Ontario axes Green Energy Act, leaving some wondering what’s next

In a widely anticipated move, the Ontario government has repealed the province’s Green Energy Act.

Why it matters: Since the Green Energy Act was introduced in 2009, thousands of Ontario farmers have added small-scale renewable energy generation projects to their properties. Most are used as an additional source of revenue.

Sweaburg-area farmer and South West Oxford mayor David Mayberry said the cancellation came as no surprise, given the oft-repeated Conservative refrain leading up to the election that the Act would be gone. The party’s candidates gained traction throughout the campaign through assertions that the Act’s subsidization of renewable installations was to blame for high electricity costs, and through charges that the Liberals ignored rural communities’ objections to the siting of large-scale wind turbine projects in their midst.

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Mayberry, currently Oxford County’s Warden is set to return by acclamation next month to his seat as the Mayor of South West Oxford, is optimistic it won’t be long before the Conservatives introduce a program to replace the Green Energy Act. He predicts the new legislation will set out rules and opportunities for net metering of electricity from small-scale generation projects.

Net metering allows property owners to use what they need from their projects, and sell the excess into the provincial grid. The government may also define a new locally focused process for approval and construction of mid-scale projects such as wind or solar farms, he said.

Ontario Federation of Agriculture President Keith Currie agrees.

“I’ve had a brief, general conversation with (Energy) Minister (Greg) Rickford,” said the Collingwood-area grains and oilseeds producer. “But at this point, they’re being pretty coy.”

Better local decision making

Currie is confident that any new program will allow for better local decision-making. He’s certain that any new approvals of small-scale, on-farm projects will only happen if the applicants show proof the electricity is needed in their area.

He also hopes that any new program will also improve upon the previous government’s enabling of small-scale, on-farm biogas or biomass digesters.

“The Green Energy Act was meant to incent biogas developments, but I just think the complexity of the regulations made it difficult to have them approved.”

If no replacement program is brought forward, though, Mayberry says it will represent a lost opportunity. That’s because the Green Energy Act, since being introduced back in 2009, was successful in one of its main goals: kickstarting a renewable energy sector in Ontario.

The Act was always intended, he believed, to “get things up and running,” and hopefully in the longer term, the projects would be self-supporting. Renewable energy projects, “need to be able to function on their own in the long term,” said Mayberry.

Much of what the Green Energy Act represented in 2009 had already been eliminated. A requirement for high levels of “made in Ontario” content, meant to spur job growth, was the first to go, following a 2012 ruling from the World Trade Organization that it contravened trade rules. The rates paid for small-scale MicroFIT installations, originally set so high that they became a lightning rod for criticism, were gradually decreased … and eventually eliminated in their original form at the end of 2016. The fifth and final round of MicroFIT approvals followed a different model focused on net metering, and then approvals were stopped.

Then, soon after the Conservatives were elected, they cancelled about 750 previously approved contracts of various sizes, locations and types. With all approvals under the Green Energy Act brought to a halt, the actual repeal of the legislation was inevitable.

On his farm, Mayberry has two 10 kilowatt MicroFIT solar installations — one eight years old that sells all power to the grid, and one that’s three years old and net metered. He drives an electric car.

“When I come home at the end of the day, I plug it in to the charger. The next day as I drive away, I say ‘thank you very much, Mr. Sun.’” Assuming all aspects of the original Green Energy Act contracts remain in place, he expects the eight-year-old system will also be hooked to his house once the 20-year contract is up.

He has heard of 40-year-old systems in Germany that continue to operate at about 75 per cent the rate of generation they had when they were new.

But in both cases, “I’m the first to admit I’m using Hydro One as my battery” instead of having to install his own storage.

Mayberry suggested that storage continues to be the biggest stumbling block to allowing the renewable energy sector to continue growing without government support.

He also says complexities of the electricity generation system mean it is difficult to know what the true costs are.

Currie agrees about the complexities of determining the true cost of electricity in Ontario.

“You have to remember your hydro bills have the debt retirement included in them,” he said. And that’s a big reason why the OFA currently has, as its main energy policy focus, the expansion of natural gas infrastructure so farmers have a reliable second choice for energy source.

But he also doesn’t want to see members discouraged from pursuing electricity-generating projects if the opportunities present themselves. So he is eager to learn what the Conservatives have in store.