Update from Ontario: Recalibrating for the Long Term

Review is currently under way of the Canadian province of Ontario’s new Long Term Energy Plan. By 2018, the province will add more than 900 MW of hydropower – an 11% increase – with much more potential possible.

By Paul Norris

While it could be argued that a week doesn’t go by without some “news” in the electricity sector in the province of Ontario, Canada, more strategic policy shifts really warrant attention. And with the provincial government’s launch of its review of the Long Term Energy Plan (LTEP) in July, the province is again in the midst of the key questions of supply and demand over the next 10 to 20 years.

The initial LTEP, issued in 2010, reaffirmed the provincial direction to eliminate coal-fired generation by 2014 as a key climate change policy and established specific “targets” for renewable generation to be in service by 2018. In the case of hydropower, the target was 9,000 MW, which would represent about 20% of the province’s total installed electric generation capacity. The target represented an increase of almost 900 MW over the existing base of hydro capacity, and the good news is that the province of Ontario is well on its way to meeting and even exceeding that target. The review of the LTEP provides an opportunity to look beyond 2018 and explore the role for an increased contribution of hydropower.

Almost concurrently with commencement of the LTEP review, the province’s Minister of Energy, the Honorable Bob Chiarelli, sent a strong message with respect to the government’s support for the expansion of waterpower in a directive issued to the Ontario Power Authority (OPA). OPA is responsible for both long-term planning and electricity procurement. Implementation of the directive means the procurement of up to an additional 115 MW of hydroelectric capacity through procurements that were implemented this September. The directive, which was specific to hydro, includes the following expression of the government’s view heading into the LTEP review:

“Hydroelectric power is a central pillar of the Government’s renewable electricity portfolio. The Government wishes to see continued procurement of hydroelectric capacity. I anticipate that an updated target for installed hydroelectric capacity will be established through the review of the Long Term Energy Plan”

Over the summer, the Ministry of Energy and Ontario Power Authority led province-wide consultation sessions supported by a discussion paper called “Making Choices: Reviewing Ontario’s Long-Term Energy Plan.” This paper is available at www.energy.gov.on.ca/en/ltep/making-choices.

While the review of the LTEP encompasses a wide range of issues and considerations – even extending beyond the electricity sector into natural gas and oil – a core question relates to the projected electricity capacity shortfall Ontario faces, beginning as early as 2018. Pending decisions on nuclear rebuild and the achievement of conservation objectives, the capacity gap to be addressed may range between 2,000 and 6,000 MW. In addressing the projected need for electricity, the government is looking at all options for designing a portfolio that continues to meet economic, environmental and energy needs.

For hydropower, key considerations include:

1. Defining practical potential. The Ontario Waterpower Association (OWA) established in its 2012 Strategic Plan an objective of 12,000 MW of waterpower in production, in development or included in a provincial plan for future development by 2017. OWA represents the common and collective interests of the province’s hydroelectric sector. This would represent the addition of about 3,000 MW of hydro, most likely to be in service between 2020 and 2030. To support the LTEP review, OWA is partnering with key provincial agencies including the ministries of Energy and Natural Resources to update the inventory of potential waterpower sites in the province, with consideration of new drivers (e.g. mining development).

2. Linking to transmission. While there are significant redevelopment and retrofitting opportunities across southern and central Ontario, much of the new greenfield potential is in the north, requiring transmission expansion concurrent with waterpower development. Many of the transmission projects have been previously identified as key infrastructure, and a number of them, particularly in the northwest, are at some stage of predevelopment. The LTEP review will establish regional and provincial transmission priorities, including those that could liberate significant untapped hydro potential.

3. Valuing storage. Relatively new to the discussion is the explicit recognition of the potential increased value of energy storage to the system. Ontario’s existing waterpower fleet is already the backbone of a reliable electricity system, and the Independent Electricity System Operator has consistently identified the need for flexibility across all resources as we transform our supply mix. Pushed forward for “future consideration” in previous planning initiatives, the potential contribution of pumped-storage hydropower will undoubtedly come to the forefront. Ontario’s existing pumped-storage plant at Niagara has expansion potential, and there are a number of active new development proposals.

4. Aboriginal participation. Ontario has embedded into its electricity procurement policies many features to encourage the direct participation of Aboriginal communities as equity partners in renewable energy projects. Almost half of the active waterpower projects in the province are being led by or developed in partnership with one or more First Nations – an approach OWA strongly supports through collaborative “capacity building.” Looking forward, and to the north in particular, the relationships built between waterpower proponents and Aboriginal communities can be expected to create new opportunities for hydro expansion.

The province’s “pause, reflect and recalibrate” review of the LTEP is embedded in the iterative nature of electricity system planning. Perhaps more than any other feature of waterpower that supports its continued expansion is that, uniquely, it gives planners and political decision-makers future options rather than taking them away. In short, adding waterpower adds flexibility.

Conference focuses on Ontario hydropower

The future of Ontario’s electricity system was a topic of discussion at the Power of Water Canada Conference, with both the Minister of Energy and Official Opposition Energy Critic providing keynote addresses. For information on the results of this conference, which was held Oct. 20-22 in Niagara-on-the-Lake, Ontario, visit conference.owa.ca.

Paul Norris is president of the Ontario Waterpower Association in Canada.


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