Toggle Navigation

Environment • Aboriginal • Energy

Articles

September 01, 2009

Renewable Energy Projects Under the Green Energy Act

The province of Ontario’s recent Green Energy and Green Economy Act, 20091 (“GEGEA”) aims to establish Ontario as a leader in North America in building renewable energy generation facilities, encouraging energy conservation and creating green jobs. The Act has the potential to affect wastewater treatment, in particular to encourage the conversion of residual solids into energy and reducing the need for land application of biosolids.

GEGEA amends numerous Ontario environmental and energy statutes and creates the standalone Green Energy Act, 20092 (“GEA”). The GEGEA amendments and the GEA were enacted May 14, 2009 but will not be proclaimed into force until regulations are finalized. Draft regulations and other background documents were posted for public comment from June 9 to July 24, 2009.3 The regulations will amend existing regulations under several acts and create a new renewable energy approval regulation under the EPA.

Scope of Renewable Energy Projects

“Renewable energy source” will be defined broadly as “an energy source that is renewed by natural processes and includes wind, water, biomass, biogas, biofuel, solar energy, geothermal energy, tidal forces”, although the regulations may narrow or broaden this definition.4

Regulations under the Electricity Act, 1998 will define the terms “biomass”, “biogas” and “biofuel” and will confirm whether existing usage of these terms will exclude energy generated from non-organic waste. Regulations will also be clarifying to what extent associated and ancillary equipment, roads and other transportation infrastructure will be considered part of a renewable energy project.

Therefore, it remains an open question whether sewage biosolids will qualify as a renewable energy source. Definitions of biomass in other sources may give some indication of what how GEGEA regulations will define biomass.

For example, on the one hand, a draft Ontario Power Authority feed-in tariff contract defines “renewable biomass” to be “organic matter that is derived from a plant and available on a renewable basis, including organic matter derived from dedicated energy crops, dedicated trees, agricultural food and feed crops and waste organic material from harvesting or processing agricultural products, forestry products (including spent pulping liquor) and sewage including manure” (subject to certain exceptions). This definition includes sewage, but only if it is “derived from a plant and available on a renewable basis”.5

On the other hand, the Electricity Project regulations under the Environmental Assessment Act define “waste biomass” to include “agricultural waste, sewage, woodwaste and gases generated from the decomposition of organic materials.”6 While this definition includes sewage as biomass, it also characterizes sewage as waste, and energy-from-waste projects may be excluded from the GEGEA entirely.

Feed-in Tariff

A key feature of the GEGEA is the feed-in tariff (“FIT”) program, which will give renewable energy generators the right to connect to the grid, so long as regulatory requirements are met. Long term, guaranteed prices for electricity from renewable sources and standardized contracts and prices are intended to encourage investment and financing of renewable energy projects.

The Ontario Power Authority is currently consulting on rules for the FIT program, and released draft FIT rules on July 10, 2009.7 These rules would replace the current Renewable Energy Supply III RFP process for procuring green energy capacity in Ontario. The proposed FIT program would set a long term, guaranteed price for electricity generated from renewable sources, ranging from 10.3 to 71.3¢ per kilowatt hour. The feed-in tariff for biomass is proposed to be 13.8¢ per kWh for projects under 10 MW, and 13.0 ¢ per kWh for projects over 10 MW. The government is considering making municipalities and generators that partner with aboriginal communities eligible for a higher tariff (or “adder”).

The Renewable Energy Approval

Perhaps the most dramatic and challenging feature of the GEGEA is in the replacement of the several approvals currently required under the Environmental Protection ActOntario Water Resources ActEnvironmental Assessment Act and municipal by-laws with a single new renewable energy approval. In theory, this will make a renewable energy approval easier to obtain than current multiple approvals.

Amendments to the Electricity Projects regulation8 under the Environmental Assessment Act9will create an exception for renewable energy generation facilities and testing facilities so that the environmental screening process under the regulation and the EA Act will not apply to these facilities.

Similarly, renewable energy generation facilities and testing facilities carried out by the Crown, municipalities or public bodies will be exempt from the EA Act.10

Finally, renewable energy generation facilities that are also a waste disposal site (for example, a site where biomass is disposed of through thermal treatment) will be exempt from environmental assessment under the Waste Management Projects regulation11 and the EA Act.

Controversially, municipal land-use planning controls will not apply to renewable energy projects. New renewable energy projects will not require zoning approvals or official plan amendments. Instead, the renewable energy approval will provide for standard setbacks and other land-use conflict requirements. Proposed setbacks include 120 m from significant wetlands, significant woodlands and significant wildlife habitat and Provincial Parks.

