The Ontario Power Authority has worked with many stakeholders over the past several years to procure Combined Heat and Power (CHP) projects and to develop a Clean Energy Standard Offer Program (CESOP) to fulfill ministerial directives.
Potential participants interested in submitting a proposal to the CESOP initiative can learn more about its two program offerings by clicking here.
CHP can be an efficient way to generate electricity and heat for nearby users – largely industrial processes and district heating. Several CHP projects have been successfully procured and developed – these include Markham District Energy, Durham College District Energy and the London Cogeneration Project. The OPA is currently managing contracts that represent more than 450 megawatts (MW) of CHP-based technology procured through past OPA CHP initiatives.
The OPA’s mandate is to ensure that Ontario has a reliable and sustainable electricity system, both now and for the future. This involves ensuring a diversified supply mix – by technology, fuel type, size of project and geography.
The OPA has been directed to strategically integrate 1,000 MW of CHP projects into Ontario’s electricity system, less what has been procured to date, which leaves approximately 500 MW for additional CHP projects. Projects need to be the right size, in the right location and at the right price to ensure good value for ratepayers. Specifically, the November 23, 2010, CHP directive indicates that the OPA is to individually negotiate CHP contracts for projects over 20 MW and to procure projects of 20 MW or under through a standard offer program that is limited to cost-effective projects located in areas of the province where they can be accommodated in the local distribution system and where there are local benefits.
CHP projects make the most sense where they can be built in at the design stage of infrastructure renewal projects such as at university, college or hospital campuses or housing projects. They may also make sense in cases involving the economic replacement of existing industrial boilers. These applications can provide sufficient density and consistent heat load to help justify the projects. Projects will also be expected to have some operational flexibility to accommodate electricity system requirements. It is expected that developers will work with thermal energy hosts to determine the most efficient and economic projects that can also be shaped to meet the electricity system needs.
For more information on the CESOP development process, click here.
For more information on the development of the procurement process for CHP projects larger than 20 MW, click here.