Renewable Energy RFP Process Needs Tightening

Project goals for renewable energy coming from the McGuinty government in Ontario just keep getting bigger. Energy Minister Dwight Duncan announced the latest government Request for Proposals (RFP) for up to 1,000 MW of renewable energy developments for the region. This is the government’s second RFP for renewable power.

The announcement is expected to bring $1.5 billion of new investment to Ontario, and will help the government reach its target of generating 5 percent, or 1,350 MW, of Ontario’s total energy capacity from renewable sources by 2007. The government’s RFP calls for wind, water, solar, biomass and landfill gas projects in Ontario that have a capacity of 20 MW or more. Proponents have until August to submit their proposals, and it is expected that successful projects will be announced as early as Fall 2005. “We’re creating a new and exciting industry in Ontario,” Duncan said. “Expanding our share of renewable energy will not only clean up our air, it will mean more jobs, more opportunities, more innovation and more economic growth across the province.” Prior to the McGuinty government’s commitment to increase its share of renewable sources of energy, less than 0.2 percent of Ontario electricity supply came from non-hydro renewable energy sources. To date, for example, Canadian wind power production has been concentrated in Quebec, with a capacity of 113 megawatts, and Alberta at 275 megawatts. A team selected from across ministries, the Ontario Energy Board, the Ontario Power Authority, and the Independent Electricity System Operator, will evaluate all proposals for the latest RFP to ensure they are complete and meet informational requirements. Proposals will then be evaluated to ensure they meet the minimum mandatory technical and financial requirements. Projects that meet these requirements will be ranked on the basis of total proposal price from lowest to highest, with the whole process overseen by an independent fairness commissioner. Members from the Association of Power Producers of Ontario (APPrO) released a statement to applaud the latest RFP from the McGuinty government, but also offered some advice after experiencing the application structure of the first RFP. “This time the criteria for proponent selection should be less restrictive so that more projects have an opportunity to compete,” Dave Butters, president of APPrO, said. “We have already made a number of recommendations to the government to encourage the development of the ?best’ renewable projects and ensure the broadest level of qualified participation and competition – hopefully a good many of our recommendations have been addressed.” Butters also indicated that a stream-lined provincial permitting process, when harmonized with the federal permitting process, would shorten the amount of development time and reduce the cost and uncertainty of permitting, which would in turn result in lower cost projects. With this RFP announcement, Ontario should now move forward with an Integrated Power System Plan through the Ontario Power Authority, according to APPrO. A system plan would identify ongoing resource procurement requirements as well as the specific resource criteria that will meet those requirements, including, existing and potential Ontario generation facilities, long-term energy efficiency improvements and conservation and demand reduction options, together with appropriate competitive procurement processes. Minister Duncan also announced today that in June the government will issue an additional RFP for up to 200 megawatts of power from small and medium-sized renewable energy projects under 20 megawatts. This RFP will be coordinated with the Ministry of Natural Resources’ efforts to make Crown sites available for waterpower development. The government is also exploring a strategy to encourage very small community and agriculture-based renewable energy projects. The Ministry of Energy is consulting widely on the options available and expects to make an announcement later this year. In November 2004, the government announced 10 new renewable energy projects that will provide Ontario with 395 megawatts of clean power and $700 million in new investment. The province signed 10 contracts totaling 395 MW of electricity capacity, enough power for over 100,000 homes. This includes 355 MW from five wind power projects, 31 MW from two small hydro projects, and 9 MW of capacity from three landfill gas projects. Economic benefits from these projects are estimated at over $700 million, and the weighted average price for power from these contracts was 7.97 cents/KWh. The government will formally release this RFP on Friday, April 22. More information can be found by visiting the link below.
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