Overview of Electricity Sector

Ontario’s electricity system has expanded and diversified significantly since the commissioning of the massive hydroelectric station at Niagara Falls in 1925. The province’s considerable hydro resources were sufficient to provide for almost all its electricity needs until the early 1950s when rising demand, fuelled by the postwar economic boom, brought about the construction of large coal-fired plants near major population centres. Between the early 1970s and early 1990s, Ontario invested heavily in nuclear power, building twenty CANDU nuclear reactors that, today, account for around 35% of the system’s overall capacity and 62% of its output [i]. Since the opening of Ontario’s electricity market in 2002, almost 10,000 MW of natural gas capacity has also come online, as well as several thousand megawatts of renewable energy generated from wind, biofuels and solar power. In all, Ontario’s diverse supply mix totals over 35,000 MW – the second largest generation capacity of any province after Québec.

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The current supply mix is quite different from a decade ago, when coal-fired generation accounted for almost 25% of installed capacity. At this time, Ontario’s electricity system was the most polluting in the country and the cause of air quality and human health problems in southern Ontario [ii]. After several years’ delay, the Liberal government’s pledge in 2003 to close all its coal-fired plants was finally achieved in late 2014. The elimination of coal from the supply mix represents the single largest greenhouse gas initiative in North America to date. Emissions from Ontario’s electricity sector have decreased by 68% since 2005, the equivalent of taking 7 million cars off the road [iii].

The current iteration of Ontario’s Long Term Energy Plan (LTEP) prioritizes conservation over new generation, reflecting the province’s current strong supply situation and lower demand growth. The province has decided not to proceed with construction of new nuclear reactors but will undertake refurbishments at two of its three nuclear stations. It is expected that the Pickering station, Ontario’s oldest, will be taken offline by 2020. In terms of fossil fuels, the province has committed to natural gas for peaking purposes and has undertaken targeted procurements for combined heat and power (CHP) projects that focus on efficiency or regional capacity needs.

The LTEP calls for 20,000 MW of renewable energy to be flowing into Ontario’s grid by 2025, representing almost half (46%) of Ontario’s installed capacity. Of this, 10,700 MW will be generated by wind, solar and bioenergy, while the remainder will be generated through hydropower. Although the overall non-hydro renewable (wind, solar, bioenergy) target remains the same as pledged in the original 2010 LTEP, the updated version indicates they will be phased in over a longer time period than previously planned.

 

[i] Independent Electricity System Operator. 2015a. “Supply Overview”, retrieved from http://www.ieso.ca/Pages/Power-Data/Supply.aspx, 7 Aug 2015.

[ii] Environment Canada. 2015. National Inventory Report 1990-2013: Greenhouse Gases and Sinks in Canada, Part 1. Retrieved 29 Jul 2015 from http://www.ec.gc.ca/ges-ghg/default.asp?lang=En&n=5B59470C-1.

[iii] Clean Air Alliance. 2015. Ontario’s coal phase out. Retrieved 12 Aug 2015 from http://www.cleanairalliance.org/support-a-clean-energy-future/ontarios-coal-phase-out/.

 

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