Power to the People
A Real Path to a Reliable, Cost-Effective, and Clean Energy Future
(Cette politique sera bientôt traduite)
Ted Hsu is the only candidate for leader of the Ontario Liberal Party who has worked in sustainability. For over three years, Ted was the director of SWITCH, a south-eastern Ontario sustainable energy association, whose mission was to work with business, public institutions, and forward thinking individuals to position the south-eastern Ontario economy ahead of the transition from burning fossil fuels to cleaner energy. Because of this experience, he believes that fighting climate change must be a priority, that policy must be assertive and, most importantly, must be realistic.
For Ontarians who care about climate change and care about a transition to a stable, reliable, cost-effective, affordable and clean energy future, there is only one leadership candidate who comes with a background in science, finance and business, sustainable energy and politics that can navigate the path ahead.
The Problem: Lack of Planning for Today and Tomorrow’s Needs
We need affordable, reliable electricity to sustain the energy needs of the people and businesses of Ontario while also fighting climate change. Electrification is happening fast and time is running out to address climate change.
In the coming decade most, if not all, new cars will be electric vehicles (EVs). Home heating will convert to electrical heat pumps, starting from southern Ontario. Industrial processes like steel making will ramp up electricity use. However, power plants and energy grids are not built overnight.
The Ford government has squandered many years, not just by killing renewable energy projects and low-cost conservation programs, but also by failing to invest in flexible storage options, for different contingencies and to complement different forms of renewable energy, that would allow Ontario to prepare for future needs.
That future is not far off. Within the next couple of years, we will begin to see a capacity deficit—our demand for electricity in the province will surpass generation capacity. The Ford government has known about this capacity deficit since taking office, but it wilfully ignored this looming problem until just recently. Now it is procuring new generation, including burning natural gas for baseload power, and extending the life of the Pickering Nuclear station for at least two more years, past the Dec. 31, 2024 expiry of its safety licence.
By the end of 2030—in just seven more years—Ontario will need almost 2,000 megawatts (MW) of new electricity generation. This is new electricity, and assumes that current plants continue to operate past their contract expiry dates, because no other solution has been proposed. The Ford government has two plans to meet these needs. Approximately 300 MW will be covered by a new Small Modular Reactor (SMR) —as long as there are no delays. It’s worth noting that there are no cost savings from SMRs until they are mass produced, which would be into the 2030s at the earliest.
How will the rest of the 2,000 MW deficit be covered by Premier Ford? Overwhelmingly, 1,500 MW, by newly-built natural gas plants with long term contracts. This would be a big step backwards on fighting climate change. The contract length greatly exceeds the federal government’s “Clean Energy Regulations” moratorium date on natural gas facilities, putting Ontario at risk of owning expensive stranded assets. This plan also misses out on the federal Clean Electricity Investment Tax Credit which would pay for 15 percent of capital costs.
Costs and lead times of major equipment have greatly increased across most industries in the past few years, including in the electricity sector. The U.S. Inflation Reduction Act pushes us to the back of the lineup to buy that equipment. Even Canadian energy project specialists have moved to work south of the border. No matter what type of electricity generation, purchasing and taking delivery of major components for generation projects has become more time consuming and more expensive.
This makes conservation programs vital to the urgent issue of how Ontario will source enough energy as our needs increase over the next two decades. Conservation is still considered the least expensive form of electricity “supply” for Ontario and is estimated to be 60% less expensive than energy from natural gas.
Electrification of the economy will put a huge strain on our ageing electrical grid. Therefore, there is a rapidly growing need for distributed electricity generation. It is becoming increasingly important for Ontario to maintain a reliable system.
The Goal: Reliable, Affordable and Sustainable Electricity System
The goal for any long-term energy platform should be to do the obvious: control costs, and provide adequate and reliable quantities of electricity, while lowering GHG emissions. These don’t always go hand-in-hand, but over time, they can.
The only carbon-emitting sector of Ontario’s electricity system, currently, is natural gas.Those plants are still relied upon because they can be quickly turned on when needed (dispatchable) and because our electricity system faces tight supply in the immediate future.
By 2040, Ontario will require at least 6,000 MW of new power. This assumes that everything, including gas plants, continues to operate past their current contract expiry dates. We will have to work with a combination of conservation, efficiency, new nuclear, renewable, and distributed generation to cover this energy deficit while replacing base load natural gas generation with renewables and storage. Natural gas plants still provide hugely important flexible generation to cover gaps in supply, so a transition plan for converting them to clean fuels is crucial.
Below are several ideas that form a vision for a path to a reliable, cost-effective, clean energy future:
- Maintaining Necessary Supply
- Providing Reliability with Flexible Generation
- Promoting Energy Efficiency, Conservation and Affordability
- Investing in Distributed Energy Resources and the Transmission Network
- Developing Green Hydrogen and Renewable Natural Gas
- Engaging Communities Proactively
1. Maintaining Necessary Supply
- Build renewables and storage, enough to displace base load natural gas generation.
