McGuinty Government Delivers a Balanced Plan for Ontario's Electricity Future

Archived Release

McGuinty Government Delivers a Balanced Plan for Ontario's Electricity Future

Ministry of Energy

Securing Reliability For Ontario's Long-Term Electricity Supply QUEEN'S PARK, ON, June 13 - Energy Minister Dwight Duncan directed the Ontario Power Authority (OPA) today to proceed with its recommended 20-year electricity supply mix plan, with some revisions. The plan achieves a healthy balance by moving away from coal in favour of new nuclear power and renewable energy. The government has set targets that will double energy efficiency through conservation and double the amount of energy from renewables by 2025. The government has directed Ontario Power Generation (OPG) to undertake feasibility studies for refurbishing units at the Pickering and Darlington sites. OPG has also been directed to begin the work needed for an environmental assessment for the construction of new units at an existing nuclear facility. Nuclear is expected to continue to be the single-largest source for Ontario's electricity in 2025. The government has accepted the advice of the Independent Electricity System Operator in their June 9 report that indicates a need for 2,500 - 3,000 megawatts of additional capacity to maintain system reliability. Therefore, further delays will be necessary in the government's plan to replace coal-fired generation completely with cleaner sources of energy. The government is referring the question of how to best replace coal in the earliest practical time frame to the OPA. The OPA is also being asked to recommend options for cost-effective measures to reduce air emissions from coal-fired generation. The government will continue with the plan announced in its 2006 Budget to establish a bio-energy research facility associated with the Atikokan station. The government has also accepted the advice of the OPA that natural gas should only be used to meet peak demand in high-efficiency applications and to meet local reliability need when no alternative is available. Since the government received the OPA recommendations in December 2005, it has consulted extensively with the public, stakeholders, the electricity industry, the IESO and the OPA itself. The government is acting on the advice of the OPA, the agency that studies Ontario's long-term energy needs and is responsible for carrying out the government's electricity plan. "We are taking action to secure the electricity supply Ontarians need today and have set a balanced plan for meeting growing demand in the years ahead," Duncan said. Other features of the government's plan include: - Planning to ensure adequate baseload electricity supply while limiting the future use of nuclear power to today's installed capacity level of 14,000 megawatts. - Directing OPG to begin a federal approvals process, including an environmental assessment, for new units at an existing facility. Although the government prefers to use Canadian companies and technology, its first obligation is to the people of Ontario. Decisions will be made based on the best technology offered at the best price to Ontario ratepayers. - Directing OPG to begin a feasibility study on refurbishing its existing nuclear facilities that will include a review of the economic, technological and environmental aspects of refurbishment. As part of this initiative, OPG will begin an environmental assessment on the refurbishment of the four existing units at Pickering B. - Doubling the amount of electricity drawn from renewable sources, bringing the total to 15,700 megawatts by 2025. - Doubling the conservation efforts suggested in the OPA's report, to reduce electricity demand by 6,300 megawatts by 2025. - Expanding the transmission capacity from Bruce County and surrounding area to facilitate the transmission of electricity from several new wind farms and the Bruce facility to Ontario homes and businesses. "We remain committed to replacing coal-fired generation in Ontario," Duncan said. "We have made significant progress in reducing greenhouse gas emissions and ensuring cleaner air to improve the standard of living and quality of life for all Ontarians." In setting out a balanced plan for ensuring Ontario's energy needs now and into the future, the government considered the advice of the OPA, and was guided by a number of core principles: - Ensuring reliability of energy in Ontario over the long term - Ensuring stable energy prices for Ontarians - Supporting Ontario businesses and creating a climate for future investment - Increasing the use of green, renewable energy - Integrating greater energy efficiency through conservation into Ontario's long-term energy planning - A commitment to replacing coal-fired generation The government is confident the directive to the OPA meets both the core principles and the long-term energy requirements of the province to enhance the standard of living and the quality of life for all Ontarians. The directive is the basis of the Integrated Power System Plan. This 20-year plan, revised every three years, will be submitted to the independent Ontario Energy Board for review and approval. "We are building a new energy future for Ontario," Duncan said. "Our vision is of an Ontario with a safe, clean, reliable and affordable supply of electricity that will power our communities, our businesses and our homes. It is a balanced approach to power the continued growth and prosperity of