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Posted in: Climate Change / Renewables | Procurement

Apr 8, 2016

Large Renewable Procurement ("LRP") - Take 2 - And Related Procurement Directions From the Minister of Energy

By Corrine Kennedy

On April 5, 2016, the Minister of Energy directed (the "Direction") the IESO to undertake the second phase of the LRP ("LRP II") that was first announced in 2013.

The Direction follows the Independent Electricity System Operator's (the "IESO") recent completion of the first phase of the LRP, which concluded on March 10, 2016 ("LRP I"). We recently discussed the results of LRP I here and here.

LRP I resulted in the announcement of 16 new contracts that procured a total of 454.885 megawatts ("MW") of clean renewable energy capacity. These contracts represent proposed wind, solar and hydroelectric projects in Ontario, many of which featured support from the relevant local communities and/or participation of First Nations and Metis communities. The Ontario government and the IESO have both touted the procurement as having been successful in creating fierce competition among proponents, serving to significantly drive down the price for the electricity procured.

In respect of LRP II, the Ontario government has directed the IESO to procure a maximum of 930 MW of electricity (up to 600 MW of wind, 250 MW of solar, 50 MW of hydroeletricity and 30 MW of bioenergy). Through extensive public consultation and engagement, detailed by the IESO in its March 2016 draft "Stakeholder and Community Engagement Plan," the IESO will build on the momentum and learnings of LRP I to develop, post for comment and finalize the LRP II Request for Qualifications ("RFQ") by August 1, 2016.

Likely to the relief of proponents under LRP I (whether ultimately successful or unsuccessful), the Direction contemplates the possibility that Qualified Applicants (as defined under the LRP I RFQ) may avoid having to requalify under LRP II, subject to the IESO's consideration of the issue.

Following the RFP, the IESO is directed to prepare the LRP II RFP with a view to awarding contracts no later than May 1, 2018.

The Direction also goes on to revoke earlier directions that pointed to a third phase of LRP procurement, shuts down the IESO's ongoing microFIT Program, effective December 31, 2017, and sets the limit on future procurement windows for securing renewable energy capacity under the Feed-in Tariff Program.

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