Ontario’s energy crisis and how engineers can solve it

OSPE’s President & Chair Michael Monette, P.Eng., and OSPE’s Lead of Policy and Government HudakRelations Patrick Sackville spoke with Tim Hudak on his NewsTalk1010 show on Sunday, February 12 regarding Ontario’s energy crisis and how engineers can solve it.

Based on OSPE’s research, electricity prices in Ontario are between 25-30% higher than they should be, even after removing HST from your bill. Prices are poised to continue to increase by a minimum of 4-5% each year, unless immediate action is taken.

Why is this happening? For residential customers, there are three main reasons:

  1. Ontario produces too much power
  2. Ontario is adding too many renewables to an already oversupplied, clean grid
  3. Extra costs are added to hydro bills that shouldn’t be included

All three of these problems and nearly every other issue related to Ontario’s power system is linked to the fact that governments have politicized design and planning decisions that were previously made by professional engineers who understand how our complex power system works.

OSPE continues to urge the government to reinstate the decision-making authority of professional engineers–they must be given more independence in planning and designing energy systems plans for Ontario.

Below are some of the points OSPE shared on the air. To listen to the interview, click here (Tim Hudak Show, Feb 12, 2017 – Part 2).

1. Ontario Produces More Power Than Consumers Need

  • Two-thirds of our surplus electricity is being sold at a loss outside of Ontario (for about 1.6 cents per kilowatt to the US and others) and the other third is being dumped for nothing.
  • In 2015, Ontario threw away enough zero-emissions clean power to support more than 1.5 million homes for an entire year.
  • The 2016 stats will show a one-year increase of almost 50% in wasted power. That’s more than two million homes worth of zero-emission power that Ontarians paid to produce that was either sold at a loss or literally thrown away

2. Without Storage, Adding Wind and Solar to Ontario’s Already Clean Grid Means Increased Costs and Increased Greenhouse Gas Emissions

  • A lot of people have tried to demonize renewable energy as the smoking gun when it comes to Ontario’s electricity pains, but from an engineering standpoint this simply isn’t true.
  • When Ontario started adding wind and solar under the Green Energy Act, our province already had a relatively clean grid by world standards–more than 80% carbon free. Today it stands at 91% carbon free.
  • Ontarians demand reliable access to power, so when there’s demand for electricity but the wind isn’t blowing and the sun isn’t shining, the government has no choice but to back-up wind and solar with gas fired plants. These plants are cleaner than burning coal, but when wind and solar replace hydroelectric and nuclear generation that don’t require gas fired back-up, it actually means increased greenhouse gas emissions while Ontarians also face the cost of supporting two systems on their bills.

3. Lastly, all the extra costs

  • Design and planning errors and other associated costs have been put into what’s called a “Global Adjustment” Account, and ratepayers are on the hook for these debts.
  • No public or private system on earth is perfect—mistakes happen—but the sum of these individual errors has put significant upward pressure on rates.

How OSPE can help fix this?

In October 2016, OSPE shared more than 20 actionable and fully-costed recommendations with the Ministry of Energy that could realize between 5.5 and 6.3 billion dollars in savings for Ontario ratepayers. To put that in perspective, that’s more than 25% off your bill year-round.

Key recommendations

  1. The government needs to get those costs off people’s bills and move them into a tax-based account. Yes, it increases the debt, but lower energy prices will stimulate economic growth, job creation, and grow the tax base. If it must be paid, let’s pay for it in a smart way using a progressive tax system.
  2. Next, Ontario must stop adding unnecessary renewable generation to the grid. Until demand grows or energy storage technology becomes cost-effective and scalable, it doesn’t make sense to pay to add more. The government has started to act on this, but more can still be done.
  3. The government should create an “interruptible” electricity market at the retail level so Ontario consumers can also purchase surplus clean electricity that is otherwise being exported or dumped. Interruptible means the power can be cut off when there is a capacity shortage. This power can be used to automatically displace natural gas-fuelled water and space heating in your home, at half to one third of the price of natural gas, saving Ontarians money and protecting our environment.

What other recommendations would you provide to government regarding Ontario’s energy crisis?

3 Comments
  1. February 15, 2017
    • February 15, 2017
  2. February 25, 2017

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