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Ontario Sustainable Energy Association Presentation to the Board of Directors; Ontario Power Authority June 14, 2007 Presentation to the Board of Directors;

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Presentation on theme: "Ontario Sustainable Energy Association Presentation to the Board of Directors; Ontario Power Authority June 14, 2007 Presentation to the Board of Directors;"— Presentation transcript:

1 Ontario Sustainable Energy Association Presentation to the Board of Directors; Ontario Power Authority June 14, 2007 Presentation to the Board of Directors; Ontario Power Authority June 14, 2007

2 Agenda Who Is OSEA? Advanced Renewable Tariffs The Standard Offer Program Comparison & Critique Intent of the SOC Program Moving Forward Who Is OSEA? Advanced Renewable Tariffs The Standard Offer Program Comparison & Critique Intent of the SOC Program Moving Forward OSEAARTsSOPCritiqueIntentFuture

3 WHO IS OSEA?

4 About 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) OSEAARTsSOPCritiqueIntentFuture

5 About 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 OSEAARTsSOPCritiqueIntentFuture

6 Current OSEA Members Manitoulin Lion’s Head Tiberton Kincardine Bervie Toronto Mount Forest Melancthon Waterloo Kitchener Hamilton Caledon Orangeville Dufferin Newmarket Barrie Midland Bobcaygeon Ottawa Milford Kingston Perth Temagami Walford MoCreebecThunder Bay OSEAARTsSOPCritiqueIntentFuture

7 OSEA’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 OSEAARTsSOPCritiqueIntentFuture

8 OSEA Accomplishments  SOC Program  Community Power Fund  WWEA Conference  Awards  Grants  SOC Program  Community Power Fund  WWEA Conference  Awards  Grants OSEAARTsSOPCritiqueIntentFuture

9 Community 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 OSEAARTsSOPCritiqueIntentFuture

10 Advanced Renewable Tariffs: The Origin of ARTs in Ontario

11 OSEA’s ARTs Campaign  OSEA launched campaign for Advanced Renewable Tariffs  Fall Liberal Party Endorses ARTs  Winter MoE Hires OSEA for SOC Study  OSEA launched campaign for Advanced Renewable Tariffs  Fall Liberal Party Endorses ARTs  Winter MoE Hires OSEA for SOC Study OSEAARTsSOPCritiqueIntentFuture

12 OSEA’s ARTs Campaign  Fall MoE issues directive to OPA to develop recommendations on a SOP for Ontario  March Premier announces SOC Program  March-October - OPA&OEB Stakeholder Workshops  November SOP rules issued  Fall MoE issues directive to OPA to develop recommendations on a SOP for Ontario  March Premier announces SOC Program  March-October - OPA&OEB Stakeholder Workshops  November SOP rules issued OSEAARTsSOPCritiqueIntentFuture

13 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 OSEAARTsSOPCritiqueIntentFuture

14 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 OSEAARTsSOPCritiqueIntentFuture

15 Key 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 (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 (no cap), review in 2007 OSEAARTsSOPCritiqueIntentFuture

16 Advanced Renewable Tariffs OSEA’s Proposed Prices Paul Gipe, wind-works.org OSEAARTsSOPCritiqueIntentFuture

17 OPA-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 OSEAARTsSOPCritiqueIntentFuture

18 What We Got: The Ontario Standard Offer Program

19 What 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) OSEAARTsSOPCritiqueIntentFuture

20 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 OSEAARTsSOPCritiqueIntentFuture

21 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 OSEAARTsSOPCritiqueIntentFuture

22 Comparison and Critique of Ontario’s SOP - PG

23 Ontario’s Standard Offer Program “The Most Progressive Renewable Energy Policy in North America in Two Decades”

24 Prices for Wind Energy in Europe OSEAARTsSOPCritiqueIntentFuture

25 Prices Paid for Biomass in Europe OSEAARTsSOPCritiqueIntentFuture

26 Prices Paid for Solar PV in Europe OSEAARTsSOPCritiqueIntentFuture

27 Ontario Solar Tariff North American Comparison OSEAARTsSOPCritiqueIntentFuture

28 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 Transmission Capacity Price OSEAARTsSOPCritiqueIntentFuture

29 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 Transmission Capacity Differentiation Valuation OSEAARTsSOPCritiqueIntentFuture

30 Hydro One Queue Gaming Total Generating Capacity below red line (will not be processed) is over 1,200MW, or enough to cover ~5% of Ontario’s peak capacity demand Price Differentiation Valuation Transmission Capacity OSEAARTsSOPCritiqueIntentFuture

31 Results of the of Ontario’s SOP OSEAARTsSOPCritiqueIntentFuture

32 Ontario 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 (November-April 2007) OSEAARTsSOPCritiqueIntentFuture

33 A Disconnect Between Intent, Policy and Implementation

34 “ 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 Energy 16 th 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 Energy 16 th National Energy Services Conference February 6, 2006 OSEAARTsSOPCritiqueIntentFuture

