Feed-in Tariffs: Ontario’s Experience

[irishbobcat]

Feed-in Tariffs: Ontario's Experience
By John Lorinc
Several states are contemplating feed-in tariffs to spur growth in the renewables industry — a move that Ontario, Canada made three years ago. It worked — and then some. (Photo: Shutterstock)
Less than three years after the Ontario government introduced North America's first feed-in tariff policy to promote small-scale renewable energy, Canadian environmentalists have some advice for decision-makers in the United States: Hang on to your hats.
As reported here yesterday, several states and cities in the United States are considering a set of energy rate-setting policies that are regarded as pivotal in the growth of green energy in countries like Germany.
Feed-in tariffs — also known as "standard offer contracts" — guarantee long-term preferential rates to small renewable energy developers so they can compete on price with conventional (and less costly) forms of power.
Beginning in March 2006, Ontario agreed to price small-scale hydro, wind and biomass projects at 11 Canadian cents ($0.9 U.S.) a kilowatt-hour, and 42 Canadian cents ($0.34 U.S.) for solar — compared to about 5 cents for nuclear, coal, gas and large hydro. The rates were guaranteed for 20 years.
So many local wind and solar developers — as well as homeowners looking to install photovoltaic panels — applied for Ontario's standard offer that the government's 10-year target cap of 1,000 megawatts was exceeded within a year.
The province iced the program last spring, but is expected to reintroduce a modified feed-in tariff next week when it puts forward new green energy legislation.
"The big surprise with the standard offer was just how successful it was," says Keith Stewart, an energy analyst at World Wildlife Fund Canada. "The lesson is that renewable energy technology was a lot more market-ready than the energy planners thought it was."
"The big surprise with the standard offer was just how successful it was."
— Keith Stewart, WWF Canada
Based on Ontario's experience, Mr. Stewart offers a few more suggestions:
1) Don't cap a feed-in tariff program. Governments should rely on such tariffs as the primary procurement method for green energy, rather than inviting developers to submit to a bidding process.
2) Create a monitoring process. Under the terms of Ontario's standard offer, developers had three years to line up financing, obtain approvals and build their projects. Mr. Stewart says green energy companies should be required to demonstrate to regulators that they've passed certain milestones.
3) Underwrite a smart grid. To fully exploit the potential of renewable energy, transmission networks need to be re-engineered to accommodate smart meters and intermittent energy flows from solar and wind projects.
An expert task force convened by Ontario's electricity market operator released a report last week recommending $1.6 billion Canadian ($1.3 billion U.S.) in smart grid investments.

Ohio needs Feed-In Tariffs now!
Dennis Spisak
Mahonong Valley Green Party
Ohio Green Party
www.ohiogreens.org
www.votespisak.org/thinkgreen/