This section introduces the Large Renewable Procurement (LRP) program, which has replaced the Large FIT program for projects greater than 500 kW. The LRP program provides municipalities with a stronger voice and additional opportunities to participate in the development of renewable energy projects.
The program includes an initial Request for Qualifications (RFQ) to qualify applicants, followed by a Request for Proposals (RFP) to evaluate projects proposed by Qualified Applicants. The program design requires developers to take certain steps to engage with municipalities before contracts are awarded.
In the event of any inconsistency between this information and the Independent Electricity System Operator’s (IESO) LRP I RFP and LRP I Contract, the RFP and Contract will govern. These documents are found on the Program Resources section of the IESO’s LRP website.
On June 12, 2013, the Minister of Energy directed the IESO to end the procurement of large projects under the FIT program and replace it with a new competitive procurement process. The result is a new procurement program, known as Large Renewable Procurement (LRP). The LRP program is open to renewable energy projects using onshore wind, solar PV, bioenergy and waterpower.
The Ministry of Energy’s 2013 Long-Term Energy Plan outlines the principles, procurement targets and timelines to be incorporated into the LRP program. On December 16, 2013, the Minister of Energy directed the IESO to design and develop the LRP program in accordance with these principles, which include:
- engaging early and regularly with local and Aboriginal communities
- having procurement occur in multiple successive rounds, providing opportunity for a diverse set of participants
- identifying clear procurement needs, goals and expectations encouraging innovative technologies and approaches, including consideration of proposals integrating energy storage with renewable energy generation
Between July 2013 and February 2014, the IESO and Ministry of Energy engaged with the public, municipalities, Aboriginal communities and other groups on the design of the LRP program.
The IESO incorporated this feedback into its Final Recommendations Report on the proposed design of the LRP program, and presented this report to the Ministry of Energy in February 2014. The recommendations received the Minister’s approval in March 2014, subject to some additional direction, and the IESO was directed to start developing draft materials for the LRP program.
The LRP program has been designed to provide municipalities with a stronger voice and additional opportunities to participate in the development of renewable energy projects. As a competitive procurement program, it is also designed to encourage cost-efficient renewable energy projects to provide value for ratepayers. The process includes an initial Request for Qualifications (RFQ) to qualify applicants, followed by a Request for Proposals (RFP) to evaluate projects by Qualified Applicants. The RFQ featured robust qualification criteria for developers, including a requirement to demonstrate previous community engagement experience.
The first phase of the LRP program (LRP I) was initiated in 2014 – selected proponents under this phase are expected to be announced by March 2016.
3.1. OVERVIEW OF THE LRP I PROGRAM
Request for Qualifications (RFQ) Requirements for LRP I
The RFQ pre-screens renewable energy developers that would like to participate in the subsequent RFP. The process ensures that companies have adequate development experience, technical capability and the financial resources to develop a project through to commercial operation. Applicants are required to submit documentation to the IESO evidencing their qualifications for an aggregate capacity (MW) and number of projects.
According to the terms of the RFQ, in order to be deemed a Qualified Applicant, the development company must demonstrate that they possess the required development experience with similar facilities or large complex infrastructure projects that have been previously completed.
Development experience is defined in the LRP I RFQ as demonstrating experience in each of the areas of planning, developing, financing, constructing and operating similar facilities or large complex infrastructure projects. These terms are further explained in the following graphic.
The specific qualification requirements, which vary according to project size (MW) and number, are provided in Appendix B of the LRP I RFQ.
The IESO has also created an LRP I RFQ Qualifications Requirements Summary, available.
The RFQ stage for LRP I has been completed. On November 4, 2014, the IESO announced 42 Qualified Applicants who were deemed eligible to submit proposals under the LRP I RFP stage. The full list of Qualified Applicants can be found on the IESO’s website.
Request for Proposal (RFP) Requirements for LRP I
Only those applicants qualified through the RFQ process may submit project proposals in the subsequent RFP stage. Each Qualified Applicant must register formally with the IESO before submitting a proposal. This registration process is in place to ensure that each proponent continues to satisfy the RFQ requirements.
Information gathered from the Qualified Applicants during the registration process, such as company name, contact information, proposed project size, location and technology, will be posted on the IESO’s website. This will serve as a public resource for large renewable energy projects being proposed across Ontario.
