There is a perception that Ontario has given up on renewable energy. However, I strongly disagree. The new Ontario government is focusing on stability and inclusiveness and has made some good first steps in the right direction. The government recently wrapped up the process of engaging stakeholders and local communities in a review of the long-term energy plan (LTEP), and the comment period was closed in mid-September. The government has also recognized that energy policies must be stable and long term in order to obtain lasting economic benefits. Further, there is a greater understanding that making hasty and uninformed decisions will harm investment and job creation.
The new Ontario government has so far been steadfast and not submitted to the severe lobbying, media pressure and misinformation campaign that has been applied by the Canadian nuclear sector for quick approval of nuclear refurbishments and new builds in Ontario at Pickering and Darlington that would cost well over C$60 billion, not including the avoided costs of full insurance liability, water usage and nuclear fuel storage that would cost many tens of billions more.
The recent Ontario government has been a huge proponent of getting rid of dirty coal. Years ago, it realized that coal plants were detrimental to the health of people and communities and the development of a local green economy.
The reduction in the Samsung agreement is a reflection of reality and not a decline in support for renewable energy in Ontario. There was a strong consensus among the entire renewable energy sector that no special agreement reserving 2,500 MW should have ever been provided to Samsung in the first place and that the recent decrease to 1,369 MW is a reflection of the existing Samsung project development pipeline in Ontario. The removal of 1,131 MW of renewable energy generation from that agreement now provides the new Ontario government with the opportunity to redistribute that capacity in a new and fair process to a portfolio of renewable energy opportunities. These are all good decisions that should be applauded.
However, depending on the outcome of near-term decisions, the government may miss a unique opportunity to reset economic and energy policy in Ontario, as the province is at an important inflection point in its energy generation road map.
Ontario was severely challenged in energy supply up to the end of 2003 and was at serious risk of brownouts and blackouts. Mobile generators were being leased for over C$100 million in a Band-Aid approach to hold together Ontario’s fragile electrical grid. Nuclear generators were being designated end-of-life years before their planned date, while the tens of billions of dollars of debt incurred to construct them has continued to hang as a millstone around Ontario’s economic neck. This series of events was topped off by the Great Blackout of 2003.
In October 2003, the election of a new government in Ontario set the foundation for a more diverse portfolio of generation assets beyond the dominating “old energy” dinosaurs of coal and nuclear. A new breeze began to stir the thoughts of decision-makers as to what a more balanced approach might look like. A solid restart to renewable energy opportunities was made by the invitations for renewable energy development on Crown land in early 2004. The initial applications in 2004 and 2005 provided for tenure via land-use permits that were later referred to, in 2008, as applicant-of-record applications, although rights of tenure were removed from applications submitted after 2007.
In 2008/2009, Ontario’s manufacturing economy was hit hard by the severe economic dislocation due to the global meltdown in financial markets. The Ontario government of the day was forced to urgently look far and wide to other jurisdictions and see how it might be able to adapt the energy and related manufacturing successes of those jurisdictions for use in Ontario. The dynamically growing clean energy sectors in Germany, Denmark and other countries did not go unnoticed. The German Renewable Energy Act (Erneuerbare-Energien-Gesetz) turbocharged Germany’s ascent to lead the world in well-paying green-collar jobs and stable future prices for electricity that are not subject to the vagaries of oil prices and nuclear risk.
Ontario was built on the large renewable energy source of the day, which was hydropower. It moved the Ontario economy into the 20th century. Later, in the middle and end of the 20th century, large coal/fossil fuel generation came into the mix, and large nuclear generation eventually followed. Both are toxic to the environment and well-being of public finances, as has been demonstrated the world over.
