Opportunities for Aboriginal Communities: Green
Energy Act, FIT and microFIT
Métis Nation of Ontario –August 19, 2010
How Electricity Gets to You
Transmission
(Network)
Generation
Large Customer
Transmission
(Transformer Station)
Transmission
(Line Connection)
Distribution
(local delivery)
Source: Fortis BC
2
How We Got Here: 1906 - Present
1906 - 1973
3
1973 - 1998
Market Participants
Market Participants
(Generators, Distributors,
Retailers, Wholesalers, etc.)
(Generators, Distributors,
Retailers, Wholesalers, etc.)
1998 - 2005
VERTICAL INTEGRATION
COMPETITION
(one company owns everything)
(many companies)
2005
HYBRID
OPA Mandate
• Long term planner for Ontario’s electricity system
• Procure needed generation resources
• Design and administer conservation programs
4
How Planning is Done – Changing Approaches
BEFORE
TODAY
FIT projects
IPSP
PLANNING
Generation &
Transmission projects
5
Aboriginal Projects: Putting the Pieces Together
Partnerships
Program
(AEPP)
Feed-in Tariff
(FIT)
Renewable
Energy Project
Loan Guarantee
Program
(OFA)
6
Price Adder
(FIT)
OPA and Aboriginal Communities
• The OPA’s role is to design and administer programs
and undertake planning activities that facilitate First
Nations and Métis communities’ opportunities to:
– Develop renewable generation
– Undertake conservation activities
• OPA’s consultation role involves power system
planning and not individual projects
• OPA ready and willing to facilitate interaction between
aboriginal communities and particular ministries,
agencies and developers
7
OPA and Aboriginal Communities
• What we heard from you and how we responded
– Aboriginal communities want an opportunity to
participate in the development of the renewable energy
and associated transmission that the Province will
develop under the Green Energy and Green Economy
Act but face some obstacles:
• Access to Capital  loan guarantee program (OFA)
• Capacity  Aboriginal Energy Partnerships Program
• Opportunity  Price Adder (FIT) and AEPP
8
The Green Energy and Green Economy Act
9
GEA Overview
• Making it happen - facilitating renewable energy
development and use
• Enabling First Nations and Métis partnership and
participation in electricity sector
• Supporting capacity development in First Nations and
Métis communities
• Increasing conservation and culture of conservation
• Creating green jobs
• Developing “smart grid” – more interactive and locally
resilient
10
First Nations and Métis Participation in
Electricity Sector
• Act to be interpreted consistent with s. 35 of
Constitution Act
• Minister has the power to direct consultation in
relation to Ontario Power Authority activities
• Minister has the power to direct OPA to facilitate
aboriginal peoples’ partnership and participation in
development of renewable resources, transmission
and distribution
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Feed-in Tariff (FIT) Program
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FIT and microFIT
• The FIT Program is divided into two streams – FIT
and microFIT
FIT Program Stream
microFIT Program Stream
Small, medium and large Very small renewable
renewable energy
projects such as home or a
projects.
small business
installations.
Generating 10 kW or less.
Generating over 10 kW
of electricity.
• The microFIT program is highly simplified and the
contract issuance process is different from the FIT
program
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FIT and Aboriginal Communities
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Introduction to FIT Program
What is a FIT Program?
