Industry moves on after Ontario offshore wind shock

CANADA: The wind industry has praised the awarding of new feed-in tariff (FIT) contracts for reassuring Ontario's renewable energy market after the surprise decision in February to halt offshore wind development in the province.

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The Ontario Power Authority (OPA) gave the green light to four wind projects totalling 615MW in February. This is part of a second round of contract awards that will see some US$3 billion worth of renewable energy installed in Canada's largest power market. The 615MW come on top of the 1.5GW of wind energy that won contracts in the first round a year ago.

The OPA's announcement follows a shock decision by the provincial government to call a halt to offshore wind in Ontario, the repercussions of which were felt far beyond the companies that had been developing projects in the Great Lakes.

Robert Hornung, president of the Canadian Wind Energy Association (CANWEA), says the offshore decision had raised questions for investors about policy stability in the province. The government, he says, now needs to reinforce and rebuild confidence. "From that perspective, the announcement of new contracts is very important," he adds.

Next step

The OPA also said it will soon give details about the so-called economic connection test (ECT). This test is the next step in bringing wind online as it determines whether it makes sense to build transmission infrastructure to connect projects to the grid.

There are nearly 8.6GW of project applications - 6.6GW of them wind - awaiting an ECT. The first ECT was supposed to start last August, but was postponed.However, an OPA spokesman could not say when the details would be published. Given some of the province's green-energy ambitions, Hornung says, it needs to be soon.

The Ontario government sent the OPA a directive in early February ordering it to plan for 10.7GW of renewable energy in the province by 2018 and transmission system upgrades to support them. CANWEA expects about 7GW of the total to be wind, up from 1.6GW today. "Those are ambitious targets," says Hornung. "If they are going to be met, the momentum must be maintained."

The FIT programme's domestic content requirements are also set to jump to 50% for wind projects at the beginning of next year, up from 25% today. "Manufacturers considering making investments that would allow projects to meet these requirements are keenly interested in seeing what projects are going forward and how many," says Hornung. "It's very important to move as quickly as possible to send that signal out not only to developers, but also to manufacturers."

Two of the wind projects selected in the second round will be the largest onshore projects to receive power-purchase contracts in the province so far.

Nigig Power Corporation, owned by the Henvey Inlet First Nation, hopes to start construction next year on a 300MW wind farm on its reserve land on the shores of Georgian Bay. President Ken Noble says his company is looking for a partner. "Because of the magnitude of the project, we'll be preparing our community for prosperity," he says. As a First Nations project, the Nigig wind farm will receive C$0.15/kWh (US$0.15/kWh) under the 20-year FIT contracts rather than the standard C$0.135/kWh.

Niagara Region Wind Corporation won a contract for a C$600 million, 230MW project in Smithville, about 70 kilometres south of Toronto. Algonquin Power's 75MW project on Amherst Island and UDI Renewables Corporation's 10MW Port Ryerse wind farm also made the cut.

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