More solar farms for Ontario
I have a story in today’s Toronto Star about plans to build another three large solar farms in Ontario, adding to the four 10-megawatt projects that were announced last month by California-based OptiSolar Inc.
OptiSolar Farms Canada, the local subsidiary, is building another two 10-megawatt farms in Petrolia, Ontario, home of North America’s first commercial oil well. It’s about half an hour away from Sarnia, where the first four farms were announced. This brings OptiSolar’s announcements to 69 megawatts, and another 10-megawatt farm is planned for Sarnia and another at another location is being announced within the next month. OptiSolar hinted that total announced projects could reach 100 megawatts.
Meanwhile, SkyPower Corp. of Toronto and Balitmore-based SunEdison LLC announced the first of several solar farms planned for Ontario under their joint venture. A 9.12 megawatt farm is being built in Norfolk County in southwestern Ontario, and should be complete sometime in 2008. SkyPower has committed to building at least 50 megawatts of farms, possibly much more.
It’s quite amazing really that Ontario, a laggard in the solar market a year ago, is suddenly one of the fastest growing markets in the world. This is because of the provincial government’s standard offer program, which pays a premium of 42 cents per kilowatt-hour for solar power. Now, announcements are one thing — we’ll have to wait and see if these projects actually get built.
Curious, even at 42 cents the economics of these projects are bound to be tough. OptiSolar, which is manufacturing and installing the panels and operating/owning the solar farms has a vertical structure, so it saves costs down the supply chain. Plus, it’s betting it can manufacture its thin-film solar panels at much lower cost than rivals, and it sees Ontario as a showcase for its product. I’m less clear of the SkyPower/SunEdison model, but obviously these folks have crunched the numbers and are satisfied with the level of risk and return on investment.
As I’ve said before, interesting times.
Tyler Hamilton is senior energy reporter and columnist for the Toronto Star, Canada's largest daily newspaper. In addition to this Clean Break blog, Tyler writes a weekly column of the same name that discusses trends, happenings and innovators in the cleantech market. This blog is a personal project started in April 2005. It is not an official blog of the newspaper. Tyler can be reached at tyler@cleanbreak.ca
May 18th, 2007 at 1:30 pm
To me it seems unlikely that this large of a subsidy going to utility scale PV farms near Ontario is the best use of public money. With 100MW, this would seem to be a subsidy of $50-100M a year. If that same money were put into biomass, waste heat recovery, geothermal, geo-coupled heat pumps, wind, or… the reduction in CO2 could probably be higher.
Are there equivalent scale funding projects in some of these other areas? Is the $0.42 per kwh just for solar or does any renewable get it?
May 18th, 2007 at 5:45 pm
This isn’t really a lot of money to subsidize these projects, because they won’t actually put out that much power. Quoting non-baseload generation in peak output is a marketing gimmick. These projects should be reported in kWh/year and not peak MW, because they don’t put out any substantial power for 3 months of winter, or in the dark. Quoting the theoretical potential at solar noon in June is just a blatant misrepresentation to convince consumers to buy their own PV. A 10 MW peak solar PV plant for a few hundred million won’t light up one Christmas tree after 5pm in Ontario.
The 100kw peak Solar PV demonstration at Exhibition Place has live stats and historical data.
It’s lean times in February for these projects, even at $0.42/kWh. It’s great that they are happening, because the the media and public can’t get it through their heads that Canada isn’t the Mojave Desert and Toronto isn’t Las Vegas. Solar PV isn’t feasible there unless it’s heavily subsidized or Google using it for PR, it’s ridiculous in Ontario.
May 18th, 2007 at 6:15 pm
That really does seem pretty low for a 100kw system in the winter. January comes out to something like 2.5% of rated capacity. Does anyone know what the expected yearly capacity factor is for that area. The Exhibition Place system hasn’t been in operation long enough to get a summer recorded.
It seems like one area that really needs some funding at the national or international level is to do some real system research into what technologies offer the most benefit in which climates and economies. Such studies could be used to direct further development research and subsidies for deployment. Of course the other argument is to use a simple carbon tax and let the free markets work out the best strategies. But it seems politicians often want to get into the details of the engineering business, such as preferential subsidies, and rarely do a good job of it.
Given that the solar technology deployed in Ontario is coming from the US, I’m really baffled why there is such a devotion to it in preference to other choices.
I should disclose that I live in Southern California, so it may be a valid point that I am sticking my nose into others’ business. I just wish we had more PV panels headed our way.
May 19th, 2007 at 9:14 am
Guys, I think you’re not taking a wide enough view on this.
For one thing, not the entire 0.42$/kWh should be considered a subsidy. I don’t know what the average cost of generating is in Ontario, but in the past we’ve had to import peak summer loads at a huge rate (sorry, no figures), and these solar farms should help out with that.