our province." Disponible en français www.energy.gov.on.ca Contact Info Backgrounder ------------------------------------------------------------------------- DEVELOPING ONTARIO'S INTEGRATED POWER SYSTEM PLAN The government's supply mix directive to the Ontario Power Authority (OPA) will provide the foundation for the development of Ontario's Integrated Power System Plan (IPSP). The IPSP will outline the projects necessary to maintain a clean, reliable and affordable supply of electricity in the province over the next 20 years, and it will be reviewed every three years. In the IPSP, the OPA will focus on the conservation, supply, and transmission projects necessary to achieve the goals set in the directive, based on the best technical advice and forecasting available. In developing the plan, the OPA will engage in a consultation process that will include the public and stakeholders. Once completed, the IPSP will be submitted to the Ontario Energy Board (OEB) for review, including public hearings, which will provide Ontarians an opportunity to comment on the plan and ensure full public transparency about the future of the province's energy supply. The OEB will focus on three requirements: - The plan as proposed by the OPA fulfils the government's directive - It fulfils the directive in an efficient and economically prudent manner - Consumer interests are protected in the plan, consistent with the OEB's statutory mandate. In addition to these requirements, changes to Regulation 424/04 require the OPA to consider safety, environmental protection and environmental sustainability in the development of the IPSP. When approved by the OEB, the IPSP will direct future planning in the electricity sector. Specific projects developed under the IPSP will be subject to the environmental assessment process. Disponible en français www.energy.gov.on.ca Backgrounder ------------------------------------------------------------------------- REFURBISHING AND REPLACING ONTARIO'S NUCLEAR FACILITIES Since the 1960s, nuclear power has been part of Ontario's energy supply and currently provides half of the power used by Ontarians every day. Nuclear power provides reliable baseload power and has historically been the backbone of Ontario's energy system. Ontario has five nuclear stations with a total installed capacity of 14,000 megawatts. However, in 2005 only 11,400 megawatts were operating. The government has contracted with Bruce Power to refurbish and return to service 1,540 megawatts at two units at the Bruce A nuclear station. This would bring in-service nuclear capacity up to approximately 13,000 megawatts by 2009. The government's directive to the Ontario Power Authority (OPA) limits nuclear capacity to 14,000 megawatts. Achieving this will require decisions on refurbishment and replacement nuclear facilities. Refurbishing Ontario's Existing Nuclear Facilities Ontario has refurbished several nuclear units in the past at both the Pickering and Bruce facilities. In 2005, an agreement with Bruce Power was reached that will see the refurbishment and restart of Bruce A Units 1 and 2. As well, Bruce Power plans to refurbish Unit 3, and replace the steam generators in Unit 4, which are currently operating. The government has directed OPG to begin a feasibility study on the refurbishment of its existing facilities to review the economic, technological and environmental aspects of refurbishment. As part of this initiative, OPG will begin a federal environmental assessment on the refurbishment of the four existing units at Pickering B. Building Replacement Facilities While some units may be refurbished, it is not economically feasible to do so in all cases. For example, Ontario Power Generation determined in 2005 that it was not economically feasible to refurbish Pickering A Units 2 and 3. Building replacement nuclear facilities will be guided by the following principles: - Willing host community and appropriate site - Fixed price with performance guarantees - Turn-key agreement to limit the risk of cost overruns - Cost effectiveness over refurbishment Replacement nuclear facilities have long lead times for approvals and construction. Accordingly, the government has directed OPG to begin the work needed to enter into an approvals process, including environmental assessment for new units to be built at an existing facility. Although the government prefers to use Canadian companies and technology, its first obligation is to the people of Ontario. Decisions will be made based on the best technology offered at the best price to Ontario ratepayers. Federal Environmental Assessment Process Any refurbishment of nuclear facilities is subject to a federal environmental review process, as established by the Canadian Nuclear Safety Commission. It takes approximately two years for the environmental assessment to be completed. The ministry will also begin work with the federal government to develop an open and transparent environmental assessment process for building replacement facilities. Opportunities for public input and review are built in to the process to ensure openness and transparency. This will include public hearings to review environmental effects, advertisements, open houses and letters to stakeholders and interested residents. Disponible en français www.energy.gov.on.ca Backgrounder ------------------------------------------------------------------------- REPLACING COAL-FIRED GENERATION IN ONTARIO Since 2003, the Ontario