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Ontario set to avoid ‘over-committing’ on new, big energy projects

Liberal Energy Minister Bob Chiarelli speaks in Toronto on April 15, 2013.


Still reeling from its $1-billion gas-plant debacle, Ontario's Liberal government says it will avoid making commitments for large-scale new power projects.

The province is expected to release its new long-term energy plan within a few weeks, as it faces fierce criticism over the cost of cancelling two gas-fired power plants and rising consumer prices.

Energy Minister Bob Chiarelli said the government will commit only to projects that address short-term power needs, and will provide annual updates on the rapidly changing supply and demand picture.

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He said demand is growing more slowly than was anticipated just three years ago, when the province released its most recent plan. Earlier this fall, the government shelved plans for two new nuclear reactors that had been considered necessary to fill a gap after 2020.

"Driven by international economic circumstances, changing local need, better management of the system and the changing structure of our economy, we risk over-committing if we signal large-scale new generation build-outs," he told an industry conference on Tuesday.

Earlier in the day, a senior official with the province's power planning authority gave broad hints about the new energy plan, saying it would focus on "cost containment and cost reduction" rather than environmental goals and direct job creation, the hallmarks of previous plans.

But increased energy efficiency, conservation and other methods for shaving demand at peak periods remain the cheapest options, said Amir Shalaby, vice-president at the Ontario Power Authority.

At the same time, the province appears to be still committed to plans by Ontario Power Generation to refurbish reactors at its Darlington site, and Bruce Power retooling more of its units at the Bruce plant on Lake Huron.

Conservative Leader Tim Hudak said the Liberal government has badly mismanaged the system – and not only with its politically fraught decision to cancel two gas-fired power plants before the last election.

Mr. Hudak has attacked the Liberal government's Green Energy Act and heavy commitment to renewable sources, particularly wind power. And he said the provincial energy policy will be a major issue in the next election.

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The result has been higher electricity prices that undermine the competitiveness of key manufacturing sectors that are big energy users, he said.

"If we send investors and job creators the message that we can't manage our $15-billion energy sector, they'll take their business elsewhere," he said.

The Conservative Leader said he supports plans to build new reactors in Ontario – even as the Liberals suggest the additional electricity will not be needed – and that committing to massive plants with high capital costs is the most prudent investment.

Mr. Hudak said he expects demand for power to increase more rapidly than the Liberals indicate, adding a Progressive Conservative government would bring manufacturing jobs and investment back to the province.

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About the Author
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More


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