EDITOR’S NOTE: This article originally appeared on The Trillium, a new Village Media website devoted exclusively to covering provincial politics at Queen’s Park.
Todd Smith is a man with a plan.
Ontario’s energy minister released a plan on Monday to guide the provincial power system for the next 30 years as demand on the grid is expected to surge in the next few days.
The plan largely revolves around new renewable energy generation, such as nuclear, hydro, wind, solar, energy efficiency, and more. It stands in contrast to past moves where the province secured more natural gas capacity to help meet short-term supply needs.
The plan is a mix of already announced initiatives — like pre-development work on a new large nuclear plant at Bruce — and future proposals.
“Taken together, all of the initiatives that are detailed in this plan … provide the province with a range of options to meet future demand,” Smith said at a Monday press conference in Windsor.
“It will also maintain our diverse supply mix, positioning Ontario perfectly to support electrification and energy affordability while competing for international investments, which are looking for jurisdictions that provide access to clean, reliable electricity,” he added.
The province may need to double its current electricity generation capacity by 2050, according to a report by the Independent Electricity System Operator (IESO), as millions more people come to Ontario, existing power plants go offline, and electric cars become the norm.
The initiatives to come include working on a new round of procurements of renewable energy sources like wind and solar, expanding existing electricity transmission infrastructure and planning for even more, further building out energy conservation programs, and asking the IESO to assess two hydro storage projects.
Re-NEW-ables
The province is in the midst of purchasing 4,000 megawatts of new energy supply — enough to power about four million homes — to meet the demand expected over the next decade.
As part of that effort, in May Smith announced new energy storage and gas plant contracts that will net the province about 1,300 of the 4,000 required megawatts, with more contracts to be announced later this summer.
That won’t be enough, Smith’s plan says.
“Once this competitive process is complete in 2024, there will still be a need for additional generation in the 2030s,” the new plan said.
Smith told the IESO to get cracking on that work now and report back to the government so the actual procurement process can start in 2025 or 2026.
The contracts handed out (or to be handed out) as part of past procurements were meant to meet peak demand in the summer. The plan said the 2025-26 round of procurements will be geared toward filling up some of Ontario’s existing storage capacity to meet demand at any time.
This will allow “intermittent resources like wind or solar, which are completely reliant on weather, to integrate into our grid like they never have before,” Smith said.
Hello hydro
Smith is also telling the IESO to determine whether more hydro fits with Ontario’s energy needs.
The two projects in question — still in the proposal phase — are pumped hydroelectric storage, not a traditional dam. Pumped storage projects store water during periods of low demand, and release it through a turbine during periods of high demand.
The Meaford proposal is headed by TC Energy and, if built, is capable of generating 1,000 megawatts by taking water from Georgian Bay into a to-be-constructed reservoir, then re-releasing it into the Bay to generate electricity.
The Marmora proposal, led by Ontario Power Generation and Northland Power, would turn an old iron mine into a project that circulates the same water from the mine to another reservoir. It’s expected to generate 400 megawatts.
Only one hydro storage project currently operates in Ontario, the Sir Adam Beck Complex in Niagara, which produces 175 megawatts.
TC Energy welcomed the news in a statement to The Trillium.
The project “will be a critical component of Ontario’s growing clean economy and will deliver significant benefits and savings to consumers, said Corey Hessen, executive vice president of power and energy solutions at TC Energy.
The IESO will report back on the projects by Sept. 30 and Smith will render a decision by Nov. 30, the company said. If they get the green light, TC Energy hopes to have it up and running by the early 2030s.
Smith also made a vague promise to “optimize” Ontario’s hydro fleet and the report added a quick line about potential expansion.
“The viability of new projects is largely dependent on the cost to connect to the province’s transmission grid,” the report said.
Mission transmission
Generating enough power is great. But only if you can’t get it to consumers, it might not matter. That’s why Smith is looking to study a build-out of Ontario’s transmission system.
There’s not enough electricity flowing between northern and southern Ontario, the report said, which “restricts opportunities for economic growth, including investments in new electricity generation projects that would create jobs in both.”
Smith told the IESO to study Toronto-to-Sudbury transmission capacity and report back on “unlocking new opportunities for growth.”
There’s also a looming bottleneck within Toronto, the report said, which the IESO will also study.
Overall, Smith’s plan is solid but still presents some risks, according to Brandon Schaufele, a professor of business, economics and public policy at the Ivey Business School.
“Whenever we talk with the energy sector, there's always sort of a three-part trade-off: environmental impact, affordability and reliability,” Schaufele said. “The investments that are being made clearly have a view towards reliability and environmental impact.”
“The open question will be, can those sources be delivered on-budget to maintain affordability? If they can, I think that's a big win. If they can't, then we're going to see prices start to rise again later in the decade or in the 2030s,” he said.
