Ontario’s Independent Electricity System Operator serves a population of 13.8 million, almost 40% of Canada’s total population, making it nearly equivalent in population and peak demand to ISO-NE.
After peaking about a decade ago at almost 160 TWh, Ontario’s annual electricity use has dropped to 140 TWh — equivalent to that in 1990 — as growth has been offset by conservation, distributed generation and a decline in the pulp and paper industry. Loads are not expected to rise until 2028.
Nuclear power, now 60% of the province’s generation output, is expected to drop to 40% by 2025 following the retirement of the 3,252-MW Pickering plant. Two other nuclear plants with a combined 8,400 MW of capacity, Bruce and Darlington, are scheduled to be refurbished from 2016 to 2032.
Because of the lost nuclear output, the province will need to add as much as 3,000 MW of capacity between 2021 and 2032.
Prices
As in New England, prices are relatively high, and that has prompted frequent interventions from government.
Sergio Marchi, president of the Canadian Electricity Association, lamented that Canada’s electric rates are much more politicized than in Europe. “Electric rates, rightly or wrongly, have become a go-to tool to clobber the incumbent government.”
“I’m really surprised that Ontario ratepayers aren’t up in arms with pitchforks and the like,” said Jason Chee-Aloy, a consultant and former director of generation procurement at the Ontario Power Authority. “I think that is going to be an issue in the next election because we’ve baked in a lot of these costs.”
Jasmine Bertovic, vice president and general manager for eastern energy at TransCanada, said opening the market to more imports would provide price discipline.
The province is a net exporter with Michigan (46%) and New York (39%) its biggest export markets. About 85% of its imported power comes from Quebec.
“When you tie yourself to another jurisdiction and now you’re competing beyond Ontario … it is another check on your market. … It can’t be a check valve. It has to be open seams, open import-exports.”
Cap and Trade
Canada’s electricity system is among the cleanest in the world, says Marchi, noting that 80% of its generation does not emit greenhouse gases. That compares, he said, with Germany (41%), the U.S. (31%) and Japan (15%).
In 2017, Ontario plans to begin trading emissions through cap-and-trade auctions. The first auction will be for the province only, but Ontario plans to link its prices to those of California and Quebec, which already trade allowances. The province’s goal is to reduce CO2 to 15% below 1990 levels by 2020.
— Rich Heidorn Jr.
