5. Project Reporting
5.1 Invoicing of Payment Due
The Government of Canada's fiscal year is the period beginning on April 1 of any year and ending on March 31 in the next year.
Claims for payment of the incentive on eligible production will be submitted within 30 days following the quarterly periods ending June 30, September 30, December 31 and March 31 of each year.
Payments will be made against measured eligible production for the 10-year period.
Claims for payment of the eligible production from a Qualifying Project must include the following:
- an invoice from the Eligible Recipient to Natural Resources Canada indicating the net energy production from the Qualifying Project and the total incentive amount claimed for the period;
- a table showing the monthly gross production, the energy used and the net production for the Qualifying Project for that period; and
- bills of sale to a utility or a power purchaser indicating the monthly net production sold and the price of electricity for the Qualifying Project for that period when electricity was sold or proof of the net monthly production from a vested authority when electricity was used for its own consumption.
5.2 Annual Reporting on the Project's Performance
In addition to the quarterly energy production provided by the Eligible Recipient for payment of the incentive, Natural Resources Canada will request that the Eligible Recipient provides a report annually at the end of each operational year showing the actual performance of the Qualifying Project including, where required, annual air emission levels.
The performance information will consist of the monthly aggregated energy production of the Qualifying Project, as well as an assessment of the resource level for that month. An analysis of the quarterly performance of the Qualifying Project will indicate reasons for poor or high performance.
When EcoLogoM Program certification is required, the report must include the air contaminants emissions report, as provided to the Environmental ChoiceM Program, to validate the certification.
Annual reports are to be provided within 3 months of the anniversary of the commissioning date.
Failure to provide these annual reports will constitute a breach of agreement and the ecoENERGY RP incentive payments will stop.
5.3 First-Year Reporting on the Project's Costs and Air Emissions Reductions
After the first year of operation, the Eligible Recipient must provide a report containing the following:
- Information on costs of the project: The Eligible Recipient must provide a costing report providing a summary of factual development and installation costs for the Qualifying Project as well as expected operation and maintenance (O&M) costs over 20 years using the costing spreadsheet under Annex C or completing the costing form on the program's website.
- Information on air emissions reductions: The Eligible Recipient must show the expected Greenhouse Gases and air contaminant emission reductions per year, given in units of energy produced (megawatt hours per year [MWh/yr]) for the ecoENERGY RP portion of the power plant only. Calculations must show the assumptions and methodology of calculations, including energy sources displaced.
For biomass projects, the Eligible Recipient must report previous air emissions for the feedstock that is used in the new facility and show reductions of the new air emissions levels, as reported by the Environmental ChoiceM Program certification process. If this feedstock was not previously used, or if it was used off-site, the Eligible Recipient must provide estimates and show the methodology and calculations that were used to derive previous air emissions and justifications for them.
First-Year Reports are to be provided within three months of the first anniversary of the commissioning date of the project.
Proprietary, business-sensitive information on projects will be kept strictly confidential within the limits set out in the Access to Information Act. Only aggregated information will be used by Natural Resources Canada to show the progress of the industry.
5.4 Repayable Contribution Clause
The ecoENERGY RP aims to make low-impact renewable electricity-generation technologies competitive with conventional generating technologies by covering part of the premium cost for clean electricity. The program is not intended to subsidize projects that will generate undue profits or that may already be economical. For this reason, every CA will include a repayable contribution clause that will apply if the project receives, at some point within the 10-year payment period, substantially higher energy revenues for its production in excess of a standardized price.
The program will use the cumulative revenue of a project as a proxy for a profit benchmark. From the cumulative revenue, a Current Unit Value Received (CUVR) will be calculated and compared against a standard threshold price over which projects will not require the incentive under the ecoENERGY RP. If the excess of CUVR over standard threshold price exceeds the incentive, there will be an obligation to repay the incentive.
The calculation for the repayment clause must include all market revenues of the eligible project cumulated from the time of its commissioning, including the sale of all electricity produced by the project, and any sale of its environmental attributes, but excluding the ecoENERGY RP contribution itself.
