progress report on ontario s renewable energy standard offer program jim macdougall - PowerPoint PPT Presentation

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    1. Progress Report on Ontarios Renewable Energy Standard Offer Program Jim MacDougall

    2. 2 During this presentation, I will provide some info on our experience to date with the RESOP. I will highlight some of the lessons weve learned in implementing and designing these programs. I will describe the path forward on these programs and their contribution to encouraging small scale distributed generation.During this presentation, I will provide some info on our experience to date with the RESOP. I will highlight some of the lessons weve learned in implementing and designing these programs. I will describe the path forward on these programs and their contribution to encouraging small scale distributed generation.

    3. 3 Supply Mix in Ontario Renewable Energy Involves electricity generation using environmentally-sustainable resources Supports the replacement of coal-fired generation Reduces Ontarios contributions to climate change and other air emissions Finding clean, affordable and sustainable sources of electricity is a top priority of the Ontario Government Through the Integrated Power System Plan (IPSP), the province is committed to doubling renewable energy capacity by 2025 This is a one-slide message to highlight IPSP. -OPA develops plans for electricity supply based on the Ontario Governments Supply Mix Directive. Diagram: *Conservation accounts for 6,300MW by 2025 and it is the #1 priority for energy. Ontario is investing $10 billion ($500 million per year over 20 years) of the plan. *Renewable energy supply doubles by 2025, from ~8000 MW to 16,000 MW (and required transmission). The existing 8000MW is mainly large hydroelectric. In 2007: -7788 MW of hydroelectric -75 MW bio energy -395 MW of wind energy -1 MW of solar In 2027: -10771 MW of hydroelectric -539 MW of bio energy -4685 MW of wind energy -88 MW of solar energy *The diagram also reflects phase out of coal by 2014. *Nuclear is limited to 14,000 MW *Natural gas is used for intermediate and peak loads only, in what we refer to as our smart gas strategy. This is a one-slide message to highlight IPSP. -OPA develops plans for electricity supply based on the Ontario Governments Supply Mix Directive. Diagram: *Conservation accounts for 6,300MW by 2025 and it is the #1 priority for energy. Ontario is investing $10 billion ($500 million per year over 20 years) of the plan. *Renewable energy supply doubles by 2025, from ~8000 MW to 16,000 MW (and required transmission). The existing 8000MW is mainly large hydroelectric. In 2007: -7788 MW of hydroelectric -75 MW bio energy -395 MW of wind energy -1 MW of solar In 2027: -10771 MW of hydroelectric -539 MW of bio energy -4685 MW of wind energy -88 MW of solar energy *The diagram also reflects phase out of coal by 2014. *Nuclear is limited to 14,000 MW *Natural gas is used for intermediate and peak loads only, in what we refer to as our smart gas strategy.

    4. 4 Renewable Energy Standard Offer Program RESOP: Launched November 2006 Program is designed to encourage smaller distribution connected renewable energy projects (< = to10MW) Balance renewable targets with value of electricity to ratepayers Program Payments: Wind, Biomass and Waterpower @ $110 / MWh On-Peak performance incentive $35 / MWh Available for biomass and waterpower only Payments for Solar PV @ $420 / MWh Not eligible for inflation increases or on-peak performance Price discovery, to incent early adopters The OPA launched the Renewable Energy Standard Offer Program in 2006. Solar PV exceeded all expectations and we are concerned by the high level of response in a short time. An improved program is planned and we are working with government to ensure that the program aligns with broader policy direction.The OPA launched the Renewable Energy Standard Offer Program in 2006. Solar PV exceeded all expectations and we are concerned by the high level of response in a short time. An improved program is planned and we are working with government to ensure that the program aligns with broader policy direction.

