Power co-ops hold sway in FIT points system

CANADA: Renewable energy co-operatives in Ontario have joined forces in an effort to take full advantage of new feed in tariff (FIT) rules that favour projects by communities and indigenous groups.

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The new rules, dubbed FIT 2.0, set aside 10% of all future contracted capacity to projects in which community co-ops and First Nations groups hold a majority ownership stake. For all other projects, a new points system for evaluating FIT applications prioritises those in which co-operatives or First Nations groups hold at least a 15% equity stake.

The revised programme opens new opportunities for co-ops that were largely shut out of contract awards under the original programme's first-come, first-served structure, said Judith Lipp, chair of the newly formed Federation of Community Power Co-operatives. The co-ops decided to unify to help move community-controlled projects forward by sharing resources, setting standards and speaking to government with a unified voice.

The goal, said Lipp, is to ensure there are enough viable projects to fill the government's 10% quota. "We need to demonstrate it was justified. I think between aboriginal groups and co-operatives we will."

The revised programme's point system adds another new market dynamic as well. There are roughly 35 community power co-ops in Ontario, with four focused on wind energy. Lipp expects some to be interested in working with commercial wind developers looking to boost their chances of winning a FIT contract by having community-based investors in their projects. "There would be groups that are certainly open to a conversation," she said

Competitive advantage

There may also be new co-operatives created specifically to gain those coveted priority points, Lipp added. In fact, some observers believe commercial developers will have to secure community or First Nation investment to have much hope of being awarded a power purchase agreement under the new rules.

"I don't think they'll be competitive in applying for contracts without it," said Ernie Belyea, a partner in the law firm Bennett Jones.

The challenge is there is limited additional procurement needed to reach Ontario's current target of 10.7GW of renewable energy by 2018. The province has about 9.5GW either operating or spoken for through already-awarded contracts and a special deal with a Samsung-led Korean consortium. At the same time, there are 16.5GW of projects that applied under the original FIT programme but did not get a contract, 9GW of which are wind.

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