Province misses gas-plant goal to produce power
In contrast, Ontario has overshot target for grid-scale renewable energy storage
A year and a half after setting out to build new gas plants in Ontario, the province’s electricity system operator has come up short — raising questions about the future of new fossil fuel generation, as energy economics pivot to renewables.
On Thursday, the Independent Electricity System Operator (IESO) released the results of its second round of competitive procurement for new gas generation, where private companies submit proposals to provide electricity for the grid.
Those results show the province has only secured half of the 1,500 megawatts of new gas power it set out to obtain in 2022.
In contrast, Ontario has obtained more than its target for grid-scale energy storage, announcing “the largest battery storage procurement in Canada’s history” for a total of 2,800 megawatts, exceeding the 2,500 megawatts it wanted.
The main stumbling block to new gas power has been local opposition. Over the past 18 months, the debate around reliability, cost and emissions has travelled to municipal council chambers across the province, as proponents of new gas plants and grid-scale battery projects have tried to seek local approval for their projects.
Local residents and small-town representatives essentially have a veto over the future of the provincial electricity system — and they have wielded it.
Three gas plants projects were rejected, as well as a handful of battery projects, in the face of local opposition — leaving no clear winner between proponents of gas and renewables.
The final results of the procurement show that, overall, 18 battery projects were approved, while three new gas plants will be built.
Upgrades will also take place at seven existing gas plants. These projects did not need local approval and one in Toronto proceeded in the face of local opposition.
New nuclear plants have since been announced, as well as the first round of renewable procurements in a decade.
In Thursday’s announcement, the IESO said the gas plants will cost more than double per megawatt hour than the battery storage, largely due to the fact that they will have shorter contract lengths, going until 2040 instead of 2048.
The federal government is in the process of finalizing Clean Electricity Regulations that will limit the amount of gas that can be burned to generate electricity after 2035. The Star previously revealed that the gas plant contracts will pay out, even if the plants have to stop generating electricity due to the new federal rules.
“By keeping taxpayer dollars flowing to fossil fuel giants, the Ford government is costing Ontarians more,” said Ontario Green Party leader Mike Schreiner.
“While I appreciate that the government is finally trying to catch up on years of missed opportunities to invest in clean-energy storage, its commitment is totally undermined by their plans to waste money on expensive, polluting fossil gas plants.”
Schreiner pointed out that renewables such as wind and solar are now the cleanest and cheapest source of energy available. Renewable sources generated 30 per cent of all electricity in the world last year, according to a report by British think tank Ember.
“There is no excuse for continued investment in fossil gas that puts our economic and environmental future in jeopardy,” Schreiner said.
When the Progressive Conservative government of Premier Doug Ford was elected, it immediately cancelled hundreds of renewableenergy projects. Since then, no new renewables have been built in Ontario.
Yet the province now finds itself trying to build new electricity generation to meet demand that’s expected to rise by 60 per cent over the next 25 years, even as the economy electrifies to cut carbon emissions.
The provincial grid, which was one of the cleanest in North America after Ontario phased out coal plants under previous Liberal governments, has been getting dirtier, as plants that burn natural gas have been fired up more often to compensate for nuclear reactors being offline for refurbishment.
When the province said it would have to build new gas plants to meet peak demand — the few hours a day in the summer when people crank up the A/C — environmentalists howled, saying the extra generation could be far cheaper and carbonfree if it was generated by wind or solar, and paired with batteries to make it available anytime.
In a release Thursday, provincial Energy Minister Todd Smith lauded the battery storage procurement as paving the way for attracting industrial investment looking for clean energy.
“Our government has secured astounding new investments for the province, from electric vehicle and electric vehicle battery manufacturing to green steel, and the goodquality jobs that come with them,” said Smith. “We have now broken records once again by completing the largest battery storage procurement in Canadian history and securing the electricity generation we need to power the next major international investment, the new homes we are building and industries as they grow and electrify.”
Grid scale batteries, which charge up on surplus energy from renewables and then feed that energy back into the grid during peak demand, can serve the same role as gas plants that fire up during those same peak periods — only without any of the carbon emissions.
This has made them attractive to First Nations looking to invest in clean energy. Nine of the 10 battery projects announced Thursday have 50 per cent or greater Indigenous ownership.