Replacing coal in Ontario: what the government really did

There is so much mythology now around Ontario’s coal plants for power generation, it really is time to set the record straight on what really happened, how much it cost, and what was actually achieved. This is the first in a two-part series by Parker Gallant.

Intermittent, undependable wind power installed to replace coal-fired power generation. Seen here: a new turbine in the Algoma Highlands. Photo: Gord Benner
Intermittent, undependable wind power installed to replace coal-fired power generation. Seen here: road construction for a new turbine in the Algoma Highlands. Photo: Gord Benner

Back in 2011, Ontario had coal plant capacity of 4,484 MW but the plants really operated only occasionally, producing 4.1 terawatts (TWh) of power — just 10.5% of their capacity. The 4.1 TWh they generated in 2011 represented 2.7% of total power generation in Ontario of 149.8 TWh.  The cost  per TWh was $33 million or 3.3 cents/kWh, making the ratepayers’ bill for those 4.1 TWh $135 million.

As most Ontarians know, those coal plants were either closed (Lambton and Nanticoke) or converted to biomass (Atikokan and Thunder Bay). We were continually told closing or converting those coal plants would save Ontario’s health care system $4.4 billion, based on a study completed while Dwight Duncan was Ontario’s Energy Minister.  Duncan’s claim was a fictitious interpretation of the actual study, but it was repeated so often by Liberal ministers and MPPs that they all believed it and presumably felt the public believed it, too.  

Good PR but … the truth?

Whether one believes the Duncan claim, the fact is the coal plants were closed or converted and the ruling Ontario Liberal government made a big deal of it even to the point of obtaining an endorsement from Al Gore as the first jurisdiction in North America to end coal fired power generation.

The government never disclosed how much it cost the ratepayers/taxpayers of the province to close or convert those coal plants, and we certainly haven’t seen any improvement in our healthcare system since it happened, as one would expect from saving billions. So, was the claim of savings a falsehood? And what did closing the plants really cost?

Let’s start with looking at our electricity consumption level in 2011 and compare it to 2015. In 2011 Ontario generated 149.8 TWh and consumed 141.5 TWh.  In 2015 we generated 159.6 TWh, including 5.9 TWh of embedded generation, and we reportedly consumed 137 TWh, not including the 5.9 TWh of embedded generation consumed within the confines of your local distribution company (LDC).

The difference of 8.3 TWh in 2011 and 16.7 TWh in 2015 was exported.

Replacing coal-fired generation 

As noted, coal capacity was 4,484 MW in 2011 and in 2015 was zero — so what did we replace it with?   According to the Independent Electricity System Operator (IESO) Ontario Energy Report for Q4 2015, since the end of 2011 we have added:

  1. Nuclear supply increased by 1,532 MW (Bruce Power)
  2. 754 MW of hydro
  3. Natural gas generation increased 602 MW
  4. 2,580 more MW capacity of industrial wind turbines (IWT)
  5. Solar up by 2,078 MW
  6. Bio-mass increased by 481 MW (principally conversions of Atikokan and Thunder Bay from coal)
  7. “Other” increased by 10 MW

As well, residential ratepayers conserved 1.184 GWh1. , equivalent to 450 MW of wind turbines operating at 30% of capacity (generating electricity intermittently and out-of-phase with demand).

So altogether, Ontario added 8,037 MW of capacity to cover the loss of 4,484 MW of coal which, in 2011, operated at only 10.5% of capacity.

Ratepayers also reduced consumption by 6,553 GWh with residential ratepayers representing 1,184 GWh of that reduction.

It would appear the variations of long-term energy planning emanating from the Ontario energy portfolio continually overestimated future demand by a wide margin. Their numerous ministerial directives to the Ontario Power Authority (merged with IESO January 1, 2015) with instructions to contract more and more unreliable intermittent wind and solar generation with “first-to- the-grid” rights at high prices produced surplus energy.

This stream of directives and the acquisition of excess capacity resulted in increasing electricity costs for ratepayers due to surplus generation and payment guarantees for displaced generation.

They also added other expensive policies such as conservation initiatives that simply piled on unneeded costs.

