Ontario Power Authority Officially Files Proposed 20-Year Plan for Province's Electricity System

    TORONTO, Aug. 29 /CNW/ - Conservation, renewable energy, nuclear and
natural gas are all cornerstones of Ontario's electricity future, according to
a milestone plan, filed today by the Ontario Power Authority (OPA), with the
province's energy regulator, the Ontario Energy Board (OEB).
    Designed to ensure a reliable, adequate and sustainable long-term
electricity supply for the province, the 4,000-page submission - two years in
the making - is a roadmap for achieving:
      -  One of the most ambitious electricity conservation efforts in
         North America,
      -  A doubling of the amount of renewable energy on the grid by 2025,
      -  The phase-out of coal-fired generation by the end of 2014,
      -  The refurbishment or replacement of the province's baseload nuclear
      -  Transmission upgrades to achieve the policy and operational
         objectives of the Plan.

    Described as an action plan with a 20-year outlook, the Integrated Power
System Plan (IPSP) will be updated every three years, providing an opportunity
to adapt to the evolving demand for electricity and opportunities or new
    During the development of the proposed plan, the OPA received over 161
written submissions and heard the views of over 2,200 Ontarians. The Ontario
Energy Board regulatory hearings - designed to evaluate the IPSP's adherence
to government policy direction and its economic prudence - will provide
additional opportunities for public input.
    "While this plan is the product of extensive consultations and planning
expert advice, it has truly benefited from the insights of Ontarians from
across the province," says Amir Shalaby, OPA Vice President, Power System
    "For two years we have attempted to build a shared understanding of our
electricity challenges and options. The Plan, and the OEB review and approval
process, will help Ontario define its choices further."
    Prudence and flexibility were two key planning principles, according to
Shalaby. "The plan must be founded on prudence - cost effectiveness and
feasibility of options. It must also have flexibility - the ability to respond
and adapt to what actually happens and changes in our assessment of the
    The plan's estimated 20-year, $60-billion capital cost will be directed
toward conservation initiatives, new renewable generation, natural gas
distributed generation, nuclear generation and the transmission capacity
required to deliver the electricity to Ontario consumers.
    While the investments contemplated in the plan will result in some real
price increase in the cost of electricity, anyone actively practising
conservation could see their actual electricity bills decline.
    The entire IPSP will be available for downloading by visiting
www.powerauthority.on.ca. Anyone with comments or written submission should
contact the Ontario Energy Board.

    Ontario Power Authority

    In pursuit of its mandate of ensuring an adequate, long-term supply of
electricity for Ontario, the OPA creates and implements conservation and
demand management programs, ensures adequate investment in new supply
infrastructure, performs long-term electricity system planning, and
facilitates the development of a more sustainable and competitive electricity

    For further information:

    1.  The Ontario Power Authority: 416-969-6307/Toll Free: 1-800-797-9604

    2.  Participate in a Media Technical Briefing, 9:00 a.m.:

        Attend in Person:

        Attend in person at the OPA offices: Main Boardroom, 120 Adelaide
        Street West, Ste. 1600, Toronto, Ontario - please arrive before
        9:00 a.m. and register with the front desk.

        By Webcast:

        Through the Ontario Power Authority website, by logging in to:
        http://events.onlinebroadcasting.com/opa/082907/index.php. Please
        note that while the presentation can be seen and heard through the
        website (or through the website and telephone, as preferred),
        questions may only be posed by telephone (see numbers below).

        By Telephone:

        The presentation and Q&A can be heard and questions can be asked by
        phone through: Local/International: 416-849-6206. North American
        Toll-Free: 1-866-253-4737.

    Integrated Power System Plan

    Quick facts

    Overall Plan

    -   This is the first comprehensive electricity supply plan for Ontario
        in more than 15 years. The IPSP is two years in the making.
    -   Within the policy direction and targets of the provincial government
        the IPSP has five defining features:
           1. Reduce demand by conservation
           2. Replace coal by gas and renewable sources
           3. Restore nuclear capability for base load by refurbishment or
              new build
           4. Develop flexibility from gas and purchase options
           5. Implement transmission that is necessary for reliability,
              incorporation of desired generation and system efficiency
    -   By 2025, Ontario's 45 percent of Ontario's electricity supply will be
        provided by conservation and renewable sources - eight percent from
        natural gas and 47 percent from nuclear power.
    -   The Plan will offset any growth in peak demand arising from increased
        population and economic growth for next 10 years or more.
    -   Ontario will build almost as much generating capacity over the next
        20 years as there is in the province today.
    -   Every three years, the OEB will review the plan to ensure it stays on
        track with changing priorities and benefits from the application of
        new, proven technologies.