- Retain gas power plants to ensure reliability, not for base load power.
- Build out remaining hydropower resources
- Continue with plans to refurbish and expand nuclear power.
- Recognize that it’s harder to replace fossil fuels in remote and northern locations and in certain agri-food applications. These sectors can transition last or transition to green hydrogen and renewable natural gas.
Additional electricity generation is necessary in Ontario. In 2018, we were told time and time again by Doug Ford that we had too much electricity, and he proceeded to cancel renewable contracts and rip wind turbines out of the ground.
Now we are stuck with the consequences of Premier Ford’s bad decision making. Ontario's last Long Term Energy Plan, from the previous Liberal government in 2017, took into account future shortages, but the plan was ignored by Premier Ford.
This summer, Ontario is already close to the point of lacking enough electricity supply to meet demand.
Solar and wind energy are the cheapest forms for power generation today. But they are intermittent, which is why they must be coupled with energy storage. The more storage we have, the more we can make use of cheap solar and wind energy.
It is important to proceed without delay in building out storage. In addition to time running out to stop global warming, we are at the back of the line because of the Ford government's intentional delays and, now, the immense procurement from the U.S. Inflation Reduction Act. Even Canadian developers and experts are working in the U.S..
We need more electricity in the short, medium and long term, and we need it to be clean, reliable and affordable. Given the scale of the need in the next 20 years, we should continue to refurbish nuclear plants, including preparing and designing the Bruce nuclear expansion before CANDU expertise from AECL retirees is lost. Building storage to take advantage of excess renewable generation is also a straightforward way to unlock more capacity from the existing system.
While gas plants have their use as flexible resources, that should be their sole use.
In the last 2 years, gas plant output has increased 62% to now handle one-tenth of the electricity we use. That number, and its associated GHG emissions, will rise. This increase isn’t because of more fluctuating peaks, it’s because of a general lack of supply. This can be made up with renewables without causing system adequacy issues while directly reducing carbon emissions.
Gas and gas infrastructure will remain a backup, as would wood stoves for off-grid heating. Rural and Northern Ontario will probably transition last. However, that is not the final story on gas. Green Hydrogen and Renewable Natural Gas can help cover the most difficult to replace uses of natural gas, and be used with little modification to existing power plants.
At all times we have to keep a realistic eye on costs and check whether there are other areas of the economy where the same expenditures can result in more GHG reductions. The cement, agri-food and heavy transport sectors are examples of competing opportunities.
Not all sectors will transition at the same time. For example, there are agri-food uses of natural gas and propane for drying which will be difficult to replace in a cost-effective way. Heat Pumps will replace natural gas burning furnaces, but their efficiency depends on local climate and surface geology, so southern Ontario will transition first.
There are still modest hydropower resources to be developed in Ontario, about 1000 MW from existing sites and possibly another 3000 MW is possible in northern Indigenous communities that wish to develop them. This renewable resource is a significant contribution to aid our energy transition.
2. Providing Reliability with Flexible Power Generation
- Prioritize the development and building of new storage to compete with gas for flexible generation.
- Transition existing gas plants to cleaner operations.
Beyond providing base load power, we have to consider the reliability of electricity generation. Without reliability there will be economic costs and a loss of political will for the transition.
The biggest challenge with electricity is meeting those few times a year when demand spikes, or when supply is cut off by unusual weather or natural disasters. Very few resources are capable of turning on and off to meet those spikes at a moment's notice.
This is why it has been so difficult to compete with the flexibility of gas plants.
The most obvious direct competitor to a gas plant in terms of flexibility is energy storage. Coupled with renewables, storage provides clean, flexible generation when we need it most.
Examples of storage include chemical batteries, pumped hydro, flywheels, thermal energy and hydrogen. This is a rapidly developing technology sector, and should also be viewed as a potential source of economic growth.
Gas plants, while they may be carbon emitting resources, still have value as quickly available reserves to ensure reliability. Most are tied into long term contracts already, so eliminating them would be a poor financial decision. There are ways of making these plants run cleaner than they do now and still provide the same level of flexibility to the system (see section 5).
3. Promoting Energy Efficiency, Conservation, and Affordability
- Conservation and Efficiency have long been considered the lowest cost power "generation" available. It's the obvious place to start when looking for cost savings.
- Smart land use, building standards and transportation policy will reduce energy use.
- More dedication to developing time-of-use systems, and educating consumers, can reduce peak demand, lower market costs and cut GHG emissions.
- SmartGrid technology can reduce electricity waste.
When asking how we lower electricity costs in the short term, conservation and efficiency is the place to start. It is the lowest cost way to help electricity supply meet demand, by far. Conservation and efficiency at home save money that people can see on their monthly bills.
