Demand for Ontario purchase contracts

CANADA: The Ontario Power Authority (OPA) is processing 1022 applications for 20-year power purchase contracts under the province's new feed-in tariff (FIT) programme, 79% of which are for wind energy projects.

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The applications total about 8GW of potential generation, more than three times the available transmission connection capacity in the province. They will be evaluated to make sure that shovel-ready projects are first in line for the 2.5GW of contracts available in the first round, says the OPA.

The overwhelming response shows that the Fit has succeeded in putting Ontario on the radar screen of wind energy investors, says Robert Hornung, president of the Canadian Wind Energy Association (Canwea). The programme offers guaranteed tariffs for a range of renewable energy technologies, amounting to C$0.135/kWh for large-scale onshore wind and C$0.19/kWh for offshore projects.

The concern now is how quickly the purchase agreements can be finalised in order for construction to begin. The OPA originally expected to start awarding contracts in December 2009, but the huge response means that it will not happen until March 2010.

"You can tell by the level of interest that there are a lot of people who are ready to get started," says Hornung. "People would like to see this move forward as quickly as possible."

The high degree of investor interest also means there is no need for special side deals, says David Butters, president of the Association of Power Producers of Ontario. The province has come under fire for a proposal that would see it set aside 500MW of transmission for Samsung C&T Corporation if the South Korean industrial giant invests in wind manufacturing in Ontario (Windpower Monthly, December 2009).

"Our members have invested billions of dollars into the Ontario electricity sector," says Butters. "They intend to invest billions more and they all believe strongly in transparent, open procurement processes."

Once the initial round of Fit contracts is awarded, the OPA will look at the projects that are left and use them to help decide where future transmission should be built. But the province has already jump-started the process in some areas where the need is obvious.

Last September it ordered government-owned Hydro One, which operates 97% of Ontario's grid, to begin planning 20 transmission projects to enable connection of renewable energy facilities (Windpower Monthly, November 2009).

In addition to the Fit applications, the OPA received 1193 applications for so-called microFit projects, 10kW and smaller in size. Most are for residential solar PV systems, with only one 2kW wind project in the mix.

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