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Long Term Energy Plan a Missed Opportunity

LTEP full of short-term thinking

By Angela Bischoff, Ontario Clean Air Alliance

            Ontario’s just-released Long Term Energy Plan contains both good and bad news for electricity consumers in this province.
           The good news is that the government has finally acknowledged that these plans are largely a shot in the dark: The uncertainty created by the intersection of major economic and technological changes really makes forecasting future electricity needs a “your guess is as good as mine” exercise. Therefore, the government has, for the first time, acknowledged a need for “flexibility” and annual reviews of actual electricity demand and generation.
           That may sound like common sense, but it is not the way electricity planning has traditionally been done in Ontario. Instead, our electricity planners have drawn up “the sky’s the limit” forecasts of electricity demand growth to justify huge expenditures on nuclear power. The current plan pulls back on the throttle a bit, but still opts for a high-side projection of growth in demand to justify rebuilding up to eight nuclear reactors. But the government has left the door open a crack to revisit these plans if we simply don’t need the electricity.
           And we won’t if the government gets serious about its new Conservation First approach. Here the plan is realistic in recognizing that regulators, such as the Ontario Energy Board (OEB), have to get with the program on promoting energy efficiency. The OEB has a short-sighted history of nixing utility conservation plans on the basis of short-term cost increases, while ignoring the long-term savings these plans would generate. We have to start taking the longer view on the value of efficiency and conservation—whether it’s avoiding the need for much higher-cost nuclear reactors, or helping businesses increase their competitiveness by lowering their energy costs.
           The plan also acknowledges that importing electricity could be a viable option for meeting our needs for a cold beer or a well-lit yard. In the past, Ontario has had a blinkered belief that all electricity used in the province must be produced in the province, which seemed to be more about provincial pride than common sense. After all, we are right next door to Quebec—a province with some of the lowest electricity costs in North America. Quebec has traditionally exported power to the northeastern US, but is now experiencing hot competition from gas plants in that region. As a result, the price it receives from export sales has fallen by more than 50% during the last five years. Furthermore, Quebec’s electricity surplus is growing, due to two huge new hydro projects that are coming online.
           Here in Ontario, low-cost water power imports from Quebec could immediately replace 86% of the electricity from the Darlington Nuclear Station, using existing transmission lines. But instead, Ontario Power Generation is applying to the OEB for a 30% increase in the price it is paid for power from its nuclear plants to kick-start the funding of its “final cost unknown” Darlington rebuild project.
           Do we really want to write more blank cheques for a company that has demonstrated so little commitment to cost control or responsibility to ratepayers? Or should we forget about rebuilding expensive, aging and unreliable nuclear plants, and make a deal with Quebec instead?
           If we are really doing long-term planning for electricity, we should focus on where things are headed, not on yesterday’s technology. Electricity demand is dropping due to changes in our economy (a move away from heavy industry) and better technology (LED lighting, efficient computers, smart pumps and motors). Costs for green energy technologies like wind and solar, meanwhile, are dropping so rapidly that bankers, like US giant Citigroup, are warning their clients that conventional generators (nuclear and fossil fuel) soon won’t be able to compete.
           In other words, Ontario’s fixation with nuclear power is like doubling down on typewriters. Of course, the government includes lots of rhetoric about cost control and “risk transfer” for nuclear projects in its plan, but we’ve heard this song before and inevitably we end up with a nasty surprise anyway when the final bill comes in. The real point is, why would we even take the risk when there are more cost-effective and safer solutions staring us in the face?
           It’s time for Ontario to build an energy bridge with Quebec that can take us to a renewable and cost-effective future.