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The Rationale for Ontario's Green Energy Act
1. 2009 OEA Industry Leaders’ Roundtable
Ontario’s Feed In Tariff in the Context of North
American Renewable Energy Policies
April 30, 2009
John Dalton
jdalton@poweradvisoryllc.com
Tel: 978 369-2465
2. Presentation Outline
Renewable Energy Policies in North America
Objectives
Creating Manufacturing Jobs
Renewable Portfolio Standards
Feed In Tariffs
Objectives
Challenges
Ontario’s approach
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3. Range of renewable policies being employed across North
America
Alternatives include:
Purchase mandates, including Renewable Portfolio
Standards (RPS) and Standard Offers
Tax incentives
Grants
Policies driven by objectives including:
Environmental benefits
Price stability
Economic development
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4. Economic development focused on manufacturing jobs
Providing the conditions to attract industry
Competitive, skilled labour force
Logistics: minimizing shipping costs
Procurement of components and delivery of
product
Close to the market
Driven by incentive levels (PV) and resource base
(wind)
Access to other markets
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5. RPS the predominant form of procurement policy in the US
www.dsireusa.org / April 2009
WA: 15% by 2020* VT: (1) RE meets any increase ME: 30% by 2000
New RE: 10% by 2017
MN: 25% by 2025 in retail sales by 2012;
MT: 15% by 2015
(Xcel: 30% by 2020) (2) 20% RE & CHP by 2017 ☼ NH: 23.8% by 2025
OR: 25% by 2025 (large utilities)
ND: 10% by 2015 MI: 10% + 1,100 MW ☼ MA: 15% by 2020
5% - 10% by 2025 (smaller utilities) by 2015* + 1% annual increase
(Class I Renewables)
SD: 10% by 2015 WI: Varies by utility; ☼ NY: 24% by 2013
10% by 2015 goal RI: 16% by 2020
☼ NV: 20% by 2015* CT: 23% by 2020
IA: 105 MW
☼ OH: 25% by 2025†
UT: 20% by 2025*
☼ PA: 18% by 2020†
IL: 25% by 2025 VA: 15% by 2025*
☼ CO: 20% by 2020 (IOUs) ☼ NJ: 22.5% by 2021
CA: 20% by 2010 10% by 2020 (co-ops & large munis)*
☼ MO: 15% by 2021 ☼ MD: 20% by 2022
☼ AZ: 15% by 2025 ☼ DE: 20% by 2019*
☼ NC: 12.5% by 2021 (IOUs)
10% by 2018 (co-ops & munis) ☼ DC: 20% by 2020
☼ NM: 20% by 2020 (IOUs)
10% by 2020 (co-ops)
TX: 5,880 MW by 2015
HI: 20% by 2020 28 states & DC
have an RPS
5 states have goals
State renewable portfolio standard
☼ Minimum solar or customer-sited requirement
*
State renewable portfolio goal Extra credit for solar or customer-sited renewables
Solar water heating eligible
† Includes separate tier of non-renewable alternative resources
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6. RPS structures vary by state
Restructured markets, RPS utilize RECs
RECs represent the environmental attributes
Benefits of RECs: market-based signal of attributes
Can lower costs of realizing target
Disadvantages: uncertainty regarding REC value
REC markets short term
Discount for long-term sales
Net effect can be higher costs for renewable energy
New York RPS: central procurement: $22 to $15
New England states utilize RECs: $45 to $35
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7. FITs effective in developing renewable energy industry
Most appropriate where costs and performance well
known
Key is stability offered by the program
Allows manufacturers to make investment decisions
Risk if you get the FIT price wrong
Depends on the premium relative to market
Asymmetrical: prices too high versus too low
Major source of tension with FIT implementation
Enable project development on sustainable basis
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8. Ontario’s FIT seeks to resolve this tension
Program pricing balances the following objectives:
Promote broad participation in program
Provide price stability necessary to promote
investment
Encourage efficient project development
Electricity market reforms must ultimately consider the
impacts on customers
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9. Introducing Power Advisory
Power Advisory specializes in electricity market analysis and strategy, power
procurement, policy development, regulatory and litigation support, resource
planning and project feasibility assessment.
Our consulting support is driven by the objective of offering clients
strategic and tactical insights that provide competitive advantage.
Our approach is based on an understanding of fundamental economic
drivers as shaped by market structures and market participant behavior.
Our consulting services are provided by seasoned electricity sector
professionals, offering a wide breadth and significant depth of industry
knowledge.
For additional information regarding our services, please contact:
John Dalton
jdalton@poweradvisoryllc.com
978-369-2465
Power Advisory LLC 2009
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10. Introducing Power Advisory
Clients include:
Algonquin Power
Atlantic Power
Bluewater Power Generation
Bruce Power
Canadian Wind Energy Association
Connecticut Resources Recovery Authority
Great Lakes Power
Manitoba Hydro
National Energy Board
Natural Resources Canada
Northland Power
New Jersey Resources
Ontario Energy Board
Ontario Power Authority
Suncor
TransAlta
TransCanada
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