Can Ontario Meet its New Renewable Energy Directive?

Last week, Ontario’s Energy Minister directed the Ontario Power Authority (OPA) to immediately begin the process of contracting 2,000 megawatts (MW) of renewable energy projects, with 500 MW of projects in the consultation phase by the end of 2007.

While renewable energy organizations in Ontario welcomed the announcement, there are concerns that the OPA will not be able to meet the goals because of the limitations of its Standard Offer Program (SOP).

The SOP, established in November of 2006, created the first feed-in tariff (FIT) for renewable energy in North America in over twenty years. The program has been hailed as a progressive step for the development of renewables in Canada.

Since the SOP was implemented, 100 contracts for 500 MW of renewable energy projects—mostly for wind—have been signed. Under the contracts, generators of renewable energy are paid CAD$0.11 per kilowatt-hour (kWh) for small hydro, wind and biomass projects. Generators of solar power receive $0.42 per kWh. There is also a project size cap of 10 MW.

Because the directive is calling for such a significant increase of renewable energy projects—all of which must be over 10 MW—some renewable energy advocates are asking for a revision of the project size cap and possibly an increase in tariff prices for solar, wind and biogas. Some Canadian organizations such as the Ontario Sustainable Energy Association (OSEA) believe the tariff prices are not high enough to encourage the amount of development needed to meet the directed goals.

“There’s only one mechanism for OPA to meet this goal—and that’s the Standard Offer program,” said Paul Gipe, an Advisor to OSEA. “All they need to do is raise the project cap and then convene stakeholders to decide how much of that directed capacity we can meet under the current tariff prices.”

OPA said it would soon begin a dialogue with stakeholders to create a timeline for project development and determine the role of each technology in meeting the directive. There has been no response thus far to calls for a change in the project size cap or tariff prices.

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I am a reporter with ClimateProgress.org, a blog published by the Center for American Progress. I am former editor and producer for RenewableEnergyWorld.com, where I contributed stories and hosted the Inside Renewable Energy Podcast. Keep in touch through twitter! My profile name is: Stphn_Lacey

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