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Canada

Creating commercial opportunities; First green power

Green power generated from wind energy is to be sold at premium rates for the first time in Canada. Toronto residents will have the option of buying electricity from a demonstration wind turbine to be erected by Ontario Hydro and government agency Natural Resources Canada. Details of the Toronto project emerged at the annual conference of the Independent Power Producers' Society of Ontario in mid October.

For the first time in Canada, green power generated from wind energy is to be sold at premium rates. The beneficiaries will be Toronto residents who will have the option of buying electricity from a 600 kW demonstration wind turbine to be erected by Ontario Hydro and government agency Natural Resources Canada (NRCan). Details of the Toronto project emerged at the annual conference of the Independent Power Producers' Society of Ontario (IPPSO) in mid October.

The initiative resembles a wind project at Traverse City Light and Power in Michigan and could prove to be a self-financing model for future renewables development throughout Canada. Moreover, it may help Ontario Hydro's Renewable Energy Technologies (RETs) programme. The programme's Round One request for proposals is currently stalled by Ontario Hydro's senior management.

The turbine, announced at the CanWEA conference in October but without the green pricing details, will be erected in 1997 at the Ontario government's lakeshore Ontario Place entertainment centre just west of downtown Toronto. The project will test whether Toronto customers will choose green power instead of nuclear and fossil electricity, as opinion polls have indicated they will. It would also expose a huge public audience in southern Ontario to wind power technology, according to Ontario Hydro's Brian Kelly.

As well as Ontario Hydro and NRCan, the joint venture partners include Toronto Hydro and Ontario Place itself, along with the environmental group Pollution Probe, and the City of Toronto, which offered a $1 million loan from its Toronto Atmospheric Environment Fund in late September.

Ontario Hydro's participation is in stark contrast to its action earlier this year in launching lawsuits in provincial court to prevent two municipal utilities, London Hydro and Ajax Hydro, from buying electricity from yet-to-be-built private gas and biomass projects. Ontario Hydro apparently views such projects as a threat to what it calls the "Ontario power pool" and its electricity monopoly. The utility has a track record thus far of quashing all attempts at municipal cogeneration and renewable development, including attempts by municipalities and private developers at constructing grid connected wind farms.

The Toronto project may offer a way around the impasse. Environmentalist and Toronto Hydro Commissioner Jack Gibbons argues "that any municipal utility has the legal authority to build its own wind turbine if it wants to. Ontario Hydro, he says, is not going to take them to court because the project is small scale and not an economic threat. Furthermore, "It would look so disgraceful for them to be trying to block a wind turbine so they can keep on producing coal fired electricity."

Ontario Hydro's Bunli Yang says the Ontario Place project is outside the utility's RETs programme and was initiated as an unsolicited proposal by Tacke Windpower. The participants of the Ontario Place project are still working out their responsibilities and it is still too early to tell who will hold title to the turbine, he adds.

Already started

Kelly revealed at the IPPSO conference that he has already begun offering Ontario businesses, households, the federal government and other institutions green power from RETs projects. In particular, he is eager to sell green power to the federal government as part of its proposed Green Power Procurement Program. Kelly is proposing a four cent retail premium on top of Hydro's average cost of $0.055/kWh. He said he was trying to turn the $110 million RETs programme from "a research and development sinkhole" into a "commercial opportunity."

The RETs Round One would total about 46 MW in 12 "preferred projects," which would generate 158 GWh a year. More than one medium size wind farm is on the short list, says Yang. A decision on the round one winners is still expected by the end of the year.

"We're just trying to do everything we can to show to Hydro's senior management that it is strategically in Hydro's interest . . . to go ahead and sign the power purchase agreements," says Yang. Kelly has not yet been authorised to sign green pricing contracts with customers, so at the moment the Round One RFP apparently amounts to a measurement by Ontario Hydro of customer interest.

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