Stuck in Transmission

The Ontario Power Authority (OPA) has had a pattern of disseminating news for the Feed-in-Tariff (FIT) late on Friday evenings. 

This week was different. 

With an announcement distributed just before dusk this past Monday, things are definitely looking up. The news was positive even if it came later than expected. We can expect that some additional large PV projects (above 500 kW) will proceed to the contracting stage this year. 

Past cover-of-darkness announcements, in contrast, have included the surprise announced change to the microFIT ground-mount rates back on July 2, and the October 8 announced early switch to the 60% Domestic Content requirements for PV projects. 

Depending upon the project size, the OPA bins all PV applications into two categories: capacity allocation exempt projects, and non-exempt projects (typically those above 500 kW). The larger, non-exempt projects must go through a series of tests to determine whether there is adequate Transmission capacity available and, if not, whether that capacity will be provided. 

In terms of capacity, as of 12 October over 54% of all pending FIT applications (PV, Wind, Hydro, Biofuel), including 23% of pending PV FIT applications, are on-hold pending Transmission availability assessments. If projects require new Transmission capacity, then the economics of adding that new Transmission capacity are to be assessed through an ‘Economic Connection Test’ (ECT). 

As of June 4, all of the pending, capacity allocation non-exempt applications were submitted into this new ECT process. At that time, the OPA advised that it would identify projects not requiring Transmission upgrades by the end of September. Unfortunately that self-imposed deadline passed without any news. 

After months of waiting, some insights on the status of these applications were provided during the recent Feed-In-Tariff Supply Chain Forum held in Toronto October 5th and 6th. At the Forum, Bob Chow of the OPA advised that there would not be any news on the ECT applications until second quarter of next year. While his participation and candor was greatly appreciated, this was discouraging news to the conference participants. Based upon the original timeline and its coincident timing with the Forum, the attendees, many of whom have submitted applications along with the required financial deposits, were hoping that the OPA would use the Supply Chain Forum to announce an initial list of projects that could proceed. 

This Monday the OPA provided us with a positive surprise. In “Late November 2010”, “a list of projects that will proceed to contract” will be provided along with “a list of projects that will proceed to the ECT.” 

Having passed its one-year birthday on September 29, the Ontario program is still maturing and evolving. Dealing with Ontario’s massive grid is non-trivial. Progress on these larger PV project applications is a positive sign for the program and the growing domestic industry. 

More Pressure in Trade Disupute 

Meanwhile, we have not heard the last word on the ongoing concerns and Trade Dispute regarding Ontario’s Domestic Content requirements. The Globe and Mail reported yesterday that a group led by Mitsubishi has just released a comprehensive study on the economic impacts of these restrictions. 

Not surprisingly for those of us who lean towards open markets, the analysis demonstrates that the Domestic Content Requirements may actually restrict the number of jobs created and ultimate economic benefits for the Province of Ontario. According to the article, “The study concluded that Ontario’s rules would result in increased costs for solar projects of all sizes, 9,000 fewer jobs and $2-billion less in investment.” 

 Previous d-bits posts on the Ontario Solar PV FIT and MicroFIT programs

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