In January 2010, SaskPower released their "Green Options Partners Program" which allows private small and medium-sized power producers to generate and sell between 100 kilowatts (kW) and 10 megawatts (MW) of electricity to SaskPower. SaskPower will pay producers a fixed price for their electricity ($96.09/MWh in 2011) instead of granting an electricity bill credit as is the current practice. Oddly, the program has been implemented with little fanfare in the province. Most interest seems to be from renewable energy developers in other provinces and outside Canada.

The Green Options Partner Program is a standing offer program (or SOP in renewable energy lingo). It is a forerunner to a feed-in-tariff (or FIT) which is the legislative tool that catapulted Germany to being a world leader in wind energy and is currently turning Ontario into a global renewable energy powerhouse.

On January 21, 2010, a Korean consortium led by Samsung signed a $6.6 billion dollar deal with the Ontario provincial government. This has been described by industry commentators as "one of the biggest renewable energy deals in the history of the world". The consortium has agreed to build 2500 MW of wind and solar projects in Ontario. The agreement will bring in 4 new manufacturing facilities and 16,000 jobs as well as clean energy for 580,000 homes in Ontario. Building off of this new deal, Korean trade officials plan to make Ontario their base of operations for all of North America. This is a direct result of provisions of the new Ontario Green Energy Act which provide for a legislated FIT mechanism.

SaskPower currently procures some electricity through Requests For Proposals. In an RFP process, SaskPower solicits bids from various generators and developers and picks who they want to work with - or even if they want to work with anyone. In the typical RFP process, developers and generators expend considerable resources to comply with the RFP requirements and at the end of the process, SaskPower usually selects a single candidate. The developer must then sign an often onerous power purchase agreement with SaskPower, essentially on terms and conditions dictated by SaskPower. 
The RFP process is a fuzzy method of procurement. With a FIT, on the other hand, the utility cannot discriminate against developers or arbitrarily deny access to the transmission grid for renewable generation. The FIT also provides for a standard form contract to sell the power to the utility at a fixed price which is based on the cost of generation. A FIT typically requires the utility to purchase all renewable energy that is available for sale at the fixed rate - this provides certainty to the developer and investors. This is a crucial difference from a traditional RFP process where the developer must compete with others in the RFP process on pricing and then negotiate further with the utility to get paid this price - an uncertain process for developers and investors.

You've probably figured out already why FIT's are such powerful policy mechanisms to drive innovation and clean energy development forward - the non-discriminatory cost-based price paid to generators enables investors to obtain a reasonable return on renewable energy investments. This naturally makes it much easier for developers to secure financing for projects and encourages more renewable energy projects to be developed. That in turn leads to the growth of local manufacturers, as evidenced by the Korean deal just signed by the Ontario government. The Ontario FIT program started accepting applications on October 1, 2009 and only three and half months later the Ontario government closed a $6.6 billion dollar deal for investment in the province - and this is only one deal. There are countless other investments in the province in the six-figure range, which indicates that the FIT is already an astounding success and a tremendously powerful policy mechanism.

While still early, the low-key response to the Green Options Partners Program is disappointing given that our land base, wind regime and solar resources in Saskatchewan are much better than that of Ontario. This program is the first step in the right direction toward a FIT; kudos to SaskPower for implementing this program. It is now up to small and medium-sized developers to capitalize on this opportunity. It is an excellent chance for Saskatchewan-based businesses to help diversify and build on our energy resources.