Ontario Power System: The generation and distribution of electric power in Ontario is regulated by the Ontario Energy Board. The Independent Electricity System Operator (IESO) manages Ontario’s wholesale power generation and sales market. The Ontario Power Authority (OPA) is responsible for power planning, conservation, and the contracting of generation capacity outside the wholesale market. Transmission and rural distribution is run by a provincial government corporation - Hydro One. Urban distribution is operated by a series of private or municipal owned Local Distribution Utilities. Large rural renewable energy generators are mostly connected to the transmission system while smaller generators feed into local distribution systems.
Ontario also has a competitive retail market for
electricity so that individual customers can purchase 100% renewable power from
retailers at a premium price.
Ontario FIT and MicroFIT Programs: The Government of Ontario officially launched its feed-in tariff in initiative in 2009 through the Green Energy and Economy Act – at the time the most comprehensive of its kind in the Americas. The Ontario FIT and Micro-FIT (for systems <10kW) programs are operated by the Ontario Power Authority and give priority grid access to renewable sources of power and set fixed tariffs under 20 year contracts. The FIT Programs allows any renewable power system, from the smallest household solar system to large wind farms, to connect to the grid and be paid tariffs that provide a reasonable return on investment.
By the end of 2012, contracts for over 9000 MW of new renewable power had been offered with more than 1300 MW in commercial operation – the rest under development. These contracts have already leveraged over $10 billion in private investment and resulted in significant new solar and wind manufacturing capacity and hundreds of new jobs in Ontario. The program has been so successful that the 2018 provincial targets of 10.7 GW of new renewable power producing 10-15% of the Ontario’s electricity will be reached 5 years early. Increasing grid capacity has become a major factor in rate of deployment of new renewable power systems.
The two original FIT and MicroFIT programs were put on hold in 2011 while they underwent their first scheduled price and rule review. The review report released on March 22, 2012 can be viewed at http://www.energy.gov.on.ca/en/fit-and-microfit-program/2-year-fit-review/. For a variety of reasons (see commentary below), the programs have been very slow at re-starting. A new MicroFIT 2 Program was opened in August 2012 with a target of 50 MW. A new “Small FIT 2 Program” window was opened for only six weeks in December 2012 with a target of only 200 MW.
The new Program rules give priority to community or First Nation owned projects, and those on health care and municipal facilities, through a series of “set asides” and a priority points system . An “adder” of up 1.5 cent/kWh will continue to be paid on non-solar projects for community and First Nations projects and a premium paid for biomass and hydro projects that deliver power during peak periods. Community power projects will also continue to be eligible for legal and project development grants under the Community Energy Partnership Program.
The new rates reflect the lower cost of solar and wind systems in 2012 – a sign of success of the program to date.
For more details on the new FIT Program rates and rules visit http://fit.powerauthority.on.ca/
Participation in the FIT program requires the payment of a
registration fee and application security. Projects that require additional grid
capacity are required to meet transmission/distribution availability and
economic connection tests. All these requirements are waived for MicroFIT
projects less than 10 kW. Both FIT and MicroFIT projects must meet Ontario
domestic content requirements.
In addition to the FIT Program, Ontario is making major new transmission investment for grid expansions to accommodate increased renewable energy deployment and to develop a smart grid – see http://www.ieso.ca/imoweb/siteShared/ontarios_smart_grid.asp?sid=md .
Commentary: The introduction of feed-in tariffs and guaranteed access for renewable power sources in 2009 promised a complete change in the way power would be provided to Ontarians in the 21st century, with a new Ontario grid built around these renewable power sources. Up until then, renewable power sources had to be integrated into an existing grid. However, the government’s commitment to this transition in 2013 is not as strong. Insufficient support for community ownership in the initial FIT Program led to several large wind farms being opposed by local residents. The very success of the FIT programs also led quickly to grid constraints and renewable capacity outstripping the power planning process. The long delays in re-starting the FIT programs and the new short application windows have resulted in many renewable energy companies closing down and a struggling community power sector.
Hopefully, provincial targets for renewable power will be raised and a more stable feed-in tariff program established in 2013.