Ontario Power Authority seeks new clean-energy, high-efficiency power projects of all sizes



    Two new distributed generation initiatives announced

    TORONTO, June 14 /CNW/ - The Ontario Power Authority (OPA) is encouraging
businesses and institutions across Ontario to invest in distributed generation
electricity projects to satisfy their own electricity and heat requirements
and, where possible, those of neighbouring facilities, as well.
    The OPA's two new initiatives - announced today - will encourage
organizations to use the electricity and heat generated for their own
requirements and to sell incremental energy - in the form of electricity or
steam - to surrounding users. These projects generally take advantage of
situations where industries or groups of users require both electricity and
thermal energy for industrial use, heating or cooling. They are also practical
for some district heating systems and where industries have under-utilized
energy streams.

    The two initiatives are:

    Clean Energy Standard Offer Program
    (project capacity of 10 megawatts or less)

    The first initiative - Clean Energy Standard Offer Program - will reduce
barriers to small generators who generate power using clean fossil fuels or
under-utilized energy streams.
    Under a Standard Offer Program small generators, who meet approved
criteria, will be offered 20 year contracts for the power produced. The OPA
will publish draft program rules, based on recommendations approved by the
Ontario Ministry of Energy, later this summer. The final program is expected
to launch this fall.
    The Clean Energy SOP is available for qualifying combined heat and power
applications that use natural gas or under-utilized energy streams that can
generate electricity. CESOP combined heat and power projects are appropriate
for multiple settings, including residential, industrial, commercial or
institutional applications.
    The CESOP will be modelled on the successful Renewables Standard Offer
Program for small projects using renewable sources - solar, wind, bio-mass and
water power. In the first four months of the renewables SOP program, contracts
have been executed with more than 78 projects across the province,
representing some 396MW of potential capacity for the life of the 20 year
agreements.

    Link: OPA - OPA Initiatives: Clean Energy Standard Offer Program

    Combined Heat and Power - Second Phase
    (project capacity of more than 10 MW)

    The OPA has also posted a Request for Expressions of Interest (RFEI)
intended as the first step towards a potential future CHP procurement for
larger co-generation projects. The CHP RFEI will assist the OPA in gaining
additional understanding of potential larger CHP projects that may be viable
or in active development and will help determine the need for, and scope of,
any future procurement.
    The new process follows a successful CHP procurement completed last fall
- the first of its kind in Canada. In October 2006, the OPA awarded seven
contracts with a total capacity of 414 MW. These projects represented a total
capital investment of some $800 million and ranged in size from a 2MW district
energy project in Oshawa to a 236MW industrial application in Thorold.

    Link: OPA - Generation Development: Procurement Processes

    Ontario Power Authority

    In pursuit of its mandate of ensuring an adequate, long-term supply of
electricity for Ontario, the OPA creates and implements conservation and
demand management programs, ensures adequate investment in new supply
infrastructure, performs long-term electricity system planning, and
facilitates the development of a more sustainable and competitive electricity
system.



    BACKGROUNDER
    -------------------------------------------------------------------------

    Backgrounder
    Clean Energy Standard Offer Program

    June 14, 2007

    The Clean Energy Standard Offer Program will support small clean energy
generating alternatives including combined heat and power and electricity
generated as a by-product of another process. Whether the primary fuel source
is natural gas, under-utilized heat, or under-utilized energy, the intent is
to encourage participation by a variety of technologies and their respective
applications.

    First and foremost, the CESOP will reduce barriers to participation by
small generators in the electricity system. In addition, the program will
adhere to the following principles:
    
    -   the efficient and effective use of energy,
    -   sustainability and environmental compliance,
    -   the reliability of the electricity system,
    -   a good value proposition for participating generators and rate
        payers,
    -   program simplicity.

    In designing the CESOP consideration was given to other OPA programs and
procurements currently underway - the 1,000MW Combined Heat and Power RFP and
the Renewable Energy Standard Offer Program - as well as programs from other
jurisdictions that utilize a standard offer approach to addressing the needs
for clean generation development. The CESOP launch is expected in fall 2007.

    Who is eligible to participate?

    There are no restrictions on who can participate in the program other than
OPG and its affiliates. Projects cannot have already had an electricity-supply
contract with the government. Eligible clean energy projects must:

    -   be located in Ontario
    -   have an installed generating gross nameplate capacity of no more than
        10 megawatts
    -   be connected to an eligible distribution system licensed by the
        Ontario Energy Board and connect at a voltage of no more than
        50 kilovolts
    -   be metered by the local distribution company in accordance with OEB
        requirements
    -   adhere to transmission constraint limits, as applicable.

    Which types of generation projects are eligible?

    Clean energy is essentially power derived from burning natural gas or from
the capture and use of by-product fuels or under-utilized energy.
Specifically, a clean energy project is one of:

    -   A natural gas fuel fired combined heat and power project, involving
        the concurrent production of both heat and electricity
    -   A by-product fuel fired generation project
    -   An under-utilized energy generation project (including thermal and
        mechanical)
    

    Who will be typical generators?

    Potential generators are expected to include any commercial or industrial
facility that requires both heat and power or which produces any source of
under-utilized energy. Some typical applications include:
    Greenhouses
    Hospitals
    Office and apartment towers
    Hotels
    Universities
    Industrial Facilities
    Natural gas pressure regulating stations

    How will the generator be paid?

    The Clean Energy Standard Offer Program Rate will incorporate some of the
system benefits of distributed generation, a scale bonus and a system
reliability benefit. Generators will be compensated based on a fixed schedule
that reflects the need to increase generation during prime peak and mid peak
hours.

    What are the Transmission System Constraints?

    As with Renewable Energy Supply Request for Proposals and the Renewable
Energy Standard Offer Program, there are areas of the province where the
transmission system has limited or no ability to accept new generation. These
restrictions will also apply to CESOP generators and the OPA will not be
considering applications that connect to a distribution feeder that in turn
connects to one of the transmission stations (TS) in the Orange Zone in the
Bruce Lake Huron area.

    For more details on the OPA's recommendations for the Clean Energy
Standard Offer Program find www.powerauthority.on.ca.





For further information:

For further information: Media Contact:: OPA Media and Public Relations,
(416) 969-6307, 1-800-797-9473

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