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Thursday, September 28, 2023
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Powering Ontario’s Growth: nuclear or gas, or nuclear and/or gas

We congratulate Ontario energy minister Todd Smith for publishing an excellent and clear plan for Ontario’s energy. Powering Ontario’s Growth was published early July, and represents one of the very few, if not the only, energy plan that acknowledges that heating and transport are energy use categories, and that “Refined Petroleum Products” and natural gas are energy. That categorization alone separates this plan from its counterparts in and out of Ontario.

Particularly interesting was the treatment of electricity affordability (p. 19). After displaying a plot showing average contracted/regulated prices per kilowatt hour of the major generation sources on the Ontario grid, the report says

“The government’s approach to ensuring affordability is based on leveraging the existing resources on the system today. Currently hydroelectric and nuclear provide the lowest-cost power to Ontario’s grid, with contracted solar and wind costs being higher, reflecting the over-market priced contracts signed between 2004 and 2016. Ontario’s recently procured clean storage resources will help these renewable energy resources provide capacity, by addressing their intermittency due to weather-dependency, while also helping Ontario to better integrate future renewables assets to support the province’s growing electricity needs.”

Here are those costs, sorted by cost from lowest to highest, together with crucial information (often lacking in such comparisons) on the compared sources’ generation output attributes. These attributes tell whether or not a source is viable on the grid.
Table 1: Ontario electricity generation costs

Generation typeCost, ¢/kWhDispatchable?Baseload supplier?
Hydroelectric6.1
Nuclear10.1
Gas11.3
Wind15.4
Bioenergy25.8
Solar50.2
(Cost figures based on Powering Ontario’s Growth, Figure 1.7, p.19)

Two things are instantly obvious from this table. First, wind and solar are neither dispatchable nor baseload suppliers. This explains why they are among the most expensive generation types. That characteristic won’t change. Wind is highly erratic, often is a very low producer during times of high demand; solar is also highly erratic, and usually does not any power at all.

Second, the three cheapest generation sources, hydro, nuclear, and gas, are either dispatchable or baseload sources. That explains why they are the cheapest.

In the quoted passage above, it is claimed that storage will help to address the important issue of intermittency of wind and solar. However, affordability is absent from consideration. But that is the crucial point. Affordability is the prime determinant of whether electrification succeeds or fails.

As mentioned, Powering Ontario’s Growth correctly identifies refined petroleum products and natural gas as the biggest energy sources in Ontario. The former, in the form of gasoline and diesel, powers almost all road transport. The latter heats residences and commercial and institutional buildings. If grid electricity is less affordable per unit of useful energy, then electrification will have to be mandated. Such a mandate would be too politically risky for a government to implement, and we doubt any government would try.

Dispatchable/baseload implications
This means Ontario’s alternatives for building the new generation capacity that the Minister says we will need really boil down to hydro, nuclear, and gas—the three cheapest electricity generation sources, by far.

Unfortunately hydro is virtually all tapped out, and is therefore not available as a bulk alternative. So drop hydro from the list, which leaves nuclear and gas. Certainly these sources are capable of powering the entire grid, but one of them is zero-emitting and the other his high emitting. (Biofuel represents such a minuscule contribution that we wonder why it is on the list at all. We do not consider it here.)

Another fact jumping out of the table is that wind and solar, neither of which is dispatchable or baseload supply, require the sources that are dispatchable and baseload. In other words, wind and solar require some combination of hydro, gas, and nuclear simply in order to be viable on the grid. This means that the costs of having wind and solar on the grid exceed those shown in the table. The figures shown are nominal costs—i.e., contracted or regulated. The costs do not include the system costs.

Most importantly, one of them—nuclear—is expandable, to well over twice current capacity, with virtually no land use expansion. The other, gas, must utilize significant new land. For this reason, it carries significant political risk. The Ontario Liberal Party failed to reach official party status in two consecutive elections due to this feature of natural gas generation.

(The gas plant scandal of 2011 destroyed the Liberal Party dynasty in Ontario. Had the Liberals not known their prospect of winning a third consecutive majority government in the 2011 Ontario provincial election was dim, there would have been no need to cancel construction of two gas-fired power plants in critical ridings in Oakville and Mississauga. That prospect was dim, because of voter discontent in four southwest Ontario ridings that until 2011 were solidly Liberal but swung hard against the party because of the Green Energy Act of 2009, which waived local bylaws forbidding industrial construction in residential and farming zones; this allowed wind turbine developers to force turbines into those ridings over local objections. Realizing the GEA would cost them those 4 ridings, and fearing a general anti-Liberal backlash, the Liberals panicked, cancelled the Oakville and Mississauga gas plants, and because they failed to win a majority government were unable to quash the inquiries into the cancellations. The fallout from the inquiries destroyed the then-premier’s political career, put his chief of staff in jail, and led to the Party’s electoral destruction in 2018, from which it has not yet recovered.)

Ideology vs fact
The facts are stark, and we applaud Minister Smith for putting them prominently in Powering Ontario’s Growth. Wind and solar are by far the most expensive generation sources in Ontario’s current grid. At such prices, wind and solar simply cannot be prominent in the electrification generation mix in the future.

This leads inevitably to the following:

  1. Storage, which is many times more expensive than current infrastructure and equipment for balancing both “random” demand and intermittent wind/solar, also cannot be prominent in the future generation mix.
  2. Wind and solar are politically risky, as witness the Ontario Liberal Party demise beginning in the 2011 election.
  3. Minister Smith has, rightly, said publicly that wind and solar are unreliable and too expensive.
    The political constituencies that support wind and solar have never and will never support the current governing party in Ontario. They did and still do support the Liberals, who failed to achieve official party status in the most recent two elections.
  4. These constituencies, which offer little in the way of constructive advice on how to viably electrify Ontario’s two biggest energy use categories, are also of little use in building a viable governing paradigm.
  5. They are therefore safely ignored.
  6. The only viable non-emitting electricity generating source is nuclear. Hydro has been tapped out.
    Natural gas for major bulk electricity generation carries economic, environmental, and political risks:
  • Economic: prices have the strong potential to spike into the territory we saw in the run-up to 2008.
  • Environmental: At a floor CIPK of 400 grams for electricity generation, a major new commitment to natural gas–fired generation offers no hope of meeting Ontario’s or Canada’s commitments to emissions reductions.
  • Political: Each new facility requires new large transmission lines, and carries high likelihood of organized political opposition, just like in Mississauga and Oakville in 2011.
    Nuclear generation capacity could be more than doubled, from the existing land footprint at existing and connected current plants. A twofold expansion of nuclear capacity carries virtually no land-use implications at all.

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