Ontario cancels subsidy for fossil fuel-based CHP

Ontario is set to cancel subsidies from summer 2018 for combined heat and power (CHP) plants that run on fossil fuels.

Under its new Long Term Energy Plan (LTEP), which updates a 2013 plan, the Canadian province aims to achieve 7 TWh in energy savings by 2020 as well as contribute to Canada‘s wider goal of reducing its emissions to 30 per cent below 2005 levels by 2030.

While fossil-fuelled CHP plants received incentive support under the 2013 plan because, according to the LTEP, “they can significantly reduce demand on the electricity grid”, their eligibility will end in July “to help meet the Province’s climate change goals”.

However, the plan noted that behind-the-meter waste energy recovery projects will continue to be eligible, as will renewable power projects including those paired with energy storage systems.à‚ 

The incentive offered up to 40 per cent of the capital cost of a CHP plant.

According to reports, Ontario’s CHP and building sectors were unsurprised by the move given the province’s climate goals. However, commentators have speculated that future CHP development will focus on smaller projects with lower capital costs, with a corresponding blow to their ability to be used as backup/emergency power.

But the plan may hold better news for other forms of decentralized energy. In a comment on the new LTEP, the Toronto-based law firm of Osler Hoskin & Harcourt said the plan, which proposes expanding investment in energy storage, smart meters, transactive energy and blockchain, “expects consumers to become more dependent on distributed energy resources and less dependent on local distribution companies”.

Image credit: TUBS/Wikimedia Commons

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