The FIT Program under the Green Energy Act and Green Economy Act pays proponents a 50% peaking bonus to produce hydroelectric power during peak demand hours – whether this power is required or not.
Perhaps you have wondered how we came up with a 50% peaking bonus when the Ministry of Energy is reporting a 35% peaking bonus.
The peaking bonus is 35%, but it is 35% over a price that is never actually paid (which is called the Contract Price).
The only two prices actually paid for hydro-electric energy is the 35% bonus for power produced at peak-demand times, and a 10% reduction at all other times.
So, to summarize, the Feed-In Tariff pays for electricity generated at peak times:
- 35% more than the Contract Price (which is 13.1 ¢/kW●h).
- 50% more than the non-peak time.
There is no time when the Contract Price is paid, there are only two kinds of times, peak time and non-peak time.
So if you are running a hydro-electric generating station, there are only two rates that get paid:
- 17.685 ¢/kW●h from 11:00 am to 7:00 pm Monday to Friday; and
- 11.79 ¢/kW●h at all other times.
You can state the 35% bonus, but must also take into account the 10% reduction in the rate paid at all other times, which is complicated to state. It is simpler – and correct – to say “there is a 50% bonus for electricity generated during peak demand hours, compared to electricity generated at all other times”.