Ontario's FiT: Setting the Standard in North America
Presented by Paul Gipe at the Green Energy Act Finance Forum on Friday January 29, 2010
For more information visit http://www.marsdd.com/greenenergyforum
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Gipe - Ontarios FiT: Setting The Standard In North America
1. Disclaimer: The views expressed are those of Paul Gipe
and are not necessarily those of the sponsor.
Disclosure: Paul Gipe has worked with Aerovironment,
ANZSES, APROMA, ASES, AusWEA, AWEA, BWEA,
BWE, CanWEA, Canadian Co-operative Assoc., CAW,
CEERT, DGW, DSF, EECA, ES&T, GEO, GPI Atlantic,
IREQ, KWEA, MADE, Microsoft, ManSEA, MSU, NRCan,
NRG Systems, NASA, NREL, NZWEA, ORWWG, OSEA,
Pembina, PG&E, SeaWest, SEI, TREC, USDOE, WAWWG,
WE Energies, the Folkecenter, the Izaak Walton League,
the Minnesota Project, the Sierra Club, and Zond
Systems, and written for magazines in the USA, Canada,
France, Denmark, and Germany.
Paul Gipe, wind-works.org
2. Carleton College V82, Northfield, Minnesota
Ontario’s Feed-in Tariffs:
Setting the Standard in North America
by
Paul Gipe
Paul Gipe, wind-works.org
4. Renewables Can Be Added Quickly
Wind 5 yrs Wind 10 yrs Solar 5 yrs
Germany 15 TWh/yr 35 TWh/yr 5 TWh/yr
Spain 15 TWh/yr 28 TWh/yr 5 TWh/yr
Germany Renewables: 10 Years--5% to 15%
Spain: 10 Years--0% to 10%
Paul Gipe, wind-works.org
5. 2008 North American Wind Market
Ontario 6th Largest Market
Total MW Thousands
7.1
Texas
2.8
Iowa
2.5
California
1.8
Minnesota
1.5
Washington
1.0
Ontario
0.0 2.0 4.0 6.0 8.0
Paul Gipe, wind-works.org
6. North American Solar PV Market
Ontario Moves to Top of List
California
Ontario (2009)
New Jersey
Colorado
Nevada
0 50 100 150 200
2008 MW/yr
Paul Gipe, wind-works.org
7. “Nothing is as powerful as an idea
whose time has come.”
-- Victor Hugo
*Loose translation of “On résiste à l'invasion des
armées; on ne résiste pas à l'invasion des idées.
Paul Gipe, wind-works.org
8. Renewable Tariffs in North America
. . Unthinkable?
• Yes--Just 6 years ago
“You’re Absolutely Nuts!”
Andy Karsner, DOE, 2006
• Today? No
• Now Possible
• Growing Trend
in North America
& Developing World
China, India, Mongolia
Paul Gipe, wind-works.org Gaspé, Quebec
10. Ontario Moved First
First Modern System
of Advanced Renewable Tariffs
in North America
Paul Gipe, wind-works.org Montfort, Wisconsin
11. Ontario “Gets It”
• Closing Coal Plants
• Delaying Nuclear Build
• Putting Renewables First
Groundbreaking in North America
Paul Gipe, wind-works.org Goderich, Ontario
12. Ontario’s Green Energy
& Green Economy Act
• Multi-faceted
• Efficiency & Conservation
• Renewable Energy
Procure Through Feed-in Tariffs
Paul Gipe, wind-works.org
13. Ontario’s Green Energy Act
The Most Progressive Renewable
Energy Policy in North America
in Two Three Decades
Paul Gipe, wind-works.org Goderich, Ontario
14. Ontario’s Green Energy Act
• Changes Public Policy on Electricity
Includes Industrial & Environmental Policy
• Gives Renewables Priority
In Utility Procurement & System Design
• Targets Industrial Development
• Targets Job Creation
Goal: 50,000 Jobs in 3 Years
Paul Gipe, wind-works.org
15. Ontario’s Feed-in Tariffs
• Differentiated by Size & Technology
• Differentiated by Application
• Tariffs Based on Cost of Generation
Plus Reasonable Profit
• No Program Cap (Bring It On!)