To be considered for a LRP contract, a project proposal must meet mandatory requirements as outlined in Stage 2 of the evaluation process. Generally, these project-specific proposals will detail the location, electrical generation capacity and grid connection point of the project, as well as providing evidence of community engagement. A developer may also complete additional engagement activities to earn Rated Criteria points under the evaluation process. Rated Criteria are discussed in Section 3.2 below.
A copy of the LRP I RFP in its entirety can be accessed on the IESO website.
3.2. EVALUATION OF LRP I PROPOSALS
|STAGE 1||Completeness Requirements
|STAGE 2||Mandatory Requirements
|STAGE 3||Rated Criteria
|STAGE 4||Evaluation and Selection
Stage 1 of Evaluation: Completeness Requirements for RFP
The IESO will review the LRP applicant’s proposal package and confirm that all the necessary forms, security payments, declarations and evidence have been submitted. This is required to deem a proposal package complete.
If the package is deemed complete, it will proceed to the second stage of the evaluation process – Mandatory Requirements.
Stage 2 of Evaluation: Mandatory Requirements for RFP
Importantly, all of the mandatory requirements outlined in the LRP program must be completed by the developer before the application is submitted to the IESO; otherwise the proposal will be rejected.
For projects proposed on Crown land and/or Unorganized Territories, the mandatory requirements may differ. Please refer to the IESO’s LRP webpage for more information on these types of proposals.
Some relevant mandatory requirements for the LRP I RFP are outlined below.
(1) Community Engagement Plan
Developers are required to submit a Community Engagement Plan for their large renewable project, together with all Site Considerations Information, as a part of the RFP proposal.
The Community Engagement Plan (and Site Considerations Information) is intended to facilitate engagement between developers and local municipalities (“Project Communities”) where the proposed project or transmission line is to be located.
Project Communities are defined in the LRP process as local municipalities where the proposed project or transmission/distribution lines are planned to be located. For projects on First Nation Lands (e.g., reserves), this will include the First Nation community.
It is expected that developers will work with Project Communities to develop a tailored Community Engagement Plan unique to each project and the community’s needs.
(2) Municipal Meeting
Developers must make best efforts to arrange at least one meeting with municipal officials. Municipal meetings are intended to facilitate early relationship-building between the developer and the local municipality, and to collect feedback on local needs and considerations regarding the proposed project. Municipalities may wish to address local issues during this engagement.
Once a municipal meeting has been held, the developer will be required to submit a Municipal Meeting Confirmation, available for download at the IESO website.
If the developer fails to hold at least one meeting, the developer must provide evidence that best efforts were used to hold such a meeting and that the failure to hold the meeting was entirely outside of the developer’s control. A municipality’s refusal to meet with a developer will not prevent a developer from submitting a complete proposal.
Municipal meetings provide an early opportunity for communities to make their concerns known, but they are not substitutes for the regulatory approval engagement processes that are required if the developer successfully obtains a contract. More information on these processes can be found in Section 6.
(3) Public Meetings
At least one public meeting must be held for each proposed project, in each of the Project Communities or Unorganized Territories where the project or transmission/distribution line is proposed. Public meetings are intended to facilitate early public engagement and information sharing, and to provide an opportunity for developers to collect feedback on preliminary project design considerations. Project information, including Site Considerations Information, must be presented at the meetings.
Meeting notices must be distributed widely in the local community at least two weeks before the meeting is held. These notices must be published in local newspapers, posted on the developer’s website, delivered to the municipal clerk and distributed to neighbours of the proposed project, among others.
Site Considerations Information
Site Considerations requirements ensure developers consider the viability of the proposed site and investigate some of its environmental features before submitting a LRP I RFP proposal.
Site Considerations Information is collected by conducting preliminary desktop studies to determine the presence of certain environmental features at the proposed project site. A map is produced showing these environmental and project-related elements, including:
- the proposed project site and proposed transmission/distribution line and grid connection point
- endangered or threatened species observations, provincially significant areas of natural and scientific interest, and provincially significant wetlands
- heritage resources
- highways, railways and airports
Applicants are also responsible for contacting the Ministry of Tourism, Culture and Sport (MTCS) to confirm the presence of known archaeological resources in the project area. For further information, please see the MTCS infosheet on cultural heritage resources.
In the process of compiling this Site Considerations Information, applicants may contact municipalities for information on certain environmental features of the proposed project site.
