Ontario Biogas System Update: Feed-In Tariff, Regulated Mixed Anaerobic Digestion Facility Rules and Renewable Energy Approvals

Table of Contents

  1. The Feed-In Tariff (FIT) Program
  2. Approvals Process for a Biogas System
  3. Renewable Energy Approvals (REA)
  4. Overall Implications of Rules and Programs

Many biogas projects in Ontario are under construction or are operational, in part with funding through the former Ontario Biogas Systems Financial Assistance Program and incentives offered through the Feed-In Tariff Program. There are a variety of provincial policies and regulations to assist in the development of other biogas projects. The information below outlines the current opportunities and key rules for biogas systems, summarizing the basic components and details of the programs, policies and regulations. Please refer to the original source materials for more in-depth information.

The Feed-In Tariff (FIT) Program

The Independent Electricity System Operator's (IESO) Feed-In Tariff (FIT) Program was developed to encourage and support greater use of renewable energy sources of varying sizes and technologies. FIT offers eligible participants a guaranteed price for electricity generated from different renewable energy technologies, for projects larger than 10 kilowatts (kW) and generally for projects up to 500 kilowatts. Prices offered depend on project type and are designed to allow project developers to recover costs and a reasonable return on investment. For current pricing, refer to the latest version of the FIT Price Schedule.

There are many details associated with securing a FIT contract. Visit the FIT Program website for program details regarding eligibility and approvals requirements.

Several important factors related to the FIT prices:

  • To satisfy the "on-farm" designation, biogas systems must be a Regulated Mixed Anaerobic Digestion Facility (RMADF) under the Nutrient Management Act, 2002. See the approvals process for RMADF below.
  • There are additional provisions in the FIT program, including price adders and priority points, that support projects that have community, Aboriginal or municipal participation. These price adders vary depending on the level of partnership.
  • There is an incentive to produce power during peak hours. At the time of writing, on-peak hours are 11 a.m. to 7 p.m. on business days. Any other time is considered off-peak.

Eligible projects are ranked using a system of priority points. Those with the most priority points are most likely to secure a FIT contract. Project ranking is important, as the IESO can only contract up to the allotted capacity for each application window. A number of other conditions, including the ability to connect to the grid, also need to be considered. For complete details, visit the FIT Program website.

For proposed biogas electricity projects generally larger than 500 kW, there is a Large Renewable Procurement (LRP) process - please see the Independent Electricity System Operator's LRP website for details.

Approvals Process for a Biogas System

There are three routes to having biogas systems approved to receive off-farm feedstocks in Ontario:

  1. Regulated Mixed Anaerobic Digestion Facility (RMADF) in the Nutrient Management Act, under Ontario Regulation 267/03. The regulation allows qualifying facilities to accept up to 50 per cent (by volume) off-farm feedstocks. See the OMAFRA factsheet Nutrient Management Regulation Requirements for On-farm Anaerobic Digestion Facilities for more information.
  2. Renewable Energy Approval (REA) for electricity projects that do not satisfy the RMADF requirements.
  3. Environmental Compliance Approval from the Ministry of the Environment and Climate Change for non-electricity projects such as biogas upgrading.

There is no formalized approval mechanism for non-electricity biogas systems using only exempt wastes, such as agricultural waste, although many construction and safety rules and regulations continue to apply.

Environmental Approvals to Mix Manure and Food Waste in a Biogas System at a Nutrient Management Regulated Mixed Anaerobic Digestion Facility (RMADF)

The RMADF rules were expanded in 2013. They were developed jointly by the Ministry of Agriculture, Food and Rural Affairs (OMAFRA) and the Ministry of the Environment and Climate Change (MOECC) to support manure treatment. The rules allow the mixing of off-farm feedstocks in manure-based biogas systems. An approved biogas system at a farm is permitted to mix up to 50 per cent of certain off-farm feedstocks with agricultural feedstocks. Of the agricultural feedstocks, at least 50 per cent by volume must be manure. There are three types of feedstocks:

  • Schedule 1: The regulation allows certain off-farm feedstocks to be mixed with agricultural inputs without any pre-treatment.
  • Schedule 2: Other feedstocks require a thermal pre-treatment of 70°C for one hour, or 55°C for 20 hours.
  • Schedule 3: Feedstocks, such as municipal source separated organics that are not permitted at an RMADF biogas system.

