Ontario slates $100 million toward renewable natural gas

By Anna Simet | June 02, 2016

Ontario’s government plans to spend up to $100 million over the next four years to foster growth of renewable natural gas (RNG) in the province. 

On May 26, the Ontario Ministry of Environment and Climate Change announced the funds, to be drawn from cap and trade proceeds via the province’s Climate Change Action Plan, which is expected to be released imminently.

Ontario’s emission reduction targets begin at a reduction of 15 percent of 1990 levels by 2020, increasing to a reduction of 80 percent by 2050.

Coinciding with the funding announcement and aimed at helping achieve carbon reduction goals, the Canadian Gas Association outlined new targets for country’s natural gas sector, which are 5 percent RNG-blended natural gas in the pipeline distribution system by 2025, and 10 percent by 2030, equating to removing 3 million passenger cars from the road.

RNG can be produced, cleaned and injected into the natural gas distribution system at competitive costs compared to other renewable energy options, according to the CGA, which estimates RNG to cost between $10 and $25 per gigajoule (GJ), or 4 to 9 cents per kilowatt hour (kWh), while recent renewable electricity contracts for utility-scale solar and wind projects have been signed for $19 and $44 per GJ, or 7 to 16 cents per kWh.

In British Columbia, Ontario and Quebec, natural gas distribution utilities are already blending RNG into their gas pipeline systems, according to the CGA, and by the end of 2017, 11 RNG projects in Canada will be online.

The investment in RNG compliments the province’s $200 million Natural Gas Access Loan and $30 million Natural Gas Economic Development Grant programs introduced last April. The government also plans to work with utilities to inject renewable energy-based hydrogen into the natural gas stream.