    5. 5 RESOP Background RESOP pricing was derived: competitive RFP pricing results, plus adder for lost economies of scale, and Adder for assumed transmission loss reduction For price discovery for PV projects at $420 / MWh Connection policies (OEB/HONI) Generation can be connected up to minimum feeder load plus reverse flow up to 60% TS capacity Connection queue rules are first-come first-served Here is some information on how distribution connected generation is treated in Ontario. *Ontario defines distribution as feeders of 50kV or less. *Cost to connect are paid by generators, including and required system protection costs or upgrades triggered by the connection. *Queue position is important since costs are driven next generator in paying for associated costs. i.e. There is limited capacity in transmission lines if the line capacity is full, then the next generator who wishes to connect would have to pay for the upgrades of the entire transmission line. *As in other jurisdictions (Texas, California) the approach to transmission planning is under review since we need to build transmission ahead of generation, to meet aggressive renewable targets. Here is some information on how distribution connected generation is treated in Ontario. *Ontario defines distribution as feeders of 50kV or less. *Cost to connect are paid by generators, including and required system protection costs or upgrades triggered by the connection. *Queue position is important since costs are driven next generator in paying for associated costs. i.e. There is limited capacity in transmission lines if the line capacity is full, then the next generator who wishes to connect would have to pay for the upgrades of the entire transmission line. *As in other jurisdictions (Texas, California) the approach to transmission planning is under review since we need to build transmission ahead of generation, to meet aggressive renewable targets.

    6. 6 RESOP Results To Date Total executed contracts is approximately 1600MW For Solar PV, *there are 55 projects greater than or equal to 1 MW *there are 225 projects less than or equal to 10 kW The graph highlights that there was a race to the distribution queue now have over 5000MW seeking connection. The high concentration of wind and solar, and low response by water and biomass, is partly a result of the regulatory process in Ontario. (i.e. it is not a level playing field biomass and waterpower project have stricter regulations)Total executed contracts is approximately 1600MW For Solar PV, *there are 55 projects greater than or equal to 1 MW *there are 225 projects less than or equal to 10 kW The graph highlights that there was a race to the distribution queue now have over 5000MW seeking connection. The high concentration of wind and solar, and low response by water and biomass, is partly a result of the regulatory process in Ontario. (i.e. it is not a level playing field biomass and waterpower project have stricter regulations)

    7. 7 RESOP Results To Date

    8. 8 RESOP Results To Date RESOP contracts achieving COD by LDC (October 31, 2008) These are projects that have declared COD. There is a concentration of Contracts with Hydro One and Toronto Hydro.These are projects that have declared COD. There is a concentration of Contracts with Hydro One and Toronto Hydro.

    9. 9 OptiSolar Farms Canada Inc. is building six 10 megawatt (MW) solar farms in Sarnia, a city of 90,000 at the tip of Lake Huron in southwestern Ontario. These solar farms will provide Sarnias Local Distribution Company (LDC), Bluewater Power, with an additional 60 MW of electricity generating capacity. Thin Film technology - California manufacturing company.OptiSolar Farms Canada Inc. is building six 10 megawatt (MW) solar farms in Sarnia, a city of 90,000 at the tip of Lake Huron in southwestern Ontario. These solar farms will provide Sarnias Local Distribution Company (LDC), Bluewater Power, with an additional 60 MW of electricity generating capacity. Thin Film technology - California manufacturing company.

    10. 10

    11. 11

    12. 12 50 kW Bio-gas Turning manure into electricity, using an anaerobic digester system. The Klaesis are early adopters of this technology in fact, theirs is one of Ontarios first operational systems that is generating electricity to the grid through the net metering program and thats after they have powered two homesteads and the farm buildings. 50 kW Bio-gas Turning manure into electricity, using an anaerobic digester system. The Klaesis are early adopters of this technology in fact, theirs is one of Ontarios first operational systems that is generating electricity to the grid through the net metering program and thats after they have powered two homesteads and the farm buildings.

