Update: Ontario Moves Forward With Standard Offer Contracts for Small Renewable Energy Projects

Date: 31 Mar 2006 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

The province of Ontario has directed two agencies to implement and develop the details and contracts for a Standard Offer Program that will make it easier and more cost-effective for businesses and entrepreneurs to sell power to the grid by setting a fixed price for small generation projects that use renewable energy.

Under the program the Ontario Power Authority will pay 42¢/kWh (Canadian $) for solar photovoltaic power generation and 11¢ per kWh for wind, biomass or small hydro power. Biomass and hydro projects will also be eligible for an additional payment of 3.52¢/kWh for power that is delivered on-peak.

"We’re taking a bold new step that will allow hundreds of small, local, renewable energy producers to get into the energy market, providing cleaner energy that will help meet Ontario’s needs today and in the future," says premier Dalton McGuinty.

"No other jurisdiction in North America has crafted such a striking policy that allows everyone to participate in affecting a sustainable energy economy in Ontario," said Melinda Zytaruk, General Manager of the Ontario Sustainable Energy Association.

Setting standard rates for green power is part of the province’s plan to acquire 5 percent (1,350 MW) of its energy from renewables by 2007 and 10 percent by 2010.

For more history of this initiative see our September 2005 story, Ontario Developing Standardized Pricing for On-Site Renewable Electricity.

Under a Standard Offer contract, all small-scale renewable energy producers will be able to sell renewable power to the grid for 20 years. Other key characteristics of the program include:

  • There is no limit to the amount of renewable generating capacity that can be brought online through this program
  • The project can be located anywhere in Ontario; however, projects must take into account distribution and transmission considerations
  • Each individual project can produce up to a maximum of 10 megawatts
  • The program is open to all interested developers with the exception of Ontario Power Generation
  • All new projects must connect directly to the distribution system (50 kilovolts or less)
  • Eligible projects must have been in service after January 1, 2000.

The final details of how Ontario’s Standard Offer Contract program will be implemented are going to be determined by the Ontario Power Authority and the Ontario Energy Board. The Ministry of Energy expects contracts to become available by June 2006.


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John Farrell

John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power.