    -   Conservation comes first. It takes priority over any form of new
    -   6,300 MW of total peak demand will be reduced through conservation by
        2025 - it's like removing one house in five from the grid.
    -   The OPA will seek to identify and develop conservation opportunities
        that exceed the 2010 and 2025 goals.
    -   One-sixth of the projected budget - more than $10 billion - is to be
        spent on conservation alone.

    Environmental Benefits

    -   The gains from successful implementation of the Plan would include:
           -  Sulphur dioxide emissions will decrease by 95 percent
           -  nitrogen oxide emissions will fall by more than 50 percent
           -  mercury emissions will be eliminated
           -  carbon dioxide emissions will fall by more than 60 percent.

    Engagement Process

    -   The engagement process included the publication of eight critical-
        issue discussion papers, and webconferences and in-person meetings
        involving more than 2,200 Ontarians.
    -   161 written submissions on the IPSP were reviewed and considered.
    -   The OPA contacted 134 First Nations to provide information about the
        IPSP and opportunities to comment. Twenty in-person meetings were
        held with First Nations chiefs and representatives.


    -   A baseload gap of 85 TWh must be filled after contributions from
        existing and committed supply, planned conservation and renewable
    -   Baseload needs can be met by either nuclear power or combined cycle
        gas generation ("CCGT").
    -   The OPA does not intend to procure any nuclear supply by the end of
    -   15,000 MW of resources are planned for 2015, including 6,434 MW
        specifically to replace coal-fired generation.


    -   The real cost-to-customer increases are expected to be in the order
        of 15-20 percent, although Ontarians who aggressively conserve will
        likely see a decrease in their real costs.
    -   The IPSP includes generation projects, transmission enhancements and
        conservation efforts estimated to cost roughly $60 billion
        ($59.7 billion by 2025 in 2007 dollars):
           Conservation   $10.2
           Renewables      15.4
           Nuclear         26.5
           Natural Gas      3.6
           Transmission     4.0
    -   Of the transmission total, some $3 billion (or 75 percent) is for
        transmission enhancements to facilitate renewable resources.

    Integrated Power System Plan


    The Integrated Power System Plan (IPSP) presents a prioritized
implementation plan that responds to the Ontario government policy direction
conveyed through the Supply Mix Directive (June 13, 2006). The IPSP is based
on a 20-year forecast, but is subject to updating and regulatory review every
three years; this will enable the Ontario Power Authority (OPA) to revise the
mid- and long-term plans based on near-term accomplishments and experiences.
    In its directive, the government stipulated that the province's
electricity requirements should be met from the following resources in this
priority order:

    1.  Conservation
    2.  Renewable resources
    3.  Nuclear power for remaining baseload requirements
    4.  Gas-fired generation for peaking, high-value and high-efficiency uses
    5.  Coal-fired generation replaced by cleaner sources in the earliest
        practical time frame (the government later determined through
        regulation that coal phase-out will occur by the end of 2014 at the

    The directive also indicated that the transmission system is to be
strengthened to meet these goals.
    The IPSP proposes how to achieve the desired supply mix, while ensuring
the system meets the electricity needs of the province for capacity,
electricity production, reserve requirements and flexibility. The resources
may not be fully built and available to the system in the order indicated
because of long lead times and required transmission upgrades. For example,
hydro resources are expected to contribute more renewable resource capacity by
2025 than wind resources (10,771 MW versus 4,685 MW). However, hydroelectric
generating resources originating in Northern Ontario will likely be brought
online later because of the necessary transmission investments that are
    The IPSP will be implemented through a number of projects, facilities and
programs. The plan submitted to the Ontario Energy Board represents the OPA's
current view of a reasonable, cost-effective way to achieve the desired supply
mix goals. The sequence and specific projects will likely change as
opportunities present themselves in the marketplace.
    Each element of the plan is discussed below in more detail.


