Category Archives: wind

Nanticoke, once North America’s largest coal plant, to host 40MW solar farm

Okay, it’s ridiculous to compare a 40-megawatt solar PV park to a coal-fired power plant that could crank out 4,000 megawatts at peak capacity, but the fact Ontario Power Generation (OPG) got a contract today to build such a solar project at the old Nanticoke Generating Station is, at the very least, symbolically significant.

Ontario’s Independent Electricity System Operator announced the results Thursday of its Large Renewable Procurement (LRP), which, for good reason, replaces the previous feed-in-tariff (FIT) program. The FIT program just couldn’t keep up with the pace of technological change and learning in the industry, and since the solar and wind industry in Ontario is now well established, it was time to abandon the rich premiums that came with the FIT and make the big boys of renewable energy compete for Ontario’s business.

In total, 455 megawatt of wind, solar and hydro was contracted out as part of the LRP:

  • Five wind contracts totalling 299.5 MW, with a weighted average price of 8.59 cents per kWh;
  • seven solar contracts totalling 139.885 MW, with a weighted average price of 15.67 cents; and
  • four hydroelectric contracts totalling 15.5 MW, with a weighted average price of 17.59 cents.

See list of projects here.

The lowest price Ontario got for wind was 6.45 cents, which is half of what it initially paid under its feed-in-tariff program. As Ontario’s Clean Air Alliance pointed out, that’s lower than what a re-built Darlington Nuclear Station is expected to cost, assuming it doesn’t go over budget (and history says it likely will). Now, nuclear is baseload, wind isn’t. But keep in mind that the purchased wind power comes risk-free to Ontario ratepayers. Can’t say that for nuclear deals in the province, no matter how much lipstick you put on a pig.

With solar, the lowest price locked in was 14.15 cents, which is remarkably close to what Ontario was paying for large-scale wind under its FIT program. It’s also significantly lower than rates for large-scale solar under the FIT program, which back in 2013 started at 34 cents and climbed from there.

These power purchase agreements (PPAs) show just how much solar costs have fallen — and will continue to fall. Now, you may be tempted to point to super-low cost solar contracts announced in places like California, Texas and New Mexico. Toronto-based Skypower has even bid 8 cents (U.S.) for projects in India. But keep in mind the solar regime isn’t as favourable in Ontario, the dollar is lower, and projects were tied to some social goals. For example, 13 of 16 projects include participation from one or more Aboriginal communities, including five projects with more than 50 per cent Aboriginal participation. I wonder, however, if the province could have secured even lower bids if it agreed to backstop loans on winning projects — perhaps from a green bond issue?

Still, the price is heading in the right direction. As the Canadian Solar Industries Association said,

“It is also the first time that a utility scale solar project has been contracted at a price that is lower than the retail rate of electricity in Ontario.”

That’s a milestone we should all remember.

But back to the OPG contract. Its significance wasn’t lost on Dan Woynillowicz, policy director at Clean Energy Canada.

“It’s both a powerful symbol and great progress to see a contract offered for a solar farm that will be built on the land once occupied by the Nanticoke coal-fired power plant, once Canada’s top greenhouse gas polluter.”

I wrote about OPG’s planned bid for solar projects last May in Corporate Knights. At the time, OPG was hoping to win up to 120 megawatts worth of projects, which would be spread across its shut down Nanticoke and Lambton generation sites, as well as its still-operating Lennox station near Kingston.

Here’s what I said:

OPG, a publicly owned crown corporation, has historically been held back from bidding on renewable energy projects, given that its sheer size and influence were seen as unfair advantages in a competitive, open market procurement process. The company supplies roughly half of the province’s power, mostly through nuclear and large hydroelectric facilities.

In June 2013, however, the Ontario government restructured its feed-in-tariff program such that only smaller renewable-energy projects could participate. Larger project proposals, those generally more than 500 kilowatts in size, would need to compete through a request-for-proposal (RFP) process.

And in a controversial twist, Energy Minister Bob Chiarelli directed the Ontario Power Authority to allow OPG to participate in all renewable energy procurement rounds.

I think it’s smart to let OPG enter this game. Sure, it’s a large publicly owned incumbent, but the solar market has matured and can hold its own. OPG also has unique experience (and recent success) partnering with aboriginal communities.

