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Climate Change / Renewables
Sep 27, 2016
Ontario Suspends Second Round of Large Renewable Procurement
The Ministry of Energy announced today that Ontario will immediately suspend the second round of the Large Renewable Procurement (LRP II) and Energy-from-Waste Standard Offer Program. This will halt the procurement of over 1,000 MW of solar, wind, hydroelectric, bioenergy and energy from waste projects. In making the announcement, the Ministry of Energy stated that the decision to suspend LRP II is expected to save up to $3.8 billion in electricity system costs relative to Ontario's 2013 Long-Term Energy Plan forecast.
LRP II was a competitive process overseen by the Independent Electricity System Operator (IESO) for procuring large renewable energy projects usually larger than 500 KW. LRP I, which concluded in March 2016, resulted in the announcement of 16 new contracts that procured a total of 455 MW. In April 2016, the Minister of Energy directed the IESO to move forward with LRP II to procure a maximum of 930 MW but not to undertake a third round of LRP. In June 2016, the Minister of Energy directed the IESO to increase the procurement targets for LRP II from 930 MW to 980 MW. This increase represented 50 MW of capacity from prior procurement targets that had not been met.
LRP II launched at the end of July 2016 with a Request for Qualifications (RFQ). Today, the IESO stated that further to the announcement by the Ministry of Energy, the IESO is cancelling the LRP II RFQ process and will not be moving forward with the subsequent LRP II RFP process.
Earlier this month, the IESO released the Ontario Planning Outlook, a technical report that provides a 10-year review (2005-2015) and 20-year outlook (2016-2035) for Ontario's electricity system. The Ministry of Energy announcement suspending LRP II references the Ontario Planning Outlook and the IESO's conclusion that Ontario "will benefit from a robust supply of electricity over the coming decade to meet project demand." Whether the government means that the procurement planned for LRP II is no longer needed at all or is no longer needed right now, will likely be clarified in the new Long-Term Energy Plan. The new Long-Term Energy Plan is scheduled to be released next year following consultations this fall with consumers, businesses, energy stakeholders and Indigenous partners.