Wind energy has lots more to offer in Ontario
January 23, 2020
“Ontario’s electricity market must evolve in order to capture wind generation’s full capabilities” white paper concludes
Ontario is a wind energy leader – with its 90+ projects accounting for nearly 40 per cent of Canada’s total installed capacity – but the industry has a great deal more to offer in this province. Figuring out how best to leverage that untapped potential was the purpose of a just-released and comprehensive white paper on Ontario’s electricity markets and its wind resource and industry.
The white paper begins by providing a timely reminder that Ontario’s current electricity supply surplus won’t last much longer. Demand is expected to start edging past supply again by as soon as the early-2020s, with planned retirements and refurbishments of nuclear generating units being a major factor.
The Wind Value Proposition
As the white paper outlines, wind energy has attributes that make it a particularly compelling option, in a world where distributed energy resources are increasingly valued, and where customers are more actively managing their demand. Wind is, of course, both non-emitting and the lowest-cost source of new generation. It can also be effectively co-located with storage and other resources, can ramp-up and down rapidly, is scalable, and is therefore well-suited to helping address the more frequent and variable spikes now seen in peak demand.
Wind projects also have the capacity to supply not just energy, but ancillary services and other benefits that help keep modern grids operating cleanly and efficiently. Those include operating reserve, regulation, reactive support and voltage control, load following, capacity, and monetizable environmental attributes.
Making it All Happen
Growing the wind generation fleet, and more fully realizing the value of Ontario’s remarkable wind resource, will be a large undertaking in which various stakeholders will need to be actively engaged. The white paper makes 14 recommendations aimed at unshackling wind energy’s full potential. They are aligned with key contextual considerations such as the Independent Electricity System Operator’s (IESO’s) ongoing pursuit of its Market Renewal Program, with system needs such as reliability, and with policy priorities such as affordability.
Key among the recommendations:
- Improve energy production forecasts for variable generation and the use thereof, and explore market design changes to more efficiently utilize available and cost-effective resources such as wind energy;
- Improve methodologies to calculate the capacity value of variable generation;
- Permit wind generators to supply ancillary services, and develop appropriate compensation models, and identify new ancillary services consistent with grid flexibility and operability needs;
- Monetize the environmental attributes of wind energy (through, for example, Renewable Energy Certificates) with proceeds applied in part to lower electricity costs to consumers;
- Explore and pilot the potential for local distribution utilities to contract bilaterally with wind generators as well as commercial and industrial consumers of electricity; and
- Integrate into policy and specifically account for the particular compatibility of wind energy with the requirements associated with electric vehicles and transportation electrification.
The white paper is now being distributed to key stakeholders and is an important reference point for CanWEA and the wind industry as we advocate for clear, stable policy and a market framework that allows all technologies to compete on a level playing field for new opportunities. This is timely, as IESO consultations on future resource adequacy are underway.
My key take-away from this exercise is that the recommendations align remarkably well with current and emerging electricity-related needs in Ontario. I am particularly struck by the opportunity to improve affordability by monetizing environmental attributes; and by the strong synergies between wind generation on the one hand, and electrification and grid modernization imperatives on the other.
Ontario has some catching up to do to get the full value from its wind resource and this white paper will help the wind industry and stakeholders in efforts to shape policy-development and market design that can help, for the benefit of all Ontarians.
The white paper was commissioned by CanWEA and prepared by Power Advisory LLC.
- Download a copy of the white paper – Wind Energy and the Ontario Market
- For more insight on the current wind energy market in Ontario, check out our fact sheet.
- Wind Dividends – 2018 Update: Analysis of the Economic Impacts from Ontario’s Wind Energy Industry details the economic benefits of Ontario’s investments in wind energy.
Photo: Siemens Gamesa