Ontario’s carbon-free grid would require significant investment and added costs, report finds

A report by the Ontario Independent Power System Operator concluded that creating a net-zero grid by mid-century would nearly triple annual costs to about $60 billion, up from $20 billion today.Nathan Denette/The Canadian Press

Ontario’s emissions-free grid — which could support the mass adoption of electric vehicles and heat pumps — would cost three times a year what the province currently pays, the Ontario Electricity System Coordinating Agency said Thursday.

In report answering Energy Secretary Todd Smith’s questions about the future Ontario Grids, the Independent Electricity System Operator (IESO) concluded that achieving a net-zero grid by mid-century would require around $400 billion in new infrastructure, not to mention vast amounts of land. The annual cost is about $60 billion, compared with $20 billion today. Electricity generation will double, displacing the use of gasoline, natural gas and other fossil fuels.

“Achieving a net-zero economy powered by an emission-free electricity system will involve substantial investment in new infrastructure and increased costs,” the report concluded.

“It is critical to manage this transition carefully so that costs do not hinder electrification, negatively impact the economy, or place an undue burden on low-income populations.”

Ontario may impose a moratorium on new natural gas plants beginning in 2027, IESO said. But the province will have to acquire new non-emissions generating capacity, including small modular reactors and solar farms, ramp up energy efficiency efforts, and spend up to $210-$100 million on new transmission infrastructure — all Will result in higher electricity bills.

The organization has already announced plans to procure as much as 1,500 MW of gas-fired power capacity over the next few years.

“Natural gas does provide flexibility,” IESO vice president Chuck Farmer told reporters at a briefing. “It’s available when the temperature is high and the demand is particularly high, or in extreme cold, or when we have other issues with our fleet that require us to add something very quickly.”

IESO’s vision of continued reliance on natural gas conflicts with the federal government’s proposal to fully decarbonize Canada’s electricity system by 2035. For analytical purposes, IESO assumes that Ontario will still have 7,840 MW of natural gas-fired capacity in 2035, down from 10,000 MW today.

Its findings also refute research from a number of independent agencies asserting that Ontario can and should meet federal goals.

Late last month, consulting firm Power Advisory was commissioned by the Atmospheric Fund to publish one such report. It concluded that Ontario’s plan to expand natural gas generation would increase grid emissions by 260 per cent by 2040. Additionally, it found that a combination of solar and wind power, along with storage and energy efficiency initiatives, would be more affordable and could keep rates on par with what Ontarians pay today. Existing natural gas plants will only be used sparingly.

Bryan Purcell, TAF’s vice president of policy and projects, said new gas plants may have a short lifespan.

“Under current federal regulations, these facilities may need to close by 2035, which may be eight years after they are built,” he said. “IESO has committed that if it passes, taxpayers and taxpayers will bear the cost.”

Carolyn Kim, senior director of community and decarbonization at the Pembina Institute, said in a statement that IESO underestimated the reliability of clean generation assets and overestimated the competitiveness of natural gas.

However, IESO assumes that the gas plants will continue to operate until they are 25 years old – and that existing plants must continue to operate, in part because new transmission infrastructure in Toronto and York Region cannot be completed before 2035.

IESO has also increased its investment in nuclear reactors, the traditional workhorse of Ontario’s power grid. It is estimated that in order to achieve net zero emissions by 2050, Ontario will have to build an additional 17,800 megawatts of nuclear generating capacity. That equates to Ontario Power Generation’s plan to build about 60 small modular reactors at its Darlington nuclear power plant by 2028 — the only new reactor currently planned for the province. If that happens, Ontario will have three times the size of its current reactors by mid-century.

ontario is Race to acquire new power generation capacity to fill the imminent shortage. In its latest annual assessment of grid reliability across the continent, released Tuesday, the North American Electric Reliability Corporation (NERC) identified Ontario as one of a handful of high-risk jurisdictions that could soon experience power shortages even under normal conditions. one. NERC forecasts a 1,700 MW shortfall in Ontario in 2025 and 2026.

“In Ontario, companies are running out of capacity for the next few years starting in 2025,” Mark Olson, senior engineer for reliability assessment at NERC, told reporters at a briefing. Fixed capacity refers to energy that is guaranteed to be delivered under a contract.

“Largely, it comes from planned nuclear work, and planned decommissioning of power plants”.

But natural gas does Contribute to Ontario’s Energy Security. According to NERC, Ontario sources natural gas from neighboring jurisdictions through mainline and distribution facilities. Many of its natural gas plants are close to a major underground natural gas facility operated by Enbridge called the Gas Dawn Hub, which reduces the risk of gas being unavailable during extreme cold conditions.

“Ontario’s natural gas fleet is robust and supported by significant supply and transportation contracts,” the NERC report noted.

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