Information collected about the proposed project site must be posted on the developer’s website, provided to all Project Communities, and displayed at the public meeting(s).
The results of the Site Considerations exercise are not considered by the IESO in their review of a project proposal. However, the collection of this information serves to inform the developers and the Project Communities about the environmental features and viability of the proposed site.
The Ministry of the Environment and Climate Change (MOECC) has created a Location/Siting Considerations checklist to provide information that proponents should consider when selecting a suitable site for their renewable energy projects.
Agricultural Land Restrictions for Ground-Mounted Solar
The IESO has produced an Agricultural Land backgrounder, which provides information about how the agricultural land restrictions for ground-mounted solar projects have been designed under the LRP program. This backgrounder also explains how these restrictions apply under different agricultural land designation scenarios.
Ground-mounted solar projects will not be allowed in Prime Agricultural Areas that are designated in a current approved Official Plan. If applicable to the area proposed for a ground-mounted solar project, both upper and lower-tier Official Plans must be checked for a Prime Agricultural Area designation. If the process to designate Prime Agricultural Areas has not been completed for the applicable current approved Official Plan, ground-mounted solar projects will not be allowed on CLI Class 1, 2, 3 or Organic Soils. In all cases, ground-mounted solar projects will not be allowed on Specialty Crop Areas. This approach relies on definitions set out in the Provincial Policy Statement, 2014.
Prime Agricultural Areas are defined in the Ontario 2014 Provincial Policy Statement as areas where prime agricultural lands predominate (specialty crop areas and/or Canada Land Inventory Class 1, 2 and 3 lands). This includes areas of prime agricultural lands and associated Canada Land Inventory Class 4 through 7 lands, and additional areas where there is a local concentration of farms which exhibit characteristics of ongoing agriculture. Frequently Asked Questions on Prime Agricultural Areas are posted on the Ontario Ministry of Agriculture, Food and Rural Affairs’ website.
Information on agricultural land classification and Specialty Crop Areas can be found on the Ontario Ministry of Agriculture, Food and Rural Affairs’ (OMAFRA) website.
Generally, an LRP project can connect to any electrical grid connection point (circuit) within 50 kilometres (km). If no circuits are available within 50 km, the project can connect to the first, second or third closest circuit. There are no line length limits for waterpower projects.
To allow for flexibility in a proposed project’s design, developers may submit a proposal with different possible contract capacities (i.e., different possible project sizes (MW)).
The LRP I Transmission Area Map outlines regional grid connection capability across the province. The Northwest, Sault, Bruce and Niagara regions have no ability to connect LRP I projects.
Figure 1: The IESO’s Transmission Area Map for LRP I projects, as of May 22, 2015. Please note, this map only applies to LRP I projects.
Availability of grid connection capacity can change over time – for example, if grid upgrades are proceeding in the area. The IESO will provide updated maps of grid connection capacity for future procurements as applicable.
Applications for LRP projects will also be subject to grid connection tests to assess availability of grid connection capacity at the proposed connection point. For additional information, see the discussion of Transmission Availability Test (TAT) and Distribution Availability Test (DAT) in Section 4.
Stage 3 of Evaluation: Rated Criteria
The Rated Criteria are optional and reward project proposals with local support and participation. Points for the completion of Rated Criteria will be awarded to proposals that demonstrate community engagement over and above the engagement outlined in the mandatory requirements. The higher the Rated Criteria score a proposal receives, the more likely it may be competitive for a contract in Stage 4 of the Evaluation (see below).
The IESO describes the Rated Criteria in Section 3.3 of the LRP I RFP document.
The following table illustrates how the Rated Criteria points will be awarded to LRP proposals based on the completion of specific engagement activities. Points are awarded for groups of related activities rather than for each activity individually (point combinations for Community Engagement are illustrated in tables below).
|COMMUNITY ENGAGEMENT||Up to
|ABORIGINAL PARTICIPATION||20 POINTS||
Rated Criteria points are awarded differently depending on whether the project is located on private or Crown land. In either case, projects are eligible to receive 20 points for Aboriginal participation.
This scoring system is intended to promote relationship-building between the developer and local municipality, and to provide additional opportunities for local communities to raise local needs and considerations with developers.
Some of the applicable rated criteria will differ if a project is proposed on Crown land. The IESO’s website provides information for projects sited on Crown land.
