Ontario’s recent decision to suspend the second round of its Large Renewable Procurement (LRP II) process is a missed opportunity for a province that has become a leader in investing in an increasingly clean and modern electricity system. LRP II had been seeking 600 MW of new wind energy. The suspension of LRP II does not affect any existing wind power developments under contract with Ontario’s Independent Electricity System Operator, according to the province’s minister of energy.
The decision to pause further procurement under LRP II was precipitated by the recently released Ontario Planning Outlook (OPO). The Canadian Wind Energy Association believes that the OPO understates the need for new electricity generation, given the important role electrification will play in meeting the province’s climate change targets and moving to a low-carbon economy. Ontario also plans to refurbish 10 nuclear reactors, and wind energy should be an important clean energy backstop for system reliability.
Investments in wind energy have positioned Ontario well, as Canada is now putting a price on carbon and taking the first steps to transition to a low-carbon economy. Ontario leads Canada in installed wind energy, with 4,361 MW of capacity, meeting about 5% of electricity demand. Continuing to invest in wind energy is essential to enable Ontario to meet its climate goals while remaining globally competitive.[adright zone=’190′]
In 2014, Ontario was first in North America to eliminate coal-fired electricity generation, while also making significant investments in its electricity infrastructure. Investments in new natural gas and renewable generation, refurbishment of nuclear facilities, and new transmission have resulted in higher electricity prices, as new facilities are more expensive than existing ones for which capital costs have been paid. New renewable generation has also created thousands of new highly skilled jobs, delivered local economic benefits and virtually eliminated smog warnings throughout Ontario. Continued growth in emission-free wind energy will be critical to meeting Ontario’s energy and climate policy goals.
Achieving a low-carbon economy will require deep electrification. Success on this front requires Ontario’s electricity grid to be powered by non-emitting, affordable electricity sources such as wind that can be used to power other sectors that have traditionally used fossil fuels, such as vehicles, transit, heating of buildings and many industrial processes.
These clean energy sources must be economic, and in this regard, wind energy has many competitive advantages. It is a technology, not a fuel, which means there is no commodity price risk, such as exists for natural gas. Being non-emitting, wind energy also avoids carbon price risks. Without commodity or carbon price risks, wind energy is more likely to enjoy long-term price stability.[adleft zone=’190′]
The costs for wind energy have fallen by 61% over the past six years, making it cost-competitive with other energy sources, as evidenced by the wind energy projects in Ontario’s LRP I, with costs as low as C$0.065/kWh. Plus, costs are projected to continue falling (41% by 2040, according to Bloomberg) as economies of scale and efficiencies are realized through the massive global expansion underway.
Ontario’s current energy plan reflects an understanding that there is a need, and a will, to cost-effectively and reliably integrate more clean, renewable energy into the electricity grid. The investments already made in wind energy are aligned with a global movement toward renewable energy, and Ontario is now broadly recognized as a Canadian leader for its strong domestic renewable energy sector. This capacity gives Ontario and Canada a competitive edge in a burgeoning global market. The International Energy Agency estimates that $36 trillion will need to be invested in the energy sector over the coming years as all jurisdictions seek to avoid the threat of serious climate disruption.
If Ontario is to cost-effectively transition to a low-carbon economy that meets its climate goals, it will be necessary to maintain or increase the pace at which it shifts to clean, renewable energy.
The industry is committed to working with the Ontario government as it updates its long-term energy plan. We will use that forum to demonstrate that the province must procure new wind energy to meet future growth in electricity demand and to provide its citizens with long-term price certainty at a more competitive rate than alternatives. [adright zone=’190′]
Brandy Giannetta is Ontario regional director at the Canadian Wind Energy Association. She can be reached at brandygiannetta.canwea.com.