Ontario’s Green Energy Act
On May 14, 2009, Ontario passed the Green Energy Act 2009 (“Act”). The Act is intended to encourage the development of renewable energy in Ontario by streamlining the approvals process, enhancing connection and distribution, and providing certainty in the province’s power purchase arrangements.
A feed-in tariff procurement program will replace the Ontario Power Authority’s current request for proposal process and standard offer program. This new program is intended to increase investor confidence in renewable energy projects by providing standard program rules, standard contracts and standard pricing for classes of renewable energy. Prices will be differentiated by energy source or fuel type, generation capacity and the manner by which the generation facility is used, deployed, installed or located.
A one-stop approvals process will combine existing environmental approvals into a single new renewable energy approval with province-wide standards for renewable energy projects. To minimize potential delays, the Act exempts renewable energy projects from prescribed planning approvals issued by municipalities (including official plan and zoning). The Act is to be administered to promote community consultation (including municipalities) through a process prescribed by the province. Also, consultation requirements for participation by aboriginal interests may be specified by the province.
The Act authorizes incentives and cost recovery programs to encourage the expansion and upgrade of transmission and distribution systems. Transmitters and distributors will be required to connect and grant priority access to renewable energy projects if the project meets prescribed technical, economic and other regulatory requirements.
To fully exploit the potential of renewable energy, ‘smart grid‘ technologies will be adopted to better accommodate the intermittent energy flows from wind and solar projects.
Energy conservation is to become a priority in Ontario by developing Building Code conservation standards, requiring conservation and demand management plans for prescribed consumers, setting electricity conservation targets for local utilities, creating new financing tools to encourage small-scale renewable energy projects and requiring energy audits prior to the sale of homes (which a purchaser may waive).
While nuclear and hydroelectric power are expected to be the backbone of Ontario’s energy mix over the next few decades, the Act should make it easier and more profitable to develop renewable energy projects in Ontario.
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