One potential hitch is that SunEdison is OPG’s development partner. The company is going through some tough times right now (the existential kind), and it’s unclear whether that will have an impact on OPG’s plans.

Canada’s clean electricity exports to triple under U.S. Clean Power Plan

Originally published in the Toronto Star tablet edition, Star Touch.

By Tyler Hamilton

As Canada’s petroleum sector struggles with the reality that sub-$30 (U.S.) oil could be here for some time, the country’s power sector is prepping for a dramatic increase in U.S. demand for clean electricity.

Call it a shift from pipelines to power lines.

Action on climate change is the reason — more specifically, U.S. President Barack Obama’s Clean Power Plan, which aims to slash carbon dioxide emissions from power plants by a third by 2030.

The plan is expected to triple the flow of Canadian electricity into Midwestern and northeastern border states, part of a broader U.S. effort to comply with the international climate obligations that 196 countries agreed to in Paris.

Stakeholders from the Canadian power sector are calling it a breakthrough. “We are very pleased with the outcome,” said Patrick Brown, director of U.S. affairs with the Canadian Electricity Association (CEA).

Screen Shot 2016-01-18 at 11.04.21 AMClean electricity imports from Canada are a multibillion-dollar opportunity, but have typically not counted toward state-level renewable energy mandates. After being heavily lobbied, however, the U.S. Environmental Protection Agency recognized imported power, including hydroelectricity, as an important way for states to comply with the new federal emission rules.

Brown said 80 per cent of electricity generated in Canada is emission-free, versus about 20 per cent south of the border. “That’s a real competitive advantage that we believe the Canadian government and provinces need to leverage,” said Brown, adding that an education effort is underway to make state officials more aware of the import option.

The North American Electric Reliability Corporation, which monitors and regulates grid stability in Canada and the U.S., estimated in a report last April that net Canadian electricity exports under the Clean Power Plan could grow three-fold between 2020 and 2030 as demand for renewable power grows in states such as Ohio, Michigan, New York and jurisdictions in New England.

In 2014, such exports represented $3 billion in cross-border trade, meaning the market could be worth $9 billion annually within the next 15 years. The projections are consistent with the preliminary findings of a new high-level report prepared by Boston-based consultancy London Economics International.

“States could decide they don’t want Canadian power, as there’s nothing in the plan that says they should use it. But it does encourage states to look in that direction,” said Andrew Finn, an associate of the Canada Institute at the Woodrow Wilson International Center for Scholars in Washington, D.C.

Finn has spent the past few years pointing to Canada as something more than just the oil sands and pipeline projects, both of which have overshadowed the hydro import option.

“Frankly, the Keystone XL pipeline project took so much oxygen out of the room, but with that out of the way this idea has more room to breath,” he added.

Longer term, some observers say the size of the export market has potential to reach $40 billion a year. Jatin Nathwani, a professor of engineering and environment at the University of Waterloo, estimates that clean electricity trade to the U.S. could soar 10- to 20-fold over the next few decades as part of a continental-wide effort to reduce greenhouse-gas emissions.

“Such an epochal change is conceivable over a 30- to 50-year timeframe consistent with the timelines for achieving a low-carbon economy,” Nathwani argued in a 2014 analysis that was featured in a report from the Canadian Academy of Engineering.

But the transition from pipelines to power lines comes with its own set of challenges, not unlike those experienced by Keystone XL proponents. Long distances and sometimes rough geography make for high upfront infrastructure costs and considerable risk, especially in the face of any political or public opposition to transmission infrastructure routes.

The fact that the constitution gives the provinces authority over electricity generation and transmission has historically been a sticking point.

“Support for expansion of electricity generation and transmission facilities — on a vastly increased scale — as part of a deliberate national ‘export driven’ strategy is either limited or all too often met with derision or outright hostility,” Nathwani wrote.

Still, the opportunity could prove irresistible. As more sub-national jurisdictions move to price carbon, and as more vehicles and industrial activities switch to running on electricity, power consumption is expected to rise in the United States faster than domestic developers can keep up.

The International Energy Agency, meanwhile, has warned in one scenario that the accelerated retirement of aging U.S. nuclear reactors could see nuclear power supply drop by as much as 70 per cent by 2040.

