Gipe - Ontarios FiT: Setting The Standard In North America

Disclaimer: The views expressed are those of Paul Gipeand are not necessarily those of the sponsor.

Disclosure: Paul Gipe has worked with Aerovironment,ANZSES, APROMA, ASES, AusWEA, AWEA, BWEA,BWE, CanWEA, Canadian Co-operative Assoc., CAW,CEERT, DGW, DSF, EECA, ES&T, GEO, GPI Atlantic,IREQ, KWEA, MADE, Microsoft, ManSEA, MSU, NRCan,NRG Systems, NASA, NREL, NZWEA, ORWWG, OSEA,Pembina, PG&E, SeaWest, SEI, TREC, USDOE, WAWWG,WE Energies, the Folkecenter, the Izaak Walton League,the Minnesota Project, the Sierra Club, and ZondSystems, and written for magazines in the USA, Canada,France, Denmark, and Germany.

Paul Gipe, wind-works.org

Carleton College V82, Northfield, Minnesota

Ontario’s Feed-in Tariffs:Setting the Standard in North America

byPaul Gipe


Höhe Westerwald, Germany

Setting the Stage


Renewables Can Be Added Quickly


Germany Renewables: 10 Years--5% to 15%Spain: 10 Years--0% to 10%

Wind 5 yrs Wind 10 yrs Solar 5 yrs

Germany 15 TWh/yr 35 TWh/yr 5 TWh/yr

Spain 15 TWh/yr 28 TWh/yr 5 TWh/yr

2008 North American Wind MarketOntario 6th Largest Market

7.1

2.8

2.5

1.8

1.5

1.0

Texas

Iowa

California

Minnesota

Washington

Ontario

Total MW Thousands

0.0 2.0 4.0 6.0 8.0


North American Solar PV MarketOntario Moves to Top of List

California

Ontario (2009)

New Jersey

Colorado

Nevada

0 50 100 150 200

2008 MW/yr



*Loose translation of “On résiste à l'invasion desarmées; on ne résiste pas à l'invasion des idées.

“Nothing is as powerful as an ideawhose time has come.”-- Victor Hugo

Renewable Tariffs in North America . . Unthinkable?

• Yes--Just 6 years ago“You’re Absolutely Nuts!”

Andy Karsner, DOE, 2006

• Today? No

• Now Possible

• Growing Trendin North America

& Developing World

China, India, Mongolia

Paul Gipe, wind-works.org Gaspé, Quebec

Toronto, Ontario

Renewable Tariffs . . .Developing Momementum


Ontario Moved First

First Modern Systemof Advanced Renewable Tariffs

in North America

Paul Gipe, wind-works.org Montfort, Wisconsin

Goderich, Ontario

Ontario “Gets It”


• Closing Coal Plants

• Delaying Nuclear Build

• Putting Renewables FirstGroundbreaking in North America

Ontario’s Green Energy& Green Economy Act

• Multi-faceted

• Efficiency & Conservation

• Renewable EnergyProcure Through Feed-in Tariffs


Goderich, Ontario

Ontario’s Green Energy Act

The Most Progressive RenewableEnergy Policy in North America

in Two Three Decades


Ontario’s Green Energy Act

• Changes Public Policy on ElectricityIncludes Industrial & Environmental Policy

• Gives Renewables PriorityIn Utility Procurement & System Design

• Targets Industrial Development

• Targets Job CreationGoal: 50,000 Jobs in 3 Years


Ontario’s Feed-in Tariffs

• Differentiated by Size & Technology

• Differentiated by Application

• Tariffs Based on Cost of GenerationPlus Reasonable Profit

• No Program Cap (Bring It On!)


