Rivers: Is it Time to Phase out Natural Gas?

By Ray Rivers

June 3rd, 2021

BURLINGTON, ON’

The previous provincial government closed all of the coal-fired power plants and permanently banned coal as a fuel for electricity production. That was one of the largest greenhouse gas reduction initiatives in North America. More than 30 mega-tonnes of greenhouse gases annually were eliminated.

That is the equivalent to taking seven-million petroleum powered vehicles off our roads. In addition, closing the coal plants helped reduce the number of smog days in Ontario from 53 in 2005 to zero in 2015.

In 2005 coal-fired electricity still accounted for 19% of the utility bill. By 2015 when coal was gone, wind and solar energy had come from nowhere to account for 9%, even as electricity use in the province increased by another 3%. And while the costs of getting there were not inconsequential, solar and wind are today’s lowest cost sources of electrical energy.

Wind turbines work exceptionally well if located in the right place.

Of course wind and solar are intermittent sources of energy by their very nature. And while awaiting the development of backup energy storage systems, natural gas had been included in the mix to allow for those times when the sun was down or the wind had stopped blowing. Still, by 2018, the year the government changed political parties, natural gas accounted for only 3% of the energy mix.

Renewable energy accounts for a third of the electricity produced in Ontario. And a third of that comes from Ontario’s fleet of solar and wind installations. But after the 2018 election the Ontario government stopped approving and started cancelling new solar and wind projects. Still, even in 2020 wind and solar still generated over 11% of the provincial energy mix.

As a result Ontario’s electricity system is currently about 94 percent carbon free. However that is down from 97 percent under the former government, though still very respectable when compared to other jurisdictions like the USA, or even Alberta.

Solar panels have proven to be very cost effective.

Unfortunately the current provincial administration is allergic to naturally sourced renewable energy. In fact, the Premier has recently moved to de-prioritize renewable energy in an effort to allow increases in the carbon content of Ontario’s energy mix.

So it should not be surprising that this Ontario government, through its wholly owned Ontario Power Generation, has just spent three billion dollars purchasing three existing gas plants from TC Energy. It is easy to understand why TC Energy would want to unload these facilities which represent yesterday’s fossil fuel burning technology. But why would the Ontario government buy them?

The contrast with what we see happening in the US could not be clearer. US President Joe Biden is committed to eliminating natural gas electricity production within 15 years, replacing it with renewable energy. Canada has just announced new climate change targets for 2030 which would entail a 40-50% reduction in fossil fuel burning.

Recently 27 municipalities across Ontario, representing half of the province’s population, have demanded that Ontario phase-out natural gas electricity production. They are concerned about re-carbonizing Ontario’s energy mix and the potential smog pollution which would result. Converting Ontario’s vehicle fleet to electricity is hardly carbon free if recharging the cars’ batteries relies on carbon based electricity.

The province’s Independent Electrical System Operator (IESO),which manages Ontario’s power system, had begun a stakeholder engagement process to examine the feasibility of phasing-out natural gas. In response, the Ontario Energy Association (OEA,) which represents most large energy providers, quickly generated a report in defence of the gas plants.

One of the three gas fired energy plants the province bought.

The OEA report delivers what they term a ‘rough estimate’ of $60 billion over the next decade as a consequence of eliminating natural gas from electricity production. Rough estimate is a generous term for this sketchy effort at producing a large enough number to get everyone’s attention. And unsurprisingly, the imaginary number, intended to impress the reader, is based on heroic and incomplete assumptions – in short, shoddy work.

But this is not just about climate change and the environmental consequences of burning more fossil fuel. There have been huge economic costs associated with the direction this government has been taking us from the get-go. They gave away $3 billion when they dismantled Ontario’s cap and trade emission reduction system. Another $231 million was spent compensating approved new renewable energy projects which were cancelled by the government.

Then there were the millions, (initially $30 million) which were poured into the pointless effort to kill the national carbon tax. And now the Province is spending $3 billion to buy gas power plants which will have to be decommissioned in as little as a decade.

Meanwhile the government is paying $6 billion a year to subsidize our monthly electricity bill, a practice estimated by the Ontario Energy Association to possibly end up costing $228Billion over the next 25 years. And even so, the cost of electricity has actually increased since this government came to power, peaking just prior to the onset of the pandemic and the Premier’s decision to offer work-at-home rate relief during the crisis.

By any measure, economic or environmental, this is a troubling roadmap. And it is taking Ontario tax payers into the most ideologically driven and wrong-headed misadventure since a former premier broke up Ontario Hydro.

Ray Rivers writes regularly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking.  Rivers was once a candidate for provincial office in Burlington.  He was the founder of the Burlington citizen committee on sustainability at a time when climate warming was a hotly debated subject.   Ray has a post graduate degree in economics that he earned at the University of Ottawa.  Tweet @rayzrivers

Background links:

Coal Power Plants –    Ontario Energy Mix –      Ontario Electricity Rates –

Municipal Pressure –      OEA Study –      TC Plants –

Today’s Energy Mix –     Ratepayer Subsidy –