• Generators of renewable energy – from homeowners
to large developers – are paid a reasonable price for
the electricity they produce over the term of the
contract
• Allows generators to recover expected cost of the
investment plus a reasonable profit
• Can provide a predictable and stable source of
revenue to reduce risks
A FIT Program provides a simple way to contract for
renewable energy supply
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Introduction to FIT Program
Standardized features of FIT Program
• Open to various renewable energy supply technologies
–
–
–
–
Wind
Waterpower
Solar Photovoltaic (PV)
Biomass technologies
• Different prices for different technologies and project sizes
• Long-term contracts (e.g. 20 years)
• Prices that aim to cover total project costs and provide a
reasonable rate of return over the contract term
• Opportunities for promoting community-based and
Aboriginal projects
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Introduction to FIT Program
Objectives of the FIT Program
• Increase the amount of renewable energy supply to
ensure there is enough generation and reduce emissions
• Simpler method to build new green generation
• Create new green industries through investment and job
creation
• Provide incentives for investment in renewable energy
technologies to encourage more development in the area
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Building Transmission for FIT
• OPA will on a regular basis assess economics of
building transmission to serve generation projects
that have applied under FIT
• Information from FIT applications will provide support
for build out of Ontario’s transmission system
BEFORE
TODAY
FIT projects
PLANNING
PLANNING
Generation & Transmission
projects
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Contract Pricing
• Opportunities for promoting Aboriginal involvement
• Pricing by technology and size
• Aboriginal Project Price Adder
– Adjusts in proportion to Aboriginal Interest in renewable
energy project
• Prices aim to cover total project costs and provide a
reasonable rate of return over the contract term
• Prices derived using recent market data, OPA
experience with previous renewable energy contracts
(Renewable Energy Supply (RES), RESOP) and
experience in other jurisdictions
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FIT Price Schedule (August 13, 2010)
Renewable Fuels
Rooftop or /Ground Mounted Solar PV
Rooftop Solar PV
Rooftop Solar PV
Rooftop Solar PV
Ground Mounted Solar PV*
On-shore Wind*
Off-shore Wind*
Waterpower *
Waterpower *
Biomass *
Biomass*
On Farm Biogas *
On Farm Biogas *
Biogas *
Biogas *
Biogas *
Landfill gas *
*Eligible for Aboriginal or Community Adder
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**Contract term for water power extended to 40 years
Capacity Range
≤ 10 kW
> 10 kW ≤ 250 kW
> 250 kW ≤ 500 kW
> 500 kW
> 10 kW ≤ 10 MW
Any size
Any size
≤ 10 MW
> 10 MW ≤ 50 MW
≤ 10 MW
> 10 MW
≤ 100 kW
> 100 kW ≤ 250 kW
≤ 500 kW
> 500kW ≤ 10 MW
> 10 MW
≤ 10 MW
> 10 MW
Price (¢/kWh)
80.2/64.2
71.3
63.5
53.9
44.3
13.5
19.0
13.1**
12.2**
13.8
13.0
19.5
18.5
16.0
14.7
10.4
11.1
10.3
Aboriginal Project Price Adder
• Varying adder in proportion to % of equity ownership by
Aboriginal Group, for example:
–
–
–
–
>=50%
40%
25%
10%
» 100% of price adder
» 80% of price adder
» 50% of price adder
» 20% of price adder (10% minimum level required)
• Rationale
– Many projects likely to be partnerships with non-Aboriginal
companies
– Encourages partnerships with Aboriginal Communities
– Encourages Aboriginal Community partners to maximize their
equity share
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Aboriginal Project Price Adder
Technology
Wind
PV
(Ground
Mounted)
Maximum Aboriginal
Adder (cents / kWh)
1.5
1.5
Water
Biogas
Biomass
Landfill
Gas
0.9
0.6
0.6
0.6
Adder reflects incremental capital costs
Adder reflects incremental cost of debt financing for equity portion
Adder is available on a sliding scale based on equity interest
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Aboriginal Community
•
“Aboriginal Community” means, for the purposes of
the FIT Program,
a First Nation that is a “Band” as defined in the Indian
Act (Canada);
ii. the Métis Nation of Ontario or any of its active
Chartered Community Councils;
iii. a Person, other than a natural person, that is
determined by the Government of Ontario for the
purposes of the FIT Program to represent the
collective interests of a community that is composed
of Métis or other aboriginal individuals; or
iv. a corporation that is wholly-owned by one or more
Aboriginal Communities as described in (i), (ii) or (iii).
i.
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Updates to the microFIT Program – August 13
• New price for groundmounted solar PV 10kW and
less
– 64.2 ¢/kWh
• Program only open to eligible
participants such as
individuals, co-ops and
farmers
• OPA to establish Advisory
Panel to explore options for
other participants such as
commercial aggregators
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Prices for Renewable Energy
Projects that are 10 kW or less
Price
(¢/kWh
)
Contra
ct
Term
(years
)
Percentag
e
Escalated
(%)
Solar PV
Rooftop
80.2
20
0
Groundmounted
64.2
20
0
Wind
13.5
20
20
Waterpowe
r
13.1
40
20
Biomass
13.8
20
20
Biogas
16.0
20
20
Landfill gas
11.1
20
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Renewabl
e
Technolog
y
Program Uptake - since October 2009
• microFIT
– 19,000 microFIT applications representing over 170
megawatts (MWs)
– 6,100 conditional offers – 57 MWs
– 800 microFIT contracts for projects that have
completed installation and are connected to the grid –
5 MWs
• FIT
– Over 2,700 applications representing over 15 gigawatts
– Over 600 contracts executed – over 2000 MWs
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