The March 2011 Fukushima disaster incited large sections of the public in many countries to demand that nuclear power be shut down and quickly phased out. Fukushima is a constant and unsettling reminder of both the risks and costs when things go bad with nuclear generation. The German government gave in to public protests and demands and immediately shut down seven reactors, with the remaining being phased out by 2023. In place of large nuclear generation, Germany began to ramp up far-offshore wind developments in the North Sea and East Sea due to the relatively quick build time, high-quality and reliable wind resources, and availability of shallow-water development areas. The Alpha Ventus far-offshore wind test platform was accelerated, and an offshore electrical grid was planned to harvest far-offshore wind generation and connect it to the mainland German electrical grid.
Today, Ontario has a generation portfolio that still has some coal and a large amount of nuclear, as well as a diverse portfolio of renewables that include, but are not limited to, onshore wind generation, solar photovoltaic, solar thermal, ground-source energy and co-generation. Ontario is transitioning back to a path of clean renewable energy generation from a diverse portfolio. Ontario’s path is parallel to the clean energy steps being taken by many of the world’s developed economies. Even France’s high dependence on nuclear is facing a planned reduction of over 30% in the coming decades.
There are no comparable federal structures for energy in Canada, as energy is a provincial responsibility. However, the Canadian government has an important role to strongly support provincial energy initiatives. CanmetENERGY, a unit of Natural Resources Canada, does an enviable job with minuscule funding, as does Sustainable Development Technology Canada. In Ontario, MaRS DD and the Evergreen Foundation do an excellent job with the resources that they have to work with and deserve additional support. The lack of a coherent, cooperative and coordinated approach to moving opportunities through the research, development, demonstration and deployment process here in Canada is a detriment to provincial economic development, research and development, and job creation efforts.
Each Ontario energy transition has required a large source of energy generation to drive private and/or public sector investment and economic development, as well as supply-chain development, well-paying jobs, advanced manufacturing, research and development, and related spin-offs.
Offshore wind in the Great Lakes is Ontario’s economic driver for the 21st century and the catalyst for a full transition to clean generation, conservation and energy stability.
Presently, there is a very large opportunity for strong economic development from renewable energy generation and the supply chains that they create in Ontario and all U.S. states that border Ontario. The recognition of this fact is causing concern – and a lot of pushback – from the large energy status quo providers.
Documents from the U.S. Energy Information Administration show that over 25% of the U.S. coal and nuclear generation fleet will be “end of life” and need to be shut down within the next three years; a good thing for 41% of Ontarians who reside near the area of nuclear and coal plant closures.
Ontario requires conscientiously sited offshore wind development to provide the heavy-lifting capacity necessary to drive the economic change that the Ontario government has said it wants as an outcome of the Green Energy and Green Economy Act of 2009. More locally developed supply chains and servicing capabilities can deliver the stable pricing and delivery timelines that enable more onshore developments owned by local communities, First Nations and small developers.
With Ontario having a significant portion of the world’s largest freshwater lakes, offshore wind is a very viable option. It is clean, renewable, perpetual and reliable energy, and the jobs that it can generate, via an integrated Great Lakes-based supply chain, would substantially benefit both Canada and the U.S.
There is a huge opportunity for the new Ontario government to be a world leader in the green energy economy, with offshore wind development acting as the catalyst of a comprehensive portfolio of renewable and sustainable energy solutions. It is time for U.S. states around the Great Lakes to join Ontario in formulating a progressive, sustained and coherent plan to develop the only renewable energy resource shared by both Canada and the U.S. – offshore wind across the Great Lakes.
Given the prevailing winds of the Great Lakes, Ontario is the keystone to unlocking the offshore wind potential – and job opportunities – of our only bi-national energy resource. A report from the non-partisan Conference Board of Canada (CBOC) on Dec. 8, 2010, “conservatively” concluded that just 2,000 MW developed over a 15-year period, based on 55% to 63% local content (Trillium’s own TPW1 was over 70%), would do the following: create between 55,000 and 62,000 person-years of employment in Ontario; generate real private capital investment in Ontario of C$10.44 billion; lift Ontario’s GDP by up to C$5.5 billion; generate between C$1.06 billion and C$1.16 billion in personal income and indirect taxes – not including corporate taxes; and create an average of 3,900 to 4,400 jobs per year during construction and over 600 permanent jobs for operations, not including several thousand manufacturing jobs.
