Good climate policy news: Ontario and the USA

2009-02-28

in Canada, Economics, Politics, The environment

Emily Horn and Morty

I am happy to be able to report on some promising developments, both within my own province and in the giant to the south.

Firstly, the Government of Ontario has tabled a new Green Energy Act. There’s a lot to the 75 page document, but one of the most promising elements is the introduction of feed-in tariffs for renewable generation. Here’s the idea: the bill will make it mandatory for those who own the electrical grid to buy energy from renewable power sources, after connecting them. The price paid for the energy will be set by the province, and it will vary depending on technology, resource intensity, project scale, and location. Tariffs of this kind have been effective at driving renewable deployment in the United States and Germany. The whole bill is online (PDF), as is an executive summary. There is also a guide on what more is required for ratification (PDF). In addition to feed-in tariffs, the bill contains provisions for developing a smart grid, the involvement of First Nations groups, the creation of two funding bodies, and a mandate for conservation. It will also adjust energy pricing (though the issue of how is vague) and streamline the approval process for renewable energy projects.

Secondly, it is worth noting that Obama’s new budget includes projected revenue from a national cap-and-trade system. Grist is discussing it in a three part series: I, II, III. While the projected revenues are low ($83 billion per year by 2020), this is further evidence of the Obama administration’s willingness to move forward on this file.

Carbon pricing and the promotion of renewables are both critical elements of a strong overall climate policy. There is reason to hope that after decades of inaction, things will really start to take off in North America within the next couple of years.

[Update: 2 March 2009] Over at Clean Break, Tyler Hamilton has written a good piece on the Green Energy Act. It includes more analysis than the other coverage I have seen.

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{ 14 comments… read them below or add one }

. February 28, 2009 at 11:12 am

Bill 150, Green Energy and Green Economy Act

by Dianne Saxe

One of the Schedules will create the proposed Green Energy Act. Among many other things, the Green Energy Act will allow the province to require vendors of real estate to provide energy efficiency information, possibly an energy audit. Realtors have complained, but we think it’s an excellent idea. The vehicle equivalent, Drive Clean, has been immensely useful in reducing air pollution from badly maintained cars and trucks. It may also have saved car buyers money by ensuring that their new cars have working pollution control systems. When Drive Clean was announced, it was met with a chorus of objections, but the market adapted soon thereafter.

Renewable energy cooperatives

by Dianne Saxe

Bill 150 includes a a series of amendments to the Co-operative Corporations Act to encourage communities to set up renewable energy cooperatives.

. February 28, 2009 at 11:28 am

Green energy, eh?
Green Energy Act introduced to Ontario’s provincial parliament; feed-in tariffs key mechanism

Among its many provisions is the Ministers ability to use feed-in tariffs as a key implementation mechanism. Unlike the German Renewable Energy Sources Act, Bill 150 does not include specific feed-in tariffs. The tariffs will be determined in a separate administrative process.

This provision of the act is another key element of successful systems of feed-in tariffs like those found in Germany, France, and Spain. Advocates, such as the Ontario Sustainable Energy Program, have been arguing for such differentiated tariffs since 2004. The province’s original Standard Offer Contract program included only two tariffs: one for solar, and another for everything else. The implication of this provision in the bill is that Ontario plans to more closely follow successful practices elsewhere.

. March 2, 2009 at 11:24 am

Green Energy Act: Where do we go from here?

So, overall, the assessment is generally quite positive. But there remains the one obvious question: Will the government deliver the progressive policies and programs necessary to realize the vision outlined in the legislation, and will they do it in a timely fashion? There’s a lot of talk flowing from the tabling of this bill that needs to be turned into action.

Premier Dalton McGuinty says the proposed legislation is part of a larger initiative to tell other jurisdictions that when it comes to renewable energy and conservation we intend to be the North American leader, meaning Ontario is the place to invest and lay down roots. The province would be wise to aggressively market itself this way over the next year or so. McGuinty, when asked about the tendency to overpromise and under-deliver, said we should judge his government based on its track record over the coming months and years.

. March 2, 2009 at 11:41 am

Quick approvals for green energy projects
by Dianne Saxe

The Green Energy Act will allow the province to put a six-month limit on environmental assessment and other approval processes for “green” energy projects. The precedent is the 2008 environmental assessment regime for transit projects. After projects such as the St. Clair streetcar were delayed by local opposition, vastly increasing their cost, the province decided to sweep away many of the approval obstacles to “green” projects.

R.K. March 2, 2009 at 12:01 pm

It’s great to see some good news.

Hopefully, both the efforts in Ontario and the United States will prove effective.

Kai March 2, 2009 at 1:49 pm

Ok, I’m not really Kai – I’m tristan. But if I was Kai, I’d want to tell you about my conference in Copenhagen-

http://www.our-opportunity.com/

. March 2, 2009 at 1:49 pm

Federal Cap-and-Trade System: 100% Auctions
Posted by Clark Williams-Derry
02/26/2009 05:20 PM

“Through a 100 percent auction to ensure that the biggest polluters do not enjoy windfall profits, this program will fund vital investments in a clean energy future totaling $150 billion over 10 years, starting in Fy 2012. The balance of the auction revenues will be returned to the people, especially vulnerable families, communities, and businesses to help the transition to a clean energy economy.”