Examples include insulation in older buildings, replacing oil or electric baseboard heating with heat pumps, individual water and electricity metering, or reflective roofs.
Smart land use, building standards and transportation policy can contribute immensely to reducing energy usage.
Time-of-use pricing has long been a means to shift people’s usage away from peaks and burning less natural gas as a result, but the incentive to do so has always been lacking, and many people don’t fully understand the system. Education, along with a more dramatic price swing between peaks and valleys of demand, can provide the incentive to save significantly more money, lower peak demand for the province and burn less gas. The Ford government has just started to understand all of this, but the effort must be maintained.
In situations such as rentals where the owner and the consumer are different people, incentives don’t work as well and energy efficiency standards will be required.
Waste in the system can also be a demand driver. Simple changes resulting in a smarter grid-to-home system (smart thermostats, time-of-day controls) can cut waste and leave the province needing to supply less energy overall.
4. Investing in Distributed Energy Resources and Grid Modernization
- Distributed energy resources need improvement in Ontario to be ready for an electrified future.
- Small scale storage at the local level can reduce Ontarian’s costs at the source.
The transition to an electrified future has begun. People plug in EVs and this is expected to grow as Ontario becomes a powerhouse for EV production. But even as Ontario ramps up production of cars and generation of electricity to meet new demand, this doesn’t solve the glaring issues at the distribution level.
It doesn’t matter if we have enough electricity in the long run if the local transmission/distribution infrastructure can’t handle it. Think about what it’s like when a fuse blows at your own house because too much energy is being sent through one area. Guess what it’s going to be like when every house on the block wants to charge their EV?
Cities like Palo Alto, California, with high per capita ownership of EVs, have encountered difficulty with inadequate infrastructure for local power distribution. We need to learn from their experience and plan ahead. The province needs to work with local distribution companies to come up with cost effective means of making this transition before it becomes too late and too expensive.
Distributed energy resources don’t necessarily need to be limited to the grid, but can be in individual homes as well. The government should invest in programs to promote adapting small-scale storage in the home. This can help reduce the burden on the grid during peak times, make better use of rooftop solar panels and help people save money when prices are the highest.
5. Developing Renewable Hydrogen and Green Gas
- Promote hydrogen blending at existing gas plants to make them cleaner with no loss of flexibility.
- Take advantage of excess renewables, especially overnight, to generate clean hydrogen.
- Use hydrogen to power the industrial or heavy transportation sector, especially rail, and sell to external jurisdictions.
- Develop green gas options
Hydrogen can be made renewably. The technology is still improving but it exists and can be used at first to soak up excess renewable supply at night. The vast majority of natural gas plants’ existing gas turbines can blend a certain level of hydrogen without needing any major upgrades or changes to the plant itself. At that point, it becomes an issue of economically making clean hydrogen in large enough quantities.
The government has taken the first steps to better understand hydrogen’s role in the electricity sector, but it needs to be accelerated to make a notable impact. The uses of hydrogen extend far beyond the electricity sector into industry and heavy transport, but it is a good place to start.
Renewable Natural Gas can be generated from landfills, livestock, municipal organic waste and wastewater, and agriculture and forestry residue. Its potential in Ontario would cover less than 5% of current natural gas usage, but it’s important as a source of GHG-free gas for the uses which are the hardest to replace. It is also a source of revenue for farms and the rural economy.
6. Engaging Communities Proactively
- Widespread public support is essential to transitioning from burning fossil fuels to renewable energy with storage.
- There are economic benefits to be enjoyed by local communities who host facilities. Local renewable energy generation and storage makes environmental, economic and national security sense.
- Earning support takes time and so must be proactive.
- Special attention must be paid to proactively building trust and earning free, prior and informed consent from Indigenous communities.
The generation of solar and wind energy occupies much more land than nuclear or natural gas plants and so it affects many communities. Therefore this transformation of our energy economy requires widespread political support.
On the other hand, the benefits from renewable energy, conservation and efficiency, beyond the environmental benefits, include:
- Lower cost of living from conservation and efficiency,
- Revenue from energy sales,
- Jobs from construction and procurement,
- Diversification of local government revenue sources,
- Local generation for security from international disruptions,
- Possibility of local ownership shares
Energy conservation and efficiency, while important for the whole economy, affect most people at home and affect most people struggling with cost of living. There is still much to be gained from reducing wasted energy at home, especially from older housing stock. People can see the cost savings and that earns political will for the transition we need.
Local communities must be given time to learn and become comfortable with renewable energy and storage projects. A project's economic benefits should be shared as widely as possible. Communities must be given time to debate the costs and benefits. That is why community engagement must be proactive.
We must take the time to proactively build trust and earn the free, prior and informed consent of Indigenous communities.
Community engagement should be a cornerstone of any plan to stop burning fossil fuels.