35 “Standard Offer will open up the opportunity for community-based projects to sell power to the grid.” Donna Cansfield, Minister of Energy 16 th 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 16 th National Energy Services Conference February 6, 2006 OSEAARTsSOPCritiqueIntentFuture

36 “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.” Donna Cansfield, Minister of Energy 16 th National Energy Services Conference 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.” Donna Cansfield, Minister of Energy 16 th National Energy Services Conference February 6, 2006 OSEAARTsSOPCritiqueIntentFuture

37 “ 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.” Donna Cansfield, Minister of Energy 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.” Donna Cansfield, Minister of Energy Integrated Solutions to Manure Management III March 9, 2006 OSEAARTsSOPCritiqueIntentFuture

38 “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 Energy February 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 Energy February 27, 2007 OSEAARTsSOPCritiqueIntentFuture

39 “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 OSEAARTsSOPCritiqueIntentFuture

40 “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 McGuinty March 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 McGuinty March 21, 2006 OSEAARTsSOPCritiqueIntentFuture

41 “ 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 OSEAARTsSOPCritiqueIntentFuture

42 “ 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,” Premier Dalton McGuinty March 21, 2006 OSEAARTsSOPCritiqueIntentFuture

43 “ 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.” Premier Dalton McGuinty 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.” Premier Dalton McGuinty March 21, 2006 OSEAARTsSOPCritiqueIntentFuture

44 “... Find the right mechanism to spread the use of wind across the province.” Minister of Energy Dwight Duncan April 12, 2007 “... Find the right mechanism to spread the use of wind across the province.” Minister of Energy Dwight Duncan April 12, 2007 OSEAARTsSOPCritiqueIntentFuture

45 “... We will bring the barriers down.” Minister of Energy Dwight Duncan April 12, 2007 “... We will bring the barriers down.” Minister of Energy Dwight Duncan April 12, 2007 OSEAARTsSOPCritiqueIntentFuture

46 “We did it because it was the right thing to do.” Minister of Energy Dwight Duncan April 12, 2007 “We did it because it was the right thing to do.” Minister of Energy Dwight Duncan April 12, 2007 OSEAARTsSOPCritiqueIntentFuture

47 Going Forward

48 Immediate Corrective Action  2 Year Review (OSEA has Begun)  Consultation Fall 2007  New SOC Tariffs March, 2008 SOC Program: What’s Next? OSEAARTsSOPCritiqueIntentFuture Additions to The SOP General Policy Improvements To The SOP

49 SOP: 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 to The SOP General Policy Improvements To The SOP Immediate Corrective Action OSEAARTsSOPCritiqueIntentFuture

50 SOP: Immediate Corrective Action Additions to The SOP General Policy Improvements To The SOP Immediate Corrective Action OSEAARTsSOPCritiqueIntentFuture Ontario Revised Solar PV Tariffs

51 SOP: Immediate Corrective Action Additions to The SOP General Policy Improvements To The SOP Immediate Corrective Action OSEAARTsSOPCritiqueIntentFuture Ontario Revised Biogas Tariffs

52 SOP: Immediate Corrective Action  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 to The SOP General Policy Improvements To The SOP Immediate Corrective Action OSEAARTsSOPCritiqueIntentFuture Ontario’s Conservation Culture

53  Revisit  Prices  Increase Differentiation  Differentiated Tariffs for Wind  Inflation Indexing (60%)  Add Offshore Wind  Add Solar Thermal SOC Program: What’s Next? OSEAARTsSOPCritiqueIntentFuture General Policy Improvements To The SOP Immediate Corrective Action Additions to The SOP

54 SOC 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 OSEAARTsSOPCritiqueIntentFuture General Policy Improvements To The SOP Immediate Corrective Action Additions to The SOP

55 Immediate Corrective Action SOC Program: What’s Next?  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 OSEAARTsSOPCritiqueIntentFuture Additions to The SOP General Policy Improvements To The SOP

56 Replicating The “Ontario” Model  Official  BC, Saskatchewan, Manitoba  Unofficial  Québec, Nova Scotia, Michigan?  Official  BC, Saskatchewan, Manitoba  Unofficial  Québec, Nova Scotia, Michigan? OSEAARTsSOPCritiqueIntentFuture

57 Advanced Renewable Tariffs  Deliver More Capacity  More Quickly  More Equitably  Deliver More Capacity  More Quickly  More Equitably OSEAARTsSOPCritiqueIntentFuture

58 ARTs: A Question of Equity  Feed Laws are Fair  Nearly All Can Play  Farmers, Ranchers, First Nations, & Co-ops OSEAARTsSOPCritiqueIntentFuture

59 No Time for Half Measures … No Time to Lose

60 Renewables…  When You Look Closely Worth Every Cent

61 Thank you! To contact OSEA: or Paul Gipe Renewable Energy Consultant, OSEA Deb Doncaster Executive Director, OSEA


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