Auditor-General’s Report Raises Important Issues for the Future of Ontario’s Energy System

03 Dec 2015 5:36 AM | Anonymous

This article was written as a response to the editor of the Globe and Mail about their article on the Auditor General's report written on December 2, 2015.

The Auditor-General's report poses many important questions and re-opens the debate on how the province should plan our electricity system. First of all, we should be planning for our energy needs, not just our electricity requirements.

With climate change affecting ever more aspects of our lives, we have an obligation to develop our energy system in a way that mitigates climate change and reduces greenhouse gas emissions, with proper consideration of all technical, financial and social implications. The Ontario Sustainable Energy Association (OSEA) agrees with the Auditor-General's report. We do need a transparent process for energy planning, in particular around decisions that will affect the price consumers pay, not only now, but also in the future.

Only yesterday, TransCanada announced details about a government deal with Bruce Power regarding the refurbishment of its aging nuclear reactors, extending their lifespan to 2064. What is troublesome about this is what we have to pay for the power from these reactors. In 2016, Bruce Power will receive a uniform price for all units of $65.73 per MWhr. Over time, that price will be subject to a series of adjustments that most of us will never be able to understand or even know. Juxtapose this uncertainty to Feed-in Tariffs (FIT). The rates paid for renewable energy projects, such as wind, solar, hydro and bio-energy, are fixed for 20 years.

Generators will be given no additional adjustments - the price is the price - very transparent and very predictable. FIT rates have decreased with significant reductions for solar PV, as technologies and project development costs decrease - a trend forecast to continue. The only thing we know about the price of nuclear power is that it keeps going up and that in Canada and around the world projects always costs more than estimated. If a private FIT project developer goes over his budget, there is no bailout from the province.

What the Green Energy Act and the Feed-in Tariff enabled Ontario to do, and the Auditor-General's report fails to notice, is that it jump-started an entire industry, creating jobs, manufacturing and opportunities for communities, municipalities, farmers and First Nations to develop and benefit from their own energy projects.

Energy is a complex issue, but virtually all other industries are changing with the introduction of new and smarter technologies. Rosemarie Leclair, chair and CEO of the Ontario Energy Board (OEB), aptly pointed out, in her speech at the APPrO conference, that we can already foresee great changes in the way in which energy will be generated and consumed in the future. According to her this is similar to what has happened in other industries, for example, the taxi or television industries, with the introduction of Uber and Netflix.

Another point that the Auditor-General's report failed to note is that left to its whims; the former OPA would have continued with the status quo and gone ahead with not only nuclear refurbishments but also new nuclear plants. What we do know is that at only 28% efficiency, every kilowatt hour generated at a nuclear plant creates heat that is wasted forcing us to use fossil fuels to heat our homes and buildings, resulting in more greenhouse gas emissions. It is a vicious circle and, therefore, a myth that nuclear plants add no greenhouse gas emissions.

Building new large-scale power plants and building out high-voltage transmission lines no longer makes sense in this new technological era of interconnected and highly flexible micro solutions. OSEA and many others believe that building a smarter, decentralized and more nimble system based on renewable energy, cogeneration, improved efficiency, and conservation is the prudent path for consumers as well as the environment. One of the biggest issues in our current system is that much of the heat generated during the production of electricity is wasted. In countries like Denmark, no power plant will get a permit unless the heat is captured and used. Even government directives have not been effective in getting the former OPA to pursue even a fraction of the opportunities for combined heat and power in Ontario.

Ontario has to find a better way. OSEA is initiating a study that is intended to help Ontario do just that.

Written by Nicole Risse, Interim Executive Director, Ontario Sustainable Energy Association

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