Thank you for the…

Thank you for the opportunity to submit comments on ERO number 019-5816.

In 2019, Business Renewables Centre-Canada launched with the mission to help corporations and institutions procure 2 gigawatts of renewable energy in Alberta by 2025. Early in 2022, we reached this goal— three years ahead of schedule—and we are in the process of creating a new goal and expanding our efforts beyond Alberta. BRC-Canada is a community where buyers can learn how to source renewable energy directly from renewable energy project developers. Put simply, we make it easier for corporations to enter the renewable energy market and source directly from developers. By sharing the hard-earned lessons of the early movers through primers and guides on such topics as Power Purchase Agreement accounting and deal structures, we help first-time buyers advance swiftly up the learning curve to make informed procurement decisions and complete their deals faster, more easily, and more cost-effectively.

We are very supportive of your efforts to implement robust environmental attribute certificate (EAC) system through the Clean Energy Credit registry that would:

· Provide a credible and transparent system, with good accounting, that ensures additionality and enables buyers to take credit for clean energy procurement

· Ensure that ownership of EACs under various sourcing models or other programs is clear and prevents double counting within the energy consumer community2,7

Environmental, Social, and Governance (ESG) commitments from the world’s largest commercial and industrial operators and institutional investors are driving unprecedented demand for renewable energy to displace scope 2 emissions in their climate performance reporting and to reach renewable energy targets.

This opportunity means that jurisdictions with emitting grids can attract renewable energy investment that is backed by corporate offtake agreements, bringing rural economic development, landowner lease payments, municipal taxes, and low-cost null power for Ontario consumers.

Perhaps more importantly, jurisdictions that accommodate commercial and industrial (C&I) demand for renewable energy are more competitively placed to attract employers and investors who want to procure renewable energy near their operations. This is apparent in Alberta, where Amazon chose to locate a new facility for its Amazon Web Services (AWS) operations partly because of the access that Alberta offers to “renewable energy that will help allow the company to fulfill its emission reduction goals.” But this objective is only met if the registry serves the ESG objectives of prospective investors and job creators, as revealed by what “clean energy” purchases they have made in other jurisdictions.

Establishing the CEC registry is only a first step toward enabling this C&I market in Ontario. Subsequent programs and policies will need to be implemented to fully realize the benefits of the C&I market, particularly the free market opportunity for buyers to select projects that developers can connect and for the buyers and/or developers to realize a fair price for the energy generated that reflects the value of that non-emitting energy to the grid. This means addressing the value that is found in out-of-market contracting and recovered through the Global adjustment charge, and therefore external to consumers’ energy charge and generators’ wholesale energy revenues.

Ontario should take care to design policies and programs in a way that is targeted to accommodating the ESG-driven objectives of major global investors. Ontario can do this by tailoring the design to serve the market’s revealed preference, as evinced by the types of "clean energy" procurements that large C&I investors have undertaken in other jurisdictions. These clear market preferences reveal the considerations that are most important in the CEC registry design:

· A focus on renewable energy (particularly wind and solar);

· Enabling buyers to substantiate corporate ESG claims and to withstand audit and scrutiny by ensuring the CECs have:

o verifiable and credible additionality attributes and

o avoid double counting concerns.

· freedom to identify and choose projects that fit the buyers’ energy needs and other objectives like social impact; and

· opportunity to hedge against the fair cost of electricity consumption in the jurisdiction.

Any design elements that frustrate C&I buyers’ revealed preferences will undermine the effectiveness of the enabling policies or programs to realize their objective of accommodating these ESG drivers and attracting investment and job creation to Ontario. This includes the following risks:

· that renewable CECs preferred by buyers will be indistinguishable from or undermined by affiliation with CECs produced by less desired generation sources, like nuclear or large-scale hydro; and

· that CECs within the registry will be perceived as potentially double counted against other emissions reductions regime (such as industrial carbon pricing) or from non-additional (legacy) projects.

To this end, it is important that the design consider the reputation and credibility of the entire CEC registry to avoid undermining the perception and appeal of all CECs within the registry.

In summary, to meet the objective of attracting investment and jobs to Ontario, the program design must serve the demands of prospective investors and job creators. These demands are reflected in the “buyer” choices that these investors have empirically made (“revealed preference”) in jurisdictions that already accommodate purchasing deals.

These prior deals in the United States, Alberta, and globally, clearly reveal the demand for new/additional energy from renewable generation that is not double-counted against other obligations or claims, and includes the opportunity for buyers to pursue specific social impact objectives and to hedge energy and carbon price risk.

A consolidated representation of what buyers want to see in CEC/REC registries is available in the existing private-sector registries that have been developed in consultation with buyers and other stakeholders: Ecologo and Green-e. Given the success of these frameworks, they are serving buyers interests, so their designs should be closely observed and followed (or, indeed, employed in Ontario directly).

Thank you for the opportunity to submit these comments, and we would be happy to answer any questions you may have.