Renewable power developers can expect to see a draft of the Request for Qualifications (RFQ) for phase two of Ontario’s Large Renewable Procurement program (LRP II), before the end of June 2016. Ontario’s Independent Electricity System Operator (IESO) has announced that the draft LRP II RFQ is expected to be posted by June 23 for stakeholder and community feedback. IESO expects the final LRP II RFQ to be posted by August 1, 2016.
IESO completed phase one of its Large Renewable Procurement program (LRP I) in April 2016, with the execution of 16 contracts for the aggregate procurement of 454.885 megawatts (MW) of renewable energy capacity. The IESO and other stakeholders look to build on their LRP I experience as attention turns to LRP II.
LRP I: ANATOMY OF A SUCCESSFUL PROPOSAL
The Large Renewable Procurement program is a competitive process for procuring large renewable energy projects generally larger than 500 kilowatts. LRP I began in mid-2014 with an initial RFQ stage to qualify applicants, followed by a Request for Proposals (RFP) stage to evaluate proposed projects. In LRP I, the IESO sought to procure up to 565 MW of total renewable energy capacity, broken down into 300 MW for wind projects, 140 MW for solar projects, 75 MW for hydro projects and 50 MW for bioenergy projects.
A total of 42 applicants qualified through the RFQ stage of LRP I, and 103 proposals were submitted. During the RFP stage, the applicants were asked to submit project-specific proposals including details on location, capacity, connection point, community engagement and aboriginal participation. The 16 winning proposals were selected based on a four-stage evaluation process that included rated criteria scoring (based on landowner/leaseholder support, project community support, execution of a project community agreement and aboriginal participation), determination of an “Evaluated Proposal Price” (based on factors including bid price, contract length, technology capacity and rated criteria score) and connection availability testing.
On June 9, 2016, the IESO released aggregated details regarding the eligible proposals received in response to the LRP I RFP. The LRP I Proposal Summary breaks down the proposals by various criteria, including proposed site location, proposed connection point and rated criteria points awarded.
A closer look at the successful proposals reveals that of the 16 projects awarded LRP I contracts, three quarters secured local community support and almost two thirds executed a project community agreement. However, three of the winning projects failed to secure aboriginal participation and two failed to score any rated criteria points whatsoever, representing almost 30 per cent of the total capacity awarded in LRP I.
LRP II: MOVING TARGETS, OTHER CHANGES
As the program shifts into LRP II, the IESO is seeking to draw from lessons learned in LRP I. Pursuant to a directive from the minister of energy issued on April 5, 2016, in LRP II, the IESO will seek up to 930 total MW of renewable energy capacity, comprised of up to 600 MW for wind projects, 250 MW for solar projects, 50 MW for hydro projects and 30 MW for bioenergy projects. In comparison to LRP I, targets for LRP II have increased dramatically for wind and solar projects, while targets for hydro and bioenergy projects have been reduced. In LRP I, proposals received for wind and solar projects surpassed procurement targets by significant margins, while hydro and bioenergy projects were undersubscribed.
In anticipation for LRP II, the IESO has initiated stakeholder and community engagement to solicit feedback on LRP I and suggested improvements for LRP II. The IESO hosted a two-hour webinar on April 12, 2016, to explain the results of LRP I and to introduce an online survey inviting stakeholder feedback. A summary of feedback from this survey is posted on the IESO’s stakeholder engagement webpage.
Project developers participating in the survey generally displayed a relatively favorable view of the LRP I process, while community groups and members of the general public saw more room for improvement. Suggested improvements for LRP II included more IESO-led targeted engagement sessions for specific stakeholder groups.
The IESO is currently preparing a document to respond to feedback and will circulate and post it in conjunction with draft documents for the RFQ stage of LRP II, which is scheduled to begin August 1, 2016. In the meantime, the IESO is encouraging stakeholders to continue providing feedback on the procurement process to email@example.com.