14 December 2011
“The province’s electricity supply problem, at least for the next 15 years or so, appears to be primarily that there is a potential shortage of power to meet peak demand, which occurs during the afternoons of weekdays in the summer months. The small renewable power projects currently under way do nothing to address this need.
Thus, the current FIT program incentives applicable 24 hours a day, 7 days a week, which guarantee rates far in excess of the average rate per kilowatt hour ($0.13 vs. about $0.04 average) should be abolished immediately. Small power projects should be required to compete directly with other sources of energy outside of peak hours. If some preference is to be offered to renewable sources, the appropriate way to do that is by way of either a carbon tax, or a noncarbon incentive.
Any incentives should only apply to power produced during the period of concern. Paying for power at the spot rate may well provide sufficient incentive during these periods, since spot rates are typically several times the average rate, so it is doubtful whether any additional incentive is required.”