Japan’s Crisis Will Affect Ontario Energy Plan

By Greg Meckbach, Queen’s Park Correspondent

(TORONTO, ON) –  Will last month’s earthquake in Japan throw a wrench into the Ontario government’s long-term plan for electricity?

 The short answer is likely.

 In February, the Government of Ontario directed the Ontario Power Authority (OPA) to close two coal-fired generating units at the Nanticoke generation plant on Lake Erie west of Niagara Falls and to increase the use of nuclear power. The goal is to reduce carbon emissions in Ontario’s power generation system by eliminating coal-fired plants by 2014.

 

Despite the emphasis on the Feed-in Tariff program, designed to encourage private investment in wind, solar and other clean energy projects, Liberal Premier Dalton McGuinty is probably not sure that power from wind and solar alone will compensate for the loss of coal power. 

 

So on Feb. 17, Ontario Energy Minister Duguid directed OPA to plan for nuclear power to account for about 50 per cent of total generation. This plan is to include refurbishment of 10 Gigawatts of existing capacity, and procuring additional equipment for 2 GW. 

Three weeks after the OPA got this directive, an earthquake measuring about 9.0 on the Richter scale hit Japan. This resulted in heavy damage to the Fukushima nuclear power plant and a partial evacuation of the surrounding area. Commentators in North America have been asking, rhetorically, whether we should expand facilities here.

 

During question period in the Ontario Legislature March 21, NDP leader Andrea Horwath asked McGuinty whether he would “put a hold” on the hearings into the proposed Darlington nuclear power expansion, until nuclear regulators “assessed the lessons” from Japan.

 

Comparing Fukushima to Ontario Power Generation’s nuclear facilities is comparing apples and oranges. Although minor earthquakes occur in Ontario, they tend to be less than 6.0 on the Richter scale. Public Safety Canada lists 19 major earthquakes in Canada during the last 200 years. All 6.0 or higher earthquakes listed occurred in the north, the west or Quebec.

 

Regardless of the facts, the earthquake in Japan has given the anti-nuclear crowd more ammunition, which they will use. How the McGuinty Liberals respond will depend on whether his candidates in the October election will lose votes to the NDP due to the government’s stance on nuclear power.

 

Whether you are in favour of or against nuclear power, it’s not realistic for Ontario to close down all coal generating units and make up for the reduced capacity through wind and solar alone.

 

Ontario Power Generation currently has 6.6 GW of nuclear capacity, 7 GW of hydro and 6.3 GW of thermal.

 

The province wants to make it easier for other companies to generate solar and wind power, but participating in the Feed-in Tariff program not as easy as one might think. For one thing, the government stopped accepting applications for offshore wind on Feb. 11.

 

According to the OPA’s April 1 bi-weekly report on the Feed-in Tariff program, OPA has received 5,576 applications representing a potential to produce 17 GW of power. That number sounds pretty impressive, considering that OPG’s total thermal capacity is 6.3 GW (including 2.7 GW at Nanticoke).

 

But it’s not so impressive when you look at the other numbers on the charts. A total of 1,241 applicants, with a total proposed capacity of about 3.3 GW, were in the “contracts executed” and “under development” category. According to a press release from the Ontario government last October (which announced the closure of four coal-burning units), Ontario relies on 11 existing coal units producing 4.48 GW. So the total amount of power generated by coal exceeds the total capacity in development under the Feed-in-Tariff program by more than a Gigawatt.

 

According to the April 1 bi-weekly report, a total of 20 Feed in Tariff applicants with 11 Megawatts (0.11 GW) were operational. That’s less than 0.1 per cent of OGP’s total capacity. A total of 404 applicants, with more than 8 GW of capacity, were categorized as “awaiting ECT.” This means they did not pass the  Transmission Availability Test (TAT) and the Distribution Availability Test (DAT). Failing the TAT and DAT is not necessarily a show-stopper for applicants to the feed-in tariff program. Those who fail those tests can then proceed to an “economic connection test,” which is designed to determine whether the costs of the upgrade required for the grid are justifiable for initiating development work.

 

However, it does mean there is a total of 8 GW of potential (yet-to-be-built) clean power generating capacity that could not connect to the grid if it were built now, with no clear indication of whether those projects will be able to hook up in the short term, or how much it will cost to upgrade the transmission networks to enable them to operate if they ever are built. Even if they can get a suitable link to the local distributor, there are domestic content rules forcing applicants to buy some components manufactured in the province.

 

Still, the Ontario government is determined to eliminate the use of coal in electricity generation. The timeline has been a moving target. Although  Minister Duguid has pointed out that the Conservatives increased coal power 127 per cent while they were in power, the Liberals have been pushing back their deadline to eliminate coal.

 

Last October, Ontario Power Generation permanently shut down four coal generating units: Two at Nanticoke and two at Lambton in Sarnia. This move came five years after it shut down the coal generating units at the Lakeview plant in Mississauga.

 

The Ontario opposition Conservatives have a lot to say but do not address the crux of the problem, unless they believe an increase in coal use is the silver bullet. John Yakabuski, MPP for the Ottawa valley area riding of Renfrew-Nipissing-Pembroke and the Conservative energy critic, is focused mainly on executive compensation, the existence of OPA and the higher rates resulting from the so-called smart meters, which charges consumers more during peak hours.

 

Yakabuski raises some valid points, but the debate in the Legislature has been more about finger-pointing than constructive dialogue.

 

On March 28 in question period in the Legislature, Yakabuski asked Duguid about the OPA, which he characterizes as a “bloated bureaucracy.” Duguid accused the Tories of wanting to “remove planning from energy altogether.”

 

The Conservatives introduced a motion calling for the OPA to be dismantled. The motion was defeated 46 to 21 in the Legislature on March 28.

 

The Conservatives have pounded the Liberals over hydro rates. For customers who have smart meters, regulated rates range from 5.1 cents per Kilowatt hour for off-peak (from 9:00 pm until 7:00 am) to 9.1 cents per Kwh for peak times.

 

Companies providing power under Feed in Tariff are guaranteed much higher rates. A biomass facility providing more than 10 MW would get 13 cents per Kwh while a rooftop solar energy project providing less than 10 Kwh would get 80 cents per Kwh. All onshore wind facilities get 13.5 cents per Kwh.

 

Yakabuski is opposed these subsidies the Liberals are giving to Feed-in Tariff generating firms.

 

The refurbishment of nuclear plants, buying new reactors and subsidizing solar, wind and biomass generating stations will cost money. What Ontario residents don’t pay through their hydro bills they will pay through their taxes. The Liberals made a bold move when they decided to eliminate coal. They made a bold move with the Feed-in Tariff program, and another bold move by including domestic content requirements. The challenges of building solar and wind-based infrastructure using components made in Ontario did not put the Liberal in an easy position. The backlash over the crisis at the Fukushima plant has put them in an even more difficult position.

Greg Meckbach is a digital media editor in Toronto. The views expressed here are his own.

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