For a long time, one of the major concerns for hydro customers in Ontario has been the ever-rising utility costs in the province.
With the removal of the debt retirement fund, the addition of Global Adjustment fees to our bills, and the recent rate increase for Time of Use (TOU) and Tiered Pricing customers, new strategies are needed in order to manage our electrical consumption and costs.
CHP is an excellent alternative to local distribution companies and involves supplying electricity and heat simultaneously to the consumer via on-site power generation. With modern natural gas generators, consumers can take advantage of Ontario’s stable natural gas prices. On-site power generation also allows high-usage customers to use electricity during the day without fear of fluctuating electricity rates and large Global Adjustment fees, and to use the heat byproduct for space/water heating and/or cooling, or for industrial processes.
Aside from customers who have entered a retail contract, grid-connected consumers in Ontario pay the Hourly Ontario Energy Price (HOEP). In addition to the HOEP, consumers pay a Global Adjustment (GA) fee. This fee, as defined on the IESO’s website, “covers the cost of building new electricity infrastructure in the province, as well as delivering Ontario’s conservation programs”.
In 2019, Ontario electricity consumers paid between $858M to $1.33B monthly in GA fees, contributing as much as 80% of a given utility bill. The way that this fee is calculated and passed on to consumers depends on electricity usage and a classification system. For more information on determining which classification you are and determining how your GA fees are calculated, see this article.
Consumers with CHP on-site power will notice a remarkable drop in these Global Adjustment charges and Time-of-Use rates. By collaborating with AI Renewable, you can benefit from a CHP Lease structure where we arrange for funding and the turnkey solution to install CHP power generators from beginning to end, at no capital cost to you. With the installation of on-site power, your facility can experience truly significant savings in utility costs.
If you would like to learn more about how switching to CHP can benefit you, contact AI Renewable for a free assessment. We’d be happy to help!
The various levels of government in Canada all share the mentality that action taken to better the environment is in fact action taken to ensure the continued health of the economy. With a renewed commitment of $2.37 billion over four years for the clean technology industry1, each level of government will continue to commit funds to assist in the development of renewable energy projects that reduce the nation’s greenhouse gas emissions while also stimulating job creation.
In addition to funding programs, the momentum of renewable energy development is also propelled by major associations such as the Canadian Hydropower Association, the Canadian Solar Industries Association (CanSIA) and the Canadian Renewable Fuels Association (CRFA) that continue to advocate for the proliferation of renewables. Take a look at some of the initiatives available across the country:
ecoEnergy for Renewable Power – Launched in 2007, this nationwide initiative seeks to encourage the generation of electricity from renewable resources such as hydro, biomass, photovoltaics, wind and geothermal energy. projects with contribution agreements receive a one cent per kilowatt-hour (kWh) incentive for eligible production during their first ten years of operation. The program itself will end on March 31, 2021.
Green Heat – This program provides businesses in the Northwest Territories up to $15,000 per year to fund up the cost of developing renewable energy systems that reduce fuel use and the carbon footprint of remote locations.
Business Renewable Energy Fund – Launched in 2007, this nationwide initiative seeks to encourage the generation of electricity from renewable resources such as hydro, biomass, photovoltaics, wind and geothermal energy. projects with contribution agreements receive a one cent per kilowatt-hour (kWh) incentive for eligible production during their first ten years of operation. The program itself will end on March 31, 2021.
First Nations Clean Energy Business Fund – This program offers up to $500,000 in funding to First Nation governing bodies that require funding to undertake the financial analyses of potential project or the development of a clean energy project.
ecoEnergy for Renewable Power – The FCM’s Green Municipal fund provides funds to municipalities Canada undertaking pilot projects, capital project or feasibilities studies that directly relate to the reduction of greenhouse gas emissions and energy consumption. High-ranking projects may be eligible for a loan of up to $10 million combine with a grant for up to $1.5 million.
