The Clean Energy Standard Offer Program (CESOP) will support small clean energy generators. The Program is intended to encourage participation by a variety of clean energy technologies, including natural gas-fired Combined Heat & Power (CHP), by-product fuel-fired generation projects, and generation projects fuelled by under-utilized energy (thermal or mechanical) sources.

Key elements

The CESOP will compensate small generators connected to the distribution system, reflecting the various benefits of embedded generation and providing good value to ratepayers. Contracts will be awarded to eligible projects that have a nameplate capacity of 10 MW or less, for a 20 year term.

Natural gas-fired CHP projects, whose net revenues vary according to fluctuations in both fuel and power prices, will have their revenues topped up by the OPA. The payment by the OPA will be pegged to the deemed value and virtual performance of a representative CHP facility. As market revenues rise for actual CHP projects under contract, the level of support payments by the OPA will drop, and vice versa. Payments for CHP projects are based on the performance of the representative facility during a 16-hour weekday (M-F) schedule for all 12 months of the year.

Eligible by-product and under-utilized energy projects will receive fixed payments on a per MWh basis. A higher amount is offered during higher demand times (7AM to 11 PM on weekdays) and a lower amount at other times, so as to provide incentive for these facilities to operate as much as possible at times of peak demand.

September 25, 2008:

In response to the feedback received since the posting of the May 2008 Report, the OPA has made modifications to certain program elements, and has posted an Updated Report on the Ontario Power Authority’s Revisions to the Clean Energy Standard Offer Program for Small Electricity Generators Connected to a Distribution System (downloadable PDF).  Further information can be found in the updated Clean Energy Standard Offer Program Backgrounder.