Ontario’s energy outlook: The perfect storm | The Chronicle-Journal

Ontario’s energy outlook: The perfect storm | The Chronicle-Journal

COMMENTARY

By Byron LeClair

I liken the challenges facing Ontario’s energy planners to that of the perfect storm. Past debt and inadequate investment in electricity generation and transmission are three major hurdles planners will have to overcome and ratepayers will have to pay for, which will inevitably lead to substantial increases in the rates we pay for energy in Ontario.
When the Tories wound up Ontario Hydro in 1999, the utility managed to accumulate $22 billion of unfunded debt (Ontario Hydro’s total debt was a staggering $38.5 billion of which $16.5 billion was supported by existing assets). This debt represented an electricity “cost” not passed onto the ratepayers of the 1980s and ’90s. Instead, this “cost” was handed off to future generations to deal with.
But the impact of this debt goes beyond the debt retirement charge ratepayers see every month on their Hydro One statements. It has fundamentally flawed our perception of what the true cost of electricity is.
Most of us can remember our parents fretting over their monthly hydro bills, when rates were at about 8.5 cents per kw/h, bundled to include transmission, distribution and generation costs.
We were led to believe that our parents were paying their fair share for their electricity, but little did we realize that all of Ontario ratepayers were subsidizing their electricity rates against future generations of ratepayers.
In 1999, there were approximately four million Ontario Hydro customers (one million retail, three million residential). This means for each customer, the total unfunded debt equaled $5,500.
Had each customer paid their fair share for the preceding 20 years, each ratepayer should have been paying $275 more per year or an additional $13.75 per month. Assuming an average two-storey home uses about 1,500 kw per month, the average consumer should have been paying an additional one cent per kw/h to cover the unfunded debt. As we know, this did not happen.
The deficit of one cent per customer per kw/h was the first part of the perfect storm that provincial planners are now faced with.

The next wave of this energy storm to hit the province was its failure to invest in new generating capacity or refurbish its existing assets. The provincial policy to eliminate coal from our supply mix only exacerbated the supply problem.
We know that the province will require new energy. How much depends on the future growth of the province’s economy and population.
Ontario’s energy plan is to build 2,000 megawatts of new nuclear energy in combination with investment into renewable sources. This new generation will require new funding over and above what we already pay for. It will be an inescapable reality for current ratepayers that new projects will require new financing — whether this is supported through the private sector with feed-in tariff programs, or power purchase agreements or capitalized through Crown corporations and then passed onto customers is all semantics.
The hard reality is that we will all pay more for our electricity in the very near future. The cost of this new generation is also in current year dollars. Developers such as OPG have to pay 2011 dollars for cement, steel, copper, labour — all the input costs associated with bringing new generation online or refurbishing existing capacity. This adds substantially to the cost of electricity.
The final triumvirate of this perfect storm is the woeful investment made into transmission, either in the form of new infrastructure, maintaining our current system or modernizing the existing system.
Despite $7 billion of investment made by Hydro One over the past eight years, the province’s transmission system is congested to the point where new generation is challenging to connect. With an additional $2 billion expected to be invested in five priority transmission projects, it will still be insufficient to ensure adequate supply to meet the province’s growing energy needs.
Furthermore, these new projects still do not enable the province to secure abundant hydro-electricity in either Manitoba or Quebec. The province will still need to integrate its transmission network inter-provincially.
As an aside, I often find the commentary made about Northwestern Ontario’s surplus of electricity forgetful of the fact that while we may have a surplus of supply (though this is debatable), our transmission costs are the highest in the province with low population density and the vastness of the territory adding significantly to our cost of electricity in the Northwest. The costs are in fact so high that many of our communities are not yet connected to the provincial grid.
Facts are facts. We have a historic debt load that must be paid. We do not have enough electricity to meet future needs. We do not have enough transmission infrastructure to deliver this electricity to the ratepayers. To address these needs, new money is required, which means increases in our electricity rates.
As we move towards a fall election, I would urge all ratepayers to listen carefully and consider what the parties are saying. Any party platform calling for reduced electricity rates in the face of this perfect storm is a promise that will be broken.

Byron LeClair is director of energy projects at Pic River First Nation. These are his personal observations, not those of the First Nation.

Hydro reservoirs produce less CO2 than believed - CBC News

Hydroelectric reservoirs emit about one-sixth of the greenhouse gases previously attributed to them, says an international team of scientists.

They emit 48 million metric tonnes of carbon annually, a downgrade from earlier estimates of 321 million metric tonnes, according to a study of 85 reservoirs published in this week's online version of Nature Geoscience.

"Our analysis indicates that hydroelectric reservoirs are not major contributors to the greenhouse gas problem," Jonathan Cole, a limnologist at New York State's Cary Institute of Ecosystem Studies, said in a release.

"But there are some caveats," he warned. "To date, only 17 per cent of potential hydroelectric reservoir sites have been exploited, and impacts vary based on reservoir age, size, and location."

In particular, emissions are correlated with latitude and the amount of vegetation being flooded.

"Reservoirs in tropical locations, such as the Amazon, emit more methane and carbon throughout their life cycles," said lead author Nathan Barros of the Federal University of Juiz de Fora in Brazil.

Hydro reservoirs are created by damming rivers and flooding large swaths of land so that when water is released it can turn turbines and generate electricity. The water not only displaces wildlife and people, but drowned vegetation and soil also give off the greenhouse gases carbon dioxide and methane.

As reservoirs age, emissions decline, with cold-water systems giving off fewer emissions than warm water ones.

Hydroelectricity supplies an estimated 20 per cent of the world's electricity and accounts for more than 85 per cent of electricity from renewable sources.

Hydro reservoirs produce less CO2 than believed - Technology & Science - CBC News