A rushed decision to procure new gas fired power plants, without public consultation or transparent analysis of the alternatives. Hundreds of millions of public dollars wasted due to poor electricity infrastructure planning. I’m not talking about the gas plant cancellations of 2011 that cost an estimated $1 billion. This is Ontario’s next gas plant scandal, unfolding right now unless the province changes course quickly.
On October 7th, Ontario’s Minister of Energy directed the Independent Electricity System Operator (IESO) to procure 1,500 megawatts of new natural gas-fired electricity generation capacity. This decision was taken without any public consultation, based on a very brief IESO report without financial analysis or comparison of other pathways. These new gas plants are to be built by 2027, and some given 20-year contracts to operate until at least 2047. Combined with the planned ramp-up of existing gas plants, they will result in more than a 300% increase in carbon emissions from Ontario’s electricity system.
This decision imperils Ontario and Canada’s progress against climate targets. But it also leaves Ontario on the hook for hundreds of millions of dollars in potential contractual penalties. The federal government has committed to net zero electricity across Canada by 2035, and is in the process of drafting a regulation to achieve that goal. The regulation will prohibit the unabated use of natural gas for electricity generation starting in 2035. No company will risk investing in a new gas plant to open in 2027, knowing they will most likely be required to shut it down in 2035. To bring bidders to the table, the Minister has directed the IESO to offer bidders a guarantee: if climate regulations require the new plants to shut down, the people of Ontario will fully compensate them for their losses.
In other words, this government is planning for Ontario and Canada to fail to meet its climate commitments, and is putting a billion-dollar bet on it. If this is a losing bet – and let us hope that it is – Ontarians will be paying the bill for polluting gas plants we don’t need until 2047. Either way, the people and businesses of Ontario lose.
It doesn’t need to be this way. Earlier this month, the IESO released a much more thorough study showing that it would be more cost-effective to meet Ontario’s energy needs using non-emitting distributed energy resources (DERs).
DERs include solar, energy storage, and automated demand response systems located close to loads in existing facilities. Unlike new gas plants, DERs don’t need to be built over the objections of local communities, and they are fully compliant with the federal government’s forthcoming clean electricity regulation. DERs are shown to generate seven dollars for every one dollar invested, and the benefits are distributed in communities large and small across the province.
Large scale centralized renewables backed by storage is also an option, and overwhelmingly the choice for other jurisdictions that need more generation capacity. Renewables are set to account for almost 95% of the increase in global power capacity through 2026, with solar PV alone providing more than half. In contrast, 50% of planned gas plants in the US have been cancelled prior to construction in recent years, across red and blue states, in favour of cleaner and more cost-effective alternatives.
The bottom line is that investing in new gas fired power plants is fiscally and environmentally reckless.
This Ontario government doesn’t have a long-term energy plan, nor a strategy to comply with the federal clean electricity regulation. Instead, the province and the IESO are rushing into a poor decision that will come at an excessive cost, increasing emissions, and losing our ‘clean grid’ advantage. But it’s not too late to change course.
We’re confident that municipalities with gas phaseout resolutions (there are over 30) and residents of communities near proposed gas plant sites will be strong in their opposition, just as they were in 2011. More than a decade later, amidst growing climate concern and availability of clean solutions, amidst inflation and increasing carbon price – who is going to support these plants? Recent Abacus polling shows that most Ontarians think clean energy will be more important for the economy than fossil fuels within ten years.
There’s a place for any Ontarian’s voice who depends on clean, reliable, affordable electricity. You could contact the Ministry of Energy directly or ask your MPP where they stand and what they can do. All of us should tell the province to put the brakes on new gas plants and invest now in distributed energy resources, large-scale renewables and storage, and conservation. It’s the right path for Ontario.
Image credit: Chris Young, Canadian Press via CTV News
Michelle Cong says
Thank you for sharing this news, Bryan and TAF. I’ve written to my MPP to voice my concerns and asked them what they could do to help. If this scheme is carried out, I don’t see how Canada is meeting its net zero goal by 2050. Losing confidence is a dangerous thing because we could lose the motivation to combat climate change at all. If you hear any updates, please share with us.
Bryan Purcell says
Thanks for the rapid response Michelle! We’ll have more to say in the weeks ahead, including our own assessment of alternative low carbon electricity pathways.
Vincent Schutt says
Hello, may I suggest that TAF’s previous communications is also part of the problem and the thing most readily available and in your control to correct.
For years now TAF has been celebrating the coal phase out as and I quote “Ending coal-fired power is the single biggest GHG reduction measure in North America.”
TAF swapped us from coal to natural gas. TAF uplifts natural gas. TAF is now realizing its error in accepting a compromise of switching from coal to natural gas.
While TAF was claiming this as an environmental win, the emotive driver that made the switch possible has gone unheeded by TAF – the fact that the win was made possible because a switch from coal to natural gas is a win for short term human health with reduced atmospheric contaminants ***In the Toronto Regions***. Of course environmental impacts from natural gas extraction methods lead to health impacts in other regions where the natural gas harvest is occurring. Also when Ontario follow TAF’s path to say no to Coal, we said yes to methane leakage during raw material harvest, transportation, use etc. The ghg impact of natural gas leakage is of course never factored into TAF’s GHG models. (nor is natural gas’s lower EROI than coal)
Part of moving forward is recognizing failure, and learning from it. I fail all the time. When I recognize my failure I can quickly stop failing in that way. Fail fast methodology. TAF hasn’t publicly acknowledged that the win which has been proselytized for years, was in fact supportive of natural gas to come onto the grid.
If we want to stop more natural gas, (yes please), maybe a good place to start is to identify and realize how TAF was instrumental in creating a pro-natural gas culture.
Examples of TAF’s uplifting of natural gas:
Bryan Purcell says
Thank you, Vincent for your interest in this issue and for following TAF’s work over the years. TAF has always emphasized a ‘conservation first’ approach, including in the resources you link to. In our work on coal phase out, TAF emphasized conservation and renewables as the preferred alternatives, and none of the resources you link to promote natural gas generation. Thank you for pointing out the importance of reporting on fugitive methane. While governments don’t report these emissions, TAF has been working especially closely to research and report life cycle emissions, see our fugitive methane report from earlier this year https://taf.ca/publications/new-guidelines-on-fugitive-methane/
Our carbon emissions inventory launching next month will include fugitive methane emission for the first time, and as far as we know, we’re the first in Canada to do this. TAF still considers the Ontario coal phaseout a success, and has since been advocating for conservation and clean energy.
Vincent Schutt says
Well thank you for posting the report — this is exactly what I was suggesting was needed.
When we look at the report summary TAF says: “Based on TAF’s research and conservative estimates, the fugitive methane rate is at least 2.7%”
…. Then in the full report, once again the report you just sent, it says and I quote:
“adjusting the fugitive methane rate to over 2.8% would suggest that natural gas emissions are worse than coal, making it impossible to achieve our climate targets with a continued reliance on natural gas.”
Which leads me to wonder how possibly you can say this in response:
“TAF still considers the Ontario coal phaseout a success”
Well honestly I was thinking this was wrong, because it has been my understanding that coal was taken off the grid on the back of more natural gas. While that is true it is only very mildly so.
So I just did a deep dive on the data, and I thought that more natural gas was brought on line to support the Coal roll away. My understanding now is that the natural gas generating capacity is there – but not being used (i’m assuming its for summer peaking power. I’ve been thinking TAF was complicit in supporting natural gas but the data shows that is a false conclusion and unfounded.
So, in that case, I’ll tender my apology, and say thank you for your work.