WIND AND SOLAR ENERGY LAW CML 1105I MARCH 14, 2013 Stephen Hazell

Overview Rise of renewable energy production Regulatory process for approving wind and solar projects in Ontario Feed-in tariff program for wind and solar projects in Ontario Chatham-Kent case WTO GATT complaint

Renewable Energy Growth Global renewable energy market $280 billion and growing rapidly Global investment in solar power grew by 52 per cent in 2011 Ontario on line wind power generation increased from 15MW in 2003 to 1,950 MW in 2011 (enough to power a city the size of London ON)

Renewables – International Energy Agency 2012 Renewables already an “indispensable part of the global energy mix” Over coming decades, there will be a pronounced shift away from oil and coal toward low-carbon sources like renewable energy Renewables will “approach coal as the primary source of global electricity” by 2035

Green Energy Act (Ontario) Ontario Green Energy Act (2009) intended to expand renewable energy production, encourage energy conservation, create green jobs Applies to wind, solar photovoltaic (PV), biogas, biomass, landfill gas, and waterpower Replaced 2006 Renewable Energy Standard Offer Program which introduced fixed 20-year feed-in tariffs (42 cents/kWh for PV, 11 cents/kWh for other energy)

Green Energy Act (Ontario) New streamlined provincial approval process for renewable energy projects based on the concept of a complete submission. Integrates into a coordinated process all provincial Ministry requirements for the review and decision making on proposed renewable energy facilities

Green Energy Act (Ontario) Establishes feed-in tariff rates for energy sources: –FIT for commercial systems –MicroFIT for small non-commercial systems less than 10 KW High initial tariff rates for solar PV systems: 80.2 cents/kWh “Made in Ontario" clauses demand Ontario labour and manufacturing to receive feed-in tariff rates

Green Energy Act (Ontario) MNR approvals under Public Lands Act, Lakes and Waters Protection Act, Fish and Wildlife Conservation Act, Endangered Species Act, 2007 (among others) DOE approvals under Renewable Energy Approval Regulation of Environmental Protection Act Exempt from Environmental Assessment Act No public hearings, except on appeals to Environmental Review Tribunal

Environmental Protection Act (Ontario) S (1) After considering an application for the issue or renewal of a renewable energy approval, the Director may, if in his or her opinion it is in the public interest to do so, (a) issue or renew a renewable energy approval; or (b) refuse to issue or renew a renewable energy approval. (2) In issuing or renewing a renewable energy approval, the Director may impose terms and conditions if in his or her opinion it is in the public interest to do so.

Green Energy Act Preamble Government of Ontario committed to “fostering the growth of renewable energy projects, which use cleaner sources of energy, and to removing barriers to and promoting opportunities for renewable energy projects and to promoting a green economy” “ensuring that the Government of Ontario and the broader public sector, including government-funded institutions, conserve energy and use energy efficiently in conducting their affairs” “promoting and expanding energy conservation by all Ontarians and to encouraging all Ontarians to use energy efficiently”

Green Energy Act S.5.(1) 5. (1) The Lieutenant Governor in Council may, by regulation, designate renewable energy projects, renewable energy sources or renewable energy testing projects for the following purposes: 1. To assist in the removal of barriers to and to promote opportunities for the use of renewable energy sources. 2. To promote access to transmission systems and distribution systems for proponents of renewable energy projects.

Green Energy Act S.5.(2) S.5.(2) A person is permitted to engage in activities with respect to a designated renewable energy project, a designated renewable energy source or a designated renewable energy testing project in such circumstances as may be prescribed, despite any restriction imposed at law that would otherwise prevent or restrict the activity, including a restriction established by a municipal by-law, a condominium by-law, an encumbrance on real property or an agreement.

Green Energy Act S.11 S.11. (1) There shall be created, within the Ministry,... the Renewable Energy Facilitation Office... (2) The following are the objects of the Office: 1. To facilitate the development of renewable energy projects. 2. To work with proponents of renewable energy projects and other ministries to foster the development of renewable energy projects across Ontario and to assist proponents with satisfying the requirements of associated approval processes and procedures, including providing proponents with information in respect of interactions with local communities. 3. To work with proponents of renewable energy projects to alert them to potential requirements imposed by the Government of Canada.

Green Energy Act: Success or Failure? Estimated 20,000 jobs created $27 billion invested in private sector renewable energy investment More than 30 solar manufacturers On track to procure 10,700 MW of non- hydro renewable energy generation by 2015 Political failure in rural Ontario?

Environmental Protection Act (Ontario) S (1) This section applies to a person resident in Ontario who is not entitled under section 139 to require a hearing by the Tribunal in respect of a decision made by the Director under section (3) A person may require a hearing... only on the grounds that engaging in the renewable energy project in accordance with the renewable energy approval will cause, (a) serious harm to human health; or (b) serious and irreversible harm to plant life, animal life or the natural environment.

Chatham-Kent Wind Action Inc. v. Director, Ministry of Environment On June 15, 2012, the Director, Ministry of the Environment issued a Renewable Energy Approval (“REA”) under s EPA for South Kent Wind LP Class 4 wind facility (270MW) 124 turbines, offsets 842,000 tonnes CO2/year Chatham Kent Wind Action Inc. appeal to Environmental Review Tribunal under s of EPA on basis of serious harm to human health

Chatham-Kent Wind Action Inc. v. Director, Ministry of Environment

But two key witnesses for appellant not qualified as experts No evidence linking turbine noise to health presented by appellant Environmental Review Tribunal affirmed Director’s decision, rejected appeal Could s. 142 test ever be met? What about cumulative effects of multiple projects?

WTO Challenge to Green Energy Act Japan/EU challenged made-in-Ontario clause of GEA, requiring wind/solar farms to use large percentage of in- province parts/labour to receive preferential rates Ontario, Canada argued energy is government procurement and therefore exempt from GATT WTO held that GEA contravenes GATT in December 2012

WTO Challenge to Green Energy Act Issue not whether domestic content requirements give advantage to local companies Content provisions were intended to create local jobs WTO agreed energy purchased by public agencies is procurement but purchase also for commercial resale, so GATT exemption doesn’t apply

WTO Challenge to Green Energy Act WTO panel expressed no opinion on legitimacy of Ontario's promotion of renewable energy through FIT Canada notified WTO in February 2013 that it is appealing Appeal panel cannot consider new evidence, only re-examine law

WTO Challenge to Green Energy Act If December ruling upheld, Canada/ Ontario will be asked to "swiftly correct its fault" by removing the local content rules on the feed-in-tariff, or else "offer compensation or suffer a suitable penalty”

Two-Year Review Report Ontario FIT Program (March 2012) Carried out by Deputy Minister Energy Recommendations: –Continue commitment to clean energy –Streamline process –Encourage greater community/Aboriginal participation (priorize community-supported projects) –Improve municipal engagement –Reduce FIT prices (20% solar, 15% wind)