The centerpiece of Dalton McGuinty’s government has been the Green Energy and Economy Act (GEA). The linchpin of the GEA is the MicroFIT program, which allows individuals and small organizations to produce and sell electricity. The MicroFIT program is facing a significant challenge that may well threaten its future.
I’ve spoken of this challenge in previous posts, but I’m going to delve into it a bit further. The most lucrative and thus the most attractive opportunity to participate in MicroFIT is to sell electricity produced by a solar photovoltaic (PV) array, especially if that array is mounted on a roof. Rates for ground-mount systems are lower, so they offer a lower return on investment than rooftop ones.
Rooftop solar is attractive to the MicroFIT czars because in general, where there are rooftops there are buildings, and where there are buildings there are people, and where there are people there is electricity consumption. If you generate electricity right where it is used, you have no power losses due to transmission lines and substations. MicroFIT implicitly assumes that rooftop arrays will be in cities, where most electricity is consumed.
It hasn’t quite worked out that way.
One farmer reads the fine print and figures out that the barn in the middle of his empty, windswept field fits the bill as a rooftop installation. Another realizes that she doesn’t have enough roof space to make it worth her while, but she can still make money from a tiny corner of the back forty by installing a ground-mounted array with a dual-axis tracker (that sounds complicated, but just imagine an engineer’s answer to the follow-the-light action of a sunflower). And soon there’s a flood of applications from rural areas.
So, MicroFIT has attracted a lot more applications from rural areas than its designers intended. So what?
The MicroFIT powers-that-be realize that a big chunk of the power they may be forced to buy is being generated not in cities, right at the point of use, but in, as they say, “God’s country”. So we’re back to dealing with big transmission line and substation losses. And suddenly the economics don’t look nearly as good.
But there’s more.
It turns out that the MicroFIT participant is not the only player with some work to do to get a solar array up and running. Our electricity distribution grid was designed assuming that power is generated in a few high-output facilities (nuclear and thermal plants). The grid has to be modified to accommodate so-called “distributed generation”. Those modifications are up to the Local Distribution Company, or LDC – Guelph Hydro, Toronto Hydro, and Hydro One are examples.
These modifications are economical if you have a lot of people in a small area that are getting in on the Act, so to speak. If a bunch of homeowners on one city street all agree to put solar panels on their rooftops, it’s easy for the LDC to justify upgrading the segment of the grid on that street so it can handle distributed generation.
If the MicroFIT applicant in question is a rural landowner like a farmer, it’s a different story. Even if all the farmers in a given concession join together like our urban friends mentioned above, there’s still an awful lot of grid to improve. Neighbouring farms are miles apart, not cheek-by-jowl like in the city. That’s a lot of wire, switches, and other electrical paraphernalia to replace.
We’re actually not talking about a huge amount of electricity. These farmers are probably producing barely enough to offset their own usage. So there really isn’t that much extra juice flowing through the wires as a result of all these solar installations. Hydro One and its ilk are getting flak from some players in the solar industry for being overly conservative about how much more power their lines can handle when the sun is at its brightest.
I’m a civil engineer, not an electrical engineer, so I’m not in any position to criticize Hydro One’s technical decisions. They are tasked with delivering electricity as safely and as reliably as possible. They’re good at the “safely” part. As for “reliably”, their standards are sadly rooted in the middle of the last century, long before our society became utterly dependent on the microchip (which doesn’t respond well to the power dips that occur with alarming frequency, at least where I live). But that’s a topic for a future post.
At any rate, it looks like MicroFIT applications are more likely to get connected if they come from urban areas. The GEA is already under attack by those opposed to wind power, nearly all of them non-city-dwellers. The experience with solar installations is likely another reason why in the provincial election earlier this month, rural Ontario gave Mr. McGuinty the finger.
The problem is, Hydro One has no incentive to speed along the adoption of solar power. They were mandated under the GEA to provide responses to applicants on a particular timeframe, and they have decided they can’t live up to that. On October 11 they were granted an extension of six months to work through the application backlog. That’s a perverse incentive if there ever was one. If a student just gets granted an extension every time they complain, their assignment is never going to get handed in.
The Ontario Power Authority (OPA), on the other hand, has plenty of incentive. Part of its mandate is “…ensuring adequate, reliable and secure electricity supply and resources in Ontario.” They’re the ones that actually contract to buy electricity from MicroFIT participants. Every megawatt that comes from solar is a megawatt that the OPA won’t have to buy from financially risky, all-or-nothing, long-lead-time nuclear or fossil fuel plants.
However, while the OPA may have a general interest in signing as many solar MicroFIT contracts as possible, they have no specific interest in individual cases. If one applicant gets refused by Hydro One – especially if it’s a farmer, whose electricity will mostly bleed away to line losses before it gets to market – that’s nothing to the OPA. There are plenty of fish in the sea, and they can just sign the next guy in line.
The Liberal government has an incentive to speed things along. Every time the Globe carries a story about a MicroFIT applicant that got screwed over by Hydro One, it adds to a vague feeling of unease among the electorate. Voters wonder if the Liberals, by passing the GEA, bit off more than they could chew. If a government ministry were responsible for the whole process, citizens could petition their MPPs. But Hydro One is a provincial crown corporation, and the arms-length nature of that relationship means that there isn’t much room for political influence.
So in a nutshell, when rural MicroFIT applicants get burned, Hydro One has no reason to care. The OPA cares, but not enough to intervene in a particular case. And the governing Liberals care, but are too far removed from the action to be very effective on behalf of their constituents.
I discussed this with my friend Curt Hammond of Pearl Street Communications. We concluded that what these rural solar aspirants need is a hero. Someone in their corner. Someone with the specific responsibility of defending the interests of the little guy that just wants to do their part in the fight against global climate change and dependence on unsavoury petroleum-backed regimes. Someone with the clout to get Hydro One to play ball. Someone with a mandate from the people of Ontario to keep the province moving toward its brighter, cleaner, healthier, green-energy future.
A Green Energy Ombudsman.
What do you think?