Don’t nuke affordable alternatives: GPO Comments on the Long Term Energy Plan

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Julie GreenSenior Policy Advisor
Ministry of Energy
 
EBR Registry Number: 011-9490
Long Term Energy Plan Review
 
Dear Ms. Green:
 
I am pleased that the Ontario government recognizes the need for significant revisions to its 2010 Long Term Energy Plan (LTEP). I appreciate the opportunity to submit the Green Party of Ontario’s comments on the Long Term Energy Plan Review.
 
The 2010 LTEP had three fundamental flaws that must be corrected in the new LTEP.
 
1. The 2010 LTEP continues the flawed assumptions that historically have caused Ontario’s energy planners to overestimate demand. This leads to unnecessary capital costs for new generation that is not needed.
 
2. The 2010 LTEP commits Ontario to maintaining a generation mix that requires 50% nuclear without exploring safer, more cost effective alternatives. This policy constrains the growth of both conservation and renewables. It locks Ontario into spending tens of billions of dollars on new and refurbished nuclear reactors that may not be needed.
 
3. The 2010 LTEP continues Ontario’s flawed assumption that bigger is always better. Maintaining a centralized, mega project approach to power generation stifles innovation and prevents the flexibility needed to adapt to changing circumstances and new technologies.
 
These flawed assumptions protect the status quo. In particular, they put the interests of Ontario’s electricity generating companies, especially the nuclear industry, ahead of the public’s interest in a safe, affordable, reliable and environmentally responsible electricity system.
 
The Green Party of Ontario proposes the following changes to the 2013 LTEP:
 
1. Prioritize energy efficiency and conservation over new generation.
 
The cheapest and greenest solution to Ontario’s energy needs is energy efficiency and conservation. The government took a positive step in this direction by following the GPO’s lead in calling for a “Conservation First” policy.
 
To move from rhetoric to reality, however, the government must revise the demand growth and conservation targets in the LTEP.
 
Past energy planning initiatives have overestimated long-term electricity demand growth, while also underestimating the cost of nuclear power. These two erroneous assumptions have led previous governments to build large nuclear power plants to fill future potential shortages of electricity. The shortages have not materialized. But the excess of inflexible baseload power has undermined, and in some cases capped, conservation efforts. Ontario cannot afford to let this happen again. 
 
This time it’s critical that the revised LTEP establish ambitious demand reduction targets, with escalating minimum reduction targets for 2020, 2025 and 2030.
 
The government must also mandate in the 2013 LTEP that the Ontario Power Authority (OPA) will pursue all cost-effective conservation and efficiency opportunities before procuring new electricity generation. In addition, the government must remove all financial and regulatory barriers to conservation and demand management programs.
 
At the same time, the government must implement programs that help consumers pursue conservation and energy efficiency, and remove barriers that prevent them from doing so. This includes re-instating a home energy retrofit program to help homeowners, businesses and tenants save money by saving energy. 
 
It also requires that the government stop undermining conservation efforts by rewarding consumption with its misleadingly named Clean Energy Benefit, a 10% reduction on electricity bills that primarily benefits the wealthy.
 
2. Don’t spend billions of dollars on new nuclear when electricity demand is falling.
 
Since electricity demand is set to return to 1992 levels by 2022, there is no need to spend billions for new nuclear reactors. Even though electricity demand is down, the 2011 LTEP directive was never adjusted to reflect the fact that the OPA incorrectly predicted that demand would rise significantly. 
 
Given this, it makes little sense and is financially irresponsible to lock the province into spending billions on inflexible nuclear reactors at this time. 
 
The province should explore more flexible sources of power generation that can be deployed incrementally.
 
3. Subject the costs and risks of nuclear projects to an open and transparent public review.
 
No nuclear project in Ontario’s history has delivered on time or on budget. Nuclear project cost overruns have been over budget by 40% to 250%. 
 
Even cost estimates for nuclear projects are consistently underestimated. For example, former Energy Minister George Smitherman suspended the bidding process for new nuclear reactors in 2009 when estimates came in that were more than 4 times higher than the OPA’s cost estimate.
 
Given the nuclear industry’s poor performance in estimating costs and meeting budgets, the Ontario government must subject the costs and risks of nuclear projects to an open and transparent public review before committing to new or refurbished nuclear power in the 2013 LTEP.
 
In addition, the Ontario should pass legislation that does not allow nuclear companies to pass cost overruns onto ratepayers or taxpayers before committing billions to nuclear projects.
 
4. Eliminate the arbitrary requirement that nuclear power must provide 50% of Ontario’s electricity supply. Explore all alternative sources of generation before committing Ontario to new and refurbished nuclear.
 
