Toronto: Through a series of stakeholder engagement initiatives, the Ontario Power Authority is collecting input on its proposed Clean Energy Standard Offer Program (CESOP). With its current plan to release the program by June 2011, the consultation is expected to wrap up shortly, in order to allow OPA staff time to finalize the program for release.
The OPA’s Manager of Generation Procurement, Darryl Yahoda, consulted with a range of people from the cogeneration and energy recovery industries during February and March. A major open meeting titled “Combined Heat and Power Standard Offer Program (CHPSOP) Stakeholder Session” with web and telephone access took place on February 25. The Canadian District Energy Association held a public session on March 4 titled “Combined Heat and Power Standard Offer Program Symposium.” Presentations were made by the OPA, gas and power utilities, cogeneration equipment suppliers, cogen developers and operators, and others. Papers from that session are available from the CDEA. “Judging by the attendance at this event, and the knowledgeable questions that came forward, this program will be well received and quickly responded to,” said APPrO Executive Director Jake Brooks.
Soon after the CESOP program was announced in late January, APPrO consulted with its members and prepared a summary of feedback for the OPA. Following are some excerpts from APPrO’s letter to the OPA of February 22:
“APPrO and many of our members have reviewed the OPA’s latest proposed terms for the Clean Energy Standard Offer Program. The initial response from our members is that this program should be successful as currently proposed. A number of worthy projects may now be able to proceed, many of which have been stalled for years, if the terms as we understand them are put into practice in the near future. APPrO has also conferred with the Canadian District Energy Association (CDEA) and found that members of the two organizations are in substantial agreement on CESOP as it is currently proposed.
We would like to thank you and your colleagues at the OPA for putting together a proposition that is likely to attract investment and community support in the regions in which is made available. It is particularly noteworthy that, based on our internal discussions, proponents from very different parts of the clean energy industry all seemed to feel they had something manageable to work with. This is a sign that your preparatory work has been thorough.
APPrO has one primary concern above all others. It is that is our members want to see this program move from proposal to operation as quickly as possible. As you know, there have been numerous delays in releasing the program already. Many projects and physical opportunities are lost as time goes on, either because boilers and chillers have to be replaced on their own schedule, or because investors lose interest and move on. Although further refinements are possible, there comes a time when the desire for perfection needs to be set aside in order to proceed.
Even at the risk of cutting the consultation process short, we urge the OPA to move the CESOP program into operation at the earliest possible date. We believe that the current program is viable as it stands and that consultation will be more productive at a later point when there is operating experience with CESOP.
APPrO members have raised a few questions about the program design which would be worthy topics of discussion, and will likely surface during your planned consultations. Please note that we see these discussions as the kind that can proceed in parallel with the launch process for CESOP. Although we have identified some issues, they are presented for the purpose of information-sharing, not as input to the CESOP process in the sense that discussion around them might be allowed to complicate the finalization or release of CESOP.
With that in mind, our members have told us that they would like some clarification in the following areas:
a) How will the timelines and priorities be determined for connection of CESOP projects to the local grid, given that there are likely to be a number of prior applications from renewable generators for connection to the same distribution system? We appreciate the need to be coordinated with the FIT program, and think that the project readiness criteria proposed by the OPA could be highly relevant to such questions.
b) How was the O&M cost of .6 cents per kWh established? It doesn’t seem to relate directly to any particular type of technology or installation.
c) In cases where behind-the-meter connection is intrinsically preferable, it is important to understand the specifics of the mechanism which will be used to recuperate upstream savings. We are not arguing the principle of the claw-back in the context of the current proposition, but lenders and investors require certainty on how the clawback will operate.
d) What are the process and criteria likely to be during the stakeholder consultation phase, and in future, for assessing the readiness of other geographic areas as eligible for CESOP? In order to enable the most economically attractive projects to proceed, the current restriction to 4 urban areas appears to be one of the first areas for reconsideration or expansion.
e) Has the OPA investigated the possibility of using dispatchable CHP to offset intermittent renewables in areas that are currently outside the approved urban centres? The nature of dispatchable CHP systems makes them very well suited for operation in close coordination with the wind industry and for utilizing grid capacity during hours when renewables are not producing at their maximum output.
We do not intend these questions to deter you from your course of finalizing the CESOP and getting it into full operation. They are to serve as indicators of areas that will likely be of interest for future discussion.
In short, APPrO members are positive about this development and your role on bringing it to this state. We would be happy to provide support in bringing CESOP to fruition.”
The letter was signed by Jake Brooks, Executive Director.
For presentations from the CDEA conference, all the PDFs have been combined into one package, which readers can download from the CDEA website: http//cdea.ca > Resources > Developing District Energy Systems > Presentations from the ... .
On March 31, the OPA posted updated CESOP contracts, rules and definitions on the CESOP webpages. Please see this location: http://www.powerauthority.on.ca/combined-heat-power-standard-offer-program-chpsop.
See also, “CESOP rides again” IPPSO FACTO, February 2011 and the OPA website under “Clean Energy Standard Offer Program.”