    13. 13 Monthly Production Fepro Farms

    14. 14 Weekly Production Fepro Farms

    15. 15 Daily Production Fepro Farms

    16. 16 Rankin Construction One 2.0MW hydro turbine manufactured by Canadian Hydro Components Inc. to be located in the weir channel east of Lock #2 of the Welland Canal and make use of the excess water flow used to control the lock levels. A powerhouse will be constructed downstream of the existing weir and will modify an existing gate for use as a penstock. Head ~11mRankin Construction One 2.0MW hydro turbine manufactured by Canadian Hydro Components Inc. to be located in the weir channel east of Lock #2 of the Welland Canal and make use of the excess water flow used to control the lock levels. A powerhouse will be constructed downstream of the existing weir and will modify an existing gate for use as a penstock. Head ~11m

    17. 17

    18. 18 Clear Creek is in Norfolk County. Project gross capacity: 9.9MW Model: Vestas V82 Capacity Factor Net: 31.51% Commercial Operation: January 1, 2008 Modern utility-scale wind turbines consist of a generator positioned on top of a tubular steel tower and powered by a three-bladed rotor. Rotor Diameter: 82m Swept Area: 5,281 m2 Nominal Revolutions: 14.4 rpm, 14.4/10.8 rpm Number of Blades: 3 Power Regulation: Active Stall Air Brake: Full blade pitch by three separate hydraulic pitch cylinders Tower Hub Height: 78m Clear Creek is in Norfolk County. Project gross capacity: 9.9MW Model: Vestas V82

    19. 19

    20. 20 Monthly Production - Frogmore Wind Farm

    21. 21 Weekly Production - Frogmore Wind Farm

    22. 22 Daily Production Frogmore Wind Farm

    23. 23 Location of RESOP Projects in Ontario

    24. 24 RESOP Interest

    25. 25 Renewable Energy Integration Southwestern Ontario Wrt Bruce map, the proposed 2nd Bruce to Milton line has recently been approved by the OEBWrt Bruce map, the proposed 2nd Bruce to Milton line has recently been approved by the OEB

    26. 26 A series of images that demonstrate the interest in RESOP and the significant change in the way we think about connecting generation to distribution systems. This shows that there were 2 CIA requests in the West Zone of the distribution grid in 2005A series of images that demonstrate the interest in RESOP and the significant change in the way we think about connecting generation to distribution systems. This shows that there were 2 CIA requests in the West Zone of the distribution grid in 2005

    27. 27 At the end 2006 after program was announced (March) and launched (November)At the end 2006 after program was announced (March) and launched (November)

    28. 28 At the end of 2007At the end of 2007

    29. 29 Orangeville TS - Hydro One red line This slide shows the first 80 MW of interested generation that applied for Connection Impact Assessments with Hydro One. As you can see, interest far exceeds available connection capacity.This slide shows the first 80 MW of interested generation that applied for Connection Impact Assessments with Hydro One. As you can see, interest far exceeds available connection capacity.

    30. 30 RESOP Challenges Demand for RESOP far exceeds opportunities to connect on distribution systems The current approach to distribution system policies and distribution system management never anticipated significant generation Need to reassess how much generation we want on distribution, and what type or mix of generation SOPs force a conversation about how much and what kind of generation is appropriate on distribution systems. Our system was designed for large central plant generation, transmitting power long distances to local distributors and ultimately to customers. The grid and its associated regulatory construct was not intended to address many of the issues that arise when significant generation is placed on distribution, and in particular when this generation exceeds customer demands in an area. Reverse flow of generation onto transmission creates additional issues which I am sure my friends from Hydro One will address. One area where we will soon have to make policy decisions, as demonstrated in some of these images, is how to efficiently and fairly allocate the new transmission capacity for additional generation when the Bruce to Milton Transmission expansion is complete. How much and what kind of generation do we want on distribution networks, how much and what kinds of additional generation do we want on transmission networks.SOPs force a conversation about how much and what kind of generation is appropriate on distribution systems. Our system was designed for large central plant generation, transmitting power long distances to local distributors and ultimately to customers. The grid and its associated regulatory construct was not intended to address many of the issues that arise when significant generation is placed on distribution, and in particular when this generation exceeds customer demands in an area. Reverse flow of generation onto transmission creates additional issues which I am sure my friends from Hydro One will address. One area where we will soon have to make policy decisions, as demonstrated in some of these images, is how to efficiently and fairly allocate the new transmission capacity for additional generation when the Bruce to Milton Transmission expansion is complete. How much and what kind of generation do we want on distribution networks, how much and what kinds of additional generation do we want on transmission networks.

