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Province reviews energy rules; Proposal would pull plug on some renewable power projects

Proposed changes to Ontario’s rules for renewable power projects will prevent some new ones from starting up in the province.

Environmental groups and renewable energy experts say the changes would put the brakes on a recent upsurge in renewable power projects in the province and could have dire affects on the burgeoning “green” power industry in Ontario.

“[The existing program] is attracting a lot of investment internationally in the province in the area of renewable energy so it’s very important that the government sends a clear signal so investors aren’t scared away from our province,” said Jose Etcheverry, a York

University environmental science professor and climate change policy analyst for the David Suzuki Foundation.

Environment minister John Gerretsen got wind of the some of the discontent surrounding the proposed changes at a recent international conference on renewable energy in Kingston. He plans to bring the matter up with Ontario’s new energy minister, George Smitherman, in the coming days.

“We should be doing everything we can in order to bring as many renewable energy projects online as possible,” the Kingston and the Islands MPP told the Whig-Standard.

At the heart of the issue is the Ontario Power Authority, which oversees the province’s electricity system, and its decision to review the Renewable Energy Standard Offer Program. The incentive program, launched in November 2006, was designed to help the province meet its renewable energy supply targets by providing small electricity generators a standard price.

The program has drawn a lot of interest in Ontario, particularly in the Kingston area, which has become a hotbed of activity for renewables such as wind and solar power projects.

Ontario Power Authority spokesman Tim Taylor admits the proposed changes will restrict some new projects, but “only for the short term.”

“The determining factor is transmission and distribution,” Taylor said.

The Ontario Power Authority’s plan to overhaul the provincial electricity system, which is in the approvals process, has allotted $4 billion to update transmission and distribution lines. That retrofit is expected to be complete sometime in 2012 or early 2013.

“When we have some confidence that is the case, and our view is that it will be around 2010,we will be able to begin accepting new projects into the system,” said Taylor.

He said the problem is that the demand for the standard offer program to date has far exceeded the limitations of some local electricity distribution and transmission systems.

According to an Ontario Power Authority report on the proposed changes, hundreds of “green” energy projects are said to be applying for connection to the grid and the province has limited ability to accommodate them.

Just a little more than a year after its kickoff in 2006, the standard offer program had surpassed its 10-year goal of 1,000 megawatts.

To date, the Ontario Power Authority has roughly 314 contracts to buy electricity from projects with a total maximum potential energy supply of 1,300 megawatts going to the grid.

“There are parts of the province where it’s not very useful to have any new generation because the transmission capacity in those areas has reached its maximum … but it’s kind of a balancing of the various needs,” said Taylor. “The developers want to know their electricity is going to be purchased because they need to make an income and consumers of electricity have to know that they’re not overpaying because we’re buying generation that can’t be harvested.”

Etcheverry doesn’t buy this as a reason to curtail renewable energy projects.

“There are parts of the province where new transmission is necessary to accommodate renewable energy, but the way around this is by building new transmission not by constraining the development of renewable energy,” he said.

Etcheverry said the proposed changes have more to do with the Ontario Power Authority’s emphasis on nuclear power as opposed to renewables.

“This is what this is all about -two schools of thought that are competing against each other,” he said.

Etcheverry describes renewables as the “biggest industrial opportunity available for Ontario.

“In a highly industrialized location such as Ontario, we could re-tool existing industries that are, at the moment, going bankrupt like the auto industry to produce renewable energy systems,” he said.

Ontario needs to look at what the world leaders, including Germany, Spain and Denmark, are doing to solve their energy problems and to reduce carbon emissions, said Etcheverry.

He also said there is a sense of urgency to act now to foster a renewables industry in Ontario because the province is competing with other locations, including the United States, where a major shift in thought is expected to occur about environmental issues after the next presidential election.

“Are we going to be buying manufactured renewable energy systems from the United States or are we going to do it ourselves,” said Etcheverry. “Right now, the standard offer contract has put us at an advantage.”

The standard offer program makes it possible for projects of no more than 10 megawatts that generate electricity from wind, solar photovoltaic, thermal electric solar, renewable biomass, biogas, biofuel, landfill gas or waterpower to sell their power to the Ontario grid.

The program’s proposed new rules don’t affect projects that applied to the Ontario Power Authority before May 12, 2008.

The proposed changes, the topic of public consultations, restrict proponents to a single 10-megawatt project per feeder or transmission station. The new rules also limit each individual proponent to a maximum of 50 megawatts under development per technology at any one time.

The Ontario Power Authority is expected to release a revised version of the standard offer contract rules next week, and the new rules are to be released during the week of Aug. 4.

Jennifer Pritchett
Whig-Standard Environment Reporter

The Kingston Whig-Standard

10 July 2008