Ontario standard offer program to benefit small hydro

A new Renewable Energy Standard Offer Program in Ontario has sparked the interest of the province’s small hydropower operators.

Ontario Power Authority issued final program rules in November, including several new provisions that could benefit the hydroelectric industry and other renewables, Ontario Waterpower Association President Paul Norris said. (HNN 3/23/06)

The Standard Offer provides standard terms and conditions intended to make it simpler and less costly for operators of small renewable energy facilities to participate in Ontario’s electricity supply system. For hydropower, the Standard Offer Program has renewed interest in existing and abandoned infrastructure, Norris said.

Standard Offer is one of three OPA procurement strategies, the others being competitive procurement through requests for proposals, and non-competitive procurement though negotiation.

Greenfield, incremental, redeveloped projects eligible

Three types of projects are eligible for Standard Offer:
o New �greenfield� projects;
o �Incremental� projects in which the amount of generation at an existing facility is increased; and
o Redeveloped projects, in which a previously abandoned facility is brought back into service.

To be eligible for the program, renewable energy projects must:
o Have begun commercial operation after Jan. 1, 2000;
o Be located in Ontario;
o Have an installed capacity of no more than 10 MW;
o Be connected to a distribution system licensed by the Ontario Energy Board; and
o Be willing to enter into a contract with Ontario Power Authority for 20 years.

For the first year in the program, a hydro project owner would be paid a base rate of C11 cents (US9 cents) per kilowatt-hour for electricity delivered under contract. In subsequent years, part of the base rate would be indexed to inflation. Projects that can reliably operate during peak demand hours would be eligible for an additional C3.52 cents (US3.15 cents)/kWh for electricity delivered during peak hours.

Hydro projects must obtain all relevant provincial and federal approvals for development and construction within three years of signing the standard offer contract.

Standard Offer Program rules are available on Ontario Power Authority’s Internet site, www.powerauthority.on.ca.

Additionally, OPA issued a 38-page discussion paper in January on procurement processes to contract for conservation and demand management, and generation resources. Comments on the document, �Procurement Options,� are due Feb. 2. The document and instructions for commenting are on OPA’s Internet site.

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