The CBOC report interestingly also states, “Economic impacts as it relates to gross domestic product associated with the operations and maintenance of offshore wind turbines is much stronger than construction of the built wind farms because the services are rendered locally, largely in wages and salaries. On average, for each inflation-adjusted dollar spent on operations, about $1.54 is added to real GDP, roughly 4,300 person-years of employment is created or roughly 0.19 workers per megawatt would be directly employed in operations and maintenance in that year.”
The nuclear power industry has been supported by public finances for over 70 years and still requires massive direct and indirect subsidies to operate, in addition to public funding for the long-term cleanup of nuclear catastrophes such as Chernobyl and Fukushima. Ontario’s feed-in tariff price of C$0.19/kWh is only 1/15th of the cost of new nuclear development using public guarantees for construction plus the avoided cost of water and insurance, and this does not include the cost of fuel, labor, decommissioning and long-term storage.
The development of a commercial-scale far-offshore wind pilot project will provide the new Ontario government with greater flexibility in its LTEP deliberations, as the project’s size, energy reliability and speed to development can offset generating assets that will be either removed or refurbished in the near- and medium-term time horizons.
A useful step to move the discussion forward would be to have Ontario create a 21st-century definition of development zones in the Great Lakes. Nearshore should be defined as less than 5 km from the mainland, offshore should be defined as between 5 km and 20 km from the mainland, and far-offshore should be defined as more than 20 km from the mainland. No offshore wind development should be allowed in nearshore areas, described here as within 5 km from the mainland.
Larger wind development opportunities will be far-offshore and perhaps, at a later time, in offshore areas. Far-offshore wind developments are virtually invisible, even on the clearest days, and therefore minimize any visual aesthetic issues.
There is often concern for the protection of wildlife when it comes to offshore wind projects. However, literature reviews and direct Great Lakes studies by Trillium Power have conclusively demonstrated that more than 90% of avian interactions are within 1 km of the mainland and that foundations of far-offshore wind farms create a “reef effect”that regenerates aquatic species at eight times the normal speed.
Far-offshore wind energy generation should be considered as both an economic catalyst and a viable and strategic form of energy for Ontario that does not have some of the more contentious siting concerns of other wind projects. According to the Ontario Power Authority’s LTEP Technical Briefing document, 400 MW to 500 MW of far-offshore wind development could easily be accommodated in the 1,500 MW to 1,997 MW planned for 2017 and 2018, respectively, as “Additional Future Options”. In addition, responses provided at the LTEP hearings in Toronto noted that the 1,131 MW of generation that were removed from Samsung’s 2,500 MW agreement were not added to the 1,500 MW and 1,997 MW “Additional Future Options” amounts noted in the technical briefing document. Adding these amounts together creates an energy gap, “Updated Additional Future Amount,” of 2,631 MW in 2017 and 3,128 MW in 2018.
Economic development returns from offshore wind development have been proven to be very significant and are presently being harnessed by Germany, Denmark and the U.K. Ontario is transitioning back to the clean and efficient energy path and joining these other advanced economies. Ontario has an opportunity to harness the potential of far-offshore wind as a highly efficient clean energy necessity.
Clearly, the door is not closed on renewable energy in Ontario, and the province has many options to boost its economy via the pragmatic development of its renewable energy sector. Through cooperation with stakeholders, local communities and leading-edge developers, the new Ontario government can continue to make Ontario a clean energy leader. w
Ontario Takes Smaller, Focused Steps To New Energy Path
By John Kourtoff
Several recent decisions from the provincial government signal that Ontario is heading in a new direction when it comes to the future of energy generation.
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