Ontario's Standard Offer Contracts -- A Summary

March 21, 2006

Ver. 03

The government of Ontario announced today a new renewable energy policy patterned after the successful programs in Germany and France. This policy will be called Standard Offer Contracts. The announcement was made by Premier Dalton McGuinty and the Ontario Minister of Energy, Donna Cansfield.

The announcement follows a two-year campaign for Advanced Renewable Tariffs by the Ontario Sustainable Energy Association.

Like policies in Germany, France, and a total of 15 EU countries, the Ontario program will include wind, hydro, biomass, and solar photovoltaics.

Summary

• There are no limits or caps on the program.
• Prices or tariffs will differ between technologies.
• Prices will be high enough to drive rapid development.
• Contracts under the program will be for 20 years.
• Project size is limited to 10 MW to encourage distributed generation.
• The program provides for simplified interconnection with the grid.
• The program is reviewed every two years to monitor progress.
• Though widely used in Europe, this is the first program of its kind in North America. (PEI implemented a simple fixed tariff in 2005.)
• Interest has been shown in the Ontario program by other provinces of Canada and by some states in the USA.
• The program will be among the most ambitious in North America, in part because of the policy mechanism it uses.

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