DAILY NEWS Dec 12, 2013 6:53 AM - 0 comments

The cost of developing a renewable energy future? Forty per cent bill increase

Plan projects renewable energy will grow to 46 per cent of Ontario's generating capability by 2025, but monthly electricity bills will still surge

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By: David Nesseth

Ontario has released a new long-term energy plan that relies heavily on conservation and renewable energy as keys to reducing cost and environmental impact by 2032, but debate is brewing over the plan’s cost impact.

In the December 2013 document, Achieving Balance: Ontario’s Long-Term Energy Plan, the Ontario government says its plan is to offset almost all growth in the province’s electricity demand over the next two decades by using programs and improved codes and standards.  

“Energy efficiency is the centrepiece of Ontario’s new long-term energy plan,” states Tim Weis, director of renewable energy and energy efficiency policy at the Pembina Institute, which released an analysis of the Ontario plan in conjunction with its release on December 2, 2013.

The Ontario energy plan states five principles that will help Ontario move forward: cost-effectiveness, reliability, clean energy, community engagement and an emphasis on conservation and demand management before building new generation.

While the new plan will likely result in a 30 to 40 per cent cost increase for electricity consumers, the energy plan  states that the cost could have been substantially higher if the government had not reeled in its plans for the expansion of nuclear energy. In actual dollars, the forecast means that a customer who paid a monthly bill of $125 over 2013 will pay $167 per month in 2016, and $210 per month by 2032.

During a press conference following the release of the Ontario energy plan, PC Leader Tim Hudak admitted his Party would not be able to lower Ontarians’ electricity bills. Still, he was less than impressed with the new Liberal plan.

“Energy should be viewed from the basis of what it does to grow our economy and create jobs, not a social program or way to get a pat on the back from [former U.S. vice president] Al Gore,” Hudak told reporters, noting that he would like to see Ontario stay the course with nuclear energy.

The energy plan shows that the typical large industrial consumer is expected to pay $3 million less than the previous forecast over 2013-2017 and $11 million less by 2025.

Under Ontario’s previous energy plan, an industrial consumer with a demand of five megawatts per hour (MWH) was projected to pay $109 per MWH in 2014. The new energy plan projects that cost would only be $87 per MWH.

“The efficiencies we’ve already had from lower demand are going to generate that benefit starting next year for industrial manufacturing industries,” said Ontario Minister of Energy Bob Chiarelli, who released a statement in conjunction with the new energy plan.

Although financial details are not expected to be released until the spring 2014 budget, it appears that Ontario has plans to follow Manitoba’s “on-bill financing” program. Starting in 2015, the new energy plan says the Ontario government will help with some of the upfront costs of making energy efficiency retrofits. The additional payment costs of the loan would be built into monthly energy bills.

“Demand response” will be a particular focus of the Ontario government moving forward, the energy plan says. Otherwise known as “time-of-use”, the concept refers to adjusting energy use outside of peak demand hours, such as early morning and early evening, when the grid is most strained. Think smart meters. The plan says that Ontario will depend on demand response to meet 10 per cent of peak energy demand by 2025, equivalent to approximately 2,400 megawatts under current forecast conditions.

The U.S. Environmental Defense Fund has praised the Ontario government’s focus on demand response, fully supporting the plan as a means to cut energy consumption in a smart, simple and effective way. The plan is part of what the group sees as a critical part of the energy future for all of North America.

Before understanding where the Ontario government wants to go in terms of energy use, it’s helpful to know where the province currently stands. To help understand, the Ontario Power Authority provided a breakdown of the province’s energy use for 2013 within the new energy plan: 56 per cent nuclear; 22 per cent hydro; 10 per cent gas; three per cent wind; two per cent coal; one per cent solar, one per cent bioenergy; five per cent conserved energy.

In the energy plan, the government projects that renewable energy will grow to 46 per cent of Ontario’s generating capability by 2025. It also projects that nuclear production will drop by 17 per cent over the same period.

In the Legislature, NDP Leader Andrea Horwath said she took exception to Ontario families and businesses paying more when they already have some of the highest electricity rates in Canada, specifically because of the Liberal government's policies.

“This doesn't look like a plan for affordable power,” Horwath told Queen’s Park as the energy plan was introduced in the Legislature. “It looks like a desperate government trying to hold on to political power,” she added.

In conjunction with the release of the energy plan, Chiarelli released a statement to reinforce the province’s position.

“Ontario is a world leader in energy technology, innovation and smart grid solutions,” said Chiarelli. “Smart meters and consumer demand response programs are allowing ratepayers to control and understand their electricity consumption better while additional smart grid technologies are being used by utilities to operate an advanced, more efficient and modern grid. All told, our investments are making Ontario’s grid modern, clean and reliable and a foundation for future growth and prosperity.”

 This news item first appeared in EcoLog News. To learn how to subscribe, visit www.ecolog.com

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