Ontario has announced a new voluntary registry for businesses that want credit for using non-emitting electricity, both renewable and nuclear.
The Ford government says the clean energy credit (CEC) registry will give companies another option to meet their sustainability targets, and is headlining the system as a way to attract new investors to the province.
In 2020, 56.8% of the province’s electricity was generated from nuclear reactors, 24.4% at hydroelectric facilities, 8.7% from wind turbines, and 2.2% from solar panels, with 6.3% from burning natural gas, according to Ontario Energy Board data.
“Ontario is leveraging this competitive advantage to drive investment and create jobs,” said Energy Minister Todd Smith. The Independent Electricity System Operator (IESO) immediately launched a public consultation on the system, after Smith instructed the agency to design a registry and report back by July. The target date to launch the new system is January 2023.
Ontario has no official, centralized registry to track purchases of clean energy credits for electricity, although similar voluntary registries exist in more than a half-dozen U.S. states. The government release included statements of support from retailers and a major electricity producer.
“This made-in-Ontario initiative will lead to a competitive marketplace, wherein businesses can voluntarily make commitments which will green our grid, drive local innovation, all while delivering competitively-priced credits to business,” said Diane Brisebois, president and CEO of the Retail Council of Canada.
Ken Hartwick, president and CEO of Ontario Power Generation, called the centralized registry “a significant step that will benefit ratepayers and support Ontario electricity consumers wishing to track and report on their emissions goals.”
But the Pembina Institute cautioned that an open-ended market for clean energy credits won’t be enough to drive the renewable energy development the province needs.
“A market for certificates by themselves is not enough,” Pembina Senior Analyst Saeed Kaddoura said in a release. “It should be built upon an electricity procurement mechanism that creates an opportunity for credit generation and drives demand for credit purchasing and retirement, with a vision for long-term growth of the renewable energy sector in mind.”
Kaddoura cited three fundamental principles that would have to be built into the system to maximize environmental and job creation benefits.
“CECs need to be generated from new renewable energy projects to drive new clean energy into the grid,” he advised. “Second, avoid double counting: a project cannot generate credits under more than one tracking system, and credits can only be used once and must be retired after use. Third, avoid leakage: Ontario-based companies must build projects, use the electricity, and generate and retire credits under the CEC registry within the geographic boundary of Ontario.”
So who is going to buy and “retire” these credits? And for how much?
Maybe the Ontario government should not have killed off Cap&Trade as soon as they got elected…