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ONTARIO
From Site Selection magazine, December 2014
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The True Price

The Ontario Ministry of Energy’s cost/benefit insights on going green.

by ADAM BRUNS
C

anada's most populous province, home to aggressive renewable energy goals since 2009, saw power plants burn their last coal earlier this year. But such organizations as Canadian Manufacturers & Exporters are bridling at today's high cost of energy in the province.

This fall we directed questions about all of the above to the office of Bob Chiarelli, Ontario's Minister of Energy. They were answered by Bradley Hammond, director of communications for the Ministry.

Site Selection: Canadian Manufacturers & Exporters presented evidence that "Ontario has become an island of higher cost electricity in North America." What types of measures are you taking to keep power affordable for industrial users?

BobChiarelli

Bob Chiarelli has served as Ontario's Minister of Energy since Feb. 2013.
Photo courtesy of Ontario Ministry of Energy

Ontario Ministry of Energy (OME): The government is committed to ensuring that industrial electricity price mitigation programs help support a dynamic and innovative climate for businesses to thrive, grow, and create jobs in Ontario. This commitment is highlighted through the number of programs and initiatives we have implemented in order to keep power affordable for industrial users in Ontario, which include the Northern Industrial Electricity Rate Program, the Industrial Electricity Incentive Program, the Industrial Conservation Initiative, and the Industrial Accelerator Program. The province has also undertaken a wide range of initiatives to realize ratepayer savings:

  • Revised provisions of the Green Energy Investment Agreement reduce contract costs by $3.7 billion, assuring continued clean energy investment, protecting existing job commitments and extending further job creation to 2016.
  • A significant reduction in the purchase price of renewable electricity in new Feed-in-Tariff contracts, reflecting the reduction of domestic content requirements and in technology prices, saving $1.9 billion.
  • The IESO [Ontario's Independent Electricity System Operator] has brought in new rules to allow transmission-connected wind generation to be dispatched when the system does not require it. These changes could save ratepayers up to $200 million per year. Related OPA [Ontario Power Authority] contract amendments are expected to save ratepayers up to $65 million over five years.

Thanks to the province's strong supply situation and gains in conservation and efficiency, new nuclear capacity is not needed at this time. The deferral of the construction of new nuclear generating units will save up to $15 billion in capital investments and enable us to make large investments only where they are needed.

SS: CME also wished to see the long-term energy plan "tied to an integrated plan to retain existing and attract new manufacturing investment to Ontario." In what ways are you doing that?

OME: For businesses, we expanded the Industrial Electricity Incentive program, which encourages increased industrial production through a reduction in the associated costs of electricity, and the Industrial Conservation Initiative (ICI), which rewards large consumers that shift consumption away from peak periods. The ICI program was expanded to enable participation from medium-sized businesses operating in electricity-intensive sectors.

SS: To what extent is the complete weaning from coal a feather in the cap for Ontario?

OME: Getting off coal is the single largest climate change initiative undertaken in North America and is equivalent to taking up to seven million cars off the road. Ontario is the first jurisdiction in North America to fully eliminate coal as a source of electricity generation. Replacing it with a mix of lower emission energy sources has led to cleaner air and a healthier environment. It means we have a more modern and reliable energy economy that creates job and enhances international interest. Ontario's clean energy initiatives have attracted billions of dollars in new private sector investment. As of the end of 2013, an estimated 42,000 direct and indirect jobs have been created through the Green Energy Act.

Now that Ontario has successfully eliminated coal as a source of electricity generation, we continue to develop new sources of supply to ensure a clean, reliable, and affordable supply of electricity. That means making important investments in nuclear generation, which remains the backbone of Ontario's supply. The Canadian Manufacturers & Exporters, for instance, reports that 15,600 people are employed in the operation and support of nuclear plants in Ontario - an industry that has been successful in exporting Canadian technology around the world to countries including Argentina, South Korea, China, Romania, and India - and it is expected that international opportunities to use the nuclear expertise based in Ontario will continue to be explored.

SS: How would you characterize the status of the province's groundbreaking renewable energy agreement with Samsung several years ago?

OME: The 2010 Green Energy Investment Agreement (GEIA) has led to significant investments by Samsung in Ontario, including the creation of four manufacturing plants in Toronto, Tillsonburg, London and Windsor, which are expected to create up to 900 direct jobs. Nine wind and solar projects are also under way, which will add enough electricity each year to power approximately 300,000 homes.


"As of the end of 2013, an estimated 42,000 direct and indirect jobs have been created through the Green Energy Act . "

The Ministry of Energy worked collaboratively with the Korean Consortium (KC), including Samsung, to update and revise the GEIA in June 2013. The revised GEIA reduces contract costs by $3.7 billion and includes:

  • Protecting the agreement's job commitments and adding a commitment to solar manufacturing jobs in 2016;
  • Reducing the agreement's total commitment for renewable energy projects from 2,500 megawatts (MW) to 1,369 MW; and
  • Requiring that KC obtain municipal council support resolutions for new renewable energy projects before moving forward.

Samsung C&T is a committed partner to the Government, and continues to take a lead role in meeting all obligations under the GEIA.


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