Ontario sees – and gets – the green light of renewable energy

Ontario has begun setting the pace for North America’s change from fossil fuels to renewable energy and that pace appears to be quickening.

First, the Canadian province’s government passed a landmark Green Energy Act (GEA) in May of this year. Then three weeks ago, Ontario’s deputy premier and minister of energy and infrastructure, George Smitherman, halted plans to build two new nuclear reactors because of excessive costs, pleasing anti-nuclear activists who had objected to the GEA’s continuation of  provincial reliance on nuclear power.

These developments have positioned Ontario to dramatically grow its green-energy industry, eliminate coal use,  diminish dependence on nuclear  power, create an estimated 50,000 jobs and allow everyone – from individual citizens to large groups - to contribute renewable, clean energy to the grid and profit from it.   

But questions remain about an essential piece of the plan, called a feed-in tariff (FIT). Created as part of the GEA, the tariff sets up a systematic, comprehensive structure of guaranteed price rates for energy generated by community wind, solar, hydro, biomass and biogas projects, both small and large. The idea behind the tariff is to make clean and renewable energy-generation profitable for all who engage in it by giving a somewhat better rate to small or fuel-limited projects that won’t generate a great deal of energy and and a somewhat lower rate to projects likely to generate a lot.

Details of Ontario’s tariff remain to be worked out, such as where financing for energy projects will come from, what guarantees (if any) will be required for loans, what constitutes a “community” project and whether or not multiple communities will be allowed to collaborate on a single project, said Deb Doncaster, executive director of Community Power Fund, an nonprofit funding and advocacy organization. Discouragingly, the tariff also does not yet have a wind-source differential built in that will allow projects in less-windy areas to earn a slightly higher rate on the small amount of energy they generate, she said.  

“It’s taking a long time, but I don’t mind,” she said. Eventually, Doncaster noted, the tariff will result in gross revenues of about $250,000 per megawatt per year: “$50 million a year that’s staying in Ontario, that’s going in the pockets of citizens and voters.”  

Her colleague Kristopher Stevens agreed. Executive director of the Ontario Sustainable Energy Association, a nonprofit that supports renewable-energy community power projects and that founded Community Power Fund, Stevens noted that with feed-in tariffs,  “the success is largely because it isn’t just large corporations” doing energy projects and enjoying the profits.

“You need to have a really broad base of support” among ordinary people,  he said. And collaboration is essential: On his trips to nations with advanced sustainable-energy programs such as Germany, he’s seen a few landowners collaborate on wind farms that generate “millions of euros.”  

The GEA includes the specific goal of helping all of Ontario’s local communities, including those of aboriginal First Nation and Metis peoples, develop renewable-energy revenues.  But both Doncaster and Stevens think that, in addition to the opportunity to collaborate and pool resources, Ontarians need the capacity to connect to the power grid, which is currently full, as well as antiquated. Other vital steps to success include creating an expanded “smart”  grid with access for the entire public; getting government-backed loan guarantees for start-up energy projects; and encouraging investment from, and community partnerships with, commercial developers to reduce risk.

Stevens and Doncaster agree that Ontario already has two of the elements most important to the effective growth of renewable energy: the GEA and a true leader. Smitherman is “really willing to listen,” Stevens said;  Doncaster calls the minister “ambitious as hell” and “well-informed.”  

Doncaster also thinks Smitherman’s own internal fuel supplies will have as much to do with the GEA’s success as Ontario’s wind and solar resources. “How much energy does this guy have left to see this thing through?”  she wondered, adding that Ontario needs a “green” foundation to fight political battles, conduct studies and enhance Ontario’s profile when Smitherman has moved on.

But with Smitherman still steering Ontario’s energy policy and the costly new-nukes plan put aside for now, the time is right  to move Ontario to a 100-percent-renewable grid, said Jack Gibbons, chair of the Ontario Clean Air Alliance and an opponent of nuclear power.

Though he noted that the feed-in tariff doesn’t include a law banning nuclear-power companies from passing cost overruns on to  the consumer, nor does the tariff apply to combined heat and power or the natural gas used by nearly every Canadian household, Gibbons called the GEA “a great act … an important step forward” that creates huge incentives for wind and solar projects.

 He also has hope that Ontario is turning away from its longtime pro-nuke position because building reactors has become too expensive.

The attraction of nuclear power has always been its cheapness – but no longer, Gibbons said. ”Now the market has proven that we are correct. It’s a technology whose time has passed.”