Ontario’s Electricity Dilemma – Achieving Low Emissions at Reasonable Electricity Rates 

Original Goals for Electricity System Transformation

• Reduce CO₂ emissions from power plants:
  • Phase out coal plants and build new efficient CCGT gas plants.
  • Restart 4 nuclear units at Bruce A and 2 units at Pickering A.
  • Add wind, solar, bio-energy and small hydro generation.
  • Refurbish nuclear units as they reach end of design life.

• Create new green energy sector jobs:
  • FIT program to accelerate deployment of renewables.
  • Create 50,000 jobs in new green sector.

• Keep transformation costs within 1% per year in additional costs:
  • Install smart meters with Time-of‐Use (TOU) rates.
  • Encourage peak reduction and load flattening.

• A careful engineering analysis and grid simulation would have shown that the policy goals could not have been economically accomplished because:
  • Backup generation is required for wind and solar. Consequently wind and solar are displacement energy sources.
  • The total value of displacement sources to the consumer is only the economic value of the displaced fuel. For hydroelectric and nuclear it’s 0.5 cents/kWh. For natural gas it’s 4 cents/kWh plus a carbon reduction benefit of 1 cent/kWh for each $30 per ton CO₂ of environmental costs.
  • The policy to eliminate coal in Ontario reduced the carbon reduction benefit of wind and solar by 2.5× because gas is cleaner than coal. …

Why Will Emissions Double as We Add Wind and Solar Plants?

• Wind and Solar require flexible backup generation.

• Nuclear is too inflexible to backup renewables without expensive engineering changes to the reactors.

• Flexible electric storage is too expensive at the moment.

• Consequently natural gas provides the backup for wind and solar in North America.

• When you add wind and solar you are actually forced to reduce nuclear genera,on to make room for more natural gas genera,on to provide flexible backup.

• Ontario currently produces electricity at less than 40 grams of CO₂ emissions/kWh.

• Wind and solar with natural gas backup produces electricity at about 200 grams of CO₂ emissions/kWh. Therefore adding wind and solar to Ontario’s grid drives CO₂ emissions higher. From 2016 to 2032 as Ontario phases out nuclear capacity to make room for wind and solar, CO₂ emissions will double (2013 LTEP data).

• In Ontario, with limited economic hydro and expensive storage, it is mathematically impossible to achieve low CO₂ emissions at reasonable electricity prices without nuclear generation.

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