Ontario offers standard pricing to small hydro, other renewables

Premier Dalton McGuinty announced the government of Ontario will set a standard price for purchasing electricity from hydropower projects of up to 10 MW and other renewables projects to expand opportunities for renewable energy.

Through Ontario’s Standard Offer Program, the government will set a fixed price for electricity purchased from small projects powered by renewables. Ontario Power Authority will buy electricity generated by small hydro, wind, and biomass at a base price of C11 cents (US9 cents)/kWh. It will pay C42 cents (US36 cents)/kWh for solar energy.

While the premier made the announcement March 21, additional details must be worked out in the coming months before contracts can be drafted and signed. OPA, which is responsible for administering the program, plans to conduct meetings with interested parties and stakeholders on contractual language that should be included.

New standard price could add 1,000 MW over 10 Years

Over the next ten years, the new policy is expected to help add as much as 1,000 MW of renewable energy to Ontario’s supply, the province said. It also expects the added capacity to help ease strain on Ontario’s electricity system, reduce air pollution, promote reliability, protect the environment, and create new high-skill jobs.

“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,” McGuinty said.

Under a standard offer contract, owners of all small renewable energy projects can sell power to the grid for 20 years. There is no limit to the amount of renewables capacity that can be put in service. Projects can be located anywhere in the province, although developers must take into account distribution and transmission considerations. The program is open to all developers but province-owned Ontario Power Generation, which is specifically excluded.

During the past year, the Energy Ministry and Ministry of Natural Resources pursued initiatives to promote development of small hydropower sites in Ontario.

Waterpower Association sees revitalized small hydro

The Ontario Waterpower Association said the Standard Offer Program would help revitalize small hydro.

“Today’s announcement is another step forward toward realizing the significant water power potential remaining in Ontario,” OWA President Paul Norris said. “This program specifically recognizes the reliability, economic, and security benefits that smaller, geographically distributed renewable energy sources can provide.”

For hydropower developers in Ontario, the standard offer is an old concept whose time has come again, OWA said. Between 1986 and 1994, the province, through government-owned utility Ontario Hydro, entered into more than 50 standard contracts with sponsors of small hydro facilities ranging from 50 kW to 20 MW, it said. More than 140 MW of new and renewed hydro was brought on line at power stations across the province.

The program originated with a government request that the Ontario Sustainable Energy Association prepare a report outlining criteria for offering a standard rate for electricity to small or community-based renewable power projects. In 2005, the group recommended Ontario develop a standard offer program.

Later that year, Ontario’s energy minister asked OPA and the Ontario Energy Board to develop details for a standard offer program for small renewables projects. A copy of their report is on OPA’s Internet site, www.powerauthority.on.ca. Program information also is on OWA’s Internet site: www.owa.ca.

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