1. Why does there have to be a priority sequencing among programs for available capacity on the grid?

  • Capacity on the electricity grid is a limited resource. Testing for available access to the distribution and transmission systems is an iterative process, and programs cannot be tested simultaneously.
  • Given the number of generation procurement and conservation BMG projects expected in 2014 and 2015, consideration has been given to the priority sequence among programs for accessing the grid.

2. What is the sequence that has been decided?
After consultation with the OPA, the Ministry of Energy has indicated its policy for the priority sequence in which programs should access capacity on the grid. That sequence is:

  1. Micro-scale (10 kW or smaller) projects (conservation BMG and renewable)
  2. Conservation behind-the-meter waste energy recovery projects (WER)
  3. Conservation behind-the-meter combined heat and power projects (CCHP)
  4. Location-specific programs contracting with existing generating facilities, such as the HESOP Expansion Stream
  5. Energy storage
  6. Province-wide programs in sequential order based on timelines, including FIT, CHP and LRP

3. How was the sequence determined?
The sequence was determined by taking into consideration the various Ministry of Energy policy priorities, including the government’s Conservation First policy. The OPA has developed a process and schedule for grid connection testing that reflects these policy priorities and the practical realities of administering multiple procurement initiatives at the same time. View the testing schedule.

4. Why are micro-scale projects at the top of the list?
Micro-scale projects are those that are 10 kW or smaller. They are relatively easy to locate because of their small size.

5. Why do conservation behind-the-meter projects need grid capacity?

  • The OPA offers incentives for behind-the-meter generation projects in the Industrial Accelerator Program (IAP) and the saveONenergy Process and Systems Upgrade Initiative (PSUI). For these projects, the facility generates electricity and uses what is generated on-site, which reduces what is drawn from the electricity grid.
  • These projects have a similar impact on the transmission and distribution system as any generator. Testing is necessary to ensure that these projects can safely connect to the grid.

6. When will this approach come into effect? What happens to those programs that already have applications submitted and are currently in process?
This policy approach to allocating grid capacity is effective immediately. Procurement programs that are already underway will have grid capacity made available according to the priority sequence.

7. Why does conservation include behind-the-meter generation?
As part of the Conservation First policy, the government has adopted a broad definition of conservation that includes various types of customer action, including BMG. This approach helps create a culture of conservation in Ontario, enables customers to manage their energy costs using various tools, increases the productivity of Ontario businesses and promotes small-scale, local energy solutions. The focus is on WER and CCHP projects that are aimed at improving the efficiency of industrial processes, so they will use energy more efficiently.

The government has directed the OPA to “consider CDM to be inclusive of activities aimed at reducing electricity consumption and reducing the draw from the electricity grid, such as geothermal heating and cooling, solar heating and small scale (i.e., < 10 MW) behind the meter customer generation.”

8. Why are all these procurements underway when we currently have surplus baseload generation?
Surplus baseload generation is a normal periodic occurrence in electricity systems all over the world and depends on the day-to-day demand. It occurs when demand dips down below the output of resources that have the lowest running costs but are not as flexible as other types of generation. 

This doesn’t happen every day. Most of the time resources are dispatched as required throughout the day to meet the fluctuating demand, and there is no surplus generation.

Most of these procurements will be dispatchable and thus not add to any surplus. In fact, some procurements, such as for energy storage, can be beneficial in reducing the surplus. They absorb surplus energy and store it until it can offset higher cost generation.

Ontario is transforming its electricity system. A decade ago, the province was facing reliability challenges. Since then, investments in the system, including building, refurbishing and upgrading much-needed infrastructure, have significantly improved reliability.

Developing a significantly cleaner supply mix, through the elimination of coal-fired generation and encouraging investment in cleaner forms of supply, are important elements in this transformation.

Beginning in 2016, when nuclear units begin to be taken out of service for refurbishment, significant amounts of supply will be unavailable. As indicated in the LTEP, there is a potential emerging capacity requirement in 2019, and these resources will help fill that need.

9. Why are some conservation BMG projects allowed to be sited in congested or constrained areas while generation projects are not?
The government has adopted a Conservation First policy and set ambitious targets for the LDCs and the province as a whole.