To find additional information about these initiatives and others across the country visit Natural Resources Canada’s ‘Grants and Financial Incentive’ Page
Global adjustment (GA) is an extra charge on your monthly Ontario electricity bill. The GA covers the cost of building new electricity infrastructures in the province, and for delivering Ontario’s conservation programs. The GA is set monthly to reflect the wholesale market price for electricity, regulated rates for Ontario Power Generation’s nuclear and hydroelectric stations, and payments for building or refurbishing infrastructures. The GA charges has become one of the highest extra charge on your electrical bill.
How is Global Adjustment cost calculated?
Class A consumers pay based on their peak demand factor which is the total amount of electricity used during the top five peak hours divided by the system wide usage of the five peak hours. The peak demand is multiplied by the system wide GA cost for the month and that is the amount an Class A consumer has to pay for the month.
Class B consumers pay based the amount of kwh they used a month. Class B has three rates that is determined by the LDC which rate the consumer will pay each month. The three rates are 1st estimate, 2nd estimate and actual rate.
1st estimate is calculated based on Ontario demand forecasts, estimated contract and program costs and a true-up to account for the difference between the last month’s 1st Estimate and Actual
(Ex. Feb 2019 GA = Predicted GA + (6.17 (Previous months GA) – 8.09 (Actual GA of the same month))
2nd estimate is a separate calculation based on actual GA costs and consumption information available at the time it is published, an estimate for GA and consumption for the remaining days of the month, and a true-up accounting for the difference between the previous month’s 2nd Estimate and the Actual rate.
(Ex. Feb 2019 GA = Predicted GA + (8.31 (Previous months GA) – 8.09 (Actual GA of the same month))
The Actual rate, based on actual electricity demand and GA costs, is published on the tenth business day of each month for the preceding month. For example, the Actual rate for April is published on the tenth business day of May
How onsite renewable energy can eliminate or reduce your GA in Ontario
Businesses that participate in the Industrial Conservation Initiative are those that classify as a Class A consumer. The GA calculated for Class A consumers is based on the energy consumption during the top five peaks demands in a 12-month period. The GA can be reduced or eliminated by using on-site renewable generators during the peak hours to reduce the energy imported from the grid and reduce the amount of greenhouse gas emissions produced. By reducing or elimination the energy imported from the grid the GA will be reduced due to rates only applying to the amount of energy imported from the grid not the energy produced on site. The implementation of onsite renewable energy generators can lower costs while helping the environment by contributing to the global net zero emission goal.
Energy Sector accounts for approximately 35% of the global greenhouse gas emissions, with the majority arising from coal-fired power plants and natural gas. The implications of our current electricity production methods are becoming evident all around the world. The atmosphere is continuously getting overloaded with carbon dioxide, a global warming emission, which traps heat and drives up the Earth’s temperature resulting in many harmful impacts such as rising ocean levels, ocean acidification & having many more negative impacts on agriculture, economy as well as our health.
The switch to renewable energy must be made and is imperative to our future on this Planet. Many countries recognize the powerful impact that a clean energy future can have on our well being and are already making great strides in that direction. Sweden has set an ambitious goal to be 100% fossil fuel free by 2040. The government of Canada is aiming to have 90% of Canadas electricity to come from non-emitting sources by 2030, a reduction equivalent to taking 1.3 million cars off the road. 99% of Costa Rica’s electricity came from renewables in 2015. Germany leads the world in solar capacity and has been able to meet as much as 78% of a day’s electricity demand from renewables. China is also making great strides in the right direction by having the most installed wind energy capacity in 2014 and the second highest installed solar capacity. The examples and worldwide efforts in aiming towards a clean energy future are endless and when supported by investments by world leaders and the private sector they become a reality.
In conclusion, the trend toward renewables will not likely stop until a net-zero emission is achieved and maintained. When a net-zero emission is achieved and maintained will result in a sustained decline in global temperature. Investment in renewables has been dramatically increasing and the results are already becoming apparent. The price of implementing renewable energy systems has also dropped dramatically and is projected to drop further due to more effective renewable technology being developed, making the switch to clean energy even more feasible. The wellbeing of our planet and generations to come is dependent on the measures that are taken now towards climate change and a clean energy future will become a reality much sooner if we come together worldwide working towards a common goal.