Parker Gallant

August 28, 2016

  1. Interestingly, the OEB in a revision to the “average” residential ratepayers monthly consumption reduced it from 800 kWh to 750 kWh, yet suggests conservation achieved (2011 to 2014) was 1,184 gigawatts (GWh).   The total number of residential ratepayers suggests that consumption has declined by 2,739 GWh (4,564,835 residential ratepayers at December 31, 2015 X 50kWh [montly] X 12 = 2,739 GWh) since 2009.

NEXT: The second in this series will examine the additional costs associated with the various policies applied and how generation additions to Ontario’s energy mix continue to drive up Ontario’s electricity costs

 

[Reposted from Parker Gallant Energy Perspectives]

Comments

Sommer
Reply

There are so many people walking around this province with misinformation about this. I hope that this two part series will be published in as many papers as possible to help to educate people.
Thank you Parker.
Send links to this article on social media.

Jjoe
Reply

Parker, are you related to Cheryl Gallant MP?

Parker Gallant
Reply

I don’t think so but most Gallants trace their roots to Prince Edward Island, me included.

Pat Cusack
Reply

Interesting to see Welland getting a new General Electric plant and a large Ontario subsidy and this plant will produce its own electricity during peak periods using 3 engines which one assumes will be powered by natural gas. Can other industries get this subsidy to produce their own power? Bernie

Jjoe
Reply

Pat. The General Electric plant in Welland will produce engines that are used to generate power. I could find no reports that this new plant will generate any power but I would not be surprised. Yes, General Electric received a government subsidy. The subsidy was given to help get GE to locate here. It seems most big builds do. I can find no reference to the subsidy being related to power generation.

Jjoe
Reply

Power generation requires looking into the future and making decisions based on projections. The Darlington Nuclear Generating station is being phased out by the early 2020s. Pickering Nuclear Generating Station starts refurbishment this year. I assume while it is being refurbished it will produce less/no electricity. So, some of the increased generation capacity will cover these shortfalls.

The TORONT STAR publishes a graph each week showing electricity demand vs generation capacity. There were times this summer that showed the two lines of the graph close to each other or touching. This meant that all the system generation capacity was required.

Replacing generation capacity with wind and solar is way too expensive. The over all increase in generation capacity appears to be required.

Jjoe
Reply

Oops. Darlington is to be refurbished and Pickering closed. Transposed the names of the plants.

R Budd
Reply

Yes I was going to point out you got had the refurbs/closings mixed. Also its fair to note that if On. had stuck with the Long Term Energy Plan in place prior to Smitherman and this Green Energy Act, Darlington would have two new reactors in the process of completion.
Had we stuck with that plan we would not be looking a the increased reliance on natural gas and the increased emissions intensity we are going to see in this province for at least the next couple decades.
What a shame actually as those new reactors were designed to ramp easily, would have been totally compatible with solar and would have allowed for a large fleet of electric vehicles charging over night, so we could have addressed the provinces most serious pollution source.
Classic case of ideologues and opportunists getting their hands on the levers of power at the expense of the environment and public good in Ontario.

Jjoe
Reply

When the cost estimate came in on building the two proposed reactors it was much higher than earlier estimates. The government decided that the cost put the project out of reach.

R Budd
Reply

I’d like to read that statement from the Energy Minister. Can you find it Jjoe? The day before Chiarelli said they would not proceed with Darlington, they gave out a wind contract for Samsung at rates above projected cost from those reactors.
Two reactors at the existing Darlington site, with existing distribution, serving the growth areas, would in reality have been far cheaper for ratepayers and the environment than what we are getting now.
Big difference is the Liberals have had a field day selling contracts to the private sector.for party support, while electricity ratepayers get hung for the whole cost.

R Budd
Reply

Jjoe the article you provided doesn’t state cancelling the new nukes was price related, in fact it says that the latest costing was lower than previous. Chiarelli just says “we have a comfortable surplus”…, something that won’t be true in a few years. The short term surplus was because they went TOTALLY NUTS with large wind contracts and continue to give contracts for much higher cost RE. The latest FIT/MicroFIT contracts are paying $.31/Kwh for solar and $.12 for wind despite the fact their capacity value is rapidly heading to $0.00. And we’ll get 600 MW more useless wind this year. New nuclear was much, much more favourable in terms of value for money.
Those new reactors if we had stuck with the ’09 plan would have been important zero carbon sources for this province in the next decades. Unfortunately due to unfounded ideology we’ll see more fossil reliance.