    31. 31 RESOP Challenges There is a high concentration of project ownership amongst developers Developers are breaking up larger projects to qualify for the program The distribution system (and in some cases the Tx) has limited capacity first-come first served approach created race for the queue There is no requirement to move the project forward prior to 3-year in-service window Within 18 months of the program launch, the OPA contracted for over 1400 MW - This caused the OPA to review the program pending stakeholder consultation on some of the issues and lessons learned over this period. *We intend to address contract concentration by establishing proponent limits *We will impose progress requirements including security deposits and meaningful project development milestones to ensure real projects proceed. *We expect to focus the program better to target certain technologies in specific regions of the Province, where resource potential exists.Within 18 months of the program launch, the OPA contracted for over 1400 MW - This caused the OPA to review the program pending stakeholder consultation on some of the issues and lessons learned over this period. *We intend to address contract concentration by establishing proponent limits *We will impose progress requirements including security deposits and meaningful project development milestones to ensure real projects proceed. *We expect to focus the program better to target certain technologies in specific regions of the Province, where resource potential exists.

    32. 32 RESOP Proposed Changes Twoyear review commenced in 2008, as per program design Significant input was received from stakeholders through technical sessions RESOP offered developers a free option Too easy to get queue position/contract Too easy to keep queue position/contract Decided to review program in May 2008. We held sessions with industry association leaders. They provided significant input to process. Decided to review program in May 2008. We held sessions with industry association leaders. They provided significant input to process.

    33. 33 RESOP Proposed Changes Recommendations announced May 2008 Increasing certainty and program efficiency Project Milestones Allow broader participation through proponent limits 50MW in development per proponent per technology 10 MW on any TS per proponent

    34. 34 RESOP Proposed Changes Stakeholder comments: The need for a long-term Provincial solar PV strategy The need to recognize the inherent delays in waterpower projects There has been a limited response from biomass Consider grandfathering mature projects under old rules

    35. 35 RESOP Next Steps Proposed changes will be aligned with the Government's policy priorities for renewable energy in Ontario. OPA is working to respond to September 18th IPSP directive Expect to announce direction for procurement of small scale renewable energy generation by year end. Program has lacked vision or sense of purpose so stakeholder expectations are unrealistic. Need to be more deliberate about the program and target projects, technologies and sizes more appropriately. Program has lacked vision or sense of purpose so stakeholder expectations are unrealistic. Need to be more deliberate about the program and target projects, technologies and sizes more appropriately.

    36. 36 For Additional Information OPA Standard Offer Program Website: www.powerauthority.on.ca/sop OEB Website: http://www.oeb.gov.on.ca for more information on connections and queuing Questions? OPA homepage has free subscription news service, can register to receive email updates on OPA activities: Conservation Initiatives Conservation Fund Electricity Conservation on Ontario Farms Executive Speeches & News Releases Integrated Power System Plan (IPSP) Clean Energy Standard Offer Program Renewable Energy Standard Offer Program RFI/RFQ/RFPs Stakeholder Consultation Technology Development FundOPA homepage has free subscription news service, can register to receive email updates on OPA activities: Conservation Initiatives Conservation Fund Electricity Conservation on Ontario Farms Executive Speeches & News Releases Integrated Power System Plan (IPSP) Clean Energy Standard Offer Program Renewable Energy Standard Offer Program RFI/RFQ/RFPs Stakeholder Consultation Technology Development Fund