Community investment in renewables and supporting policy

Renewable Energy WorkshopEcho BayNovember 20th, 2008

Neighbourhood Bulk Buy• Benefits to homeowners

– Volume discount– Delegate research & negotiation– Transparent process– Rapid process

• Installers

– Save on sales costs– Save on travel costs

Neighbourhood Bulk Buying

Neighbourhood Bulk Buying

• www.ourpower.ca• Resources

– Start-up guides– Sign-up forms– Press release templates– Request for Proposal templates– Applicable incentives and rebates

Wind Power• Large or small• Unproven or untested designs

– Vertical versus horizontal axis– Downwind versus upwind– Roof-mounted– ducted

• Underperformance to spec.– No international standards– Unpublished results

• www.wind-works.org

Val-Éo example• Landowner co-op

– Land lease agreements– Opportunity for neighbours to invest

• Limited liability partnership– Major financial investors– Major land contributors– Co-op is managing partner

• Project developed democratically

Val-Éo example

Val-Éo example

Val-Éo example

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What is Community Power?

• Locally owned (wholly or substantially) Renewable Energy generation projects

• Optimizes local benefits (social, economic and environmental)

• Commercial-scale (enough energy to sell back to the grid)

• Accessible, open participation• Democratically controlled (1

vote/person)• Financially viable (positive Rate of

Return)

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Economic Benefits of Community Power

Community Power is a proven economic model – Stabilizes long term energy

prices– Creates jobs – Contributes to a culture of

energy conservation (U.S. Research Project - Iowa Policy Project)

Local Community Benefits

• Locally Owned Community Power Projects:– Generate 5-10 times the local benefits

than the traditional, centralized energy generation model (Iowa Policy Project )

• Traditional, centralized energy generation model – 75-90 cents of every dollar spent on

energy leaves the local economy (U.S. Dept. of Energy, Rocky Mountain Institute)

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An Emerging Economic Development Opportunity

Operation of wind turbines employs more people than the traditional energy model:

– 27% more jobs than coal plants– 66% more jobs than natural gas

plants

(New York State Energy Research and Development Authority)

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Jobs: Denmark

• World market leader for wind turbine manufacturing – Produce > ½ of the world’s wind turbines– Export rate of 90%

• Generate $7 billion annually – Defined by World Bank as a “high income

economy”– Ninth in ‘Quality of Life’ Index

• (U.S. = 13th, Canada = 14th)• Employ 20,000 people in Renewable

Energy sector– with a population of < NYC

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Jobs: Germany

• Generates $240 billion in annual revenue

• Germany’s Renewable Energy sector employs 250,000 people

• Germany is expected to provide more green jobs than the U.S. auto industry employs by 2020

(United Nations Energy Partnership and Germany’s Federal Minister of the Environment)

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Communities Drive Renewable Energy

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Community-Owned Wind Turbines in EuropeFarmer Community Corporate

Germany 10% 40% 50%Denmark 64% 24% 12%Netherlands 60% 5% 35%Spain 0% 0% 100%Great Britain 1% 1% 98%Minnesota 31% 69%

Ontario <1% >99%

Source: NL,D,DK,ES,GB: Dave Toke, University of Birmingham, 2005, updated to Toke 2008Source: Minnesota: Windustry, 2008Source: Ontario: OSEA, 2008

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Economic Dev. Potential for ON

Wind energy projects create new jobs in manufacturing, transportation and construction

Industry Canada states that by 2012• 13,000 green jobs• $10 Billion in revenues

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Economic Development Potential for Ontario

Current state of the industry in Ontario:• Turbine tower (Exhibition Place) was made in

Ajax• New solar/silicon manufacturing plant in

Vaughan• Most of the employees are former auto workers• Land Leasing ($2-5K/yr/turbine)• Community Power - Local Renewable Energy

project ownership:• First Nations• Co-operatives• Local land owners

Economic Development Potential for Ontario

Ontario’s Potential Renewable Energy• 30,000 MW Offshore Wind• 25,000 MW Onshore Wind• 5,000 MW Medium/Micro Hydro• 5,000 MW Small Hydro, Solar,

BiogasTOTAL Potential: 65,000 Megawatts

• With a comparable wind resource to Ontario, Germany already has 31,000 MW of installed capacity

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Summary

• Renewable Energy creates a strong case for economic development – Canada’s potential by 2012

•13,000 jobs•$10 billion in revenue

– Ontario’s potential•65,000 megawatts

• Economic benefits can be kept locally through Community Power projects….

