5. Previous Procurements

As a result of Ontario’s earlier renewable energy initiatives, a number of previously proposed projects have obtained electricity contracts and are now moving through the developmental steps and required approval processes outlined in Section 2.

This section discusses projects with existing electricity contracts and the requirements that apply to these projects.


5.1. EXISTING LARGE FIT CONTRACTS

Following the introduction of the Feed-in Tariff (FIT) program in fall 2009, a total of 249 electricity contracts for large renewable energy projects (greater than 500 kW) were offered to developers in 2010 and 2011.

While some projects have subsequently been cancelled by project developers, the vast majority of projects have been proceeding under their existing signed FIT contracts. These are long-term contracts under which project developers commit to providing clean electricity to the Ontario power grid. The government continues to honour existing signed contracts. Any future large renewable energy projects that are proposed for development may be eligible to participate in the LRP process or other procurement programs.

Project developers with existing electricity contracts must ensure they are meeting all applicable contract and approval requirements in order for their projects to reach commercial operation.

Ontario’s environmental approval requirements for large renewable energy projects ensure protection of communities and provide opportunities for municipalities to provide input during the project development process. More information on environmental approvals is found in Section 6.

Contract Requirements

Existing FIT contracts are administered by the Independent Electricity System Operator (IESO). The Ontario government is not a counterparty to FIT contracts and has no authority regarding contractual matters. Contract holders who have specific questions or concerns about their ability to meet contractual requirements (including deadlines) should contact their IESO contract analyst.

The FIT contract contains provisions which allow the IESO to terminate a contract under certain circumstances. The IESO has posted a list of FIT contracts that it has previously terminated on its website.

The terminated FIT contracts list includes only those contract terminations initiated by the IESO, but not those that were mutually terminated between the developer and the IESO. While developers may choose to announce mutual contract terminations, this information is not always made available due to confidentiality clauses in the FIT contract.

Approval Requirements

Large wind, ground-mounted solar and some bioenergy projects are subject to the Renewable Energy Approval (REA) process, which includes environmental studies, and Aboriginal, public and municipal consultation. For a list of projects which have obtained REA approvals, or are under evaluation, please see the Ministry of the Environment and Climate Change (MOECC) website.

Detailed information on the approval status of individual renewable energy projects can be found on the Ontario Environmental Registry. In addition to community consultation requirements under the REA process, individuals or municipalities can also submit additional comments with respect to REA applications to MOECC using the publicly-available Environmental Registry.

These projects are also subject to the Ministry of Natural Resources and Forestry (MNRF)’s requirements as outlined in the Approval and Permitting Requirements Document (APRD), which may require submission of information related to relevant MNRF permits, licences, authorizations and approvals. For more information on the MNRF’s requirements, please see the website.

For an understanding of how the APRD and the REA work together, please consult the Provincial Approvals for Renewable Energy Projects Guide.

New waterpower projects or expansions of existing projects will generally be subject to the Class Environmental Assessment (EA) for waterpower projects.

For more information on regulatory approvals for renewable energy projects, see Section 6.

5.2. GREEN ENERGY INVESTMENT AGREEMENT (GEIA)

In January 2010, the Government of Ontario entered into the Green Energy Investment Agreement (GEIA) with Samsung C&T Corporation and the Korea Electric Power Corporation. 3 Under the original terms of the GEIA, these companies agreed to develop 2,500 megawatts (MW) of wind and solar renewable generation projects and bring manufacturing plants to Ontario. The terms of the agreement have since been revised, but Samsung’s commitment to developing wind and solar renewable generation represents a significant step to achieving Ontario’s Long-Term Energy Plan (LTEP) targets. It has also led to renewable energy job creation in Ontario.

Revisions to the GEIA in 2013 were made in the interests of local communities and ratepayers. The revised GEIA has resulted in a reduction of contract costs by $3.7 billion and an updated generation capacity of 1,369 MW across three phases. Revisions have also ensured that job commitments are protected and that Municipal Council Support Resolutions are obtained for one existing Phase Two project and any new projects under the third and final phase of the agreement.

Investments to date under the GEIA have resulted in the opening of four manufacturing plants across the province and are creating 900 direct renewable energy manufacturing jobs. Over the next 20 years, it is expected that GEIA projects will continue to contribute to local economies through community benefit agreements and revenue-sharing agreements.

5.3. HYDROELECTRIC CONTRACT INITIATIVE (HCI)

In 2009, the IESO developed the Hydroelectric Contract Initiative (HCI), which allowed existing hydroelectric facilities without electricity contracts to obtain 20-year contracts to sell clean electricity to the Ontario grid. Facilities which may have already operated for a number of years were provided with an opportunity to continue their operations. There were also opportunities for contract amendments to cover project expansions or redevelopments.

Under their existing contracts, HCI facilities could only seek expansion or redevelopment up to January 21, 2013. A further opportunity for expansion or redevelopment of HCI facilities was offered through the Hydroelectric Standard Offer Program (HESOP) Expansion Stream in 2014, which is described in the section below.

Expansions of existing projects are generally subject to the Class EA for waterpower projects. For more information, please see the Regulatory Process section below.

5.4. HYDROELECTRIC STANDARD OFFER PROGRAM (HESOP)

In 2013, the IESO established the Hydroelectric Standard Offer Program (HESOP) to continue the development of hydroelectric capacity. This program divided hydroelectric procurements into two separate streams: (i) the Municipal Stream and (ii) the Expansion Stream.

HESOP Municipal Stream

The HESOP Municipal Stream was created to provide an opportunity for proposed new municipal hydroelectric projects larger than 500 kW that had previously submitted applications to the FIT program before June 5, 2010. Only projects featuring municipal participation were eligible to participate. The HESOP Municipal Stream was allocated a procurement target of 60 MW and offered a base price of 14.1 cents/kWh.

On March 7, 2014, the IESO offered a total of three HESOP Municipal Stream renewable energy contracts, representing 35.25 MW of power, to projects located in Ottawa, St. Catharines and Horton. All projects have 100 per cent municipal ownership. The City of St. Catharines has estimated that the 4.2 MW Shickluna Hydro Generating Station will result in annual income of $800,000 to $1 million for the municipality.

A total of 25 MW of the unallocated HESOP Municipal Stream target has been transferred to the LRP I target for waterpower.

HESOP Expansion Stream

The HESOP Expansion Stream provides an opportunity for existing waterpower facilities to expand their hydroelectric generation capacity. Existing hydroelectric projects covered under the Expansion Stream include non-utility generation (NUG) facilities and HCI facilities.

The HESOP Expansion Stream was given a procurement target of 40 MW. The application window was open from October 1, 2014 to November 3, 2014.

On March 24, 2015, the IESO announced a total of five HESOP Expansion Stream contract offers.


3. In October 2014, the Korea Electric Power Corporation (KEPCO) was released from its obligations under the GEIA. KEPCO’s technical expertise was no longer necessary and Samsung has assumed its obligations.