Sarnia, Ontario
Paul Gipe, wind-works.org
16. Ontario’s Feed-in Tariffs
• First Offshore Wind Tariffs in NA
• First Aboriginal Bonus in NA
First NA Policy for First Nations
• First Differentiated Solar PV Tariffs
5 Tranches or Classes
• Best Wind, Solar, & Biogas Tariffs in NA
Competitive Internationally
Paul Gipe, wind-works.org
17. Prices Paid for Wind Energy in Europe
$CAD/kWh
Germany
France
Spain
Ontario
0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16
Paul Gipe, wind-works.org
18. Prices Paid for Offshore Wind Energy
$CAD/kWh
Germany
France
Ontario
0 0.05 0.1 0.15 0.2 0.25
Paul Gipe, wind-works.org Middelgrunden, Denmark
Google Maps
19. Solar PV Tariffs Worldwide
Washington State*
Italy
South Korea
Ontario
Czech Republic
France
Germany
Austria
Spain
California*
South Australia*
0 0.2 0.4 0.6 0.8 1 1.2 1.4
$CAD/kWh
Paul Gipe, wind-works.org
20. Solar PV Yields
Hamburg, D
Nuremburg, D
Stuttgart, D
Reims, F
Toronto, ON
Halifax, NS
Nice, F
Madrid, E
0 200 400 600 800 1000 1200 1400 1600
kWh/kW/yr
Source: RetScreen
Paul Gipe, wind-works.org
21. Ontario’s Feed-in Tariffs
• No Subsidies or Grants
• Costs Borne by Consumers
Not Taxpayers--More Egalitarian
• Community Wind Bonus
Third Jurisdiction in North America
Paul Gipe, wind-works.org
22. Grading North American FITs
10 Criteria
• Program Caps
• Project Size Caps
• Contract Term
• Technologies Included
• Tariffs Based on Cost of Generation
• Tariffs Differentiated by Technology
• Tariffs Differentiated within Technology
• Wind Tariffs Differentiated by Resource
• Inflation Indexing
• Bonus Payments or Adders
Paul Gipe, wind-works.org
23. Grading North American FITs
The Gold Standard
Score Grade
Germany 90 A
France 90 A
Spain (Fixed Tariff) 80 A-
Paul Gipe, wind-works.org Fuchskaute, Germany
24. Grading North American FITs
Historical FITs
Score Grade
Cal ISO4 (1983-1984) 43 F
Ontario SOC (2006-2008) 55 D
Ontario SOC--Good First Start for North America
Paul Gipe, wind-works.org
25. Grading North American FITs
Criteria Germany France Ontario
Program Caps 10 10 10
Project Size Caps 10 8 8
Contract Term 10 10 10
Technologies Included 10 10 8
Tariffs Based on Cost of Generation 10 10 10
Paul Gipe, wind-works.org
26. Grading North American FITs
Criteria Germany France Ontario
Tariffs Differentiated by Technology 10 10 10
Tariffs Differentiated within Technology 20 16 20
Wind Tariffs Differentiated by Resource 10 10 0
Inflation Indexing 0 6 3
Bonus Payments or Adders 0 0 5
Paul Gipe, wind-works.org
27. Grading North American FITs
Existing FITs
Score Grade
Ontario (2009) 84 A-
Vermont 54 D
Maine 43 F
Wisconsin IOUs 36 F
California 28 F
Oregon 16 F
Paul Gipe, wind-works.org
28. Ontario Success Due To
• Push for Renewable Policy
Not a Solar PV or a Wind Policy
• Push for Conservation & Efficiency
Reduces Program Costs to Ratepayers
(Danes Pay Less for Electricity Than Ontarians)
• Collaborative Strategy
Green Energy Act Alliance: Green NGOs & Labor
Trade Groups: CanSIA, CanWEA, OWA
• Public Consultation
Paul Gipe, wind-works.org
29. Ontario’s FITs--Issues Remaining
• Domestic Content
Local Choice
• Differentiating Wind Tariffs
by Resource Intensity
• Samsung Deal
Paul Gipe, wind-works.org Wolfe Island, Ontario
30. Differentiated Tariffs for Wind
• Distributed Benefits
Only Accrue From Distributed Generation
Differentiated Tariffs = Distributed Wind
• Reduces Pressure on Windiest Sites
Profitability Still Higher at Windy Sites
• Reduces NIMBYism
By Enabling Greater Participation
Paul Gipe, wind-works.org
San Gorgonio Pass, California
31. Differentiated Tariffs for Wind
• Increases Program Flexibility
Lessens Pressure to Get Prices Right the First Time
• Reduces Development Risk
Determining Final Price After 5 Years of Operation
• Spreads Opportunity to All
Not Just to Elite Few
• Provides Fair Profits at Modest Wind Sites
• Limits "Excessive Profits" at Windy Sites
Paul Gipe, wind-works.org
32. French Wind Tariffs
Resource Productivity Method
• Fair Profits at Medium Wind Sites
• Not “Undue” Profits at Windy Sites
• Price Adjusted for Inflation 60%
• Profitability Index Method (Chabot)
Not Discounted Cash Flow Model
Paul Gipe, wind-works.org Igny, Lorraine, France
33. French Wind Tariffs by Specific Yield
$CAD/kWh
0.15
Base Medium High
0.1
0.05
0
960 1000 1040 1080 1120 1160 1200 1240 1280 1320 1360 1400 1440
Specific Yield (kWh/m2/yr)
Paul Gipe, wind-works.org Chateau de Lastours, France
35. Ontario’s Samsung Deal--Troubling
• Non Transparent
Hallmark of FITs is Transparency
• Preferential Grid Access
Hallmark of FITs is Equal Access
• Preferential Tariff (EDA)
Non Transparent Price Setting
No Public Discussion of $0.01/kWh Adder
May Pay Too Much at Windy Sites
Must Have Differentiated Wind Tariffs to
Avoid Overpayment
Paul Gipe, wind-works.org
36. Ontario’s Samsung Deal
• Must Not Jeopardize
FIT Program
Community & Aboriginal Projects
Dynamic & Competitive Market
• Could Be Model for Other Mfgrs.
Could Stimulate Interest by Other Players
Paul Gipe, wind-works.org St. Olaf College V82, Northfield, Minnesota
37. Ferndale, Ontario
Ontario’s FIT Program
World Class
“Made in Canada”
Paul Gipe, wind-works.org
38. Move From
A Culture of Consumption
to
A Culture of Conservation
--Ontario Premier Dalton McGuinty
Paul Gipe, wind-works.org Montfort, Wisconsin
39. Move From
A Nation of Consumers
to
A Nation of Producers
Paul Gipe, wind-works.org Lackawanna, New York