The Canadian province's government unveiled its 20-year long-term energy plan (LTEP) late last year, laying out C$87 billion ($87.4 billion) in new generation, transmission and conservation investments it says will be needed to meet electricity demand in 2030.
"The long-term energy plan throws a lot of political support behind increased renewables development," says Tim Stephure, a senior analyst at US-based IHS Emerging Energy Research. "It will make Ontario one of the largest renewable-energy markets in North America, if executed along the timeframe and at the scale that the plan envisions."
The strategy is good news for developers and supply-chain companies, which have been looking for answers to critical questions about expected demand growth in the province and how it will be met.
"One of the reasons the government moved forward with the Green Energy Act was because it wanted to accelerate the introduction of renewables into the system," say Robert Hornung, president of the Canadian Wind Energy Association (CANWEA).
"But we really didn't know what we were accelerating towards. Now with the long-term energy plan, we estimate (to be heading for) somewhere between 7-8GW of wind."
The province's previous long-term strategy, Hornung points out, envisioned only 4.6GW of wind by 2020. "That represents a significant increase," he says.
The LTEP also provides details about transmission investment needed to bring new generation online. It identifies five priority projects that, together with a new 500kV line currently under construction, will enable 4GW of new renewable-energy projects to be connected.
"I think it provides some more certainty for the industry in terms of having a better sense of where the work will occur and the timeline the province will be working under," says Hornung.
The timeline does raise some concern, says Stephure, given Ontario's ambitious build plans. "I think there are some implementation questions. You have this target for 2018, but most of those lines are slated towards 2016, 2017 and beyond," he explains. "We're trying to assess the technical capability of developing that much wind with all of the transmission initiatives being back-weighted in the forecasting period."
Investors also need to be watchful of other risks in the Ontario market, says Stephure. Growing frustration over rising power prices, even though they so far have little to do with the government's green-energy plans, and a vocal and well-organised anti-wind lobby are taking their toll on support for renewable-energy development.
"The risk we envision over the longer term is that the buy-in of the ratepayer doesn't match the enthusiasm of the government," says Stephure. "The government is convinced the Green Energy Act is a great way to drive new development, to create jobs, to renew and reinvigorate the economy. Meanwhile the population, I think, is a little bit more sceptical."
The LTEP also points to a review of the attractive feed-in tariff scheduled for this year, which could lead to changes in the C$0.135/kWh rate paid for large-scale onshore wind. Stephure expects the price could end up being cut. "Finding that balance will be the tricky part, to respond to both ratepayer concerns about cost, but also to maintain an investment climate that's attracted a lot of supply-chain players and a lot of developers."
Hornung points out that most public concerns have been raised around pricing for solar energy. "We continue to believe the price being offered for wind is fair and reasonable, and we'll argue that through the review process," he says.