-term prosperity.”


March 21, 2006


“. . . Find the right mechanism to spread the use of wind across the province.”

Minister of Energy Dwight DuncanApril 12, 2007

“. . . Find the right mechanism to spread the use of wind across the province.”

Minister of Energy Dwight DuncanApril 12, 2007


“. . . We will bring the barriers down.”

Minister of Energy Dwight Duncan

April 12, 2007

“. . . We will bring the barriers down.”


April 12, 2007


“We did it because it was the right thing to do.”


April 12, 2007

“We did it because it was the right thing to do.”


April 12, 2007


Going ForwardGoing Forward

ImmediateCorrective

Action

2 Year Review (OSEA has Begun) Consultation Fall 2007 New SOC Tariffs March, 2008

SOC Program: What’s Next?SOC Program: What’s Next?


Additions toThe SOP

General PolicyImprovements

To The SOP

SOP: Immediate Corrective ActionSOP: Immediate Corrective Action

Grant priority access or set aside % capacity of distribution system for locally owned projects

Ease Burden on Distribution Grid Lift Project Size Cap Lift Voltage Cap

Make Locally-Owned Solar Viable Raise Solar PV Tariff

Make On-Farm Biogas Viable Raise Biogas Tariff

Grant priority access or set aside % capacity of distribution system for locally owned projects

Ease Burden on Distribution Grid Lift Project Size Cap Lift Voltage Cap

Make Locally-Owned Solar Viable Raise Solar PV Tariff

Make On-Farm Biogas Viable Raise Biogas Tariff

Additions toThe SOP


To The SOP

ImmediateCorrective

Action



Additions toThe SOP


To The SOP

ImmediateCorrective

Action


Class Size (kW)Tariff

($CAD/kWh)

10 <10 0.80

100 >10<100 0.70

1,000 >100<1,000 0.60

10,000 >1,000<10,000 0.42

Ontario Revised Solar PV TariffsOntario Revised Solar PV Tariffs


Additions toThe SOP


To The SOP

ImmediateCorrective

Action


Ontario Revised Biogas TariffsOntario Revised Biogas Tariffs

Size $CAD/kWh

<150 kW 0.16

<500 kW 0.14

<5 MW 0.12

<20 MW 0.12


To Build a Conservation Culture…… You Must Be Able to See It

Wind & Solar are the Most Visible Manifestations of Renewable Energy

Solar PV can be Deployed Most Quickly

Deploying Solar PV says: “Progress Being Made”.

To Build a Conservation Culture…… You Must Be Able to See It

Wind & Solar are the Most Visible Manifestations of Renewable Energy

Solar PV can be Deployed Most Quickly

Deploying Solar PV says: “Progress Being Made”.

Additions toThe SOP


To The SOP

ImmediateCorrective

Action


Ontario’s Conservation CultureOntario’s Conservation Culture

Revisit Prices Increase Differentiation Differentiated Tariffs for Wind Inflation Indexing (60%)

Add Offshore Wind Add Solar Thermal




To The SOP

ImmediateCorrective

Action

Additions toThe SOP

SOC Program: Solar ThermalSOC Program: Solar Thermal

Germany Proposed Wärme Gesetz Costs Spread Across Heating

Oil & Gas Monitoring Technology Exists

Germany Proposed Wärme Gesetz Costs Spread Across Heating

Oil & Gas Monitoring Technology Exists



To The SOP

ImmediateCorrective

Action

Additions toThe SOP

ImmediateCorrective

Action


Lift Voltage Cap Transmission

Voltages Lift Project Size Cap

50 MW? Priority Access

Farmers, First Nations, Co-ops?

Priority Purchase Renewables before

Nuclear & Fossil Fuels

Lift Voltage Cap Transmission

Voltages Lift Project Size Cap

50 MW? Priority Access

Farmers, First Nations, Co-ops?

Priority Purchase Renewables before

Nuclear & Fossil Fuels


Additions toThe SOP


To The SOP

Replicating The “Ontario” ModelReplicating The “Ontario” Model

Official BC, Saskatchewan,

Manitoba Unofficial

Québec, Nova Scotia, Michigan?

Official BC, Saskatchewan,

Manitoba Unofficial

Québec, Nova Scotia, Michigan?


Advanced Renewable TariffsAdvanced Renewable Tariffs

Deliver More Capacity More Quickly More Equitably

Deliver More Capacity More Quickly More Equitably


ARTs: A Question of EquityARTs: A Question of Equity

Feed Laws are Fair Nearly All Can Play

Farmers, Ranchers, First Nations, & Co-ops

Feed Laws are Fair Nearly All Can Play

Farmers, Ranchers, First Nations, & Co-ops


No Time for Half Measures…

No Time to Lose

No Time for Half Measures…

No Time to Lose

Renewables…Renewables…

When You Look Closely . . . . . . Worth Every Cent

When You Look Closely . . . . . . Worth Every Cent

Thank you!Thank you!Thank you!Thank you!

To contact OSEA:

416-977-4441 or [email protected]

www.ontario-sea.org

Paul GipeRenewable Energy Consultant, OSEA

Deb DoncasterExecutive Director,

OSEA

Documents

Ontario Sustainable Energy Association