Renewable Energy Tariffs or Standard Offer Contracts: An Historical Time Line

By Paul Gipe


1983: Standard Offer Contracts introduced in California. Standard Offer No. 4 contracts, which fixed purchase power rates or Feed-In tariffs, were used to build 1,200 MW of wind energy capacity much of which is still operating today. All wind projects installed under floating price contracts, Standard Offer No. 1, failed financially.

Late 1980s: German BMFT’s 250 MW research program paid a premium for the environmental and research value of new wind generating capacity. Initially 100 MW, the program was so popular that it was increased to 250 MW before it was superseded by the Stromeinspeisungsgesetz.

1980s and 1990s: Denmark uses a complex mix of Renewable Energy Tariffs, exemptions from the carbon dioxide tax, and tax benefits to pay for wind generation. The Renewable Energy Tariff was 85% of the retail rate. This system was used until the introduction of a Renewable Portfolio Standard (RPS) and renewable energy credit trading system in 2000. The RPS eventually led to the collapse of the Danish domestic demand for wind turbines and was abandoned in 2004.

1989: The Aachen model of premium payments, that is payments above “avoided cost”, introduced in Aachen Germany for photovoltaics, at the time the highest payment per kWh for renewable energy generation anywhere in the world. The tariffs were limited to the city of Aachen, but the process was eventually repeated in other German cities, including Bonn (then the capital), and Nuremberg.

1991: The German Parliament’s passage of the Stromeinspeisungsgesetz implemented. Literally the law on feeding-in electricity. Germany’s ground-breaking Renewable Energy Tariffs or Feed-In law specified that renewable generators had the right to connect and how they would be paid for their generation based on a percentage of the retail price of electricity. Wind energy generation was paid 90% of the full retail rate; hydro, 75%; biomass, 75%.

1994: German Feed Law modified and hydro’s and biomass’ payment increased to 80% of the retail rate.

1997: Spain permits private power production.

1998: Spain introduces Renewable Energy Tariffs with Royal Decree.

1999: Erneuerbare Energien Gesetz or Renewable Energy Sources Act. The EEG introduced Advanced Renewable Energy Tariffs. These differed from the simpler approach of the original Stromeinspeisungsgesetz by specifying the actual prices that would be paid for generation from each of several different renewable technologies independent of the retail price for electricity. Different prices were also introduced within each technology band depending upon the size of the project or the resource base. For example, there were several tranches for biomass plants of varying size. This strategy allowed premiums sufficient for developing all renewable technologies, including photovoltaics.

2000: France introduces its version of Advanced Renewable Tariffs. The French law differs from German policy by the manner in which tariffs are reduced for energetic wind sites to avoid “unfair” profits.

2004: Revisions to Germany’s EEG, including tariffs for offshore wind.

2004: First appearance of books, PhD dissertations, and reports on the success of the Renewable Tariff model in rapidly developing renewable energy.

2004: Revisions to Spain’s Royal Decree on renewable generation, including tariffs for offshore wind.

2004: February, The Ontario Sustainable Energy Association launches its campaign for Advanced Renewable Tariffs in Canada’s most populous province.


2004: March, OSEA makes presentation on ARTs to the Ontario government’s Conservation Action Team at the request of Donna Cansfield, MPP, Parliamentary Assistant to the Minister of Energy.

2004: October, OSEA holds Forum on Renewable Energy Tariffs in Toronto with guest speakers Dr. Hermann Scheer, MdB; PEI Minister of Energy Jamie Ballem, Dr. Frede Hvelplund, and Dr. Olav Hohmeyer.

Premier’s Office signals interest in “new mechanism other than an RFP” for distributed wind energy projects in Ontario.

Ontario’s Renewable Energy Task Team drafts policy on Standard Offer Contracts in response to government’s request for “new mechanism” for developing renewable energy.

2004: Early November, OSEA makes presentations on ARTs to the Association of Power Producers of Ontario and senior members of the Ontario Ministry of Energy.

2004: November 11, Ontario’s ruling party adopts Advanced Renewable Tariffs as part of the party’s energy policy platform.

2004: November 18, Canada’s National Farmers Union endorses ARTs at its annual conference.

2004: December, OSEA commissioned by the Ontario Ministry of Energy to propose a policy for developing community-owned renewable power projects.

OSEA hosts pricing workshop for “stakeholders” with ADEME’s Bernard Chabot, on prices needed for renewable sources of energy in Ontario.

OSEA submits draft report to Ontario Ministry of Energy.

2004: December 16, Prince Edward Island’s assembly passed Minister of Energy Jamie Ballem’s Energy Strategy that includes a feed-in tariff for community wind projects.

2005: February, Ontario Ministry of Energy begins weighing use of renewable energy tariffs, or what it calls Standard Offer Contracts, for small (~10 MW) renewable projects.

2005: March, China’s People’s Party Congress passes its Renewable Energy Sources Law, the key provision of which is renewable energy tariffs.

2005: March, the Washington State Senate passes a bill creating a renewable energy tariff for solar photovoltaics (PV).

2005: April 7, Irish Ministry of Natural Resources announces abandonment of tendering system and creation of new electricity feed laws to meet renewables target.

2005: May, Minnesota’s State Senate passes omnibus energy bill that contains C-BED proposal for fixed-tariff to promote community wind development. The legislation moves to the Assembly.

2005: May, Washington State enacts a feed law for solar photovoltaics, a first in North America.

2005: May, Turkey adopts electricity feed law.

2005: July, The Ontario Sustainable Energy Association releases its report for the Ontario Ministry of Energy on Standard Offer Contracts (Advanced Renewable Tariffs).

2005: September, Premier of Ontario Dalton McGuinty endorses Standard Offer Contracts for community renewable development in a speech to the Ontario Energy Association.

2005: October, Ontario Power Authority and Ontario Electricity Board staff meet with OSEA and Bernard Chabot on pricing model.

2005: November, Ontario Power Authority issues discussion paper on Standard Offer Contracts and holds public hearings.

2005: December, Ontario Power Authority prepares draft recommendations to the Minster of Energy.

2006: March, After much internal debate, Ontario Power Authority finalizes recommendations and Minister of Energy issues directive launching Standard Offer program in Ontario. Ontario’s program is set to become the most progressive renewable energy program in North America within two decades.

2006: Fall, implementation of Ontario’s Standard Offer Program is expected to begin.