“The demand for electricity is going to keep going up,” said Dan Woynillowicz, policy director at Clean Energy Canada. He added that in a post-Paris world it will need to be low-carbon electricity, which bodes well for Canada.

“We need to get that message out in the same way we’ve had that full offensive championing the oil sands,” Woynillowicz said. “Imagine if we took that same level of effort to promote clean electricity exports?”

That’s exactly what some observers expect Prime Minister Justin Trudeau will do when he visits the White House for a state dinner with Obama. The two leaders have already indicated that closer co-operation on climate action and energy policy will be part of their discussion.

As for what Trudeau should do to stimulate investment on the Canadian side, Woynillowicz said it comes down to reducing risk and creating market certainty. That means creating political and financial supports, such as federal loan guarantees, and rallying the Canadian public behind the idea.

“Hopefully the Canadian government has learned some lessons in light of its experience on the pipeline side,” he said.

This article was part of a series produced in partnership by the Toronto Star and Tides Canada to address a range of pressing climate issues in Canada leading up to and following the UN Paris climate summit. Tides Canada is supporting this partnership to increase public awareness and dialogue around the impacts of climate change on Canada’s economy and communities. The Toronto Star had full editorial control and responsibility to ensure stories are rigorously edited in order to meet its editorial standards.

After Paris, it’s time for Canada to finally join IRENA

IRENA is the International Renewable Energy Agency, a UN-affiliated organization established in 2009 to promote awareness and growth of renewable energy technologies on the global stage. It’s a kind of counter-balance to existing agencies that have long represented the fossil fuel and nuclear industries. The idea for IRENA goes as far back as 1981, but it took a quarter century to get the political traction it needed.

Today, 145 countries have officially joined IRENA and another 30 are in the process of becoming members. That would bring the total to 175. By comparison, the 42-year-old International Energy Agency has only 29 members, while the 59-year-old International Atomic Energy Agency has 167 members.

Canada is a founding member of the IEA and IAEA, yet Canada is the only G8 countries not part of IRENA. In fact, all other G8 countries were founding members of IRENA. Canada isn’t even in the process of joining, yet China, India, Australia, Saudi Arabia and Iran are already members. Even Syria is signing up. The only other large country that sits with Canada outside of this massive international group is Brazil.

The Harper government avoided it like the plague. Not joining made a statement that even like-minded governments in Australia refused to make. But times have changed. Canada has a new government that says it’s serious about taking climate action. Canada played an important role in reaching a binding international climate agreement in Paris last month. Canada’s provinces have set ambitious emission-reduction targets that will require accelerated deployment of renewable energy. The country simply can’t afford to remain on the outside of IRENA.

So what’s the government’s position? Here’s the answer I got back after posing the question:

Screen Shot 2016-01-14 at 10.52.53 AM“‎The Government of Canada was recently asked to join the International Renewable Energy Agency. This request is still under review,” said Caitlin Workman, press secretary for Catherine McKenna, Canada’s federal minister of environment and climate change.

It’s safe to say that since IRENA was founded the invitation for Canada to join has been a standing one.

Some might say: Who cares? It’s just another international agency that costs money to join and doesn’t offer much in return. I’d argue it does offer value. It will keep Canadian officials more abreast of global trends in renewable energy, but more important, it will give Canada a seat at a table filled with dozens of countries looking for the skills, knowledge and technology required to transition their economies away from fossil fuels.

The export opportunities for Canada are immense. The World Bank, in a report released in September 2014, estimated that investment in clean technologies in developing countries over the next decade will exceeded $6.4 trillion (U.S.). Of that, $1.9 trillion will be focused on renewable energy technologies, with a significant chunk of that creating an opportunity for small- and medium-sized businesses. In my opinion, that number is likely low-balling the opportunity, especially in the wake of the Paris climate summit.

IRENA is an opportunity for Canada to identify the needs of others, and the role it can play in meeting those needs.

Already, representatives from its 145 members are gathering in Abu Dhabi for IRENA’s sixth-annual assembly to discuss the role of renewables just one month after the Paris summit. There will be much to discuss as they tease out the details of the Paris agreement, and much back room dealmaking that Canada will not be a part of.

Canada should be there showing leadership.



