Wind Industry ‘Shocked’ As Ontario Halts LRP Mechanism

The government of Ontario says it is immediately suspending the second round of its large renewable procurement (LRP) process and the Energy-from-Waste Standard Offer Program, effectively halting the procurement of over 1,000 MW of wind, solar, hydroelectric, bioenergy and energy from waste projects.

According to the province, this decision is expected to save up to C$3.8 billion in electricity system costs relative to Ontario’s 2013 Long-Term Energy Plan (LTEP) forecast. Individually, this would save the typical residential electricity consumer an average of approximately C$2.45 per month on his or her electricity bill, relative to previous forecasts.

On Sept. 1, the Independent Electricity System Operator (IESO) provided the minister of energy with the Ontario Planning Outlook, an independent report analyzing a variety of planning scenarios for the future of Ontario’s energy system. The IESO has advised that Ontario will benefit from a robust supply of electricity over the coming decade to meet projected demand.

Informed by the Ontario Planning Outlook, consultations and engagements will begin this fall with consumers, businesses, energy stakeholders and indigenous partners regarding the development of a new LTEP, which is scheduled to be released in 2017. As part of this plan, Ontario remains committed to an affordable, clean and reliable electricity system, including renewables.

In supporting clean energy development, Ontario has attracted billions of dollars in private-sector investment and generated over 42,000 jobs in the clean technology sector. The province has about 18,000 MW of wind, solar, bioenergy and hydroelectric energy contracted or online, and the electricity supply is now over 90% emissions-free.

Responsible management of Ontario’s electricity system is part of the government’s economic plan to build Ontario up and deliver on its No. 1 priority to grow the economy and create jobs. The four-part plan includes helping more people get and create jobs by expanding access to high-quality college education; making the largest investment in hospitals, schools, roads, bridges and transit in Ontario’s history; investing in a low-carbon economy driven by high-growth, export-oriented businesses; and helping working Ontarians achieve a more secure retirement.

The province noted the following highlights:

• Ontario’s new LTEP will be guided by a number of strategic themes, including greenhouse-gas reductions, innovation, grid modernization, conservation and energy efficiency, renewable energy, distributed energy, and continued focus on energy affordability for homes and businesses.
• At the end of 2015, Ontario’s installed wind capacity represented almost 40% of all installed wind capacity in Canada.
• Ontario is home to more than 99% of all installed solar photovoltaic capacity in Canada.
• Ontario successfully eliminated coal-fired electricity generation in 2014 – the single largest greenhouse-gas emissions reduction action in North America.

“Over the course of the last decade, Ontario has rebuilt our electricity system and secured a strong supply of clean power,” said Glenn Thibeault, minister of energy. “Our decision to suspend these procurements is not one we take lightly. As we prepare for a renewed LTEP, we will continue to plan for our future and ensure Ontario benefits from clean, reliable and affordable power for decades to come.”

Robert Hornung, president of the Canadian Wind Energy Association (CanWEA), released the following statement about the announcement:

“The Canadian Wind Energy Association is shocked and extremely disappointed by Ontario’s decision to suspend the second round of its large renewable procurement process. This is a missed opportunity for the province, as CanWEA believes that the Ontario Planning Outlook not only identifies the need for new clean energy supply in the coming years, but also understates the need for new electricity generation going forward, given the important role electrification will play in meeting Ontario’s climate change commitments and transitioning to a low-carbon economy.

“Not proceeding with this procurement also represents a missed opportunity to mitigate the risks and uncertainties associated with the costs and timing of the Pickering Generating Station operating licence extension, Ontario’s ambitious nuclear refurbishment plan, and the uncertainty of supply from outside of the province. When new electricity is required in Ontario, be it to meet demand from economic growth, electrification or to replace a nuclear unit offline for refurbishment, it is clear that wind energy is one of the most cost-competitive sources of new supply, as demonstrated by the results of LRP 1, which resulted in wind power procured at a cost as low as 6.5 cents per kilowatt hour.

“CanWEA is concerned that halting procurement of 1,000 MW of new renewable electricity generation at this time will negatively impact Ontario’s ability to meet its climate goals while remaining competitive in a rapidly changing global economy. CanWEA continues to be committed to working with the Ontario government on its forthcoming Long-Term Energy Plan and will use that forum to demonstrate to all Ontarians that the province will need to procure new non-emitting electricity generation to meet future growth in electricity demand and that wind energy can provide that power with long-term price certainty and at a more competitive rate than alternatives like nuclear power,” he concluded.