Green Energy Act could create $4.5 billion in value

TORONTO , Oct. 29 /CNW/ - A detailed analysis of the business case for power generators, transmitters and local distribution companies following the introduction and enactment of Ontario's Green Energy Act, finds the act has the potential to create significant value.

The report on the Green Energy Act's short and long-term impact is the outcome of an independent study conducted over the last year, while the Act was working its way through the legislature, say the study authors, Hatch Management Consulting.

The study, using technically viable and conservative parameters, scenarios and assumptions, simulates the returns, the value created, the productivity impact and the financial cash-flow-at-risk flowing directly from the Act, and subsequently, from the provincial government's active support of the Act's objectives.

    
    Some of the barriers identified and analysed included:

    -   environmental permit delays,
    -   uncertainty of technology choices,
    -   the unknowns of Ontario's manufacturing sector,
    -   significant grid integration challenges,
    -   construction challenges if several new renewable projects rush to
        pools of specialists at the same time,
    -   locating appropriate project sites,
    -   ensuring adherence to codes and standards still under development,
        and
    -   probable responses to the changing roles and mandates of government
        agencies that regulate the electricity sector.
    

The study concludes that the Act can create tremendous value for renewable generators and delivery entities, while reshaping the energy landscape in Ontario, provided the uncertainties around the sustainability of the program, and barriers to project development are addressed.

In addition to the above central conclusion, five observations will be relevant to a provincial debate about how best to unlock the value from the Act and sustain the momentum for Ontario to become a leader in renewable generation. Specifically, an overarching strategy would need to consider:

    
    -   That renewables technologies under the proposed regulation can
        generate significant value while the province concurrently develops
        energy-efficiency strategies and messages to lower demand.
    -   That the $4.5 billion NPV-positive business case (2009 dollars)
        remains a target for the province. Decisions taken by the provincial
        government, energy regulators and energy participants should aim to
        enhance this target.
    -   That the domestic content requirement regulations present an
        opportunity, and risk, for Ontario. The regulation could turn Ontario
        into a renewable technology centre with an ecosystem of businesses
        operating across the energy value chain.
    -   That a provincial office should be created to invest in and research
        an integrated portfolio of proven and emerging renewable technologies
        and planning tools.
    -   That an integrated renewables implementation strategy would aim to
        coordinate all stakeholders and their resources to ensure the value
        identified is in fact captured.
    

Hatch Management Consulting is a global consulting firm with principal offices in Beijing , Johannesburg , Santiago , Pittsburgh , Sao Paulo , New Delhi , Mississauga, Brisbane and London (UK).

The first public presentation of the Hatch Study will be on January 19, 2010 at the University Of Toronto Rotman School Of Management's 'Business of Green' Speaker Series.

Media welcome.

For further information: Please visit the Hatch website, http://www.hatch.ca/News/Oct29-09.htm for an executive summary of the report or contact Hatch's Management Consulting Practice: Mergen Reddy, Global Director, [email protected], Direct phone: [phone]; Bob Griesbach, Director, [email protected], Direct phone: [phone]; Tom Reid, Media Relations, Hatch, [email protected], Direct phone: [phone]