However, for most setback requirements, a proponent will be able to locate its facility within the applicable setback if the proponent submits an environmental impact study prepared in accordance with Ministry of Natural Resources requirements that demonstrates the ability to mitigate negative impacts.

The proposed renewable energy approval regulation will set out the detail of the streamlined single approval process for renewable energy projects. This proposed content of this regulation is set out in a discussion paper released by the MOE.12

The process relies on a “complete submission” by the proponent, including plans and studies. Most proponents will have to undertake community consultation before applying for a renewable energy approval, and to document how any concerns raised were addressed. Notice of proposed project and the final decision will be posted on the Environmental Registry.

The regulation will also set out technology-specific requirements that apply to the different types of facilities, such as biogas and biomass facilities. For example, for “non-farm thermal treatment of mixed biomass”, facilities would not be subject to a setback and instead proponents would have to satisfy the MOE that operations at the facility will not cause an adverse effect. Proponents of these facilities will be required to complete an air emissions modelling report, a noise study, an odour study, a surface water assessment, a design and operations plan, a hydrogeologic assessment, an effluent monitoring plan and a decommissioning plan.

Renewable energy project proponents will also have to provide public notice to residents within a certain radius of the proposed facility (currently proposed to be 1.5 km), and hold community consultation meetings.

Simplified Appeal Process

Under current laws, renewable energy projects would be susceptible to costly, lengthy and uncertain appeals by third parties who are opposed to the project. Especially vulnerable are projects involving technologies that are new to Ontario. Currently, a third party must seek “leave” from the Environmental Review Tribunal in order to appeal a decision to issue many kinds of approvals, and if leave is granted, a full hearing will follow.

Once GEGEA amendments are in force, a third party may appeal as of right without the need to first seek leave to appeal. However, the only acceptable grounds on which a person can challenge a renewable energy approval will be that the project will cause either “serious harm to human health, or serious and irreversible harm to plant life, animal life or the natural environment.” Third parties will have 15 days to appeal to the Environmental Review Tribunal, and the appeal process must be completed within nine months. The onus of proof will rest on the person who requests the hearing. The intention is to prevent frivolous appeals and procedural delays from bogging down renewable energy projects.

Aboriginal Consultation

Aboriginal consultation is now a vital part of many land-intensive projects or projects involving Crown lands. The governments plan on requiring renewable energy project proponents to carry out specified procedural aspects of consultation with Aboriginal communities in Ontario, on behalf of the Crown. Consultation will require contacting the Crown to obtain a list of aboriginal communities that must be consulted, preparing a consultation plan, giving notice to the Aboriginal communities about the proposed project and informing them about the location and nature of the project and regulatory and approval processes that apply to the facility, making best efforts to meet with the identified Aboriginal communities to discuss the project, and how Aboriginal concerns were addressed.13

Subsequent guidance materials will clarify the Crown’s responsibilities, substantive and procedural aspects of consultation and the appropriate accommodation of aboriginal communities.

FOOTNOTES

1. S.O. 2009, c. 12. 
2. S.O. 2009, c. 12, Schedule A. 
3. See the Environmental Bill of Rights online Environmental Registry at http://www.ebr.gov.on.ca , BER Registry No. 010-6516. The Ministry of Natural Resources also posted for comment on the Environmental Registry its proposed approval and permitting requirements for renewable energy projects; see EBR Registry No. 010-6708. 
4. Proposed amendments to s. 2(1) of the Electricity Act, S.O. 1998, c. 15, Sched. A. Large hydro-electric facilities will not qualify as renewable energy projects. 
5. Released June 8, 2009. Online: http://www.powerauthority.on.ca/FIT/Page.asp?PageID=1115&BL_WebsiteID=18 . The same definition is used in the Renewable Energy Standard Offer Program (“RESOP”) contract: http://www.powerauthority.on.ca/Storage/32/2793_RESOP_Contract_Version_2.0.pdf
6. Section 1(1). 
7. Available from http://www.powerauthority.on.ca/fit/Page.asp?PageID=1115&BL_WebsiteID=18 
8. O. Reg. 116/01. 
9. R.S.O. 1990, c. E.18 (“EA Act”). 
10. Pursuant to amendments to the General regulation (R.R.O. 1990, Reg. 334) under the Environmental Assessment Act. 
11. O. Reg. 101/07. 
12. Proposed Content for the Renewable Energy Approval Regulation under the Environmental Protection Act, June 9, 2009 (Online: http://www.ene.gov.on.ca/envision/env_reg/er/documents/2009/010-6516.pdf )
13. Proposed Content for the Renewable Energy Approval Regulation under theEnvironmental Protection Act, June 9, 2009, supra note 12.

Author