Sarnia, Ontario


• First Offshore Wind Tariffs in NA

• First Aboriginal Bonus in NAFirst NA Policy for First Nations

• First Differentiated Solar PV Tariffs5 Tranches or Classes

• Best Wind, Solar, & Biogas Tariffs in NACompetitive Internationally


Prices Paid for Wind Energy in Europe


Germany

France

Spain

Ontario

$CAD/kWh

0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16

Prices Paid for Offshore Wind Energy

Germany

France

Ontario

$CAD/kWh

0 0.05 0.1 0.15 0.2 0.25

Paul Gipe, wind-works.org Middelgrunden, DenmarkGoogle Maps

Solar PV Tariffs Worldwide


Washington State*

Italy

South Korea

Ontario

Czech Republic

France

Germany

Austria

Spain

California*

South Australia*

0 0.2 0.4 0.6 0.8 1 1.2 1.4

$CAD/kWh

Solar PV Yields


Hamburg, D

Nuremburg, D

Stuttgart, D

Reims, F

Toronto, ON

Halifax, NS

Nice, F

Madrid, E

0 200 400 600 800 1000 1200 1400 1600

kWh/kW/yr

Source: RetScreen


• No Subsidies or Grants

• Costs Borne by ConsumersNot Taxpayers--More Egalitarian

• Community Wind BonusThird Jurisdiction in North America


Grading North American FITs10 Criteria

• Program Caps

• Project Size Caps

• Contract Term

• Technologies Included

• Tariffs Based on Cost of Generation

• Tariffs Differentiated by Technology

• Tariffs Differentiated within Technology

• Wind Tariffs Differentiated by Resource

• Inflation Indexing

• Bonus Payments or Adders


Grading North American FITsThe Gold Standard

Score Grade

Germany 90 A

France 90 A

Spain (Fixed Tariff) 80 A-

Fuchskaute, GermanyPaul Gipe, wind-works.org

Grading North American FITs Historical FITs


Score Grade

Cal ISO4 (1983-1984) 43 F

Ontario SOC (2006-2008) 55 D

Ontario SOC--Good First Start for North America

Grading North American FITs

Criteria Germany France Ontario

Program Caps 10 10 10

Project Size Caps 10 8 8

Contract Term 10 10 10

Technologies Included 10 10 8

Tariffs Based on Cost of Generation 10 10 10


Grading North American FITs


Criteria Germany France Ontario

Tariffs Differentiated by Technology 10 10 10

Tariffs Differentiated within Technology 20 16 20

Wind Tariffs Differentiated by Resource 10 10 0

Inflation Indexing 0 6 3

Bonus Payments or Adders 0 0 5

Grading North American FITs Existing FITs


Score Grade

Ontario (2009) 84 A-

Vermont 54 D

Maine 43 F

Wisconsin IOUs 36 F

California 28 F

Oregon 16 F

Ontario Success Due To

• Push for Renewable PolicyNot a Solar PV or a Wind Policy

• Push for Conservation & EfficiencyReduces Program Costs to Ratepayers

(Danes Pay Less for Electricity Than Ontarians)

• Collaborative StrategyGreen Energy Act Alliance: Green NGOs & Labor

Trade Groups: CanSIA, CanWEA, OWA

• Public Consultation


Ontario’s FITs--Issues Remaining

• Domestic ContentLocal Choice

• Differentiating Wind Tariffsby Resource Intensity

• Samsung Deal

Paul Gipe, wind-works.org Wolfe Island, Ontario

San Gorgonio Pass, California

Differentiated Tariffs for Wind

• Distributed Benefits

Only Accrue From Distributed Generation

Differentiated Tariffs = Distributed Wind

• Reduces Pressure on Windiest Sites

Profitability Still Higher at Windy Sites

• Reduces NIMBYism

By Enabling Greater Participation


Differentiated Tariffs for Wind

• Increases Program FlexibilityLessens Pressure to Get Prices Right the First Time

• Reduces Development RiskDetermining Final Price After 5 Years of Operation

• Spreads Opportunity to AllNot Just to Elite Few

• Provides Fair Profits at Modest Wind Sites

• Limits "Excessive Profits" at Windy Sites


Igny, Lorraine, France

French Wind Tariffs Resource Productivity Method

• Fair Profits at Medium Wind Sites

• Not “Undue” Profits at Windy Sites

• Price Adjusted for Inflation 60%

• Profitability Index Method (Chabot)Not Discounted Cash Flow Model


French Wind Tariffs by Specific Yield


960 1000 1040 1080 1120 1160 1200 1240 1280 1320 1360 1400 1440

Specific Yield (kWh/m2/yr)

0

0.05

0.1

0.15$CAD/kWh

Base Medium High

Chateau de Lastours, France

French Wind Tariffs 2006

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Year

0

0.05

0.1

0.15$CAD/kWh

27% CF (900 kWh/m2)

32% CF (1,100 kWh/m2)

41% CF (1,400 kWh/m2)


Ontario’s Samsung Deal--Troubling

• Non TransparentHallmark of FITs is Transparency

• Preferential Grid AccessHallmark of FITs is Equal Access

• Preferential Tariff (EDA)Non Transparent Price Setting

No Public Discussion of $0.01/kWh Adder

May Pay Too Much at Windy Sites

Must Have Differentiated Wind Tariffs toAvoid Overpayment


Ontario’s Samsung Deal

• Must Not JeopardizeFIT Program

Community & Aboriginal Projects

Dynamic & Competitive Market

• Could Be Model for Other Mfgrs.Could Stimulate Interest by Other Players

Paul Gipe, wind-works.org St. Olaf College V82, Northfield, Minnesota

Ontario’s FIT ProgramWorld Class

“Made in Canada”

Ferndale, Ontario


Move FromA Culture of Consumption

toA Culture of Conservation


--Ontario Premier Dalton McGuinty

Montfort, Wisconsin

Move From

A Nation of Consumers

to

A Nation of Producers

Paul Gipe, wind-works.org Lackawanna, New York

We Need A Lot More Wind . . .


Matane, Quebec

. . . A Lot More Solar


Hinesburg, Vermont

. . . A Lot More Renewable Energy

Technology for Life*

*from N.F.S. Grundtvig, Danish Theologian


Ontario’s

Feed-in Tariffs

. . . Setting the

Standard in

North America

www.wind-works.org

Manawatu Gorge, New Zealand