Texas example spurs new activity -- Ontario RPS resurrected

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Independent power producers in Ontario, Canada, are calling on the provincial government to institute a renewables portfolio standard (RPS) in the province's coming competitive electricity market. Jake Brooks, executive director of the Independent Power Producers Society of Ontario (IPPSO), says experience in jurisdictions like Texas and Massachusetts shows the RPS is the best way to bring affordable green energy on-line in a timely way.

IPPSO has released a draft proposal to require all sellers of electricity in Ontario's new power market, which is set to open by May, to include the same, gradually increasing the minimum percentage of green power in their product mixes. The draft suggests the RPS begin in 2004 and the percentage the first year be set at 1% of 2003 sales. The specified percentage is to rise 1% a year until the RPS reaches 7% in 2010. It would remain at that level until 2020.

"While anyone choosing to purchase green power should be commended for their leadership, we don't think it's appropriate to leave the entire responsibility for greening our energy mix up to individual acts of personal responsibility," says Brooks. "The system as a whole has to have substantial targets for improvement, or we won't be able to meet our international commitments" on carbon dioxide reduction.

IPPSO's proposal resurrects an idea that was considered, and rejected, early in Ontario's electricity market restructuring process. In 1999, Ontario's market design committee released a report arguing that plans for emissions control through a cap-and-trade program for air pollutants "should meet the same environmental concerns that motivate proponents of renewables portfolio standards."

But Brooks says that did not turn out to be the case. "We reintroduced the idea of an RPS because the emission trading system proposed by the Ontario government this spring did not include any means of creating tradable credits for clean generators," he says. While the latest draft of the proposed trading system has rectified this somewhat through a set-aside of a "small number" of emission allowances for renewables and efficiency, Brooks says, it is not enough to drive much in the way of new project development.

Under the environment ministry's trading scheme, total annual emissions of NOx and SO2 from the six coal and oil fired plants operated by Ontario Power Generation will be capped at 36 tonnes and 157.5 tonnes, respectively, totals that would fall over time. The latest revision of the plan proposes allocating one tonne of the NOx emission allowance and one tonne of the SO2 allowance to renewable energy and energy efficiency activities.

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