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Nukes, natural gas, renewables in, coal out Ontario lays out roadmap for energy future; emphasis on salvaging nuclear power; natural gas figures large despite uncertainties Gary Park For Petroleum News
Those looking for a blueprint on future energy consumption in North America might be well advised to pay close attention to Ontario, Canada’s industrial heartland and most populous province with 13 million residents.
Pledged to close all of its coal-fired power plants and facing an uncertain supply and price future with natural gas, the province is set to embrace a revival of nuclear-powered electricity generation, while reaching out to renewable energy sources.
Premier Dalton McGuinty has also left a crack in the door open should efforts to develop clean-coal technology achieve a breakthrough.
The outline was contained in a report by the Ontario Power Authority, a government-created independent body assigned to ensure long-term energy supply in a province facing a widening gap between supply and demand. Nuclear recommendation most controversial The report’s most controversial recommendation is to spend C$40 billion on nuclear plants over the next two decades, regardless of woeful experience with nuclear power, including a C$20 billion debt left by Ontario’s earlier misadventures in the sector.
The authority says the province needs to add 9,400 to 12,400 megawatts of nuclear energy by 2025. Currently, Ontario has 16 nuclear reactors that generate a total of 11,400 megawatts.
It is adamant that by properly managing the construction and financial risks and maintaining high capacity factors and consistent operation, nuclear generation offers an “excellent alternative” to natural gas generation, which is expected to be a major resource to carry Ontario through its phase-out of coal-fired power, then play a “more targeted role,” reflecting unease over future supplies from Western Canada and the Arctic.
Gas is expected to edge up from 7 percent as feedstock for current electricity production to 11 percent in 2015, then slide to 9 percent in 2020 and 6 percent in 2025, but more than double as an output source from just under 5,000 megawatts in 2005 to 11,000 megawatts in 2025.
Renewables are projected to climb in increments from 23 percent today to 40 percent, 42 percent and 43 percent by 2025, increasing from 7,855 megawatts in 2005 to 15,500 megawatts in 2025. Nuclear to be 50% of electric generation Nuclear generation will stick close to 50 percent of electricity production over the two decades, with its contribution to production rising from 11,397 megawatts to 15,000 megawatts.
Under government policy, coal is forecast to drop from 6,434 megawatts in 2005 to zero by 2015.
However, the authority concedes that gas-fired generation has a number of attractive features: It can be built quickly, located to relieve transmission bottlenecks and can complement wind generation in meeting demand, especially in summer.
But a four-fold rise in gas prices over the past five years gives rise to a belief that gas prices will “remain high and volatile” and, because of competition among residential, commercial and industrial users, “puts its availability at a premium or even at risk.”
The authority did not recommend gas-fired generation “for base-load generation because in that role it presents risks across all three dimensions of cost, environmental impact and financial risk.”
As a result, the report turned its major thrust to the building of new reactors or refurbishing existing plants to maintain nuclear power’s 50 percent share of the province’s overall electricity production.
It suggests the government needs to spend up to C$83 billion over the next two decades to build reactors and hydroelectric dams as well as some gas-fired generation plants. Electricity bills expected to grow 17% Chief executive officer of the authority, Jan Carr, said the capital costs of such a plan will increase customers’ electricity bills by 17 percent from the current C$12 billion a year.
But that doesn’t end the bad news. A separate report by the Association of Major Power Consumers in Ontario warns the government’s plan to shut down all of the coal-fired generating plants by 2009 will add another C$3 billion a year to electricity bills.
But the 1,100 page report said it would “make sense to continue monitoring the timing risks” around the current schedule to phase out coal plants.
It says the facilities at coal-fired plants should be retained in case technology to clean up and increase the use of coal becomes economically feasible, despite the insistence of Energy Minister Donna Cansfield that there is no such thing as clean-coal technology and her determination to eliminate up to 30 million metric tons a year of greenhouse gas emissions by replacing coal.
In an effort to placate the “green” community, the government followed the report by negotiating C$2 billion in contracts to build wind and hydro power projects to have 10 percent of electricity in Canada’s biggest market come from renewable sources.
Cansfield granted contracts for eight wind facilities and one hydroelectric development to supply 975 megawatts to power more than 250,000 homes over the 2006-2008 period.
“We have made an important commitment to clean, green, renewable energy,” she said.
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