Welcome to the Renewable Energy Guide for Municipalities, updated for 2015.
The objective of this Guide – just like its predecessors in 2011 and 2012 – is to provide municipalities with a clear understanding of the renewable energy development process in Ontario and their role in that process.
This version of the Guide explains many of the key changes introduced under the Large Renewable Procurement (LRP) and Feed-in-Tariff (FIT) programs. These changes are of particular interest to municipalities in the context of local renewable energy planning.
Renewable energy is a key element in Ontario’s electricity mix. The province is working with municipalities and renewable energy project developers to help ensure that cost-effective and well-supported projects are developed. Together, these efforts will allow renewable generation to continue to play an important role in our electricity system.
This commitment to renewable energy has helped Ontario replace coal-fired electricity generation. This is the single largest climate change initiative undertaken in North America – the equivalent of taking up to seven million cars off the road.
Building clean, reliable and affordable energy in a way that gives municipalities a stronger voice in renewable energy is a top priority for Ontario. As of September 30, 2015, Ontario has more than 15,400 megawatts (MW) of renewable energy generation capacity online and almost 2,500 MW of additional projects contracted and under development.
When municipalities play an active role in the renewable energy development process, they help to ensure that renewable energy projects meet community needs.
In support of this goal, Ontario is encouraging project developers to engage with municipalities early on in the development process and seek their support for proposed projects. This principle is embedded in the design of the new Large Renewable Procurement (LRP) program, which is discussed in Section 3 of this Guide.
LRP is a competitive process for procuring electricity from renewable projects generally greater than 500 kilowatts (kW). The design of the LRP program provides municipalities with a stronger voice, while also ensuring that these projects provide value to ratepayers.
The LRP program requires developers to engage with municipalities before a proposal can be considered for an electricity contract. This creates opportunities for municipalities to identify local needs and inform appropriate siting. The Independent Electricity System Operator (IESO) plans to identify theselected proponents under the competitive process March 2016.
The Ontario government’s commitment to engaging communities early and often is also reflected in the design of the updated Feed-in Tariff (FIT) program, which is addressed in Section 4 of this Guide.
Introduced in 2009, the FIT program was designed to encourage the development of renewable energy generation and a clean energy economy in Ontario. Through this program, Ontario procures renewable energy from projects generally up to 500 kW in size under long-term electricity contracts with project developers.
As a standard offer program, FIT provides a standardized price, contract term and program rules for each renewable fuel type.
Since the last update to the Municipal Guide, the FIT program has undergone changes to reflect feedback received from developers, municipalities, Aboriginal communities and stakeholders. The FIT 4 application submission window opened in 2015 and will continue to allow for the prioritization of projects with greater than 50 per cent municipal ownership, and projects with municipal support.
There are a number of different stages in the process in which municipalities can play a role in renewable energy project development, including, but not limited to:
- participating as a developer or project partner
- encouraging projects for economic development purposes
- establishing renewable energy policies and targets
- providing comments and input on project design via the consultation process
- municipal regulatory matters, such as building permits or road use permits
To help clarify the various roles of municipalities in renewable energy development, this Guide will provide an overview of the renewable energy development process, including key changes introduced by the new LRP and FIT 4 programs. Topics of particular interest to municipalities include:
- how renewable energy projects get developed
- differences between the contracting and the regulatory processes
- the new LRP program
- changes introduced under FIT 4
- how municipalities can be involved in the regulatory process
- how municipalities can develop and own renewable energy projects directly, or in partnership with developers the decommissioning process for renewable energy projects
Ontario is proud of the role renewable energy is playing in the province’s electricity supply mix and recognizes that municipalities are key partners in helping Ontario remain a clean energy leader.