Ontario will procure additional electricity from natural-gas generation, the provincial government announced Friday, a plan that will increase greenhouse-gas emissions from the electricity sector.
The Independent Electricity System Operator (IESO) recommended in a report released the same day that Ontario add up to 1,500 megawatts by 2027, largely through expansions of existing natural-gas plants. It also recommended buying 2,500 megawatts of electricity storage, which would be charged at times of low demand and fed back to the grid when needed.
Citing the IESO’s report, Ontario’s government said that without new gas-fired capacity, the province faces “emergency actions such as conservation appeals and rotating blackouts to stabilize the grid.” It ordered the IESO to proceed with the procurements.
“An unreliable system with brownouts and blackouts is a non-starter for our government,” Minister of Energy Todd Smith said in a statement. “With today’s actions, we are ensuring that the electricity will continue to be there for families and businesses when they ﬂip the switch.”
Opposition parties decried the plan, pointing out that the government cancelled hundreds of renewable energy contracts soon after assuming office. The new generation would come from expanded gas plants and would emit up to an additional 400,000 tonnes of greenhouse gases into the atmosphere, the IESO predicted.
Chuck Farmer, the IESO’s vice-president of planning, conservation and resource adequacy, said the new electricity supply must be built by 2026, capable of rapidly ramping up and down to meet changing demand, and available for at least four consecutive hours. Though vendors of other technologies will be allowed to bid, the IESO expects much of the new 1,500 megawatts would come from gas.
“Natural gas is uniquely positioned to allow the system to keep pace with the rapidly growing economy and the electrification that we expect in the near term,” Mr. Farmer told reporters during a briefing. “And there is currently no like-for-like replacement for natural gas that can provide all of the services that gas can provide.”
Ontario’s grid includes 33 gas and oil-fired stations totalling nearly 10,500 megawatts – 28 per cent of installed capacity. Atura Power, a subsidiary of Ontario Power Generation, calls its four combined-cycle turbine gas plants the largest natural-gas fleet in the province, with a capacity of more than 2,700 megawatts.
Last year, the output of Ontario’s gas plants amounted to 12.2 terawatt hours, or 8.6 per cent of all electricity generated. In contrast with other forms of generation, such as nuclear or solar, a gas plant’s output can rise and fall within minutes to meet sudden or unexpected changes in supply and demand during the day, which is sometimes called “peaking” generation.
Ontario electrical grid features very little storage capacity – less than 100 megawatts. Mr. Farmer said the IESO believes storage “very much will be the future of the electricity system, complementing all of the other resource types in order to provide reliability.”
The Association of Power Producers of Ontario praised the government’s decision as a safe bet using well-understood technologies.
“Natural-gas generation is a proven technology, natural-gas distribution is safe and secure,” said David Butters, the organization’s president. “We know how to operate it in really hot weather and really cold weather. It ticks off a lot of the boxes.”
Some municipalities and various organizations, including Environmental Defence Canada and The Atmospheric Fund, oppose new gas generation; indeed, several want governments to phase it out quickly. Common objections include fears that new gas plants will become “stranded assets” that will be retired early, leaving ratepayers on the hook.
“It’s completely insane to build new gas plants when we’ve got lower-cost and cleaner options to keep the lights on,” said Jack Gibbons, chair of the Ontario Clean Air Alliance, which recommends wind and solar generation supported by electricity imported from Quebec.
Electricity Canada, an industry organization until recently known as the Canadian Electricity Association, has said that if Canada is to meet its target of achieving net zero by 2035, all of Canada’s fossil-fuel electricity generation plants “will have to be replaced by non-emitting ones, or have their emission abated.”
Mr. Farmer said the IESO’s coming procurement will require natural-gas developers to have a plan for abating emissions for their facility, should future regulations require it. Therefore, the risk of stranded assets “really do reside with the developer,” not with Ontario’s ratepayers.
According to RMI, a U.S. think tank that advocates accelerating adoption of non-emitting energy sources, gas plants are already being abandoned: More than half of the new ones proposed to enter service in the U.S. in the past two years were terminated before construction commenced.
The IESO said it would provide further recommendations on natural gas’s role in Ontario’s electricity sector in another report later this year.