The standard threshold price is set so that a project that reaches it will receive more than adequate revenues to achieve a reasonable rate of return. Experiences of recent requests for proposals in Canada, as well as trends in Canadian electricity prices in both regulated and deregulated provinces, show that an acceptable average price of generating electricity from low-impact biomass, hydro and wind renewable energy sources is estimated to be in the range of 8 cents to 12 cents per kilowatt hour (kWh), depending on the size of the project, its proximity to the distribution or transmission line, the technology used and the availability of resources.
Thus Natural Resources Canada has set two standard threshold prices for low-impact biomass, hydro and wind technologies, based on the size of projects, to take into account the higher costs per megawatt (MW) associated with smaller projects:
- a Qualifying Project smaller than or equal to 10 MW of capacity: 13 cents/kWh or $130/MWh
- a Qualifying Project larger than 10 MW of capacity: 12 cents/kWh or $120/MWh
Recognizing that marine energy and photovoltaic projects may be implemented during the allocation of the program and that proponents of these technologies will want to benefit from the incentive of the ecoENERGY RP, and recognizing that these projects are currently not cost-competitive with conventional energy sources and will require higher subsidies to be implemented, Natural Resources Canada has set a specific standard threshold price level for all photovoltaic and marine energy projects at 43 cents/kWh or $430/MWh.
For all other low-impact renewable technologies, Natural Resources Canada may consider specific levels of standard threshold price according to the cost-competitiveness of the technology. These will be discussed and set on a case-by-case basis.
Natural Resources Canada also recognizes that a project's annual costs may increase over time and that this increase will have an influence on the project's profitability. Hence, it recognizes that its proxy methodology may need to be revised periodically to assess whether projects are receiving a reasonable rate of return. Thus, Natural Resources Canada will review all standard threshold prices biennially.
How is the Current Unit Value Received (CUVR) calculated?
Example of a CUVR calculation:
|Provided by Proponent||Notes|
|Cumulative Revenue (CR)||$47,500,000|
|Net Cumulative Incentive Received (NCIR)||$3,000,000||Deduct any repayment made previously|
|Total Cumulative Production (CP) in MWh||395,000|
|Size of qualified project in MW||50|
|If PV or Marine Energy Project, check box with an "X."|
|Standard Threshold Price (STP) in $/MWh||$120.00||Different STP for different sizes|
|Current Unit Value Received (CUVR) where CUVR = CR ÷ CP in $/MWh||$120.25|
|Excess Value Received (EVR) where EVR = CUVR - STP in $/MWh
If positive, incentive payment is suspended for one year)
|$0.25||Payment of incentive suspended|
|Program Incentive (PI) in $/MWh||$10.00||Fixed|
|Repayment Determination (RD = EVR - PI)||$-9.75|
|If the RD is less than or equal to zero, no repayment.
If RD is positive: the Repayable Amount (RA) = RD x CP, up to NCIR.
Table 1 Calculating the CUVR under the ecoENERGY RP
The Cumulative Revenue is defined as revenue from the sales of Eligible Production generated by the Project, and the environmental attributes of that Eligible Production, to the extent received by the Proponent for its own account, on a cumulative basis from the day after the Commissioned Date up to the end of the period of calculation, but does not include the incentive paid under the contribution agreement.
The CUVR is defined as the value obtained from all cumulative revenue of the project, exclusive of program funding, divided by the cumulative production at a given time.
- In our example, the CUVR equals the cumulative revenues, $47,500,000 divided by its cumulative production 395,000 MWh, or $120.25/MWh.
Payment of the ecoENERGY RP incentive on a project is suspended for the next year if the EVR, calculated as being the value of the CUVR minus the STP, is positive.
- In our example, the STP is set at $120/MWh because the project is not PV, and it is more than 10 MW. The EVR is equal to $0.25/MWh and is positive, thus the payment of the incentive is suspended for one year.
If this EVR is greater than the ecoENERGY RP incentive, the Eligible Recipient will repay the difference (RD) multiplied by the CP, up to the total amount of the Net Cumulative Incentive Received.
- In our example, because the EVR is less than the program's incentive level, the proponent does not need to repay any amount already paid by the program.
Natural Resources Canada has developed a calculator (CUVR Calculator) to report the EVR from Qualifying Projects which is available on the program's Web site at http://www.nrcan.gc.ca/ecoaction/14145.
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