Jjoe

R Budd. From the article I cited. “The costs have come down, but they have not come down enough to justify us building new nuclear when we have a very comfortable surplus,” said Chiarelli.”

Bert
Reply

In the first (May 2016) report of Dianne Saxe, the new Environmental Commissioner of Ontario it says that the government made a mistake in choosing wind energy to fight climate change. Since emissions from electricity generation in Ontario are negligible there is no environmental benefit in wind turbines.
In the 2015 annual report, Bonny Lysyk, the Auditor General of Ontario, has only criticism on how the electricity sector has been handled. In her report she blames wind and solar for the high electricity price. She predicts that more wind energy makes the grid less reliable and will further increase carbon emissions and electricity prices

R Budd
Reply

This is a big subject, but its important as the urban public will look the other way on destructive policy like the Green Energy Act if they feel they got something beneficial from it.
The misnamed On. Clean Air Alliance and influential GTA schemers and dreamers types like Bruce Lourie did a great job of misleading the public on the role coal was playing in Ontario. One can hope someday folks like that will be tried for crimes against humanity and the environment.
They used the fact that the Nanticoke was a very large plant (relative to the dozens south of the border in Michigan) to paint On. as a very dirty provider of electricity. A huge lie at the time actually. Since the nuclear era we have been remarkably and commendably clean.
Coal use grew sharply when the refurbs at the Bruce were put off in mid ’90’s and 4 reactors were mothballed, while the economy and demand grew. Ideology and opportunism of both the NDP and Conservatives of the day were to blame.
A fair way to look at it is that between ’04 when Dalton promised to close the coal plants and when they finally closed in ’14, nuclear reactors coming on line replaced 85% of that ’04 generation.
By the time the GEA came to be in ’09, our coal plants were just there for peak demands like extreme cold events and to run air conditioning in summer. To suggest you were replacing that kind of generation with solar and wind was a big lie. Anyone who watches daily generation numbers can se how badly both those sources miss peak demands. Wind is remarkably perverse to demand in Ontario and solar crashes just as demand is building to peak..
One of the last presentations the OPA made to the OEB suggested Nanticoke was actually kept on line longer than necessary BECAUSE of the need to stabilize the wacky swings in generation, thanks to the installed wind capacity.
Bruce Power actually offered to convert Nanticioke to nuclear, but Energy Minister Smitherman went ballistic because he was busy hatching his secret deals for the then yet to be announced GEA mess.

Pat Cusack
Reply

I’ll think I’ll take me to Bora Bora. Maybe things make sense there!

Bert
Reply

Two years after the government closed the Nanticoke coal plant for emission reasons. CBC news Toronto reports on Feb 4 2016 that US Steel, the neighbour of the closed coal plant, is exempt from the new pollution limits. (Kathleen Wynnd is very committed to clean air, as you know)
Us Steel will likely benefit huge from carbon credits in the Cap and Trade scheme.

Barbara
Reply

First demonize conventional power sources and then make money off from carbon trading.

Jjoe
Reply

Barbara, the environmental impact of coal from mountain decapitation, through carbon emmisions, to dealing with the coal ash demonizes coals use.

Barbara
Reply

Look at the extraction of lithium and rare earth elements.

Depends on what you want to demonize.

Jjoe

Mountain decapitation has a much bigger negative impact. The process is truly horrific. Your point is nothing we do is environmentally harmless. I do agree with that.

R Budd
Reply

Ontario is basically replacing an irrelevant amount of coal and 1/3 of its nuclear capacity with a very large reliance on natural gas, continued reliance on oil for transport and expensive high impact wind/solar. How is this a win for anyone Jjoe, other than the corporate rent seekers brought here by the Green Energy Act?

R Budd
Reply

Nanticoke I believe used Powder River Basin coal. Nobody was decapitating a mountain for it, and On’s requirement was very small anyway. BTW that coal is noted for both low S02 and ash.
I’d prefer that and the certainty of coal storage and price, relative to the massive amount of fracking, pipelines and price volatility On. is going to be reliant on with natural gas. But certainly Enbridge, TransAlta and Suncor like the latter.

Barbara
Reply

Businesses that don’t want to bother with cap-and-trade issues will just leave and new businesses won’t come.

GE is in the IWT business so an execption.

Results will be job losses and union busting.

Barbara
Reply

Businesses that don’t want to bother with cap-and-trade issues will just leave and new businesses won’t come.