The price of nuclear power continues to increase, while the price of renewable energy continues to decline. Private sector companies are moving out of nuclear because it is too expensive. Countries such as Germany and Japan are eliminating nuclear because of safety and cost concerns.
 
Yet the 2011 LTEP directive requires the OPA to proceed with refurbishing the province’s remaining nuclear reactors even if conservation and renewables are more affordable. This makes no sense.
 
To make the best use of our tax dollars, the government prioritize energy efficiency and conservation. Only after conservation and efficiency measures are aggressively pursued, should the government should explore all options for new electricity generation. All new generation must be evaluated on level terms.
 
It is irresponsible and irrational for Ontario to arbitrarily commit to 50% nuclear generation without exploring affordable alternatives. Instead, there should be fair competition among all generation options based on cost, flexibility, reliability, safety and environmental risks and benefits.
 
The government could, for example, seek to negotiate a long-term electricity supply contract with Hydro Quebec for water power imports at a lower estimated cost than for new nuclear. The government can also pursue a diverse mix of made in Ontario energy solutions by increasing targets for wind, solar, biomass, biogas, landfill gas, water power, and combined heat and power.
 
The 2013 LTEP must remove the arbitrary cap on these sources of power generation.
 
5. Pursue all cost-effective opportunities to reduce Ontario’s total natural gas consumption below its current level.
 
The 2010 LTEP undermines Ontario’s efforts to reduce greenhouse gas emissions.
 
According to the Environment Commissioner of Ontario, the province’s greenhouse gas emissions will rise as Ontario uses more natural gas to generate electricity.
 
The 2013 LTEP must reduce amount of natural gas in the province’s supply mix. Expanding programs to support smart grid technology, energy storage and better demand management during peak periods is essential to replacing natural gas.
 
In addition, the province should increase the use of combined heat and power and district energy systems as a way to use natural gas more efficiently.  
 
6. Increase the flexibility of Ontario’s energy supply.
 
Ontario is increasingly faced with the challenge of surplus baseload generation. This happens when there is fluctuating demand and when there is more electricity being produced by non-flexible power plants than is needed.
 
Furthermore, Ontario’s surplus power has increased since the government committed to increasing nuclear supply based on a forecasted growth in demand that failed to materialize.
 
We live in a complex world that makes forecasting supply and demand difficult. When we tie ourselves to expensive, inflexible sources of generation such as nuclear, we create entrenched problems for our electricity system. Nuclear power plants cannot be turned on and off rapidly, making it difficult for nuclear power to respond to shifts in demand. 
 
The decade long planning required to bring nuclear on line and the billions of dollars in capital investment required for nuclear plants threatens to lock Ontario into a costly, outdated electricity supply mix if the government retains its commitment to 50% nuclear. 
 
Further complicating long-term planning are the rapid changes in types and costs of technology that can supply our electricity. The dramatic decline in the price of solar is one example. In Ontario, if the LTEP continues to lock us into nuclear, we will be unable to take advantage of technological advances that are good for our environment and our bottom line.
 
The 2013 LTEP should pursue energy solutions that maintain flexibility so that energy planners can rapidly respond to changes in supply and demand and to changes in technology.
 
7. Move to a decentralized, community-based power system.
 
Ontario has an opportunity to move from an inflexible, bigger is better, centralized electricity system to one that is flexible, democratic and resilient. Moving to a decentralized system creates economic opportunities that enable anyone to generate power and local jobs.
 
Today, most communities in Ontario import power and export dollars to the few places where power is generated. This leads to a less efficient, secure and resilient system.
 
The 2013 LTEP should be open to allow communities to be more active participants in energy planning and benefits. The government should consider requiring Community Energy Plans as part of a municipality’s official plan. The government must remove barriers, such as those the City of Guelph has experienced, to the implementation of community energy initiatives.
 
The 2013 LTEP must also leave the door open for individuals, farmers, municipalities, First Nations, businesses, and community groups to generate clean power that also produces local jobs. In short, the government should not let yesterday’s bigger is better, mega-project thinking prevent transitioning to a decentralized 21st century power system.
 
Conclusion
 
The energy status quo must change. Ontario has a historic opportunity to transform our electricity system to make it more democratic, affordable, flexible, clean, secure, resilient and reliable.
 
In order to do so, it is essential for the 2013 LTEP to avoid the flawed assumptions of the past. Ontario needs a Long Term Energy Plan that embraces the future, instead of protecting the vested interests of the past. It is time to open the door to affordable alternatives.
 
I appreciate the opportunity to share the Green Party of Ontario’s recommendations for the Long Term Energy Plan Review. I would be happy to provide more details and/or respond to any questions you might have.
 
Sincerely,
 
Mike Schreiner
Leader
Green Party of Ontario