About OSEAWhat is OSEA? A province-wide member-based non-profit

trade association founded in 1999 How many members does OSEA have?

1500+ (75 organizations plus individuals)Who does OSEA represent?

The Sustainable Energy Sector and Community Power including individual citizens, First Nations, co-operatives, farmers, businesses, municipalities and other institutions

Communities Drive Renewable Energy

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Community-Owned Wind Turbines in EuropeFarmer Community Corporate

Netherlands 60% 5% 35%Germany 10% 40% 50%Denmark 64% 24% 12%Spain 0% 0% 100%Great Britain 1% 1% 98%Minnesota 31% 69%Ontario <1% >99%

Source: NL,D,DK,ES,GB: Dave Toke, University of Birmingham, 2005, updated to Toke 2008Source: Minnesota: Windustry, 2008Source: Ontario: OSEA, 2008

Community Power Fund (CPF)

• Founded by the Ontario Sustainable Energy Association (OSEA)

• CPF is a sister organization to OSEA • Both OSEA and CPF serve the Community

Power sector in Ontario• Defining Community Power

– First Nations, farm-based organizations, local community organizations etc., who want to develop, own, control renewable energy projects for the benefit of their community

– Organizational models include: non-profits, co-operative, corporations that adhere to co-operative principles etc.

– Retain minimum 50% equity ownership

CPF Current Allocations

Project Development Grants ($3 million)

• Pre-feasibility Grant ($5,000 + Pre-feasibility study template)

• Feasibility Grant ($25,000)

• Strategic Opportunity Grant ($25,000)• Project Development Grant

($50,000 - $300,000)

First Round of Applications

• 2 Large Wind Grants– Windy Hills Caledon– Chippewas of Georgina Island First Nation and Windfall

Ecology Centre • 5 Strategic Opportunity Grants (Wind)

– Walpole Island First Nation– M’Chigeeng First Nation– Wikwemikong First Nation– Positive Power Hamilton Co-op– Blue Water Agriwind Co-op

• 8 Feasiblity Grants– Campbellford Seymour Community Foundation– Barrie Wind Catchers– LIFE– Next Generation Co-op– Norfolk Federation of Agriculture/FEO– TREC North– Windshare– Windward Co-operative Homes

The RESOP and Advanced Renewable Tariffs

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The First in North America

• Feed Laws• Feed-In Tariffs• Advance Renewable Tariffs

(ARTs)• Renewable Energy Standard

Offer Program (RESOP)• www.onlinepact.org

AustriaBrazilChinaCyprusDenmarkEstoniaFranceGermanyGreeceIndiaIrelandIsraelOntarioPEISouth KoreaSpainSwitzerlandTurkeyWashingtonEtc.

Feed-In Tariffs – Accelerating the Deployment of Renewable Energyby Miguel Mendonça

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OSEA’s Campaign for ARTs• 2004 - OSEA launches ARTs campaign• Fall 2004 Liberal Party endorses ARTs• Winter 2004 – Ministry of Energy

contracts OSEA for ARTs Policy study• Fall 2005 – Ministry of Energy issues

Directive to OPA to develop recommendations for a program

• March 2006 - Premier announces the RESOP

• November 2006 – OPA issues RESOP rules

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OSEA’s Campaign Evolves• November 2007 – issues Renewables

Without Limits discussion paper• May 13 2008 – OPA proposes RESOP

changes• June 2 2008 – OSEA and partners launch

Green Energy Act (GEA) Campaign• September 18 2008 – Premier

announces Green Energy Act & Minister of Energy and Infrastructure directs OPA regarding conservation, renewables and First Nations consultation

• November 2008 OSEA releases RESOP recommendations

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10 MW Project CapOpen to all Players 20 Year ContractsStandardized Prices

