Renewable Energy

Ontario has become a leading jurisdiction in renewable energy development in Canada since adopting the Green Energy Act (GEA) in 2009. In less than a decade, wind power has grown to account for 8% of installed capacity (this figure has grown to 10% as of August 2015, as pie chart above demonstrates) and supplies 3.5% of the province’s electricity demand[i]. An additional 2,500 MW will come online by the end of 2015, solidifying Ontario’s position as the Canadian leader in wind energy[ii].

Solar generation has also increased significantly under the GEA, with almost 1,000 MW embedded in local distribution networks and 40 MW connected to the provincial grid [iii]. Solar projects range in size from household solar panels, which allow individual homeowners to sell their clean energy to the grid, to large arrays covering many hectares such as the 80 MW array in Sarnia, one of the largest operating PV facilities in the world. Bioenergy facilities, which generate energy through biological processes, are also on the rise, using a variety of sources including landfill gas, biogas, and renewable biomass.

Policy Mechanisms

As the critical policy tool of the GEA, Ontario’s Feed-In Tariff (FIT) and microFIT programs have created the needed certainty to drive investment and job creation in renewables by levelling the playing field for producers. Their adoption is the key reason why solar and wind development have accelerated so rapidly over the last several years,  allowing homeowners, communities, businesses and private developers to generate renewable energy and sell it to the province at a guaranteed price for a fixed contract term.

Since first enacted in 2009, the FITand MicroFIT programs have undergone several reviews and modifications. Initially, the programs were uncapped, open processes under which large and small generators could apply at any time. Under this first iteration of the program, wind capacity quadrupled and solar energy grew from non-existence to a significant place on the province’s grid.

In 2013 the Ministry of Energy issued a directive that removed large energy projects (>500 kW) from the FIT program. In its place, the IESO has launched the Large Renewable Procurement (LRP), a competitive process that effectively places a cap on renewable capacity and reduces the number of large renewable projects. It also includes new requirements for local buy-in and removes requirements for local content.

While the IESO maintains that the LRP is designed to “strike a balance between early community engagement and achieving value for ratepayers” while keeping the province on track to meet its 2025 target, renewable energy proponents argue that the target is too low and that these changes leave industries relying on the policy with an unclear future[iv]. Targets in the first procurement include up to 300 MW of wind, 140 MW of solar, 50 MW of bioenergy and 75 MW of hydropower.

 

[i] Clean Air Alliance. 2015. Ontario’s coal phase out. Retrieved 12 Aug 2015 from http://www.cleanairalliance.org/support-a-clean-energy-future/ontarios-coal-phase-out/.

[ii] Independent Electricity System Operator. 2015a. “Supply Overview”, retrieved from http://www.ieso.ca/Pages/Power-Data/Supply.aspx, 7 Aug 2015.

[iii] Independent Electricity System Operator. 2015a. “Supply Overview”, retrieved from http://www.ieso.ca/Pages/Power-Data/Supply.aspx, 7 Aug 2015.

[iv] Stokes, L. “Ontario’s backward step on renewable energy”, 22 Jul 2013, Toronto Star, retrieved 10 Aug 2015 from http://www.thestar.com/opinion/commentary/2013/07/22/ontarios_backward_step_on_renewable_energy.html

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