Bidding process nears its close
Canadian utility Ontario Hydro is soon to choose the first winners in its Renewable Energy Technologies (RETs) Phase I request for proposals for 50-60 MW of green generation. Among the 17 shortlisted candidates who submitted bids are 11 proposals for individual turbines and four for small wind farms, confirms Bunli Yang, adviser to Hydro's division of environment and sustainable development
No medium wind farms (10-22 MW) are yet included in the RETs programme. Ontario Hydro first required wind resource assessments, now complete says Yang. At a bidders meeting in March, proposers of seven such projects reached agreement with Ontario Hydro to speed up the RETs process. They formally responded to Hydro's request for proposals on April 2, along with requests for estimates of grid connection cost. Hydro will now supply certified cost estimates by June 25, and final bids will be due by July 22. The wind industry has asked Hydro to expedite the selection process so that medium wind farm proponents will know the results of the individual wind turbine and small wind farm bidding well before the July deadline.
Yang says Hydro has allocated a Round 1 RFP "power purchase premium" of C$10 million annually, which is the amount the utility will pay over and above the incremental system value of the green energy. The balance of this sum after Hydro has selected all other Round 1 projects will help determine the number and size of the winners in the medium wind farm category.
The Independent Power Producers' Society of Ontario (IPPSO) has expressed concern that Hydro might use the entire medium wind farm budget on just one wind farm, in order to gain the efficiencies of one sizeable project, perhaps as large as 22 MW. "This might be economic, but it will reduce the number of companies able to play in the Ontario market and reduce the technical diversity and learning value of the RETs programme," says IPPSO. In order to keep open the possibility that more than one bidder will be successful, Hydro recently notified all medium wind farm bidders greater than 18 MW to also submit a scaled own version of their proposal using an 11 MW maximum.
Successful bidders are expected to sign power purchase contracts with Ontario Hydro later this year, with an in-service date for most projects of December 31, 1997. The RETs RFP is designed to help renewable energy become a "commercially proven, competitive utility supply option" after the year 2000, says Yang.
A second RETs request for proposals for 65 MW, which will include bids from Ontario Hydro's own business units and possibly also municipal electric utilities in addition to the private sector, is expected by late 1998.
A power purchase agreement awaits negotiation outside the RETs programme for Tacke Windpower's 600 kW turbine which started operation in the autumn near Kincardine, Ontario. Tacke's Philipp Andres says the turbine would have generated about 1 million kWh by June. Ontario Hydro received this energy in lieu of interest payments on the utility's start-up loan to Tacke Windpower.