Experts call for immediate investments in zero carbon solutions to modernize Ontario’s electricity grid while ensuring reliability and affordability
TORONTO, Ontario, Canada (Nov. 30, 2022) – A new report by Power Advisory, Scenarios for a Net-Zero Electricity System in Ontario, demonstrates that Ontario can meet its rising electricity demands with reliable, affordable energy solutions that are aligned with the global transition to net-zero carbon emissions. The report compares multiple paths for Ontario to produce a net-zero grid by 2035, and identifies critical planning and investments required.
This research, commissioned by The Atmospheric Fund (TAF), comes at a pivotal time as the province begins its procurement that would add new fossil fuel generation to address growing electricity needs. Ontario currently has one of the cleanest electricity grids in North America. However, the province’s plan to meet growing electricity demand with natural gas generation is projected to increase grid emissions by 260 per cent by 2040. Such a move would ensure grid reliability, but would cost Ontarians more and undermine the benefits of electrification. As Power Advisory’s report shows, these risks are unnecessary.
“We have the once-in-a-generation opportunity to build an electricity system that expands Ontario’s clean electricity advantage and meets the needs of both urban and rural communities,” says Julia Langer, CEO of The Atmospheric Fund. “A modernized and decarbonized grid would remove barriers and expand opportunities for businesses, communities, and municipalities that want to reach their climate targets and develop their own energy projects.”
Importantly, the modelling work shows that it is more affordable to meet rising electricity demand through a mix of energy efficiency, solar, wind and storage, than it is to ramp up natural gas. Existing gas plants would be limited to ensuring grid reliability, with total output well below today’s levels. Through this approach, Ontario can reduce emissions to 85 per cent below projected levels by 2035, while keeping wholesale electricity rates on par with today’s prices. The research also frames an urgent need for critical planning and at-scale investments in decentralized, small-scale energy supply and demand resources. This would in turn enable large-scale renewable energy projects with longer lead times. These are the primary building blocks of a modern, 21st-century electricity grid.
“It’s well established that Ontario’s coal phase-out was a world-leading accomplishment, later copied by jurisdictions around the world. It visibly improved the quality of life for millions of Ontarians and helped make the province a destination for cutting-edge, growth-oriented businesses and talent. Now, instead of leaning into our advantage, we risk falling behind as other jurisdictions invest in the clean grid infrastructure that the global economy demands,” says Langer.
A key finding of Power Advisory’s research is that the longer Ontario waits to act, the riskier and more expensive it will be to modernize our grid.
“Power Advisory’s modelling uses realistic assumptions that consider current policies, regulations, and emerging trends in the power system, consistent with the electricity system operator’s own modelling. All scenarios demonstrate the need for immediate action and the benefits of consistent investment over the next decade in the electricity sector,” says Travis Lusney, Director of Power Systems at Power Advisory. “Energy infrastructure takes time to build, we need to act now with the right enabling investments to lay the foundations for a net-zero grid by 2035. Delays and a narrow focus risks taking the most cost-effective solutions off the table.”
Power Advisory’s recommendations come off the heels of TAF’s annual GTHA Carbon Emissions Inventory, which shows that carbon emissions in the Greater Toronto and Hamilton Area increased by 4.5 per cent in 2021. One of the key drivers of rising emissions is the use of natural gas for electricity generation. Over the last two years, 34 Ontario municipalities have endorsed a natural gas plant phaseout, including Toronto, Ottawa, and Hamilton.
To view the full Scenarios for a Net-Zero Electricity System in Ontario report, visit: taf.ca
Additional Quick Facts
- To support economy-wide electrification, electricity demands in Ontario are expected to increase by 62 per cent by 2035 (source: Power Advisory/ IESO).
- Ontario has one of the cleanest grids in North America at 91 per cent fossil-free today source: IESO), but the province’s current plan to expand natural gas generation is projected to increase grid emissions by 260 per cent by 2040 (source: TAF).
- The US is investing $200 billion to ramp up solar, wind, energy storage and energy efficiency (source: EDF), and 50 per cent of planned gas plants in the U.S. have been cancelled (source: RMI).
- The cost of wind and solar have dropped by 72 per cent and 90 per cent, respectively, over the last decade, and are currently the cheapest sources of new electricity generation (source: Lazard).
- Wind and solar comprised 75 per cent of new installed capacity globally in 2021, up from 23 per cent in 2009 (source: Bloomberg NEF)
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About The Atmospheric Fund
The Atmospheric Fund (TAF) is a regional climate agency that invests in low-carbon solutions for the Greater Toronto and Hamilton Area and helps scale them up for broad implementation. We are experienced leaders and collaborate with stakeholders in the private, public and non-profit sectors who have ideas and opportunities for reducing carbon emissions. Supported by endowment funds, we advance the most promising concepts by investing, providing grants, influencing policies and running programs. We’re particularly interested in ideas that offer benefits in addition to carbon reduction such as improving people’s health, creating local jobs, boosting urban resiliency, and contributing to a fair society.
Learn more at taf.ca
About Power Advisory
Power Advisory is an electricity sector management consulting firm with deep expertise in the Canadian and US electricity markets. We have robust price forecasting capabilities for various electricity services and can offer in-depth analysis on market design, regulatory framework, and investment opportunities. Our market assessments are robust and reflect deep understanding of the power system, market design and investment climate. Furthermore, we are regularly called upon by clients to critically assess project economics and to evaluate the reasonableness of their underlying assumptions in both wholesale and regulated markets. Power Advisory was formed in 2007. We maintain offices in the Metropolitan Boston area, Calgary and Toronto.
Learn more at poweradvisoryllc.com
Christopher Kuntz says
Great report from TAF. it’s probably 5 years since I read anything so good.
Maybe some stats on rural Ontario might be good as well. I used to have an office in Toronto, but have lived mostly in NE Ontario and now NW Ontario. The reluctance for change in rural Ontario is equally disturbing….. Like where I live near Lake of the Woods, wind and solar almost non existent – no shortage of planned projects. But uptake from Municipal, Provincial, Hydro One electives – beyond slow. Even with 2 weeks a year of power outages.
I have my biases. 20+ years in renewable energy industry does not afford me the option of considering gas power plants. But without leadership stepping up to show their preference for renewables over fossil fuels – well – it is likely we will not meet the 2035 targets…… however, I may be proven wrong…… as I do believe saying a decade ago that “solar power would never catch up with wind on price per kW”.
Now is the time to plan for 2035.
Now is also the time to ally with politicians, grid operator, land owners and first nations, to meet the 2035 goals or targets.