Doug Ford government wants new gas plants to boost Ontario’s electricity system

Premier Doug Ford’s government is preparing to expand gas-fired power plants in Ontario, a move critics say will make the province’s electricity system dirtier and could eventually leave taxpayers on the hook.

The province is currently soliciting bids for additional gas-fired electricity generation, which means either new gas plants get built or existing gas plants get expanded.

It’s poised to be Ontario’s biggest increase in the gas-fired power supply in more than a decade, since the previous Liberal government scrapped two gas plants, in Mississauga and Oakville, at a cost the auditor general pegged at around $1 billion.

Ford’s energy minister, Todd Smith, says Ontario needs gas plants now to help meet an expected surge in demand for electricity and to provide power while some units of the province’s nuclear stations are down for refurbishment.

“It’s really important to have natural gas as an insurance policy to be there to keep the lights on and provide the reliability that we need,” Smith said in an interview.

“We need to have natural gas for the short term, especially to get us through these refurbishments.”

The portion of Ontario’s electricity supply that comes from natural gas matters not just for the environment but also for the province’s economy. Manufacturing companies are increasingly looking for a power supply that emits as little carbon dioxide as possible.

More gas plants could dissuade investment, say some

Ford has been touting the province’s “clean energy advantage” as one of the key reasons Volkswagen chose Ontario for a $7-billion electric vehicle battery plant.

Increasing the amount of gas-fired generation in the electricity system puts Ontario’s ability to attract such investments at risk, says Evan Pivnick, program manager with Clean Energy Canada, a think tank.

“Building new natural gas (power plants) in Ontario today should be seen as an absolute last resort for meeting our energy needs,” said Pivnick in an interview.

Ontario’s electricity system has among the lowest rates of CO2 emissions in North America, with roughly half of the annual supply provided by nuclear power, one-quarter from hydro dams, and one-tenth from wind turbines.

However, Ontario’s gas plants have produced a growing amount of electricity in recent years and that trend would continue if new gas plants are built.

In 2017, gas- and oil-fired generation provided just four per cent of Ontario’s electricity supply, according to figures from the provincial agency that manages the grid, the Independent Electricity System Operator (IESO).

By 2022, that figure reached 10.4 per cent.

Ontario doesn’t need new gas plants to meet the demand for electricity, says Bryan Purcell, vice president of policy and programs at The Atmospheric Fund, an agency that invests in low-carbon projects in the Greater Toronto and Hamilton Area.

“We’re quite concerned about where Ontario’s electric grid is going,” said Purcell. “Thankfully, there’s still some time to adjust course and look at other options.”

According to Purcell and Pivnick, those options to avoid gas could include power storage (in which excess generated energy is stored for later use when electricity demand rises), wind and solar projects, or energy efficiency and conservation programs.

Ottawa making it cheaper to built clean energy

The IESO concluded last fall that it would be impossible to meet the province’s electricity needs in the coming years without adding new gas-fired capacity.

However, that was before the federal government made it cheaper to build new carbon-free electricity generation by announcing $6.3 billion in investment tax credits for new wind, solar, hydro, tidal and nuclear projects.

The Ford government’s push to generate more of Ontario’s electricity from natural gas has the potential to conflict with the Trudeau government’s push for Canada’s grid to be net zero emissions by 2035.

The feds are currently developing regulations to enforce its net-zero electricity plan and one of the ideas being proposed is a phase-out of fossil-fuel-powered electricity (such as gas plants) that could include shutting down new facilities built after 2025.

However, the companies who would build Ontario’s new gas-fired power plants have nothing to worry about: even if the feds shut them down, the Ford government is promising they’ll continue to get paid.

Purcell claims this is a recipe for another gas-plant scandal, similar to what the province saw in the 2010s under Dalton McGuinty’s Liberal government.

“There’s a very real risk that we’ll not only get these new gas power plants, but we’ll be continuing to pay for them long after they are required to shut down,” Purcell said.

Asked if he could promise Ontario will not see another gas plant scandal, Smith replied, “What I’m going to guarantee the people of Ontario is that we’re going to have the power that they need.”

Ontario facing large increase in energy demand

Dave Butters, president and chief executive of the Association of Power Producers of Ontario, pushes back at the notion that gas plants in the province are inextricably linked to political scandal and defends gas-fired electricity generation.

“It’s safe, it’s relatively clean, it’s efficient, it’s effective,” said Butters in an interview. “It can respond in real time to the ups and downs of electricity demand.”

Butters says the province needs “a sense of urgency” about filling the gap between Ontario’s capacity to generate electricity and the demand for power.

“We’re on the brink of a very large increase in our electricity system in Ontario,” he said. “We’ve got to move ahead with these procurements now. We can’t wait until 2024, or we’ll be out of time.”

The province’s current call for new sources of electricity allows for up to 1,500 megawatts from natural gas-powered facilities. To put that in context: that’s the same capacity as Ontario biggest hydroelectric dam, the Sir Adam Beck II Generating Station near Niagara Falls.

 

 

Where new facilities will be built remains to be seen

Once the new facilities are operating — expected to happen by 2027 — Ontario could put a moratorium on building new gas plants for electricity, the IESO reported last fall. But the agency says the province can’t completely phase out the use of natural gas in the electricity system until 2050.

Where the new gas-fired generation will go and who will build it remain open questions.

Smith says the IESO has indicated it’s likely that much of the new gas-fired power supply will be built at the sites where gas plants are currently located, possibly by expanding existing facilities.

Four of the province’s largest gas plants are owned and operated by Atura Power, a fully-owned subsidiary of Crown corporation Ontario Power Generation (OPG).

In 2020, OPG spent $2.8 billion to buy two and half gas plants: the 900-megawatt Napanee Generating Station, the 683-megawatt Halton Hills Generating Station and the remaining 50 per cent ownership stake in the Portlands Energy Centre, a 550-megawatt gas plant in Toronto.

The biggest privately-owned and operated gas plants in Ontario include the 1,038-megawatt Greenfield Energy Centre in Courtright, Capital Power’s 875-megawatt Goreway Power Station in Brampton, and TransAlta‘s 499-megawatt Sarnia Regional Cogeneration Plant.