The reason Ontario’s Green Energy Act is a dud

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January 22, 2013

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TORONTO, ON, Jan. 22, 2013/ Troy Media/ – Getting a green energy community project off the ground in Ontario is a nightmare – and all because of a mistake made in the Green Energy Act and bureaucratic red tape.

Most of us know why a bank gives preferential treatment to large business customers over small ones. The time and effort required to assess a loan application for a major corporation is more or less the same as needed for a single outlet retailer or other small company – but the amounts involved (hence the revenues gained) are much greater with the big firm’s application.)

The same happens with green power generation in Ontario.

Small community power co-ops ought to be a natural fit for green energy. An individual house just doesn’t have the roof capacity or space (usually) to house and care for the battery system required to make one-unit solar installations worthwhile.

A community plant – like one using the roof surface of a school or a retail space – uses the supply/demand equation differently. Less expense and worry goes into storing energy and more into its use during peak-load pricing periods in the day. The Green Energy Act also lays out the terms under which the power excess to demand can be sold to the grid. For a resident, buying into the co-op is more affordable and makes more sense than an individual installation.

But the co-op has to be allowed to operate, and therein lies the challenge.

Unfortunately, the bureaucrats who approve community power co-ops are the same ones who approve giant solar farms in the Ontario countryside. Much of the opposition to the Green Energy Act outside of the grumbling when hydro bills arrive comes from rural Ontario, where solar and wind farms get sited. And like the aforementioned bankers, the bureaucrats have the same amount of work to do whether it’s an application for 200 hectares of solar panels in a field or 50 individual solar panels on a roof – and whether it’s megawatts of power into the grid, or the possibility of a trickle left over from co-op participants’ own consumption.

Co-ops in Toronto report it sometimes takes more than four years to get approval to operate. Artificial restrictions seem to blossom like weeds choking and slowing the process. Co-operatives also require that a different bureaucracy approve their structure and incorporation as a not-for-profit society, and the requirements of the two streams – energy and incorporation – don’t mesh well.

Ontario supposedly looked at the most successful green energy promotion schemes worldwide in framing its act. Yet Germany, a country noted humorously for its bureaucratic rigidity, makes it dead simple for co-ops like these to be created: infrastructure gets built and the power starts flowing much faster than in to Ontario.

Couldn’t we have simply copied what’s working? The Germans as of May 2012 get almost 20 per cent of their national electrical power from solar installations, mostly of the rooftop co-op type. In Ontario, despite enthusiastic communities, we’re getting practically nothing but a trickle of power from anything other than big solar farms.

That is what happens when you organize your Green Energy Act around an industrial partnership model rather than a community model.

Community resilience would be greatly enhanced by encouraging the co-ops in the communities, themselves: ideas like SolarShare are good (make an investment as an individual to develop and profit from a large-scale solar farm), but the shorter the link between production and use the better. And, a reduction in grumbling over the power bill would be achieved if community co-ops could get operational quickly – it would also make solar power more visible everywhere.)

Ontario’s new premier might want to consider how to cut through the bureaucratic red tape and make these co-ops happen quickly . . . and before the public decides the whole green energy initiative is meaningless to them.

Troy Media Syndicated Columnist Bruce Stewart is a management consultant located in Toronto.

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0 Responses to "The reason Ontario’s Green Energy Act is a dud"

  1. Avatar
    tonobungay   January 22, 2013 at 6:36 am

    Just a couple of clarifications: solar installations in Ontario, whether individual or coop, don’t have to worry about storage or batteries, nor do they sell their surplus.  They sell their entire output to the provincial utility but deliver it to the local utility, and buy the electricity they need from the local utility.  Of course the utilies add in all sorts of transmission fees that don’t get used, but it comes out simpler to let the local utility worry about storage.It’s a shame that community-based projects are not more popular.  It’s not just that it takes a long time but that the initial applications were not made, despite offering those projects extra money, and a lot of them dropped out of the process part way.  This was changed a year ago to add not money but queue-jumping: community projects are now at the front of the line as long as their municipal council agrees to rank them higher than companies.Still I assume this article is talking about the differences between the FiT program and the microFiT program.  Once you get above 10 kW, about one house’s worth, you are subject to more complex rules, the same ones that apply to the biggest projects.  Maybe the new “small FiT”  rules will help.  It’s difficult to ensure that what is a community project today will still be a successful community project 20 years from now.  The rules to determine whether it’s actually a community project or a private project in disguise can probably be simplified.  Now they’re checking that the co-op members are actually people who live there.A lot of the delays came from the inability of local utilities to calculate what is required for them to accept power that comes from small to medium size solar installations.  They are getting better at it now and have figured out that delaying until the next provincial election isn’t a good strategy.

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