By Drew Hill, B.Sc., P.Eng.
Communities who've been thinking of launching a wind or other renewable energy project will soon see their window of opportunity closing before it's even opened.
There are various reasons for this, starting with the Ontario government's plan to promote green energy projects.
This month the Ontario Power Authority is scheduled to initiate its long awaited Standing Offer Program.
The program is designed to encourage the development and construction of renewable energy projects which are less then 10 megawatts. Under it, renewable energy projects such as wind, biomass, and small hydro projects will be guaranteed an attractive rate of $0.11 per kilowatt hour of energy produced. Electricity generated from solar panels will be purchases for $0.42 per kilowatt hour.
To entice small renewable energy generators, excluding Ontario Power Generator, the province plans to enter into long-term power purchase agreements for that predetermined price. The proposed length of these power purchase agreements is 20 years. The market is already responding and a boom is underway in the wind industry in Ontario. Increased global demand and improving efficiencies in wind technology have decreased the unit cost of electricity generated from wind. With the Standing Offer Program about to be launched, wind energy projects are starting to line up.
However, one of the stipulations of the program is that any electricity generated must be tied into the distribution system, not the transmission system. The hydro lines connected to everyone's house are part of the distribution system, whereas the transmission system transports electricity over great distances. To balance the needs of each region and ensure system stability, the local distribution company, in most cases Hydro One, will need to review and approve each project's connection to the distribution system.
This is the main reason it's important to get into the field now, particularly when it comes to wind energy. Unfortunately, wind is an intermittent source of energy and does not always necessarily coincide with when people need electricity. This is why there are going to be restrictions on how much wind energy can be produced. These restrictions are going to vary from region to region and it is these restrictions that First Nation communities contemplating a wind energy project need to be aware of.
At the moment, the Standing Offer program is stimulating a great deal of private sector interest and there are going to be "line ups" to have projects reviewed and approved. Then, once the limited spaces have been allocated to various projects, it will be difficult for others to "get into the game".
Currently, Ontario's attractive pricing for $0.11 kilowatts an hour is causing a boom in the wind energy sector, but the limited capacity for local distribution systems to accept all of the electricity created from the wind is going to ensure that the growth quickly reaches its plateau and limits the boom. It is speculated that this growth will last 5 years before all the capacity is consumed and other projects will not be able to brought on line.
Communities interested in a wind energy project need to act decisively to ensure their project is approved, and can become a reality.
Drew Hill, B.Sc., P.Eng.,
The Abor Group Ltd.
Ontario Power Authority
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