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Ontario’s Electrification and Energy Transition Panel Releases Final Report

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Ontario’s Electrification and Energy Transition Panel (the Panel) has released its final report entitled Ontario’s Clean Energy Opportunity: Report of the Electrification and Energy Transition Panel (the Report). The Panel was established by the Government of Ontario to advise on opportunities for Ontario’s energy sector and identify strategic opportunities and planning reforms to help Ontario’s economy prepare for electrification and the energy transition. The Report provides a comprehensive roadmap for Ontario’s transition to a clean energy economy, emphasizing strategic planning, collaboration, innovation, and the crucial role of Indigenous partnerships.  This bulletin briefly highlights the key findings of the report and outlines the Panel’s key recommendations. Planning for electrification and the energy transition. The Report underscores the urgent and transformative shift in the global energy landscape, emphasizing the need to address climate change and support technological advancements. For example, the Report notes that Ontario faces a significant challenge regarding the future of natural gas, including increasing uncertainty about the feasibility of decarbonizing the natural gas grid and growing doubt about replacing large quantities of natural gas in a cost-effective way with cleaner alternatives such as renewable natural gas (RNG) or hydrogen. Key recommendations include: Recommendation 1 suggests that the provincial government should develop and communicate a commitment and associated policy principles for achieving a clean energy economy for Ontario by 2050 in order to provide clear direction for Ontario’s energy and economic future. Recommendation 3 provides that the provincial government should continue to seek alignment and coordination of clean energy economy objectives, standards, and policies with other governments (within and outside Canada) whenever practical and consistent with the province’s economic and policy interests. Recommendation 6 provides that in order to provide clarity to utilities, investors, and customers, the Ministry of Energy (the Ministry) should provide policy direction on the role of natural gas in Ontario’s future energy system as…

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Ontario Proposes Enabling Renewable Energy Power Purchase Agreements

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Ontario’s Ministry of Energy (the Ministry) recently proposed amendments to regulations under the Electricity Act, 1998 (the Act). The proposed amendments would amend Ontario Regulation 429/04: Adjustments Under Section 25.33 of the Act (the Regulation) to enable qualifying commercial and industrial customers to offset their facility’s demand through power purchase agreements (PPAs) with renewable generation facilities. The Regulation otherwise provides for the allocation of Global Adjustment (GA) costs to electricity customers and the rules for the Industrial Conservation Initiative (ICI). The proposed amendments follow other recent provincial support for meeting increasing corporate demand for clean and non-emitting sources of energy (see our bulletin on Ontario’s clean energy credit registry here) and the government anticipates that it will create a new market for corporate PPAs, provide system benefits, enhance industrial competitiveness in Ontario, and support new clean generation. This bulletin briefly summarizes key information regarding the proposed amendments. Overview The Ministry indicated that the proposed amendments are intended to support the growth of clean electricity generation by enabling qualifying ICI participants (Class A customers) to offset their facility’s demand in the top five peak hours of a base period through PPAs with renewable generation facilities that are not connected behind the facility’s meter. This would allow eligible ICI participants to reduce their demand during peak hours by the corresponding amount under the PPA, thereby reducing the GA charges under the ICI. The Ministry noted that contracted generation through PPAs would be treated as if it is supplied to the ICI participant behind-the-meter for the purpose of determining GA charges, similar to other “virtual” net metering arrangements. Eligible Technology The types of technologies eligible under the proposed amendments is expected to include wind, solar, small hydroelectric (i.e., less than 10 megawatts), biofuel, and battery storage. Next steps The proposed effective date for the amendments is May 1, 2024. Interested stakeholders are encouraged to review…

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Federal Government Releases 2023 Budget Long on Clean Economy Investment

