In a severe blow to Canada's largest renewables market, Ontario unexpectedly suspended its plan to sign contracts with developers for nearly 1GW of new capacity, citing a desire to hold electricity prices down amid a glut of electricity in the province.
Following the massively oversubscribed first round of Ontario's Large Renewables Procurement process (LRP I) – which saw EDP Renewables, EDF-RE, and other developers winning contracts for 455MW of new capacity earlier this year – Ontario had been in the process of readying an even-larger LRP II round.
The LRP process replaced Ontario's feed-in tariff system, which helped the province emerge as a major market for renewables and attract a number of manufacturers.
With 600MW of wind, 250MW of utility-scale solar and smaller amounts of other renewables capacity up for grabs, LRP II was expected to draw bids from heavyweight developers like NextEra and Recurrent Energy as well as from traditional Canadian energy giants like Suncor.
But on Tuesday Ontario energy minister Glenn Thibeault announced the province has suspended LRP II indefinitely, leaving many well-developed projects across the province in limbo.
Robert Hornung, president of the Canadian Wind Energy Association (CanWEA), said he was "shocked and extremely disappointed" by the decision.
Thibeault says Ontario does not need 1GW of new generating capacity, and scrapping LRP II will save the province's electricity consumers C$3.8bn ($2.9bn) without leading to any additional carbon emissions.
The province intends to begin consultations on a new long-term energy plan this autumn, with the strategy to be finalised sometime next year.
"Given Ontario's strong energy position, and in the interest of maintaining an affordable electricity system, the government has determined that it will suspend the planned LRP II," Thibeault wrote in a letter to province's grid operator, IESO.
"Our decision to suspend these procurements is not one we take lightly," he added.
But Hornung argues the province is underestimating its future need for clean power, especially as the economy becomes increasingly electrified.
LRP II was seen as the last opportunity for at least a few years to win contracts for large-scale renewables in Ontario.
The province emerged as a major market for wind and solar following the establishment of its feed-in tariff as part of 2009's Green Energy Act, with turbine OEMs like Siemens and GE winning big orders in recent years.
Today Ontario has 18GW of installed renewables capacity, including 40% of Canada's wind and nearly all of its utility-scale solar. The province is home to many of the country's renewables manufacturing facilities – including a Siemens blade plant in Tillsonburg.
Canadian Solar, one of the world's leading PV companies, is based in Guelph, Ontario.
The decision to scrap LRP II will accelerate the westward shift in Canada's renewables market, with Alberta and Saskatchewan having recently emerged as the most promising provinces for development in the medium term thanks to the establishment of new renewables targets.
Much of the future opportunity for renewables development in eastern Canada may be tied to opening the US to greater amount of electricity exports, particularly if the Clean Power Plan is upheld by US courts.