October 16, 2013

Feed In Tariff (FIT) and Renewables Procurement in Ontario

Dirk van de Waal – Business Analyst, Renewables Procurement

Ontario Power Authority

2

Long-Term Power System Planning

Procuring New

Supply

Enabling Conservation

Across the Province

Key Activities

Ensure reliable, cost-effective, sustainable electricity supply for Ontario.

A cleaner electricity system

• Phasing out coal by the end of 2014– 75 percent reduction in electricity sector’s carbon footprint

• Replacing coal with clean, renewable energy resources– FIT Program is helping to bring on more renewable

generation

3

System Capacity

Wind

Gas

Nuclear

Hydro

Nuclear

Gas

Coal

Hydro

Nuclear

Hydro

Wind

Bioenergy

Solar PV

Natural Gas

Coal

Efficiency/DR 2009

Nuclear

Hydro

Wind

Bioenergy

Solar PV

Natural Gas

Coal Efficiency/DR

2013 (est.)

4

Feed-in Tariff (FIT) Program

• Launched in 2009

• First comprehensive FIT program in North America

• Open to various renewable energy supply technologies – Solar Photovoltaic (PV) – Wind power– Waterpower – Bioenergy technologies (biogas, biomass,

landfill gas)

• Different prices for different technologies and project sizes

• Long-term contracts (e.g. 20 years)

FIT Program Impact

• Has encouraged billions of dollars of investment• More than 30 companies have already invested in Ontario –

manufacturers/generators/related services• Created thousands of direct and indirect clean energy jobs

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Procurement to date

6

2004 2005 2007 2008 2009 2010 2011 2012 20130

500

1,000

1,500

2,000

2,500

3,000

3,500

314

779

424 391 447

2,320

3,237

245

Total

Bio-energy

Solar PV

Co

ntr

ac

t C

ap

ac

ity

(M

W)

(Est)

~170

Non-Hydro Renewables – Executed Contract Capacity

FIT Launched

MicroFIT Program

7* Data as of Oct 1, 2013

Q4 2009

Q1 2010

Q2 Q3 Q4 Q1 2011

Q2 Q3 Q4 Q1 2012

Q2 Q3 Q4 Q1 2013

Q2 Q30

10,000

20,000

30,000

40,000

50,000

60,000

70,000

0

20

40

60

80

100

120

140

160microFIT Applications and Contracted Capacity

Accumulated Capacity

Accumulated Applications

Applications (MW)

FIT 3 and Beyond

• June 12, 2013 Minister’s direction further clarifies policy goals• Support long-term sustainability of FIT program by setting annual

procurement targets for next 4 years:– 150 MW/yr for Small FIT– 50 MW/yr for microFIT

• Replace Large FIT program with new competitive procurement process– Work with municipalities and Aboriginal communities to identify

appropriate locations and siting requirements• Strengthen participation of municipalities and public sector entities

in Small FIT– Schools, colleges, universities, hospitals, long-term care homes,

public transit services and Metrolinx• Measures to bring program into compliance with May 24, 2013 WTO

rulings8

Fall 2013 Procurement Targets

• FIT 3 application window to open on November 4, 2013 targeting 123.5 MW– Encourage participation by municipalities and public sector

entities (revised points system, CCSAs, price adders)– Rules and application process have been improved

• 15 MW pilot program for rooftop solar projects on unconstructed buildings to run concurrently

• 30 MW Fall 2013 microFIT procurement target

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Unconstructed Rooftop Solar Pilot Program

• Pilot stream for applicants with unconstructed buildings• Small FIT rooftop solar projects

– 10 kW – 500 kW

• Up to 15 MW in 2013• Considerable industry stakeholdering• Goal is to synchronize successful pilot framework into

regular FIT program in 2014

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August 26, 2013 Price Schedule

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Renewable Fuel Project Size Tranche* August 26, 2013Price (¢/kWh)

April 5, 2012Price (¢/kWh) % Change

Solar (PV)(Rooftop)

≤ 10 kW 39.6 54.9 -27.9%

> 10 ≤ 100 kW 34.5 54.8 -37.0%

> 100 kW 32.9 53.9 -39.0%

Solar (PV)(Non-Rooftop)

≤ 10 kW 29.1 44.5 -34.6%

> 10 kW 28.8 38.8 -25.8%

On-Shore Wind All sizes 11.5 11.5 0%

Waterpower All sizes 14.8 13.1 13.0%

Renewable Biomass All sizes 15.6 13.8 13.0%

On-Farm Biogas ≤ 100 kW 26.5 19.5 35.9%

> 100 kW ≤ 250 kW 21.0 18.5 13.5%

Biogas All sizes 16.4 16.0 2.5%

Landfill gas All sizes 7.7 11.1 -31%

* The FIT 3 program is available to projects generally ≤ 500 kW

2013 Procurement Schedule

• This is an anticipated schedule and is subject to change

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2014 Procurement Schedule

• This is an anticipated schedule and is subject to change

13

FIT Application and Contracting Process

14*Timelines are targets

Application Review

*60 DAYS

Connection Screen

*60 DAYS

Contract Execution, Approvals, NTP, COD

Large Renewable Projects

• Engage stakeholders and provide interim report– Through August 2013, OPA facilitated various engagement

activities for municipalities, Aboriginal communities, industry associations, general public and other stakeholders.

• OPA submitted interim recommendations report to Minister of Energy on August 30, 2013

• Interim recommendations report publicly available15

• No more procurement under Large FIT program (generally > 500 kW)

• Large FIT program to be replaced by competitive procurement process

Hydroelectric Standard Offer Program (HESOP)

• Municipal Stream– Eligible municipal waterpower projects– New-build– 10 MW for projects 500 kW – 5MW– 50 MW for projects > 5 MW– Pre-existing FIT applicants prior to

June 5, 2010

• Expansion Stream– NUG or HCI contracted facilities– Procurement for expansion potential at

existing facility

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Questions and Resources

Questions regarding FIT or microFIT, including application questions:

FIT@powerauthority.on.ca

microFIT@powerauthority.on.ca

Questions regarding your existing FIT or microFIT contract:

FIT.contract@powerauthority.on.ca

microFIT.contract@powerauthority.on.ca

Where to find additional information:

fit.powerauthority.on.ca

microfit.powerauthority.on.ca

ontario.ca/refo