Ontario expects rates to drop for green power

Wed Nov 24, 2010 3:27pm EST
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By Susan Taylor

OTTAWA (Reuters) - The Canadian province of Ontario is expected to reduce the rich rates it pays for green energy next year, but the government will introduce changes in a way that continues to support investment in clean power sources, the minister of energy told Reuters on Wednesday.

"I think most in the industry would expect that the rates will likely go down, but we're confident we'll do that in a way that maintains confidence in the investment climate in Ontario," Brad Duguid said in an interview.

Canada's most populous province launched an incentive program for renewable energy producers last year, aiming to create jobs and eliminate coal-fired power generators.

On Tuesday it expanded on its green energy program by outlining a 20-year plan that will emphasize nuclear power, renewable energy, and conservation, but will also see a doubling of electricity rates over that period.

Feed-in tariffs introduced in October 2009 offer above-market prices to producers of energy from renewable sources like the sun and wind. They are the richest and most comprehensive in North America and follow similar programs in Europe.

It is expected that any rate changes would be discussed and made in consultation with an industry group, similar to a group formed this summer when the province said it wanted to cut the rate for small ground-mounted solar projects, Duguid's spokesman said.

Tariff rates are reviewed every two years by the province, a process that starts in 2011 and will conclude by the autumn, Duguid said.

Japan complained to the World Trade Organization in September that Ontario's Green Energy Act and its local procurement requirements represent a "prohibited subsidy."   Continued...