RMADF rules also specify a variety of design and operation requirements. Changes made to the RMADF process in 2013 include:

  • setback distances are established for facilities located at non-livestock operations
  • deliveries of off-farm feedstocks are only permitted from 7 a.m. - 7 p.m.
  • facilities require signs with contact information
  • the facility must be designed to minimize leakage and noise
  • mandatory secondary combustion is required on site for larger facilities
  • properly designed sampling ports with primary and secondary valves are required
  • larger facilities require monitoring devices for over/under pressure relief valves

The RMADF process for biogas projects has many advantages:

  • RMADF effluent material is considered agricultural source material for the purposes of land application. This means it has to meet the same rules for spreading as conventional manure under the Nutrient Management Act, Ontario Regulation 267/03.
  • The RMADF approvals process is established and provides a clear checklist approach to securing approval.
  • The RMADF process is used to define on-farm anaerobic digestion facilities for the FIT Program. At the time of writing, this allows an operator to obtain a higher FIT price.
  • The RMADF allows 50 per cent off-farm materials, providing a significant boost in gas production and allowing for economically viable manure treatment.

Farms that are operated under the RMADF rules are exempted from the REA process (described below), but will typically have to comply with OMAFRA's Minimum Distance Separation (MDS) Formulae if they are located at a livestock facility. The formulae provide specific setback distances of biogas systems from residential or other sensitive uses. Non-livestock biogas systems approved under RMADF have to meet new setbacks established in the regulation.

The RMADF rules can be found in Ontario Regulation 267/03. Find more information on the MDS Formulae on the OMAFRA website.

Renewable Energy Approvals (REA)

The REA process for biogas systems classifies the biogas systems into three categories based on the type of input material and location.

  • Class 1: Farm-based biogas systems at farms not regulated under the Nutrient Management Act, under Ontario Regulation 267/03, that use only exempt waste, such as manure
  • Class 2: Farm-based biogas systems using exempt waste and/or off-farm waste
  • Class 3: Off-farm biogas systems

Systems approved under the RMADF process and biogas facilities processing non-regulated waste on farms that are subject to a Nutrient Management Strategy are exempt from REA.

REA outlines the process for:

  • setback distances of new biogas systems to the nearest odour receptor, natural feature and water bodies
  • natural heritage, archaeological and cultural assessment requirements
  • requirements for public, municipal and Aboriginal consultation

Under REA, the approval document may specify operating criteria such as minimum retention times, operating temperatures and record keeping requirements. Allowances for non-renewable fuel content, financial assurance requirements and other operating criteria for the biogas system are also considered through the process.

The REA process is typically used for biogas systems in one or more of these situations:

  • the biogas system is not built on a farm
  • an input material is used that is not permitted for RMADFs
  • greater than 50 per cent off-farm feedstock is used
  • less than 50 per cent of the farm feedstock used in the system is manure

Public Consultations

Class 1 and 2 biogas facilities are required to notify the public about the project as part of the REA approval, but are not required to hold public meetings. Class 3 biogas facilities are required to notify or consult with local municipalities (lower and upper tier), local authorities, Aboriginal communities and the public.

Financial Assurance

There are financial assurance requirements for Class 2 and 3 biogas systems. A Financial Assurance is a tool used by MOECC to ensure there are enough funds for clean-up costs associated with a project in case of a significant issue. Get more information about Financial Assurance Guidelines from MOECC's website. For Class 2 biogas systems, the financial assurance is limited to the removal and disposal of non-exempt wastes (such as off-farm feedstock materials) at the facility.

For detailed questions about the REA, consult the MOECC website, or contact the Renewable Energy Facilitation Office at 1-877-440-REFO (1-877-440-7336).

Overall Implications of New Rules and Programs

In summary, there is a comprehensive set of policies, programs and rules in place that have positive implications for biogas developers in Ontario:

  1. Good electricity prices: FIT prices are designed to provide a reasonable rate of return for biogas systems at all scales.
  2. Smaller-scale systems: The higher FIT prices for smaller scale systems may encourage more medium-sized farm operators to actively consider biogas systems.
  3. Benefits for on-farm systems: There are a number of factors that make farm-based biogas systems attractive, including:
    1. The higher-value FIT prices are available for on-farm systems
    2. The increased allowances for type and quantity of material acceptable through the RMADF rules (which are only applicable to farm-based systems using manure), and the ability to manage the resulting effluent as agricultural source material

For more information:
Toll Free: 1-877-424-1300
E-mail: ag.info.omafra@ontario.ca
Author: Jake DeBruyn - New Technology Integration Engineer/OMAFRA; Don Hilborn - Byproducts and Manure Management Engineer/OMAFRA
Creation Date: 09 February 2011
Last Reviewed: 30 April 2012