Distributed Generation in Toronto:
A Stakeholder Survey of Barriers and Benefits
Dr. Keith Stewart
Manager, Climate and Energy Solutions
WWF‐Canada
May 28, 2009
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Context
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Globally, as of 2005, 25% of new electricity generation installed globally came from distributed resources, compared with only 13% in 2002.
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In Europe, decentralized energy systems and distributed generation are growing in demand, to meet challenges of energy security & climate change. •
Downtown Toronto faces significant medium and long‐term reliability and capacity challenges. A new supply source is being actively explored and development work is being initialized. DG is an ideal solution.
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DG penetration in Toronto and Ontario is very low: 88 MW of installed capacity spread out over 77 projects (total downtown demand 2,000 MW).
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Widespread uptake DG will require a paradigm shift from the centralized power generation model Ontario was built on, and will be critical to “turbo‐
charging” green energy deployment, as envisioned in the Green Energy Act.
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Study Objectives 1. Document and analyze a broad range of stakeholder perceptions and experiences around DG in Toronto, and Ontario more broadly;
2. Gauge support among these stakeholders for facilitating increased DG implementation in Toronto; 3. Identify and characterize stakeholder perceptions of the benefits and barriers to implementing DG projects in Toronto and Ontario more
broadly; and,
4. Identify what stakeholders consider the most critical policy and technical measures necessary to facilitate greater DG implementation in Toronto.
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Methodology
The research was conducted in two simultaneous phases:
1. Stakeholder Survey: A total of forty‐two (42) individuals participated in in‐depth interviews and discussions, following a pre‐determined set of questions. Specific questions focused on perceived benefits of DG, nature and resolution of specific barriers experienced and observed, with emphasis on economic issues for DG projects. 2. Literature Review: Literature focused on several jurisdictions, including but not limited to: Ontario; Canada; British Columbia; The United States; California; New York; The European Union; Germany; Denmark, Netherlands.
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Survey Results
The chief benefits: lower carbon footprint, more efficient use of existing facilities, a more reliable grid because you’ve got more generators. You can work around congestion by having local generation. You can tilt toward greener opportunities with solar, wind and co‐gen. You know, the benefits are legion.
Conservation is one of the primary outcomes of DG – in the heating sector and the power sector.
“The value of distributed generation lies in its ability to provide generation capacity in a flexible, timely, economical and environmentally attractive manner.”
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Specific Benefits Identified by Respondents
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Survey Results: Barriers to DG
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Lack of adequate financial incentive, or a functioning Clean Energy Standard Offer Program, was the top barrier identified by 60% as
impeding the uptake of DG. Actual price will be a critical determinant of the uptake of DG, esp for CHP.
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Almost half (45%) of respondents identified a lack of vision and mandate as a real impediment to more concerted implementation of DG. The
same percentage identified a lack of coordination and strategy across the system as a major barrier to individual projects.
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The barriers to DG are consistently – and significantly – outweighing the benefits. Level the playing field: regulators and policymakers must set appropriate policy goals and regulations so that implemented DG provides more benefits than costs.
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Specific Barriers Identified by Respondents
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Addressing Barriers to DG
Top six measures identified by respondents as necessary to advancing DG in Toronto:
1. Clear plan for DG in Toronto and Ontario, with a strong vision and mandate and including specific targets (69%);
2. Upgrading of the short circuit capacity in Toronto and improving grid access more generally for DG (62%);
3. Financial incentives, such as a viable CESOP, or feed‐in tariffs (60%);
4. Creating incentives for LDCs (55%);
5. Resolving and standardizing interconnection issues and agreements (48%); 6. Streamline other municipal and provincial regulations; and,
7. Greater public education and acceptance as vital to the popularization of green energy and increasing understanding of local community energy (48%).
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Specific Measures Identified to Address Barriers
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Conclusions
1. DG could bring many benefits to the power supply system and catalyze the greening of the grid. It should therefore be prioritized, with a clear vision, roadmap and targets.
2. Despite years of interest and study, DG penetration in Ontario and Toronto remains exceedingly low. The system and financial barriers remain overwhelming and complex for proponents, and are compounded by additional technical and social barriers.
3. In downtown Toronto, additional DG integration will be limited to under 90MW (or less) until 2011, due to uprating that must be done to accommodate any additional generation. However, a multitude of other barriers could be addressed starting now.
4. The City of Toronto has a clear policy position and strategy for DG as part of its climate & energy plan, and is moving to remove municipal barriers to DG on the one hand, and to incentivize and promote DG on the other.
5. Pilots in Toronto should be a priority. The Downtown system could handle up to 70 MW while uprating work is carried out, which should be designated for priority pilots.
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DG and Cogeneration Roadmap for Toronto:
Guiding Principles
Measures to assist the development of DG and cogeneration should:
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Include a clear target and objective in the Integrated Power Supply Plan and process, with clear leadership assigned within the system for delivery of increased DG and cogeneration;
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Catalyze low‐CO2, low‐waste and efficient forms of DG and cogeneration;
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Provide a means of enabling DG projects to realize a reasonable rate of return;
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Reduce the complexity involved in setting up DG and cogeneration
projects; and,
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Ensure requirements on these smaller generators are proportionate to their size and the use they make of the wider public network.
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DG and Cogeneration Roadmap for Toronto:
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DG and Cogeneration Roadmap for Toronto:
Strategy
1. Develop and support adequate incentives and Rate Mechanisms for DG and Cogeneration
2. Break out and identify specific overall and regional DG targets in the IPSP
3. Reduce Remaining Institutional Barriers 2009‐2011
4. Total of 70 MWs in Pilot projects in Toronto 2009‐2011
5. Develop specific strategy for Cogeneration
6. Public education and community outreach
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DG and Cogeneration Roadmap for Toronto:
Most Immediate Opportunities
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CHP or cogeneration projects
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Provincial buildings / Building Code
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Hospitals/MASH sector
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District energy planning
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Loading preference
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Green Energy Act regulations
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