government has made significant progress in reducing the province's reliance on electricity from coal and reducing emissions from the province's coal plants. Ontario is leading the way with initiatives that include reducing energy consumption, replacing coal-fired generating plants, adding new, clean generating capacity, expanding public transit, limiting urban sprawl, toughening industrial emission standards and mobilizing our neighbours to fight transboundary air pollution. From 2003 to 2005, that progress includes: - Closing the single-largest contributor to smog in the GTA - the Lakeview Generating Station in Mississauga - in April 2005. - Reducing total coal-fired electricity generation in Ontario from 36.2 terawatt-hours to 30.1 terawatt-hours, a drop of 17 per cent. - Reducing carbon dioxide emissions, a greenhouse gas responsible for global warming, by 15 per cent. - Reducing sulphur dioxide emissions by 28 per cent. - Reducing nitrogen oxide emissions by 34 per cent. The Ontario government has also made substantial progress in bringing cleaner sources of energy online. Some of these include: - 1,350 megawatts of wind, solar, biomass and hydroelectric generation across the province - The Niagara Tunnel project, which will add enough electricity to meet the needs of 160,000 households - 550 megawatts gas-fired generation from the Portlands project in downtown Toronto - 850 megawatts gas-fired generation from the Sithe plant in Brampton - Contract with Bruce Power to refurbish 1,540 megawatts at the Bruce Nuclear Station. The Challenge The Ontario government had committed to replacing all of the province's coal stations by 2009, based on forecasted demand by the Independent Electricity System Operator (IESO). The IESO has recently revised its projected supply capacity and future demand requirements, by as much as 2,500 - 3,000 megawatts. That has prompted the government to decide it cannot proceed with its timetable to close all coal-fired generation by 2009. Next Steps As part of its supply mix directive the Minister of Energy is asking the OPA to develop a revised plan for replacing coal-fired generation in the earliest practical timeframe without compromising reliability. The OPA is also being asked to recommend cost-effective measures to reduce air emissions from coal-fired generation. Replacing coal-fired generation is just one of the government's initiatives to clean up Ontario's air. Other initiatives include: Transit - By October 2006, the government will have fulfilled its commitment to permanently provide two cents of the gas tax each year to municipalities. In five years, this program will have delivered more than $1.4 billion to public transit in Ontario. - Move Ontario, a one-time, $1.2 billion government investment in the province's public transit systems, municipal roads and bridges. Move Ontario will invest $838 million in transit systems in the Greater Toronto Area, including $670 million to extend the subway to York Region and funding for projects in Brampton, Mississauga and York Region. - In December 2005, High-Occupancy Vehicle (HOV) lanes were opened on portions of Highways 403 and 404 to ease congestion, shorten commute times and improve quality of life. - Providing $600 million for light rail transit in Ottawa. Cleaning the Air - Air pollution standards for cars and trucks are amongst the most stringent in North America - In 2005, the government introduced new standards for 40 pollutants to protect Ontario communities from the impacts of air pollution, the largest update in over 25 years. The government will also review and determine standards for 15 new toxins. - In 2005, the government implemented the Industry Emission Reduction Plan, establishing new emissions caps for industrial pollution sources in Ontario - leading to a 21 per cent reduction in NOx by 2010 and a 75 per cent reduction in SO(2) by 2015. - Legislated that gasoline sold in Ontario must contain an average of five per cent ethanol, beginning in January 2007. This ethanol target will reduce annual greenhouse gas emissions by about 800,000 tonnes, equivalent to removing 200,000 cars from the road. - The Greenbelt Plan, established under the Greenbelt Act and the Places to Grow Act protects more than millions of acres from urbanization. Reduced sprawl will help reduce potential air emissions from motor vehicles. Disponible en français www.energy.gov.on.ca Backgrounder ------------------------------------------------------------------------- ONTARIO'S CONSERVATION AND GREEN, RENEWABLE ENERGY ACHIEVEMENTS The Ontario government's balanced energy plan focuses on increasing the province's supply of renewable energy and on energy efficiency through conservation, with a clear aim of ensuring the province develops a diverse, clean, reliable and affordable supply of electricity. The government's supply mix directive to the Ontario Power Authority (OPA) will provide the foundation for the development of Ontario's Integrated Power System Plan (IPSP). Increasing Green Energy Supply ------------------------------ The government has already made significant progress in expanding the development of clean energy by securing more than 1,300 megawatts of renewable energy. This includes three waterpower projects, three landfill gas and biogas projects, and 13 new wind farms across the province. - Net Metering The province is encouraging homeowners, farmers and schools to set up renewable energy systems by creating a net metering