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.
No comments:
Post a Comment