Ontario Quits Coal

In the province's energy plans, Kyoto looms large

PHOTO: Norm Betts/Bloomberg News/Landov

BORING

This trench will take water from the Niagara River to a new generating facility at the falls.

Although most industrialized nations have ratified the Kyoto Protocol—which requires them, by 2012, to cut their greenhouse gas emissions to levels below what emissions were in 1990—many key signatories have yet to curb growth in energy consumption, making it hard or impossible to cut their emissions. Canada, for one, is so far out of compliance that it is even further from controlling its emissions than is the United States, which has been roundly condemned in Europe for refusing to accept the terms of the treaty. With just six years remaining before the Kyoto deadline, when Canada’s emissions are supposed to be 6 percent below 1990 levels, they are at present nearly 27 percent higher.

The challenges facing Canada are most acute in Ontario, the province with the greatest population (12.6 million) and economic power (US $444 billion gross domestic product, or roughly half that of New York state). Ontario needs to increase local ­electricity-­generating capacity in order to stay ahead of demand that is increasing at an average annual rate approaching 1 percent and to reverse a growing (and costly) dependence on electricity imported from neighbors such as Quebec and New York.

Historically, Ontario residents have not given energy use a second thought, because electricity was dirt cheap and there was never any concern about the availability of nuclear, coal, and hydroelectric power. The result is per capita electric energy consumption that is 55 percent higher than in New York or California.

Despite Ontario’s huge power appetite, the government has been under pressure to close the giant coal-fired ­electricity-generating plants that have been supplying a quarter of its power. Climate change may be an important enough reason to stop burning coal, but the main impetus for the policy has been evidence linking 660 premature deaths and 1100 emergency room visits each year to the chemical stew issuing from smokestacks. Complicating any plan to switch to low-carbon energy sources is the fact that the province gets more than half of its electric power from nuclear reactors that are rapidly approaching the end of their intended life spans and are increasingly in a state of disrepair.

In the face of these competing imperatives, the Ontario Power Authority, in Toronto, set up specifically to manage long-term electric energy planning, has hatched a bold plan that makes hard choices others have shied away from. According to the energy strategy, called the Integrated Power System Plan, Ontario will cut coal ”in the earliest practical time frame,” with 2009 being the target date. The province will rely heavily on renewable energy, prop up its deteriorating nuclear fleet, and make much more efficient use of its energy resources.

Data: Ontario Ministry of Energy

Replacing Coal in 20 Years

If all goes according to plan, new wind farms will continue cropping up across the province, helping take total electricity production from renewable sources to 15 700 megawatts [see charts, ”Replacing Coal in 20 Years”]. New hydroelectric projects, such as a 10.4-kilometer tunnel connecting the upper Niagara River with the Sir Adam Beck generating facility at Niagara Falls, will also play a role [see photo, ”Boring”].

At the same time, the plan will encourage consumers to become energy suppliers by requiring the Power Authority to pay 11 Canadian cents for every kilowatthour produced by small-scale (10 MW or less) wind, biomass, or hydroelectric generators and 42 cents per kilowatthour for solar energy. This Standard Offer program, say observers, will eliminate bureaucratic barriers that had prevented farmers, rural ­landowners, and businesses from selling energy to the grid. They predict that 1000 MW of previously untapped renewable energy will come online in the next decade.

”Encouraging communities to develop more renewable electricity will spur the kind of innovation in the energy sector that will help clean up our air, create jobs, and contribute to our long-term prosperity,” says Ontario Premier Dalton McGuinty.

A controversial and problematic element in the plan’s proposed energy mix is its expectation that nuclear reactors will continue to generate upward of 14 000 MW in 2025—the same amount of electricity that they put out today. Not so long ago, seven of the province’s 19 reactors had to be shut down because of safety concerns. And among members of the Organization for Economic Cooperation and Development, Canada had the worst record of operating its reactors reliably from 1990 to 2002, according to the Ontario Clean Air Alliance. Some of Ontario’s reactors are scheduled to be decommissioned as early as 2014, but the province has yet to decide whether they will be replaced by newer versions of the country’s homegrown Candu reactor or by reactors from foreign suppliers.

Either way, the province is pressing ahead. It pays roughly $5 billion to refurbish two reactors that were taken out of operation after an independent commission reported in 1997 that the province’s nuclear plants were being poorly managed.

The Ontario Clean Air Alliance, among others, argues that the ­province would get more bang for its buck by ­converting one or more of its now-­inactive coal-fired plants to natural gas. The organization estimates that it would cost roughly $75 million to convert the Lakeview Generating Station’s coal boilers to burn natural gas. And the conversion would yield more than 1000 MW, compared with the 515 MW derived from the Pickering A nuclear reactor, which will cost $1 billion to restart. What’s more, says the group, state-of-the-art combined-cycle gas turbines are considered virtually immune to shutdowns, while in the past, coal plants have had to be reactivated when nuclear plants proved unreliable.

The Ontario government also recognizes that it can never maintain an adequate reserve margin between demand and capacity unless it systematically addresses the region’s carefree energy use. So it has set a goal of shaving 6300 MW from projected peak demand by 2025 through conservation. Ontario has put its money where its mouth is in this area, funding initiatives such as smart metering, which allows consumers to shift some of their energy use to off-peak periods and so pay less per kilowatthour.

A two-tiered rate system that the government has set for the whole ­province—5.8 cents per kilowatthour for the first 600 kWh per month and up to 6.7 cents per kilowatthour after that—also encourages consumers to cut back on energy use. A demand-response program pays users who ­volunteer to curtail their use during periods of peak demand. The rationale is that what the government will likely pay users to conserve will be far less than what it would pay for excess capacity on the spot market.

Another concession to the importance of conservation has been a shift in the metrics by which local utilities are judged. Previously, their profits were tied to electricity sales, and this was a strong disincentive to introduce conservation programs. But new laws passed in 2004 give utilities profit bonuses equaling 5 percent of the total savings their customers see on their energy bills. Meanwhile, the province has permitted electricity rate increases totaling $225 million to finance energy conservation plans. Ontario expects those plans to save consumers a total of $1.6 billion on their electric bills.—

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