Tag Archives: OPA

New U.S. rules, industrial retrofit programs could do much to improve Ontario air quality come 2014

My Clean Break column today reveals some good news for air quality in Ontario, and points out that 2014 is shaping up to be an important milestone for the province — in more than one way. Of course, we all know that the plan in Ontario is to stop burning coal for electricity generation by 2014, and we’re well on our way to achieving that target. We’ll get there through a combination of measures: putting more renewables on the grid, shifting some generation to natural gas, importing more hydro from Quebec, and raising the bar on energy conservation. On that last note, we could see some major reductions from industry if a new program being run by the Ontario Power Authority delivers the goods. Under the Industrial Accelerator program, the province will pay an industrial energy users (the big ones, connected directly to the transmission system) up to 70 per cent of the cost of retrofits that achieve big energy efficiency gains, up to a cap of $10 million per project. So far the agency has received 40 applications to participate in the program, and 200 projects in total have been identified. The goal is to eliminate the equivalent of 300 megawatts of electricity demand (and generating capacity) from the grid by the end of 2014 and, in the process, make Ontario industry more competitive.

Now, this bodes well for air quality in Ontario, but keeping in mind that on average 55 per cent of air pollution comes into southern Ontario from the United States, we heard more good news earlier this month when the U.S. Environmental Protection Agency finalized its Cross-State Air Pollution Rule, which goes into effect in 2014. That, in combination with other EPA initiatives, is expected to reduce sulphur dioxide emissions by 73 per cent and nitrogen oxide emissions by 54 per cent compared to 2005 levels. The rule, according to the EPA, “requires 27 states to significantly improve air quality by reducing power plant emissions that cross state lines and contribute to ozone and fine particle pollution in other states.” As EPA administrator Lisa Jackson said, “No community should have to bear the burden of another community’s polluters, or be powerless to prevent air pollution that leads to asthma, heart attacks and other harmful illnesses.”

Now, this wasn’t designed to protect Canadian provinces from smog-causing pollutants — it is meant to protect high-polluting states from less-polluting states — but the fact that Ontario is surrounded on its southern border by some of America’s biggest coal-using power plants, we can expect to benefit tremendously from this rule — assuming it doesn’t get derailed by legal challenges and continuing GOP insanity. I’m surprised, in fact, this didn’t get more coverage by mainstream Canadian media.

Is a solar PV moratorium coming in Ontario?

I’ve heard from a few different sources now that Ontario may be considering imposing a moratorium on solar PV contracts issued under the feed-in-tariff program, and while any future backtracking by this Liberal government wouldn’t surprise me, I don’t think there’s any substance to these rumours. I may be wrong, but this appears to be a clear case of echo-chamber amplification. Sure, the Libs made an incredibly stupid decision by imposing a moratorium on offshore wind development. I say stupid for a number of reasons. One, it used the “lack of science” as an excuse to pull back, even though the previous moratorium on development was lifted precisely because the Ministry of Natural Resources said it was satisfied with the studies — the science — that had been done. Suddenly that science wasn’t good enough? Lame.

Two, it would have been more justifiable to impose another moratorium if the government had let developers keep the sites they had fairly secured. Instead, the government took the sites away and told developers that when the moratorium was lifted they’d have to start from scratch. Not a way to make friends of industry or to make investors feel comfortable in Ontario. It simply made zero sense to go that far, unless of course it was politically motivated — a likely explanation that is no comfort to the developers who put millions of dollars on the line and lost it all.

So, clearly the panicky Liberals are prone to making stupid decisions when under pressure by an opposition party that knows how to press its hot buttons. Will this be repeated for solar? If it was, it would IMHO completely sink the Liberal party heading into this upcoming fall election — particularly if it targeted small solar PV projects covered under the microFIT program. For larger projects, there is technically a moratorium in place. It’s called transmission restrictions, and it means only so many projects can be built in this province until transmission capacity is expanded to accommodate more. There have already been more project contract offers than the transmission system can accommodate, so really the throttle is the pace of transmission updates and the government, through Hydro One, controls that throttle. Better to make this fact clear to voters than to declare a moratorium that does nothing else but prove the Liberal party is on the run from a progressive energy plan it should be proudly promoting, with chest out and head held high.

For the record, I asked the Ontario Power Authority about these solar PV moratorium rumours and the agency flatly denied that a moratorium was coming. “OPA is not planning a moratorium for the FIT/mFIT program,” said spokeswoman Kristin Jenkins in an e-mail. “Right now, we are going through a process to issue contracts for the new Bruce to Milton transmission line which Hydro One recently received approval for. The developers that are eligible are the ones in the Bruce and West of London transmission areas on the FIT priority ranking list.  These developers did not receive contracts in the past because there was not transmission capacity.”

I asked as well about the planned two-year review of FIT pricing. Jenkins said the process will start in 2011, but she could offer no specifics on when. “We will carry out the required two-year program review in 2011, but a date has not yet been set to start that,” she said. The sooner the better. (note: I deleted a paragraph from the original version of this post which messed up the dates of the upcoming review, leading me to an unnecessary rant. My apologies for the mistake for those who read an early version).

Industrial efficiency plan for Ontario, finally

My story in today’s Toronto Star is about a new industrial efficiency program that will soon be unveiled by the Ontario Power Authority. Under the plan, the province will agree to pay up to 70 per cent of the cost of an industrial energy retrofit, making it possible for the industrial energy user to achieve up to 30 per cent energy savings and a one- to two-year payback on investment. The aim is to get 300 MW of savings initially. The province’s contribution to each project is capped at $10 million. While giving away millions to help industry use less energy would seem misguided, it’s in fact a very smart and effective strategy. The money being paid out will be much less than what it would cost to built a 300 megawatt power plant. Meanwhile, helping key industrial players become more efficient makes the Ontario economy more competitive and insulates these industrial operations — and the jobs they create — from economic downturns.

Roughly 50 to 60 big industrial players that connect directly to the province’s transmission system can participate in the program, which was spearheaded by international mining companies XStrata and Vale Inco, as well a steel giant ArcelorMittal Dofasco. The three companies, which formed a working committee that reported to the power authority, estimated that efficiency gains could “realistically” achieve 1,000 megawatts over five years.

Industrial efficiency might not be as sexy as solar and wind — actually, it’s definitely not as sexy — but the simple fact is that the greenest and cheapest megawatt is the one that isn’t used. This is a smart program. Oh yeah, and we shouldn’t forget the stimulus effect. These projects will create much-needed jobs over the next few years.