2017
Nov
02
Ontario’s New Long-Term Energy Plan Avoids Tough Questions on Integrating Energy and Climate Policy

 

 

Ontario’s new Long-Term Energy Plan, Delivering Fairness and Choice, was released last week, and it was a disappointment. With an overriding focus on near-term electricity rates, the 2017 Long-Term Energy Plan (LTEP) fails to address the most pressing energy question of our time: how will we transform our energy systems (electricity, natural gas, gasoline, diesel, propane and oil) to meet our ambitious future climate targets?

Last year, the ECO made 14 recommendations to the government about what the 2017 LTEP should address. This ECO special report responded to technical documents released by the government that were to guide public consultations for the 2017 LTEP. Below is a summary table showing whether and how the ECO’s recommendations were addressed.

The most glaring absence from the LTEP is its failure to plan for fuel use (and resulting emissions) other than electricity. Instead the LTEP gives that important topic a shoulder shrug by saying that “the outlook for the supply and demand of [other] fuels will depend on policy and program decisions over the next 20 years, as well as on technological innovation and adoption” (p. 40).

The primary focus of previous LTEPs – identifying the supply and conservation resources needed to meet future electricity demand – is largely absent from this year’s version. In part, this is because Ontario will not need new electricity supply for several years. For electricity supply gaps beyond that time frame, the 2017 LTEP states vaguely that electricity needs will be met through a market auction (a.k.a., the “Market Renewal” initiative), as opposed to the province’s previous approach of long-term fixed-price contracts. The government is hopeful that this auction will deliver significant cost savings and enable system flexibility. How the Market Renewal model can accomplish all that will be asked of it – including system flexibility to respond to various electrification scenarios and ensuring low emissions – remains to be seen.

Nonetheless, the 2017 LTEP does explore some opportunities to make Ontario’s energy systems cleaner and more efficient. The following activities will be encouraged to modernize the electricity grid and use technology to balance electricity supply and demand in real time, including:

  • using surplus electricity to produce clean natural gas (“power-to gas”),
  • energy storage,
  • innovative pricing plans, and
  • smart electric vehicle charging.

How were ECO recommendations addressed in 2017 LTEP?

ECO Recommendation
Addressed in 2017 LTEP?
Details
Enable Ontario to meet its climate change targets.
ECO Recommendation: Plan for an energy supply mix that enables Ontario to achieve its greenhouse gas targets.
Addressed in 2017 LTEP? No
Details: The LTEP focuses on electricity, and omits energy and greenhouse gas emissions forecasts for other energy sources. Action on reducing emissions from fuels will be dependent on other policies – as the LTEP notes that “the outlook for the supply and demand of fuels will depend on policy and program decisions over the next 20 years, as well as on technological innovation and adoption.” (p. 42)
ECO Recommendation: Address the risk of increased greenhouse gas emissions from customers choosing natural gas over electricity for cost reasons.
Addressed in 2017 LTEP? No
Details: This ECO recommendation was primarily aimed at overcoming the cost barrier to electrification of space heating. The LTEP notes that Ontario will aim to increase the use of heat pumps for heating and cooling, through the Green Ontario Fund (p. 115). However, the “deep electrification” scenarios (outlooks C, D, E, F) found in the technical planning reports, and the consequences on electricity demand and cost, are not mentioned in the final LTEP, and no roadmap is laid out to get a higher-electrification future.
Consider the environmental impacts of energy resources on our air, water, and land.
ECO Recommendation: Minimize the environmental impacts of Ontario’s energy system.
Addressed in 2017 LTEP? No
Details: The LTEP makes no commitment to examine the environmental impacts of energy supply resources on land, air, water in an integrated fashion.
ECO Recommendation: Commit the government of Ontario to meaningfully participate in the federal approvals process for energy projects with a significant impact on Ontario’s environment.
Addressed in 2017 LTEP? Partially
Details: The LTEP notes that “To ensure its strategic interests in pipeline projects are represented, the government will continue to participate in regulatory proceedings at the NEB {National Energy Board} and at intergovernmental forums that discuss the delivery of energy in a safe and environmentally sustainable manner. Ontario is also working with the federal government on regulatory initiatives such as modernizing the NEB to ensure major energy projects are reviewed in a predictable manner that increases public confidence.” (p. 147)