. March 2, 2009 at 4:22 pm

So what is the Obama carbon price?

Obama’s proposed budget anticipates about $80 billion in auction revenue in 2011 (Table S-6). Starting from this figure and some reasonable assumptions, its quite simple to get an approximate carbon price. (While we can hope for dramatically reduced emissions before the first year the plan takes affect, it seems unlikely.) The Obama plan explicitly calls for auctioning off 100 percent of the emissions permits, so we can get an approximate price of a permit by dividing the $80 billion auction revenue by current U.S. emissions.

With 2006 numbers for CO2 emissions, the Obama carbon price is $14.30 per metric ton of CO2. I don’t know about you, but I don’t buy my energy by the ton of CO2. Here is what $14.30 per ton would do to common energy costs*:

Effect of the Obama carbon price**

* Petroleum fuels: adds 15¢/gallon
* Electricity: adds 0.8¢/kWhr (compare to 7-10¢/kWhr residential rates)
* Natural gas: adds 8¢/therm (compare to 85¢/therm residential rates)

In other words, energy prices would increase by about 10 percent. Its a start, but a very slow one.

. March 10, 2009 at 4:28 pm

Renewable energy approvals

by Dianne Saxe

One great feature of the Green Energy Act will be freeing renewable energy projects from the current straightjacket of Ministry of the Environment rules on “waste”. Biogas facilities, for example, are currently labeled as “waste disposal sites” instead of energy generation facilities. This has numerous adverse consequences, and makes it very difficult to site them. Most municipalities have restrictive, if any, zoning for waste disposal sites.

. March 13, 2009 at 11:33 am

Continental first: Ontario proposes ambitious feed-in tariffs for wind, solar, biogas/biomass and hydro

Highlights:

* 80.2 cents per kilowatt-hour for rooftop solar.
* 19 cents for offshore wind of any size (first jurisdiction in N.A. to set price)
* 13.5 cents for onshore wind of any size
* 14.7 for biogas under 5 MW.
* 44.3 cents for 10-MW-plus solar, sliding to 71.3 cents as projects scale down to 10 kilowatts.

. March 13, 2009 at 11:34 am

Fixed prices proposed for green-energy projects

Mar 12, 2009 07:48 PM

Tyler Hamilton
Energy Reporter

Renewable energy in Ontario got a massive boost Thursday with the proposal of a fixed-price plan that, by June, could see the province paying out generous premiums to large and small generators of green power.

The premiums – called advanced feed-in tariffs – are what the government guarantees to pay over the life a 20-year contract with sellers of electricity produced from the sun, wind, water and biomass, regardless of project size.

Under the proposed plan, the first of its kind on the continent, homeowners who put solar power systems on their rooftops will be able to fetch more than 80 cents for every kilowatt-hour sold into the grid, roughly 13 times the going rate for electricity.

Farmers turning cow manure into power-producing methane will get as much as 15 cents, while developers of offshore wind projects will get 19 cents. Prices are tailored to the types of green energy being produced and project sizes. Developers of smaller projects will generally get a higher premium than developers of large projects.

. March 30, 2009 at 4:38 pm

OBA comment on the Green Energy Act

by Dianne Saxe

As Public Affairs for the Environmental Law Section of the Ontario Bar Association, I had the privilege of organizing and editing the OBA’s comments on the Green Energy and Green Economy Act, Bill 150. On the whole, we strongly support the Bill, but have pointed out a number of areas that require clarification.

. May 14, 2009 at 2:20 pm

Ontario passes Green Energy Act

The Canadian Press

May 14, 2009 at 12:00 PM EDT

TORONTO — New legislation promising to create thousands of jobs and make more room for renewable energy has passed in the legislature.

The Green Energy Act is being touted as a key piece of legislation that will transform the province’s struggling economy.

It passed in a 59 to 13 vote, despite opposition from the Progressive Conservatives.

They have long argued that some of the measures in the act amount to extra costs for already strapped consumers.

Energy Minister George Smitherman says the bill will make it easier to bring renewable energy projects online.

. February 26, 2011 at 6:25 pm

The McGuinty government forged ahead Thursday with a new slate of new green energy projects despite growing political controversy.

Energy Minister Brad Duguid said 40 contracts have been offered for new renewable projects that will be built in the next one to three years.

Thirty-five of the projects are solar, four are wind and the other is a small hydroelectric facility.

While critics focused on the cost of the new projects, Duguid said the investments would pay dividends into the future.

“We have a responsibility to move this province forward,” he told reporters. “We need to build a more prosperous future for the next generation. And we owe it to them to build a cleaner, healthier province.”

Environmentalists compared the new wind and solar farms announced Thursday to the construction of dams at Niagara Falls nearly a century ago.

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