As indicated above, points will be allocated to proposals that demonstrate community engagement over and above the mandatory requirements.
The table below describes the community engagement points available for projects located in whole or in part on private land (i.e., the projects are not entirely located on provincial Crown land within Unorganized Territory(ies):
|MUNICIPAL COUNCIL SUPPORT RESOLUTION||MUNICIPAL AGREEMENT WITH ALL PROJECT COMMUNITIES||ABUTTING LANDOWNER SUPPORT||(IF APPLICABLE) PROVINCIAL CROWN LAND LEASEHOLDER SUPPORT|
|Resolutions from every Project Community supporting the proposal are required.||Any agreement suitable to the municipality may be acknowledged using the prescribed form.||Support of at least 75 per cent of the properties abutting the proposed site and connection line are located.||Support of at least 75 per cent of all provincial Crown land leases located on or abutting the proposed project site.|
|For 80 points complete:||✔||✔||✔||✔|
|For 50 points complete:||✔||✔|
|For 40 points complete:||✔||✔||✔|
|For 30 points complete:||✔||✔|
|For 10 points complete:||✔|
Project Community means any Local Municipality(ies) and/or First Nation Community(ies) in whose boundaries the large renewable project or proposed connection line is to be located (in whole or in part).
Projects located entirely on provincial Crown land within Unorganized Territory(ies) are eligible for the following Rated Criteria engagement points:
|PROVINCIAL CROWN LAND LEASEHOLDER SUPPORT||ACCESS RIGHTS|
|Support of at least 75 per cent of all provincial Crown land leaseholders located on or abutting the proposed site.||The proponent must submit an Access Rights Declaration.|
|For 80 points complete:||✔||✔|
|For 10 points complete:||✔|
(1) Municipal Council/First Nation Support Resolutions
Municipal Council or First Nation Support Resolutions provide evidence of Project Community support for a project. If a project is seeking the associated Rated Criteria points, support resolutions must be obtained from all Project Communities.
The IESO will not accept “blanket resolutions” for multiple LRP projects. Instead, there is a prescribed template for Municipal Council Support Resolutions that is project-specific.
(2) Municipal Agreements
The LRP respects that Municipal Agreements are private contracts between the municipality and the project developer. The IESO will not be a party to the Municipal Agreement, nor does it require specific details about the agreement reached. Instead, the LRP I RFP provides a prescribed form for the proposal to receive the associated Rated Criteria score. This form is intended to provide flexibility so that municipalities and developers can create individualized agreements as needed.
Developers can enter into separate Municipal Agreements for each municipality – the prescribed form does not bind all Project Communities to the same Municipal Agreement.
Qualified Applicants may receive a Rated Criteria score of 10 points for Municipal Agreements alone.
(3) Support from Abutting Landowners and/or Abutting Crown Land Leaseholders
Developers are encouraged to seek support from private property owners and Crown land leaseholders abutting the proposed project site and the proposed transmission/distribution line. These declarations of support may or may not include municipalities, depending on the ownership of the properties that abut the project.
Declarations of support from abutting private landowners and/or Crown land leaseholders may receive Rated Criteria points alone, or be awarded more points if submitted in combination with a Municipal Council Support Resolution and/or Municipal Agreement.
To support the participation of Aboriginal communities in large renewable energy projects, proposals that demonstrate one or more Aboriginal Communities hold at least a 10 percent economic interest in the project will be eligible for a Rated Criteria score (20 points), in addition to any community engagement Rated Criteria score (up to 80 points) received.
Stage 4 of Evaluation: Evaluation and Selection of LRP I Proposals
Projects are ultimately selected based on both their Evaluated Proposal Price and the availability of capacity on the grid at their proposed connection point.
Project proposals that have obtained a Rated Criteria score will have a reduction (Rated Criteria Adjustment) applied to their proposed project price as part of the evaluation process. The advantage of having a Rated Criteria Adjustment applied is that it “discounts,” or lowers, the price associated with the project for the purposes of the evaluation only. This adjusted price is called the Evaluated Proposal Price.
Projects are tested for available connection capacity in order from the lowest to highest Evaluated Proposal Price. Projects that are deemed able to connect are offered an LRP contract. The IESO has published a backgrounder document containing additional information on connection testing under the LRP program.
The IESO has also published a backgrounder on Proposal Price Evaluation.