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Ontario Sustainable Energy Association

Ontario Sustainable Energy Association. Presentation to the Board of Directors; Ontario Power Authority June 14, 2007. Agenda. Who Is OSEA?. Who Is OSEA?. Advanced Renewable Tariffs. Advanced Renewable Tariffs. The Standard Offer Program. The Standard Offer Program.

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Ontario Sustainable Energy Association

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

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

  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) OSEA ARTs SOP Critique Intent Future

  5. About OSEA • Education and Training • Policy Development • Initiation of new community power organizations and projects • Technical Assistance OSEA ARTs SOP Critique Intent Future

  6. Current OSEA Members Walford Thunder Bay MoCreebec Temagami Bobcaygeon Waterloo Ottawa Manitoulin Melancthon Milford Kitchener Lion’s Head Perth Tiberton Orangeville Kingston Kincardine Caledon Dufferin Toronto Bervie Newmarket Mount Forest Midland Barrie Hamilton OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  8. OSEA Accomplishments • SOC Program • Community Power Fund • WWEA Conference • Awards • Grants OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  10. Advanced Renewable Tariffs:The Origin of ARTs in Ontario

  11. OSEA’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 OSEA ARTs SOP Critique Intent Future

  12. OSEA’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 OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  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 2005-2010 (no cap), review in 2007 OSEA ARTs SOP Critique Intent Future

  16. Advanced Renewable TariffsOSEA’s ProposedPrices Paul Gipe, wind-works.org OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  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) OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  25. Prices Paid for Biomass in Europe OSEA ARTs SOP Critique Intent Future

  26. Prices Paid for Solar PV in Europe OSEA ARTs SOP Critique Intent Future

  27. Ontario Solar Tariff North American Comparison OSEA ARTs SOP Critique Intent Future

  28. Ontario’s SOC’s: What’s Wrong? Price • 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 OSEA ARTs SOP Critique Intent Future

  29. Ontario’s SOC’s: What’s Wrong? Price • 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! Differentiation Differentiation Valuation Valuation Transmission Capacity OSEA ARTs SOP Critique Intent Future

  30. Hydro One Queue Gaming Price 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 Differentiation Valuation Transmission Capacity www.hydroonenetworks.com OSEA ARTs SOP Critique Intent Future

  31. Results of the of Ontario’s SOP OSEA ARTs SOP Critique Intent Future

  32. 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 Ontario SOP/ARTs Results (November-April 2007) OSEA ARTs SOP Critique Intent Future

  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 16th National Energy Services Conference February 6, 2006 OSEA ARTs SOP Critique Intent Future

  35. “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 OSEA ARTs SOP Critique Intent Future

  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 16th National Energy Services Conference February 6, 2006 OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  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 OSEA ARTs SOP Critique Intent Future

  44. “. . . Find the right mechanism to spread the use of wind across the province.” Minister of Energy Dwight Duncan April 12, 2007 OSEA ARTs SOP Critique Intent Future

  45. “. . . We will bring the barriers down.” Minister of Energy Dwight Duncan April 12, 2007 OSEA ARTs SOP Critique Intent Future

  46. “We did it because it was the right thing to do.” Minister of Energy Dwight Duncan April 12, 2007 OSEA ARTs SOP Critique Intent Future

  47. Going Forward

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

  49. SOP: Immediate Corrective Action 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 Additions to The SOP General Policy Improvements To The SOP OSEA ARTs SOP Critique Intent Future

  50. SOP: Immediate Corrective Action Ontario Revised Solar PV Tariffs Immediate Corrective Action Additions to The SOP General Policy Improvements To The SOP OSEA ARTs SOP Critique Intent Future

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