MENU
01
Home
02
Services
03
Sectors
04
Insights
05
News
06
Team
07
Careers
08
Contact
Services
01
Government Relations
02
Communications & Digital
03
Advisory Services
Sectors
01
Energy
02
Environment
03
Health Care
Updates
01
Insights
02
News
HomeServicesSectorsTeamInsights
insights
updates
January 26, 2022

Ontario Launches Work to Create a Voluntary Clean Energy Credit Market

written by

Energy Team

Ontario Launches Work to Create a Voluntary Clean Energy Credit Market

On January 26th, Ontario’s Minister of Energy, the Hon. Todd Smith, issued a letter to Lesley Gallinger, President and CEO of the Independent Electricity System Operator (IESO), asking for a Report to consider the creation of a provincial Clean Energy Credit (CEC) Market and Registry. The IESO will provide the Report back to the Minister for consideration by July 4th, 2022, with detailed design options and recommendations.

The Minister’s letter notes the growing demand from corporations seeking a clean power supply that satisfies their environmental and sustainability goals, and expounds upon the strength of Ontario’s 94% emissions-free electricity system. Establishing a CEC market will realize additional value for ratepayers from existing investments in the decarbonizing of our generation assets and help support future efforts to continue reducing Ontario’s GHG emissions.

In tasking the IESO to assess potential benefits, projected costs, and the operational architecture of the registry, several key principles are outlined:

  • Scoped to Ontario: the initial design of the registry is to address electricity generated and consumed within the province, with consideration for the potential to expand into cross-province and cross-border trading of credits in the future.
  • Voluntary: the purchase of credits is to be entirely voluntary.
  • Monetization of existing investments: credits should include existing clean/non-emitting generation, including nuclear, waterpower, wind, solar, and bio-energy assets. Proceeds from the sale of credits from existing generation should flow to ratepayers, in recognition of the historic costs incurred for these investments (through the Global Adjustment Charge, etc.).
  • Avoiding double counting: consideration of other environmental goals and programs, such as Ontario’s Emissions Performance Standards, to avoid double counting of investments/benefits.
  • Timing: leveraging theavailability of CECs from existing contracted and regulated resources, the IESO should enable the launch of the registry in January 2023.

For next steps the IESO is expected to develop a stakeholder engagement and consultation plan that would solicit feedback on design options, price ranges, and other key recommendations. Early objectives would include evaluating potential supply and demand for CECs, and consideration for how the registry can incentivize future investments in clean energy generation.

To note, under the terms of the Feed-in-Tariff (FIT), microFIT, and other procurements, the IESO attained ownership over the Environmental Attributes created by contracted non-emitting resources. Consideration will be given as to the relative demand for these attributes, as well as the appropriate entity to monetize those attributes on behalf of ratepayers. Further work will also be required on determining the valuation and compensation mechanisms for other non-emitting resources that have maintained the rights to their Environmental Attributes, for those coming off contract, or for new resources.

This announcement is a strong signal that Ontario is leveraging its clean electricity system to position the province as a strategic and competitive place to do business. If successfully designed and implemented, the CEC registry would deliver a combination of savings to ratepayers, enhanced market signals to inform investment decisions, and an additional funding mechanism for further emission reduction investment.

Happy to Help.

Sussex looks forward to providing regular updates as policy development gets underway. If your organization has any questions or concerns in the meantime, or if you would like to participate in the consultation process, please don’t hesitate to reach out to a member of our team for additional information and support.

Chris Benedetti
Managing Partner
cbenedetti@sussex-strategy.com
view profile
Bonnie Hiltz
Vice President, Energy Practice Lead
bhiltz@sussex-strategy.com
view profile
Mark Olsheski
Vice President, Energy
molsheski@sussex-strategy.com
view profile
Patrick Gajos
Director, Energy & General Counsel
pgajos@sussex-strategy.com
view profile
share article
Link copied
‍

recent posts

Ford Government Shuffle: What You Need to Know
September 23, 2023

Ford Government Shuffle: What You Need to Know

This afternoon Premier Doug Ford announced another shuffle to his Cabinet. These changes come only three weeks after a shuffle earlier in September that was prompted by the resignation of then Minister of Municipal Affairs and Housing, Steve Clark. This afternoon’s Cabinet shuffle was more unexpected, prompted by the abrupt resignation on Thursday of Khaleed Rasheed, Minister of Public and Business Service Delivery, amid scrutiny of a Vegas trip with developers linked to the Greenbelt controversy.

Prime Minister Announces Changes to Parliamentary Secretaries
September 18, 2023

Prime Minister Announces Changes to Parliamentary Secretaries

On Friday, Prime Minister Justin Trudeau announced the new complement of Parliamentary Secretaries. Parliamentary Secretaries are chosen by the Prime Minister to work with Ministers. Their responsibilities vary but generally fall into two categories: House of Commons business and department-related duties.

Ontario Government Cabinet Shuffle: What You Need to Know
September 5, 2023

Ontario Government Cabinet Shuffle: What You Need to Know

Yesterday, Premier Doug Ford announced a minor but significant shuffle to his Cabinet. These changes come just over a year since the Progressive Conservative’s re-election last June and amid a controversy regarding political interference around the swapping of land in and out of the Greenbelt.

view all
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
company
HomeTeamCareersContactTerms & Policies
explore
ServicesSectorsInsightsNews
follow us
ALL RIGHTS RESERVED © 2020