However, the ECO recommendation was also intended to apply to Ontario participation in federal oversight of nuclear projects. The only LTEP reference is that “the CNSC {Canadian Nuclear Safety Commission} will ensure that Pickering operates safely” {until 2024} (p. 51).
Put conservation first.
ECO Recommendation: Demonstrate to the public that all feasible conservation opportunities are exhausted before building new energy infrastructure.
Addressed in 2017 LTEP? Not explicitly
Details: Not immediately relevant, as the LTEP makes no explicit commitments to new supply infrastructure. In theory, this could be addressed in the future as part of the Independent Electricity System Operator’s (IESO’s) Market Renewal Initiative, if conservation is given a “fair chance” to compete in capacity and energy procurements.
ECO Recommendation: Improve the methodology for comparing energy conservation with energy supply.
Addressed in 2017 LTEP? No
Details: The LTEP does not go into this level of detail, however, work on this is being done outside of the LTEP, through the Conservation Mid-Term Review, including adjusting the “adder” for greenhouse gas emissions, and the value assigned to non-energy benefits.
ECO Recommendation: Set conservation targets for all energy sources.
Addressed in 2017 LTEP? No
Details: Conservation targets for other fuels are not mentioned.
ECO Recommendation: Ensure that regional planning puts conservation first and is effectively integrated with other levels of energy planning.
Addressed in 2017 LTEP? Yes
Details: The LTEP recognizes that “in order to increase the range of cost-effective solutions [in regional planning], barriers to non-wires solutions such as conservation, demand response and other distributed energy resources must be reduced” (p. 139). A subsequent LTEP 2017 implementation directive requests the IESO to “identify barriers to the implementation of cost effective non-wires solutions such as conservation and demand management and distributed energy resources, and provide options to address any such barriers, including potential legislative or regulatory changes, as well as options to address local distribution company capacity; and propose approaches for improving the integration of regional planning with bulk system, distribution and community energy planning, and approaches to ensure alignment with market-based approaches”.
Apply evidence-based decision-making.
ECO Recommendation: Provide detailed plans to hedge against energy supply risks associated with nuclear refurbishment and license extension.
Addressed in 2017 LTEP? No
Details: The LTEP notes the province’s ability to apply “off-ramps” for nuclear refurbishment due to cost or scheduling (p. 50-51), but does not discuss implications for how alternative supply would be sourced if the province exercises these off-ramps. It is fair to assume that the IESO will rely on its future energy auction system to respond to any future gaps in supply.
ECO Recommendation: Compare all options to balance supply and demand in the electricity system, not just natural gas.
Addressed in 2017 LTEP? Yes
Details: The LTEP commits to further explore the role of using surplus electricity to produce hydrogen to inject and reduce the carbon emissions of Ontario’s natural gas grid (p. 75). It also looks at other ways of balancing electricity supply and demand, including:
  • removing regulatory barriers such as the Global Adjustment charge for companies providing electricity storage (p. 61);
  • working with the Ontario Energy Board (OEB) to enable electric utility control over timing of charging of electric vehicles (p. 61);
  • supporting the OEB’s actions to test different time-of-use price structures, including a commitment to look at some equivalent of time-of-use pricing for larger customers (p. 56)
ECO Recommendation: Before subsidizing expansion of the natural gas distribution system, publicly compare costs and benefits of alternatives such as conservation and clean energy technologies.
Addressed in 2017 LTEP? No
Details: The LTEP renews the government’s commitment to natural gas system expansion, including its Natural Gas Grant program to pay some of the infrastructure costs (p. 135).
Provide opportunities for meaningful public participation.
ECO Recommendation: Consult the public on a detailed draft Long-Term Energy Plan.
Addressed in 2017 LTEP? No
Details: No draft LTEP was released.
ECO Recommendation: Consult the public on implementation directives/plans.
Addressed in 2017 LTEP? TBD
Details: Implementation directives to the IESO and the OEB have been released, with a request for implementation plans to be submitted by these agencies by January 31, 2018. It is unclear as to whether the IESO and OEB will conduct consultations.
ECO Recommendation: Do not override the Long-Term Energy Plan and its approved implementation plans in between the three-year review cycle.
Addressed in 2017 LTEP? TBD
Details: No details provided.

The 2017 LTEP leaves the door open on how Ontario will meet gaps in electricity demand in the future, which is not necessarily a bad thing. It also sets some important groundwork that could help the province meet future electricity demand in an efficient and low carbon manner; however, the scale of commitment in the LTEP to a future energy system that is low carbon and efficient is modest.

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