Ontario's feed-in-tariff ("FIT") program has
attracted billions of dollars in private-sector investment and
resulted in a significant amount of project financing activity
since its introduction in 2009. Yet with Ontario on track to
procure 10,700 MW of non-hydro renewable energy by 2015, the
Ontario government is now moving away from large FIT. In early
2012, the Ontario government reduced FIT rates due to potential
overcapacity and nearly maxed-out transmission lines and, more
recently, ended the FIT program for projects over 500 kW. The
existing backlog of renewable energy projects will require an
estimated $7 billion of debt to finance. Notwithstanding that this
should keep project financiers busy for some time, it is never too
early to start looking for new opportunities.
First, there is ongoing work available on "mini perm"
financings. There are currently projects in existence where the
long-term life of the renewable energy assets and the availability
or attractiveness of debt financing matching the asset life do not
coincide. The last year has seen a significant increase in bond and
other take-out financings as construction-financed projects require
refinancing. These and other kinds of take-out financing should
keep project financiers busy in Ontario even as FIT winds down.
Second, there is potential for new wind power development in
Quebec. The government recently put out a 800 MW procurement for
wind capacity, with 150 MW reserved for a project being developed
by the Mi'gmawei Mawiomi, 200 MW allocated to
Hydro-Québec Production, and 450 MW to be awarded through a
call for tenders process. Moreover, this announcement was made as
part of a broader, longer-term energy strategy that is expected to
be unveiled in the near future.
Third, there is significant opportunity for new renewable energy
development in British Columbia. B.C. faces increasing power needs,
both due to population growth and to the likely development of
several large-scale liquefied natural gas terminals in Northern
B.C. The B.C. government is simultaneously aiming to lower
greenhouse gas emissions by 33% below 2007 levels by 2020 and has
set a target of 93% "clean electricity generation",
although there is a debate about whether natural gas is considered
"clean electricity". Accordingly, BC Hydro is
contemplating programs to procure up to 2,000 GWh of annual
renewable energy capacity to come online between 2016-2018.
Fourth, there is potential for major "one-off"
renewable energy projects. The ambitious "Ring of Fire"
and "Plan Nord" plans call for large-scale mining
projects that may be powered by renewable energy. The planned
Muskrat Falls mega-development and the proposed follow-up Gull
Island Generating Facility are other projects to keep an eye on
In short – although there may be fewer new FIT projects,
there is much to look forward to on the horizon.
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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