GE is in the IWT business so an exception.

Results will be job losses and union busting.

Barbara
Reply

Wind and solar developers use ANNUAL numbers as a basis for how much power can be supplied by a project to estimated number of homes.

They don’t use how much power can be supplied on an HOURLY basis or even a DAILY basis. No way of making a prediction.

Different issues that many of public don’t think about?

Jjoe
Reply

R Budd. Powder River Basin coal may have been used at Nanticoke. However, it’s coal supply did come from the Appalachian Region of the US. “Its current site was selected in Nanticoke, Ontario, because of the nearby harbour, the proximity of United States coal supplies,…

https://en.m.wikipedia.org/wiki/Nanticoke_Generating_Station

R Budd
Reply

Again your reference doesn’t say what you suggest it does Jjoe. No reference to Appalachian coal there. And On.s use was irrelevant relative to any other jurisdictions without big hydro. On. was a green leader decades earlier. Our nuclear program was about replacing coal. Nanticoke was a big single plant while just across the US border there were several dozen smaller dirtier plants.
On. coal use was rapidly being replaced with refurbed nuclear, demand drop and natural gas. Even while the coal plants were operating (typically just for peaking) our emissions intensity were about 1/6 that of Michigan and 1/4 of Germany’s.
Unfortunately due to the GEA and its natural gas requirement replacing nuclear that progress won’t continue.

Jjoe
Reply

The citations show coal from the Eastern US. That is the Appalachian area. Where, in the 2000s, would we get high sulphur coal to burn? The closest source is the Appalachian area.

Jjoe

From a TORONTO STAR article written in 2008.

” The gooseberries have been bulldozed, replaced by rows of explosives. Just past the “Do Not Enter” sign, the mountain has been brought to its knees – cut down like a giant tree. Instead of gazing 200 metres up to its peak, as Gibson once did, you peer down at its rubbly remains, clawed at by giant shovels and trundled off by bucking yellow dump trucks.”

“What does this have to do with you? This is where Ontario gets 40 per cent of the fuel powering its coal-fired power plants. That means every day you run your dishwasher, you are connected to one of world’s oldest mountain chains, 900 kilometres south of Toronto, which is slowly being flattened, one peak at a time.”

https://www.thestar.com/news/insight/2008/02/23/coal_mining_ravages_appalachia_mountains.html

R Budd

What does BC hydro know about On. generation?… and the Star has been part of the problem in terms of energy misinformation. This is from gov’t of On. itself on coal use. Nanticoke and majority of On. coal was Powder River, not Appalacian.
http://www.energy.gov.on.ca/en/files/2015/11/End-of-Coal-EN-web.pdf
Look at page 19, then refer to the previous page for the coal use south of the border. No contest as to who was responsible for blowing off mountain tops.
I voted three times for the Lib’s to end coal use, but as the articles by Mr Gallant points out, if your goal was to reduce emissions and improve health, the approach taken in the name of coal was brutally wasteful and ineffective. What is your point???

Jjoe

“What does BC hydro know about On. generation?”

Well, it’s not BC Hydro. “Energy BC is a non-profit educational enterprise intended to act as a comprehensive and objective source on energy issues in British Columbia, Canada, and around the world.”. The work produced was under the direction of Ph.D from the University. Of Victoria. The three authors are students at the University of Victoria.

Jjoe
Reply

R Budd. you state, “This is from gov’t of On. itself on coal use. Nanticoke and majority of On. coal was Powder River, not Appalacian.”

The TORONTA STAR, states, “What does this have to do with you? This is where Ontario gets 40 per cent of the fuel powering its coal-fired power plants.” So THE STAR points out that more coal in Ontario comes from non Appalachian sources.

You and THE STAR agree. But, the coal we get fro Appalachia does promote mountain top removal. Other jurisdictions promoted more but that is something neither you or I can change.

Jjoe
Reply

My point is that eliminating coal power was a good idea implimented very poorly. Emissions and environmental damage from coal mining was too high a price to pay.

Tracy
Reply

Jjoe,
Toronto Star…well pin a rise on their nose.. Liberal rag.

Jjoe
Reply

Tracy. The TORONTO STAR has the highest circulation of any dail newspaper in Canada. Easier to trash the source than deal with the data.

Tracy
Reply

..pin a rose.
Re: renewable energy…I death resulting from exposure to infrasound is too much.

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