Conservation BMG projects provide multiple benefits to the system, local communities and the customers. These projects, which typically last 20 to 30 years, increase customer efficiency and productivity, improve local economic sustainability, contribute energy to the electricity system at a significantly lower rate than other generation resources. 

Even in the context of congestion, which is a normal periodic occurrence in the electricity system and is not typically permanent, BMG projects typically still provide value to the system, community and customers.

10. Why do conservation waste energy recovery projects undergo grid connection testing but not testing for excess area generation?
Waste energy recovery (WER) projects are defined as those that generate electricity primarily from heat or fuel that is a waste by-product of the facility.

  • WER projects are, first and foremost, process-efficiency projects that improve the productivity of the business, re-use waste and reduce demand on the electricity system. These projects are very efficient and benefit all parties during the lifecycle of the project, providing long-term value to the grid, the community and customers.
  • WER projects are specific to an individual customer and process.
  • WER projects are relatively small and few in number, and therefore have minimal impact on the overall system.
  • Given the value and nature of WER projects, they are treated like energy-efficiency projects, which are not subject to area limit testing.

11. How will the OPA determine if a conservation CHP project should proceed in a congested area?

The OPA has the discretion to determine if BMG projects are eligible for an incentive in its conservation programs. In exercising this discretion, the OPA may consider factors including:

  • the size of the project
  • the long-term cost-effectiveness of the project
  • the economic impact on the applicant and the local community
  • the contribution to the LDC conservation target.

12. What about behind-the-meter load displacement generation projects? How will they be tested?
The OPA does not currently approve applications for these types of projects in the PSUI and IA programs. The focus is on projects that use energy more efficiently.

‎BMG load displacement projects are those that the OPA determines generate electricity primarily to displace a portion of the facility's electrical load.

13. Has capacity been set aside for each of these programs?
No. There is no capacity reserved for each program to reflect the priority, except for micro projects. Given the small project size (10 kW or smaller), one MW of capacity is reserved at each transformer station that still has remaining available capacity for micro-scale projects.

14. If the Thunder Bay Generating Station previously had a capacity of 300 MW, and it is being converted to advanced biomass that will have a capacity of 150 MW, why is 150 MW not available to allocate?
Northwestern Ontario is already constrained, meaning there is more supply than demand. 

The 2013 Long-Term Energy Plan already factored in the Thunder Bay Generating Station at 150 MW after its conversion to biomass.

15. Some programs will be given access according to timelines. Who decided on the timelines and why was that sequence determined?
Many of the timelines associated with various programs flow from ministerial directions to the OPA.

Where timelines are not specified, the OPA uses best practices, previous lessons learned and stakeholder feedback during program development to determine timelines that are appropriate for the various stages of a procurement initiative.

16. Isn’t the OPA negotiating with the Korean Consortium and OPG for other projects? How is that capacity being made available?
The OPA has been directed to negotiate and execute contracts for the third phase of the Korean Consortium projects, and with OPG for the New Post Creek waterpower project.

An agreement has already been reached for the OPG Thunder Bay Generating Station conversion project.

The capacity for these projects has already been accounted for.

17. Why do different programs require different assumptions for grid upgrades? Why not make them all consistent?
Assumptions are associated with how long the projects being tested will take to reach commercial operation.  Procurements for projects with long lead times can take into account approved grid upgrades that will also take longer to implement.

For example, the TAT for waterpower projects can take into account approved grid upgrades that will be in-service within eight years, because waterpower projects receiving contracts may take that long to develop. The TAT for FIT rooftop solar projects, on the other hand, will only consider grid upgrades that will be in-service in the near term.

Approved grid upgrades are considered when they have received all necessary approvals, which include Ontario Energy Board (OEB) approval to proceed.

18. How are Aboriginal, municipal, public sector and community capacity set-asides factored in?
These capacity set-asides are included in the procurement targets set by the Ministry of Energy for the FIT Program. They don’t change the amount of capacity that will be allocated to the program.

19. What about projects in remote First Nation communities, HCI and NUG negotiations? How will that capacity be allocated?
These initiatives will not have an impact on grid capacity:

  • Remote First Nation communities are not connected to the grid.
  • The January 2013 directive ended expansion opportunities for HCI projects. 
  • Expiring NUG facilities that are re-negotiated and re-contracted will use existing capacity, resulting in no net change on the grid.