Canadians have been spared the electricity-price spikes experienced in Europe as consumers and businesses there now bear the brunt of years of myopic planning and complacency, which left the continent far too dependent on Russian energy.
We must not gloat. Policy-makers here have not been any more prescient in recent years than the Europeans in ensuring Canada can generate enough power, especially of the non-carbon-emitting variety, to meet demand at a reasonable cost. And it may be only a matter of time before we face an electricity-supply crunch, too.
The really big decisions required to meet demand – which is slated to grow by half by mid-century – keep getting postponed out of a mix of procrastination and politics. Governments here face the twin tasks of decarbonizing the power grid while preparing to meet a surge in demand stemming from the rapid electrification of everything from cars to steel mills and aluminum smelters. Yet, they have been slow to take actions to enable this transition at the lowest cost, and with the least disruption possible.
The situation is most critical in Ontario, where electricity-supply shortages threaten to lead to brownouts and surging energy bills for industrial and residential users (without additional public subsidies) before the decade is over.
Last week, Ontario Energy Minister Todd Smith announced that the province is seeking approval from the country’s atomic-energy regulator to keep the Pickering nuclear generating station operating until late 2026. But that merely amounted to a first step in acknowledging the problem. Far more costly – and controversial – decisions will be required soon, including whether to proceed with a multi-billion-dollar refurbishment of Pickering to extend its life for decades.
Opposition politicians have blamed Premier Doug Ford’s government for exacerbating the problem by cancelling several green energy contracts after first taking office in 2018. This is a weak criticism. Those wind and solar energy contracts would have supplied 443 megawatts (MW) of power – and only on an intermittent basis, at that – or barely 1 per cent of Ontario’s installed electricity-generating capacity of more than 38,000 MW. What’s more, without storage capacity, wind and solar power cannot be counted on to meet Ontario’s baseload electricity needs. They are just not reliable enough.
There is simply no way to replace the 14 per cent of Ontario’s electricity supply that Pickering currently provides with wind and solar. That’s why refurbishing four of Pickering’s six reactors may well be the best option. But it is not the only one.
Alternatively, Ontario could renew its existing contracts with natural-gas fired generating plants and procure additional gas-fired power. It will likely have to do so to some degree anyway as the Darlington and Bruce nuclear power stations undergo refurbishments that will not be completed for years. Gas plants with an ability to capture carbon would be nice, but the feasibility and cost of carbon-capture technology cast doubt on this option being available any time soon.
Ontario could, theoretically, import hydropower from Quebec. But this would require a degree of interprovincial energy co-operation rarely seen in this country. It would also require a massive increase in transmission capacity between the two provinces. And it would not come cheap. Ontario would have to outbid Hydro-Québec’s customers in the northeastern United States; the provincial utility has signed long-term contracts with New York and Massachusetts that have, for now, been delayed by opposition to new transmission lines from Canada.
Besides, Quebec is also facing electricity shortages later this decade as the province moves to promote electric-vehicle uptake and lure data centres. Any large-scale move into green-hydrogen production would increase electricity demand exponentially.
That may explain why, while campaigning for re-election last month, Premier François Legault raised the prospect of building more large-scale hydro dams. His declaration came as Quebec prepares for negotiations with Newfoundland and Labrador on renewing the 1969 contract under which Hydro-Québec purchases most of the power from the massive Churchill Falls hydro project in Labrador. The contract expires in 2041, and it is unlikely Quebec could ever get a deal as sweet as the one signed more than five decades ago by late Newfoundland premier Joey Smallwood.
Ontario and Quebec must both make tough decisions – and soon – if they are to avoid electricity shortages in coming years. There is no risk-free option. Investing massively to refurbish Pickering could turn out badly if the costs of battery storage and carbon-capture technology plunge in coming decades. The same logic applies to building more hydro dams in Quebec.
Opposition to nuclear power (from environmentalists) and big hydro projects (from environmentalists and Indigenous leaders) complicate the decisions facing the Ford and Legault governments. But neither has the luxury of kicking the can down the road.