– 11 ¢/kWh Base Price (wind, hydro, bio-gas)

– 42 ¢/kWh Solar PV– Biogas and Small Hydro + 3.5 ¢

for Dispatchability

Characteristics of the RESOP

“Value to Ratepayers” vs Cost + ROI

• Criterion subject to internal interpretation

• Not part of OPA’s Mandate• Not part of OSEA’s proposal• Neither Spain, France or Germany

use “value to ratepayers” in determining tariffs

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• Improved pricing based on cost and differentiated by scale, resource intensity and application

• Grant renewable energy priority access to the grid

• Grant renewable energy priority of purchase• Grant Community Power proponents priority

access to the grid where capacity is limited• Grant priority access to expanded grid capacity

with assured cost recovery for grid companies• Provide full inflation protection• Lift the program size cap• Implement an anti-gaming provision for projects

connected to the distribution system

RESOP Evolution

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RESOP Pricing and Technology

Resource Proposed Advanced Renewable Tariffs

Solar PV - Raise base tariff to $0.80/kWh- Differentiate by size and placement- Grandfather in existing contracts

On-Farm Biogas

- Raise base tariff to $0.17/kWh- Differentiate by size- Grandfather existing contracts

On-Shore Wind

- Raise tariff to $0.148/kWh - Differentiate rate by resource intensity

Off-Shore Wind

- Base tariff of $0.186/kWh - Differentiate rate by resource intensity

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RESOP Pricing and Technology Continued

Resource Proposed Advance Renewable Tariffs

Solar Thermal

-Base tariff of $0.10/kWh-Differentiate by application

Geothermal -Base tariff of $0.22/kWh-Differentiate by size

Hydro - Raise tariff to $0.14/kWh- Differentiate based on efficiency not name plate capacity- Peak increment $0.35

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Why Advanced Renewable Tariffs?

• Community power proponents aren’t precluded

• Broad-based participation• Simplified administrative process• More players, stronger local economies,

more manufacturing, more jobs, more renewable energy generation

• A proven policy mechanism• Provides stable investment and

manufacturing environment

What’s Next?

The Green Energy Act!

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Best Practice

• Germany’s Erneuerbare-Energien-Gesetz (EEG), or Renewable Energy Sources Act 2000

• Enshrined Feed-in Tariffs in law• World-leading industry in 15 years• 32,000 MW of installed renewable energy• Latest figure ~ 215,000 people employed in

German renewable energy industry

• For more information on the EEG:

www.bmu.de

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Building on Best Pracitices

Building on EEG in addition to OSEA’s evolved RESOP the Green Energy Act will also emphasize:

• Conservation• Role of Energy Utilities• Accessibility• Modernization - smart grid technologies• Expanded Community and First Nations’

Participation

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• Make Ontario a world leader: jobs, energy policy, renewables and conservation

• Prioritize conservation, RE and CHP over all other new electricity generation

• Enable all Ontarians to become conservers and generators while making a profit

• Grant priority procurement and obligatory grid access via Advanced Renewable Tariffs for RE and CHP projects

• Ensure a continuous improvement approach to conservation programs - minimum 2.5% annual (compounding) reduction in energy resource needs from CDM between 2011 – 2027 period

Core Goals

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• Environmental Defense

• David Suzuki Foundation

• Ontario Federation of Agriculture

• First Nations Energy Alliance

• The Ivey Foundation

• Pembina Institute

• Ontario Sustainable Energy Association

• Community Power Fund

Green Energy Act Coalition

Draft Issues• Community Power

• Renewable Energy Procurement

• Grid Evolution

• Conservation

• Environmental Protection

• Planning, Permitting, and Environmental Assessments

• Jobs and Training

• Administration and Governance of the Energy Sector

• Other Act Amendments

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Stakeholders

• First Nations• Farmers• Unions• ENGOs• Industry Associations• Muncipalities• Utilities• Lenders and other financiers• Etc.

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Thank You!Roberto Garcia

Member Services Manager1-866-573-OSEA (6732) x228

roberto@ontario-sea.org