As a former Ontario resident, I have no problem with some of my tax dollars going to subsidize research and market development that will be of benefit beyond our borders. What goes around, comes around: for one, Ontario air is “downstream” of a huge amount of dirty coal generation in the US midwest.
Solar has shown a very steep rise in efficiency and promises even more. Don’t forget that solar has virtually no operating costs and an expected lifetime much longer than the 20 years of the standard offer.
Am I mistaken in thinking that a solar farm is an installation just waiting for storage? ie. once an efficient storage technology comes available, can’t it simply be plugged in? (I don’t have a great grasp on the techno side of things.) Turning solar into baseload would seem to be a huge benefit, even in Ontario.
Again, taking the global view, I’m ecstatic that the Ontario govt is showing leadership: not just on solar, but concrete governmental support for renewables generally. It’s symbolically very important. Leadership is a valuable commodity in itself, and a rare one. This standard offer contract, which was inspired from one in Germany (I think?) will encourage others. Again, what goes around…
May 19th, 2007 at 10:56 am
There could have been a slight justification, had this money been used to advance the technology in Ontario. But using an imported system, and providing it with an expensive subsidy is nothing more than propaganda by a “green” premier. If the motive is energy security, then the scarce dollars could be used in a more productive way. These solar utilities are nothing but quick buck artists.
May 19th, 2007 at 4:57 pm
Certainly your point is correct that not all of the $0.42/kWh is subsidy. But for me the wider view would be considering all renewables on equal footing and selecting the one that yielded the overall highest reduction in CO2 for the amount of money available. Even if Ontario’s peak is summer air conditioning load it may make sense to combine peak load management techniques with a few new gas turbine plants and then invest in wind or geothermal rather than solar. If there is something that produces much more CO2 free electricity year round, it could more than make up for using gas to handle brief peaks.
It might even make sense to leave the electricity generation exactly as it is and put money into subsidizing hybrid car purchases, new public transit projects or retrofitting buildings for higher energy efficiency. Every government is going to have limited funds to support climate stabilization. They can’t do everything, and the choices may make a big enough difference to seriously matter.
Of course I’m coming from a background as a design engineer with extensive work in system optimization, so my view is very different from the political or symbolic view.
It’s interesting that the recent plans of various California utilities to add many hundreds of megawatts (possibly up to 1700MW) of solar in the coming years has passed with little attention or notice from the public. These concentrating solar thermal plants did not require any subsidy because they do produce power closely matched to peak demand and at a price competitive with other peaking options. They will be out in the desert where no one will see them, so most people will be unaware of them, just as they are unaware of the existing 350MW of solar troughs in the Mojave. I’m a bit disappointed that these don’t serve a larger symbolic roll.
May 20th, 2007 at 8:05 pm
Optisolar and others have 3 years to build these solar facilities from the day that they obtain approval from the OPA. This means that most of these systems probably won’t be fully operational until 2010.
The job creation coming from solar power is higher than any other renewable energy technology. This prompted many anti-solar officials in Germany to change their mind about the solar program there when they came into power. It is about time that Canada benefited from the cleantech boom.
The main reason folks support large scale solar support programs is that they are frustrated that the other technologies cannot be ubiquitous. Wind Energy is wonderful but at a certain penetration it is alot of trouble because it often produces power when residents don’t use it. Biomass is fraught with long term risk. Over a 40 year time period the sources and uses of fuel changes. There are only a limited number of projects that make sense from a risk perspective. In Texas they estimate only 500 MWs can come from Biomass, ever!
Solar may be expensive today, but for Ontario to be prepared for the lower cost solar coming in 2010, this subsidy pays for the training of local workers and education of local permitting and utility officials.
Starting in about 2010, the solar program will result in a maximum cost increase of about 1% for Ontario residents. Probably much less. . .
June 10th, 2008 at 2:52 pm
Read earlier artcle (April) regarding cost of 10 megawatt at $ 70 to $ 80 million, then saw article a couple of weeks back (late May)regarding an Ontario company doing a rooftop project for Walmart using Ontario auto parts workers. Now more solar farms going to the US. Why is Ontario buying from California (US) for these solar farms? Is the Ontario firm not competitive? Not that this ever seems to be a factor in government spending! Are they unable to do large scale farms? Is it only a rooftop product? Possibly it is not ‘proven’ technology? Believe the article regarding Walmart indicated it was a demonstration project. Seems if government is using Ontario money to not support Ontario manufacturing is certainly not politically smart? Possibly there may be a truck plant in Oshawa looking to diversify their product line! The sooner all Ontarians start working together the better for the economy and the environment