Solar is booming in Ontario, but you’d never know it from the data

Screen Shot 2016-01-13 at 12.43.29 PMOntario’s Independent Electricity System Operator released its annual “Electricity Data” report on Tuesday, and it breaks down the supply mix in 2015, 2014 and 2013. On the surface there hasn’t been a big shift over the past three years. We see that nuclear and hydro output has been fairly consistent. Natural gas generation was up slightly in 2015 compared to 2014, but was still lower than 2013 levels. Coal has been completely phased out, but at only 2 per cent of the mix in 2013 it wasn’t a dramatic change.

Wind as a share of the electricity mix has doubled to 6 per cent since 2013. Electricity from biofuels more than doubled, but still represents less than 1 per cent of the mix.

Then there’s solar. Looking at 2013 data, you might be confused to see Ontario didn’t have any solar on the grid. A teeny weeny bit appeared in 2014 and that increased 14-fold in 2015, but still represented a measly .25 terawatt-hours of electricity in a system that generates 154 terawatt-hours a year. In other words, a rounding error.

It’s a misleading figure, and it makes solar look like an insignificant contributor to Ontario’s electricity system, which couldn’t be further from the truth.

So what’s the deal? The above figures are for transmission-connected generation, meaning only the biggest solar projects connected directly to the transmission system are recognized. Those projects total 140 megawatts on a grid with 27,000 megawatts of capacity.

But look under the hood and you see something quite different. When accounting for solar that is connected to the local distribution system, the figure is an impressive 1,766 megawatts.

“So over 90 per cent of solar in Ontario isn’t being included in their annual figures,” points out Keith Stewart from Greenpeace Canada. “If we did include it all, solar would be about 2 per cent of total generation. It’s a clear example of how conventional power-sector thinking is blinded to the role of renewables and the evolution towards a more decentralized grid.”

In other words, this so-called “embedded” solar generation is making a big difference, especially during times of summer peak demand when the sun is shining strong and air conditioning loads put stress on the grid.


Tracking the transition to a low-carbon economy: $5.2 trillion invested since 2007, according to report

gts_1.13_web_mediumEthical Media Markets calls itself an independent publisher of research reports and other information related to the emerging green economy, and every six months it comes out with an annual and mid-year update to its Green Transition Scoreboard. The scoreboard has been tracking private investments in the green economy globally since 2007. In its August 2013 report, it highlighted what it is calling a “dramatic mid-year surge” in cumulative global investment since 2007, rising to $5.2 trillion by August from $4.1 trillion in February. And remember, this is private investment — i.e. it excludes investment in government projects.

The jump, according to the report, is partially driven by the following trends: “…the write-down of fossil fuel assets; the inevitable wave of nuclear plants due to be retired; the exposing of hypothetical forecasts of 100 years of shale gas; and the decline of large, centralized electricity generation.”

Nearly $2.4 trillion has gone into renewable energy investments, making it the largest investment theme out of the $5.2 trillion total. Energy efficiency investments represent $1.33 trillion, followed by green construction at $880 billion, corporate R&D at $378 billion and remaining “cleantech” at $235 billion. Ethical Markets Media says it comes up with these numbers by scanning reports from Cleantech Group, Bloomberg, Yahoo Finance, Reuters and many UN and other international studies and individual company reports.

The report has a narrow definition of “green” investment. It excludes funds invested in nuclear power, carbon capture and sequestration, and biofuels, with some limited exceptions. Even so, it projects the $10 trillion investment mark will easily be reached by 2020 and, alongside this increase, we will see a transition away from fossil fuels.

Says the report: “Increasingly, worldwide regulations are leaving fossil fuel investments as stranded assets with pension funds heeding the call to divest from fossil fuels and invest in green technologies. Dutch Rabobank will now refuse loans to companies involved in tar sands and shale gas, citing the long-term financial and environmental risks are too large. In July 2013, Storebrand, a major Norwegian pension fund advisor, excluded from its Energy Sector all 13 coal producers and the 6 oil companies with the highest exposure to tar sands ‘to reduce Storebrand’s exposure to fossil fuels and to secure long term, stable returns for our clients…'”

I don’t entirely agree with some of the conclusions this report reaches, but it adds another interesting perspective to the energy transition that is clearly taking place globally. Big dollars are being spent on cleaner forms of energy. That a transition is happening there is little doubt. The question now is: how fast, and can we accelerate it?