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Deputy Prime Minister and Minister of Finance Chrystia Freeland today released Budget 2023: A Made-in-Canada Plan (Budget 2023). Resilient’s bulletin outlines key climate, energy, and Indigenous highlights from Budget 2023.   Clean Electricity, Clean Economy Budget 2023 introduces “Canada’s Plan for a Clean Economy” (the Clean Economy Plan) with the following priorities: electrification; clean energy; clean manufacturing; emissions reduction; critical minerals; infrastructure; electric vehicles and batteries; and major projects. The Clean Economy Plan is centred on three tiers of federal financial incentives: (i) an anchor regime of clear and predictable investment tax credits; (ii) low-cost strategic financing; and (iii) targeted investments and programming to respond to the unique needs of sectors or projects of national economic significance.   Clean Electricity. Budget 2023 notes that Canada’s electricity demand is expected to double by 2050 and will require electricity capacity to increase by 2.2 to 3.4 times compared to current levels and proposes the following new funding and investments to support clean electricity in Canada: Canada Infrastructure Bank (CIB) will invest at least $10B through its Clean Power priority area, and at least $10B through its Green Infrastructure priority area, at least $20B to support the building of major clean electricity and clean growth infrastructure projects; $3B over 13 years to Natural Resources Canada to: Recapitalize funding for the Smart Renewables and Electrification Pathways Program to support critical regional priorities and Indigenous-led projects, and add transmission projects to the program’s eligibility; Renew the Smart Grid program to continue to support electricity grid innovation; and Create new investments in science-based activities to help capitalize on Canada’s offshore wind potential, particularly off the coasts of Nova Scotia and Newfoundland and Labrador. funding to advance the Atlantic Loop and support ongoing negotiations with provinces and utilities to identify a clear path to deliver the project by 2030. Clean Economy. Budget 2023 proposes the following new funding and support for…

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President Biden Signs Inflation Reduction Act

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The United States has just passed arguably its most significant and meaningful legislative instrument on climate change and clean energy. It is intended to have positive implications for climate and clean energy markets around the globe. On Sunday, August 8, 2022, the US Senate passed the Inflation Reduction Act of 2022 (the Act). The Act was then passed by the House of Representatives on Friday, August 12, 2022, and President Biden signed it into law today (Tuesday, August 16, 2022). The Act represents a central pillar of President Biden’s policy agenda and is extremely ambitious in scope, with significant implications for healthcare, taxes, and climate change. It authorizes approximately US$430 billion in spending, with approximately US$369 billion of that sum directed to clean energy and addressing climate change. This bulletin highlights the central climate and energy provisions of the Act. It is noteworthy that Senate Democrats estimate that the Act will raise US$739 billion in new revenue through measures such as increasing the IRS’s enforcement of tax evasion, and a new 15% minimum tax rate applicable to corporations with profits of $1 billion or more. These new revenues are intended to more than offset the expenses resulting from new programs, resulting in a projected reduction in the federal government’s deficit. The Senate was the critical hurdle for the Act, with approval remaining in doubt until its final passing by a vote of 51-50 (along strict party lines with Vice President Harris casting the 51st and tie-breaking vote).   Senate Democrats indicate that the climate change provisions of the Act will result in a 40 percent reduction in carbon emissions by 2030 compared to 2005 levels when fully implemented. While this falls short of America’s updated Paris Target of a 50-52% reduction from 2005 GHG emissions by 2030, it constitutes meaningful progress toward that goal.    The climate and energy portions…

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Budget 2022: Key climate, energy, and Indigenous highlights

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Deputy Prime Minister and Minister of Finance Chrystia Freeland yesterday released Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable (Budget 2022). This bulletin outlines key climate, energy, and Indigenous highlights from Budget 2022, part of total new spending of $31.2B, which includes: A proposal to establish the Canada Growth Fund (initial investment of $15B over five years), directly targeted at reducing emissions and enabling the transition to a low-carbon economy. Confirmation of the government’s intention to establish a refundable investment tax credit for carbon capture, utilization and storage (CCUS) projects to the extent that they permanently store captured CO2 through an eligible use. Plans to engage with experts on establishing an investment tax credit of up to 30 per cent, focused on net-zero technologies, battery storage solutions, and clean hydrogen. Support for the co-development of an Indigenous Climate Leadership Agenda to support self-determined action in addressing Indigenous Peoples’ climate priorities. Climate Budget 2022 includes new and proposed funding supporting important climate action, as follows: Canada Growth Fund. Budget 2022 proposes establishing the Canada Growth Fund, with an initial $15B investment over the next five years and the aim of attracting substantial private sector investment supporting the following economic policy goals: reduce emissions and contribute to achieving Canada’s climate goals; diversify the economy and bolster exports by investing in the growth of low-carbon industries and new technologies across new and traditional sectors of Canada’s industrial base; and support the restructuring of critical supply chains in areas important to Canada’s future prosperity—including our natural resources sector. Clean technology. Budget 2022 proposes the following new clean technology funding and investments: engage with experts to establish an investment tax credit of up to 30 per cent, focused on net-zero technologies, battery storage solutions, and clean hydrogen; provide $2.2B over…

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