program. This program gives credit to customers who generate their own power from renewable sources for any excess electricity they put back into the grid. Projects that produce up to 500 kilowatts of electricity from clean sources such as water, wind, and solar power and farm biomass are eligible. - Standard Offer The government has announced one of the most advanced Standard Offer programs in North America. Under the program, producers will be paid a standard price directly for every kilowatt-hour of electricity produced at the price set out in their standard offer contract. The Standard Offer Program is expected to result in 1,000 megawatts of new renewable generation over the next 10 years, and is expected to be operational by the fall of 2006. - Smart Metering The government is moving forward with its commitment to install 800,000 smart meters by 2007 and in every home and small business by 2010. Smart meters provide consumers with greater control over their energy costs that can lead to system-wide savings by reducing peak demand. With smart metering, customers can choose to control their energy costs through moving usage to off-peak periods (running the dishwasher at night) or lowering energy use during all periods (setting the air conditioning a few degrees higher). Building a Culture of Conservation ---------------------------------- As part of its plan, the government is also creating a culture of conservation and has directed the Conservation Bureau to launch programs that will result in up to 1,300 megawatts of energy savings by 2010, and up to $1.5 billion in new investments across Ontario. The government is committed to reducing Ontario's projected peak electricity demand by five per cent, and reducing the government's own energy consumption by 10 per cent by 2007. Through innovations like Deep Lake Water Cooling and energy retrofits that are underway or completed across the government's real estate portfolio, the government is already two-thirds of the way towards reaching its target. The ministry funded a total of 25 innovative conservation outreach and education projects through its $1.2 million Conservation Partnerships program including Cool Shops, EcoSchools, and Reduce the Juice. The Conservation Bureau is continuing the success of this through its $1.5 million Conservation Fund to promote sector-specific conservation action and awareness. The government has also put into motion initiatives and policies to help encourage energy efficiency through conservation. Some of these initiatives include: - Every Kilowatt Counts Conservation Bureau campaign providing all Ontario households with information and incentives, including: - $5 off a two-pack of compact fluorescents - $15 off a programmable thermostat - $25 off an EnergyStar ceiling fan. - Cool Savings Rebate Offers the following rebates to consumers: - $500 for replacing an inefficient central air conditioner with a new EnergyStar rated unit - $50 for having air conditioners tuned up by a registered participating contractor - $75 on the supply and installation of a programmable thermostat. The government has also authorized over $160 million in conservation and demand management programs by Local Distribution Companies to be delivered over three years. These companies have proposed over 500 conservation initiatives and invested $34 million as of December 2005. Some of these programs include: - Chill Out London Hydro's refrigerator and freezer replacement program, Chill Out offers free pick up and disposal, as well as $75 towards the purchase of an EnergyStar-rated refrigerator or freezer. About 7,000 refrigerators and freezers have been retired, saving enough energy to power 900 homes. - peakSAVER Distributed Energy and peakSAVER Air Conditioning peakSAVER Distributed Energy is an opt-in program that allows commercial customers who use between 1,000 and 4,999 kilowatts of electricity per month to switch on their stand-alone generators and offset some of the electricity from the grid. peakSAVER Air Conditioning - the program's residential and small business/commercial version - gives Toronto Hydro the ability to remotely "cycle down" homeowners' central air-conditioners, water heaters and pool pumps when the electricity system is stretched. - Toronto Hydro Appliance Program A $1.6 million program to replace old, inefficient appliances in Toronto Community Housing buildings. The incentive will help replace 23,000 old refrigerators, stoves and washing machines with new EnergyStar-qualified appliances and retrofit 19 buildings with energy-efficient lighting products, including building lighting, compact fluorescent light bulbs and light dimmers. - Hydro Ottawa Fridge Bounty Program In 2005, 500 households were able to get rid of inefficient fridges and freezers under the program, saving 600,000 kwh per year. The utility has launched their second Fridge Bounty Program, with the objective of removing an additional 1,000 old refrigerators from the electricity grid for an estimated savings of approximately 1,200,000 kwh per year - enough electricity to run 133 homes per year. Disponible en français www.energy.gov.on.ca For further information: Minister's Office, (416) 327-4418; Communications Branch, (416) 326-9602 HELP | CONTACT US | PRIVACY | IMPORTANT NOTICES © Queen's Printer for Ontario, 2008-2009 — Last Modified: February 15, 2009 For further information: Minister's Office, (416) 327-4418; Communications Branch, (416) 326-9602