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OSEA's Proposed Renewable Energy Tariffs for Ontario
October 29, 2004
Key Elements
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Contracts (tariffs) open to all players
- Contracts for 20 years
- Cost of renewable tariffs (contracts) spread across entire rate base
- Different tariffs or Standard Offer Contracts for different technologies
- Tariffs or Standard Offer Contracts for wind, solar PV, low-impact hydro, & biomass
- Specific tariffs (prices) determined by transparent process that includes technology participants, technical advisers, & political staff
- Tariffs (prices) sufficient to drive development (to avoid tokenism)
- No Caps or limits (to avoid speculation)
- Allocation of contracts by first come, first served
- Allocation of contracts to those with site control (to avoid speculation)
- Approval or rejection of interconnection request within 90 days
- Initial tariff (price) equal for all players within each technology band
- Tariff (price) reduced after a period of time sufficient for capital recovery (high price first 5-10 years, lower price thereafter to adjust for profitability)
- Reduced tariff in years after capital recovery (years 6-20 or 11-20) but sufficient for reasonable rate of return
- Two scenarios proposed: with and without inflation adjustment
- Three tiers or tranches for wind energy: low, medium, and high wind
- Wind tariffs for first 10 years fixed for all tranches
- Wind tariffs for remaining 10 years dependent upon relative productivity in units of annual specific yield (kWh/m2/yr) averaged over 8 years after high and low years removed
- Low wind = <600 kWh/m2/yr
- High wind = >800 kWh/m2/yr
- Medium wind = 600-800 kWh/m2/yr
- Capacity factor not used except as reference only (to avoid gaming)
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