IESO hands down contracts for next wave of Ontario renewable energy projects
16 contracts for 455 MW of power capacity represent millions in development costs as well as improved prices for Ontarians
TORONTO—Ontario has awarded a series of highly-coveted contracts that sanction the next wave of renewable energy projects in Canada’s most populous province.
Ontario’s grid operator, the Independent Electricity System Operator, handed down the 16 contracts totalling 454.9 megawatts of clean power March 10 under its Large Renewable Procurement program.
Building on the province’s strong wind energy industry, 300 MW of the total will be dedicated to turbine power through five separate deals. In addition, seven solar contracts will account for approximately 140 MW of energy, while four hydroelectric projects are poised to contribute 15.5 MW to the province’s grid.
“This LRP process introduced strong competition among developers of large renewable projects, helping to drive down price and secure clean, reliable generation for the province,” Bruce Campbell, the IESO’s president and CEO, said.
Unlike Ontario’s controversial feed-in tariff program, the new LRP system encouraged competitive bids, significantly driving down the price Ontario will pay the developers for power. While critics of the new competitive process say it harms smaller renewable firms and helps multi-national developers that can afford to offer lower prices, the new LRP contracts did cut the cost the province will pay for renewables significantly. The IESO said it designed the program to strike a balance between early community engagement and achieving value for ratepayers.
On average, the IESO will pay 8.59 cents per kilowatt hour for wind energy from the new projects, compared to 12.8 cents/kWh under the 2016 feed-in tariff program—which is still in place for projects smaller than 500 KW. The crown corporation will pay 15.67 cents/kWh for power from the new solar plants, relative to between 20.9 cents/kWh and 29.4 cents/kWh for solar under FIT. And for hydro, the IESO will pay 17.59 cents/kWh compared to 24.6 cents/kWh at FIT rates. Though significantly more competitive than under the FIT program, the rates remain higher than the cost of nuclear, which makes up about one-third of Ontario’s energy and costs 6.4 cents/kWh as of last year, according to Bruce Power.
While the IESO contracts are now set, many of the companies and consortia working to develop the projects must still secure a range of environmental permits and approvals before construction can begin. For instance, developers are aiming to bring the 50 MW Otter Creek wind project online by 2019. The IESO did note more than 75 per cent of the 16 projects have received municipal approval, however, which eliminates one of the major roadblocks to construction. A further 60 per cent of the clean power projects have been green-lit by landowners on nearby lands, another significant hindrance, especially when installing wind turbines.
Other projects offered contracts today include the 100 MW Nation Rise Wind Farm, the 54 MW Loyalist Solar Project and the 44 MW Nanticoke Solar Project—built on the site of what was once North America’s largest coal plant.
The IESO selected the winning bidders from a pool of more than 100 applicants. A complete list of the 16 projects can be found here.