CESOP rides again
Toronto: On January 31, the Ontario Power Authority posted the proposed rules and contract for a standard offer program focused on Combined Heat and Power (CHP) and Energy Recovery.
The OPA will conduct consultations with stakeholders until March 11, and release revised program details when it has had a chance to review the input received. Program launch is expected to take place by the end of June 2011. The goal of CHPSOP (Combined Heat and Power Standard Offer Program) is “to facilitate increased development of CHP facilities to a maximum capacity of 20 MW, connected to a Distribution System, and in an area where such generation can be effectively accommodated.”
The OPA appears to be seeking a maximum of 150 MW from CHPSOP in its first phase. The companion program for energy recovery is similar but will focus on the recovery of waste heat rather than natural gas fired power generation.
Key elements of the CHP standard offer program are expected to include the following:
• Natural gas-fired, Combined Heat and Power
• 20-year contract term
• Location eligibility requirements apply
• Distribution connected
• Did not generate electricity before August 18, 2005
• No prior contracts
• Not subject of an Impact Assessment submitted before execution of CHPSOP Contract, unless Impact Assessment was applied for before date of Directive
• Project prioritization based on Useful Heat Output guarantees (above minimum 15 percent) during the program launch period.
The Clean Energy Standard Offer Program (or CESOP, which includes both CHPSOP and ERSOP) is limited to a small number of locations in Ontario. The eligible locations are clustered around four urban areas: Greater Toronto, Kitchener-Waterloo-Cambridge-Guelph, Hamilton and Kingston. The OPA has released a listing of eligible locations for CESOP projects by municipality.
For CHP projects over 20 MW in size, the OPA is continuing work under its previously announced mandate employing individual private negotiations.
The Energy Recovery Standard Offer Program (ERSOP) is intended to support efficient generation of electricity from recovery of “otherwise wasted energy sources, such as unutilized by-products that can be used as fuels.”
The goal of the ERSOP Program is “to facilitate increased development of Energy Recovery Facilities up to a maximum capacity of 20 MW, connected to a Distribution System, and in an area where such generation can be effectively accommodated.”
The OPA has allocated 50 MW of capacity for the launch period of ERSOP. Key program elements are similar to those cited above, but in addition, the ERSOP projects “must use an Eligible Primary Energy Source for the production of Electricity and only supplement it with Eligible Supplementary Fuel.”
In addition, the host facility must already be in existence.
Further information, including the draft contract and program rules, is available on the OPA website at this location: http://www.powerauthority.on.ca/update-chpcesop.
APPrO expects to organize industry input to the OPA under its planned consultation process.
There has been a long history to the development of these standard offer programs. First announced as the result of a Ministerial directive in August 2005, versions for the program have been floated by the OPA for discussion several times in the intervening years. However, the program was never finalized or released.
APPrO consulted its members in early February on the proposed program and received positive feedback. The organization urged the OPA to proceed with the CESOP program as quickly as possible.
See also “New directives released on CHP and NUGs”, IPPSO FACTO, December 2010, “CESOP updated, delayed again” IPPSO FACTO, November 2008, and “Industry groups recommend adjustments to CESOP,” in IPPSO FACTO, August 2008.