What you need to know about the business of producing energy in Ontario,
How is Ontario’s electricity generated? The majority of Ontario’s electricity — 60 per cent last year — comes from nuclear reactors at Bruce, Darlington, and Pickering. Almost a quarter — 24 per cent — is from hydroelectricity from places like Niagara Falls, while 10 per cent comes from natural gas-powered generating plants. Only 6 per cent is from wind, and less than 1 per cent comes from solar, with a similar amount of electricity generated by biofuels.
How much electricity does Ontario use on an average day in January? The peak demand on a cold winter day would be about 20,000 megawatts of electricity. Luckily, supply outstrips demand with 25,462 megawatts of generation available this week. The record for electricity usage in Ontario was set during a heat wave on Aug. 1, 2006 when the load demand was a staggering 27,005 megawatts.
Why does electricity cost more in Ontario than in Quebec, Manitoba, New York or Michigan? Ratepayers in Quebec and Manitoba enjoy cheaper electricity in part because those provinces have ample hydro resources, such as waterfalls and dams. Ontario’s neighbours in Michigan get more of their power from inexpensive coal-fired generation that Ontario phased out to curb pollution. In New York, about 60 per cent of electricity is generated with natural gas and oil, which are cheap fuels now.
Why are nuclear reactors so expensive? While nuclear energy is relatively cheap to produce, building atomic reactors is very expensive and timeconsuming with new-build and refurbishment projects invariably burdened by cost-overruns due to engineering challenges, lengthy environmental assessments, labour issues, and other hurdles. Disposing of radioactive waste safely is also difficult.
Why do we subsidize green energy by guaranteeing to buy wind and solar power from producers for more than the electricity is worth? Seven years ago, former premier Dalton McGuinty’s Liberal government launched the feed-in tariff (FIT) program to both boost economic development — by encouraging companies to manufacture wind turbines and other equipment in Ontario — and protect the environment through the generation of clean electricity. This program allows generators of renewable electricity to sell power to the grid at a premium. These small producers, many of whom are farmers with wind turbines or solar panels in their fields, are paid a guaranteed price over a 20-year term for all the electricity they produce.
Can I get help paying my electricity bill? People with after-tax household incomes of $52,000 or less can apply for the Ontario Electricity Support Program, designed to cushion the blow from the cancellation of the Ontario Clean Energy Benefit. The Ministry of Energy says the support program will save low-income families as much as $75 monthly. About 500,000 households are expected to qualify but so far, only 77,000 have applied.
Why does Ontario sell surplus power below cost or even pay to dump it? Electricity cannot be stored, so it must be used, and when there are surpluses in the system — because of slack demand and new supplies coming on-stream — it has to go somewhere to keep the power grid in balance. That’s when the price is lowered and, on occasion, neighbouring power systems are paid to take the electricity. Surpluses should ease in the coming years as units at the Darlington and Bruce nuclear generating stations are taken down for refurbishing.