The Ontario Power Authority, as per plans announced last summer, has tabled the general outline of a new round of procurement of large renewable power projects in Ontario. “Although the details have not been finalized, the timeline is described as aggressive. That means the next couple of months are a crucial period for input from the industry to the OPA, to ensure the final design reflects the needs and concerns of developers,” said APPrO Executive Director Jake Brooks.
The OPA outlined its current thinking during a webinar on December 17. Jason Chee-Aloy of Power Advisory LLC reads the OPA materials as an indication that many specifics are still to be resolved, and that the OPA is likely to find input particularly useful in the near future.
Connections: existing rather than new transmission capacity
Perhaps the most significant revelation in the December 17 webinar was the OPA’s acknowledgement that new generation projects will be approved based on their ability to use existing grid connection capacity. In earlier renewable procurement processes in Ontario proponents were able to rely on yet-to-be-built bulk transmission facilities. Chee-Aloy says, “[T]his represents a fundamental change to the framework developed in the initial version of the FIT program and the Economic Connection Test (ECT).” It remains to be seen as to whether new generation proposals can be approved if they rely on grid capacity that is planned but not yet in service at the time of the application. The latest Long Term Energy Plan Chee-Aloy notes, “places a stronger emphasis on northern transmission projects to accommodate projected increases in electricity demand resulting from mining activities and connection of remote First Nation communities. The 2010 LTEP placed an emphasis on transmission development and upgrades to accommodate increased connection capacity for renewable generation project development. As a result of this change, a new West of London transmission line is no longer being planned for development.”
Incorporation of stakeholder engagement into non-price criteria
One of the more visible adjustments to the procurement process is likely to be the use of non-price requirements and evaluation criteria to ensure that new generation projects have a high degree of community acceptance in future. Recent recommendations from the IESO and OPA regarding regional energy planning and siting of large energy infrastructure will likely impact the Large Renewable Procurement design and development by way of project requirements and non-price criteria for evaluation of submissions within the Request for Qualification (RFQ) and RFP. See “Agencies propose techniques to enhance community engagement in power planning,” IPPSO FACTO, August 2013, and “Premier Wynne promises change in siting practices,” IPPSO FACTO, November 2013.
Chee-Aloy notes that “The 18 interim recommendations regarding the LRP and the recommendations on regional energy planning and siting of large energy infrastructure projects are all broad in nature.” This suggests that there is a fair bit of work to do in the near future to resolve how the general recommendations will be made operational. In addition, such operational decisions could affect the timing and scale of various tranches of capacity in the near future. Chee-Aloy says, “if the requirements and non-price evaluation criteria are set sufficiently high within the RFQ(s)/RFP(s), the probability of procuring the number of projects to meet the applicable targets will decrease, therefore adding to the potential for 2016 procurements and also increasing the procurement targets for the 2016 procurements.
The OPA plans to continue stakeholder engagement through the beginning of 2014 with regional community meetings planned for January and February. The OPA will also host additional webinars and meetings with renewable energy developers, equipment suppliers and other interested stakeholders beginning in early 2014.
The OPA identified a set of potential community engagement criteria including the following:
• Municipal council support resolution
• Municipal equity interest
• Community equity interest (e.g., co-op)
• Acceptance/agreements from all adjacent landowners
• Agreement to comply with municipal site plan control process
• Community benefit agreement (or demonstrated offer of one to the municipality)
• Public meeting(s) conducted in municipality outlining process, proposed project and preliminary anticipated effects and mitigations
• Compliance with zoning (e.g., site is zoned to permit electricity generation)
The broad terms used in the above list are further indication that the OPA is open to receiving input, Chee-Aloy says. “It is important for potential LRP participants to provide input, as community engagement criteria will most likely be a significant requirement and evaluation criteria in the RFQ and RFP.”
Timeline for RFQs and RFPs
Chee-Aloy reports further that the OPA plans to post a draft RFQ by the end of Q1/2014. After comments have been received from stakeholders and potential LRP participants, the OPA plans to finalize the RFQ by early June 2014. The RFQ submission window will then open and is planned to be closed around September 2014. After this step, a short list of qualified submissions will be announced around November 2014.
The OPA plans to post a draft RFP in late 2014 after the qualified submissions have been determined and release the final RFP around February 2015. RFP submissions are then projected to be submitted in June 2015 with contracts being awarded around late July 2015.
Chee-Aloy’s full commentary on the LRP is available at http://poweradvisoryllc.com/reports/.
Further information on the Large Renewable Procurement Process is available from the OPA at this location:
http://www.powerauthority.on.ca/sites/default/files/news/OPA-LRP-Interim-Recommendations-Report.pdf