How renewable energy developers are assessing risk in Ontario

Mike Snow, President of Algonquin Power Co., provides insight into his decision-making process when he looks at investing more in Ontario; how to build more stability for the industry and new markets across Canada. The Oakville-based company owns a direct or indirect equity interest in 20 hydroelectric generating facilities, 5 wind energy facilities, and 7 thermal energy facilities with a total average Power Purchase Agreement life of 13 years.

Canadian Clean: What are some of your key considerations when you look at the opportunities for projects in Ontario today?

Mike Snow: The cost to permit a project in Ontario is significantly more expensive than other provinces. The incremental cost of permitting in Ontario coupled with political uncertainty makes other jurisdictions more attractive.

We have not abandoned Ontario but our first question before spending incremental development dollars in Ontario is a risk allocation question – do we have enough dollars to risk in Ontario? Does the opportunity justify the development expenditure? The next most important question is community need and acceptance: Will our project help the community and will the community be supportive?

CC: How can developers work to insulate project opportunities more from political uncertainty which has been such a big issue in Ontario?

MS: The political uncertainty is at the provincial level.  The only effective risk mitigation we have identified at Algonquin is investing across a number of jurisdictions in addition to Ontario.

CC: Looking ahead, where do you see the new opportunities for renewables in Canada?

Short term renewable opportunities are in Quebec and Saskatchewan followed by BC.

CC: What are you looking forward to at this year’s Ontario Feed-In Tariff Forum?

MS: I am looking forward to spreading three key messages:

1. Political uncertainty increases risk which will ultimately increase the cost of securing reliable sources of renewable energy.

2. Ministry of Environment needs to evolve the permitting process to eliminate front-end loading of a significant portion of the engineering costs.

3. The need to educate Ontario residents on the significant benefits associated with hosting renewable facilities.