    The IPSP provides a long range plan to accomplish the target of 6,300 MW
of demand reduction from conservation by 2025. It focuses on achieving the
government's target of 1,350 MW of electricity peak demand reduction over the
period 2008-2010.
    The plan sets out how the target will be realized in each of four
conservation categories: Energy efficiency, demand management/conservation
behaviour, customer-based generation and fuel switching. Conservation programs
will use three strategies to achieve their targets:
    -   Resource acquisition, which refers to procuring energy and/or demand
        savings and can take the form of payments or incentives to overcome
        financial barriers to customers adopting conservation programs
    -   Capability building, which refers to developing skills and knowledge
        necessary to deliver effective conservation programs
    -   Market transformation, which means achieving a substantial and
        sustainable increase in the market share of energy-efficient
        technologies, buildings and production processes

    The 2010 target will be achieved largely from resource acquisition
programs. In the long term, however, it is expected that conservation will
come more from investment in capability building and market transformation,
with less reliance on resource acquisition.

    Renewable Resources & Enhanced Transmission

    There are two key elements to achieving the goals for renewable resources
- acquiring renewable generation supply and enhancing transmission to connect
the supply with customers.
    Renewable resources (that are feasible and cost-effective) and do not
require upgrades to the transmission network will be procured as soon as
possible. The IPSP includes a list of transmission network enhancements to
facilitate new renewable resources. The accompanying resources will be
developed by coordinating with the extensions of the transmission system
through "enabler" lines. This will mean a change to the policy under which
transmission connections have traditionally been funded in Ontario - it will
require funding enabler lines as network resources, rather than as connection
    A list of facilities and geographic areas that comprise the currently
most attractive renewable resource opportunities is included in the plan and
will be developed in order of transmission availability. That mix will likely
change as better opportunities present themselves and as progress with the
implementation of transmission upgrades and enabler lines becomes clearer.

    Nuclear Power

    After contributions from conservation and renewable resources are
maximized, nuclear power is the preferred option to meet the baseload
requirement. However, whether the requirement for 10,249 MW of nuclear
resources should be met through refurbishment of existing facilities or by
building new capacity remains to be determined. Refurbishment is more
attractive because it involves a shorter lead time; uses existing generation
sites and transmission infrastructure; local community support is already
strong at existing sites, and experience from past and current refurbishments
can be leveraged.
    The most immediate decision is whether to refurbish Pickering B. The IPSP
has flexibility to address either scenario. If Ontario Power Generation (OPG)
decides to refurbish Pickering B, the plan assumes the associated capacity of
2,064 MW will be installed by 2018. If OPG decides not to refurbish, the IPSP
assumes that the same 2,064 MW will be replaced at a later time by new nuclear

    Gas-fired Generation

    Gas-fired generation will be used when additional conservation or
renewable resources are not feasible or cost effective. It represents a
contingent resource that can be brought on as needed. When gas-fired resources
are used, they should be restricted to single-cycle gas turbines (for peaking
requirements) or combined-cycle gas turbines (for intermediate requirements).
New contracts and facilities should reflect these requirements as much as
    There are a number of gas-fired generators that operate as baseload
resources because of the contractual terms of the non-utility generation (NUG)
contracts. When these contracts expire, the facilities can operate more
efficiently to meet intermediate and peaking load needs. The IPSP includes a
current list of contracts and projects through which the OPA intends to meet
these requirements.

    Coal-fired Generation

    By regulation, the government has mandated that coal-fired generation
must be phased out no later than the end of 2014. Replacing coal-fired
generation in the province means replacing its three contributions to
Ontario's electricity needs - capacity, energy production and reliability.
Coal replacement will require a combination of resources - conservation,
renewable energy and gas-fired generation - as well as investment in
transmission facilities.
    There are different options and requirements in different parts of the
province. In the Northwest, the IPSP plans for the replacement of the Atikokan
and Thunder Bay coal-fired generation with a combination of conservation and
renewable resources to be available by 2014. In the rest of the electricity
system, gas-fired generation to meet local area reliability needs with
relatively modest transmission system enhancements will replace coal
generation most effectively. Gas-fired facilities for York Region,
Kitchener-Waterloo and Southwest GTA will replace the capacity and energy
production that coal currently provides by 2012. These and other facilities
will replace coal's current overall contribution to reliability by 2014.

    Near Term Action Plan (2008-2010)

    The IPSP identifies specific priorities for the near-term, but will -
more generally - develop options for the mid-term and explore opportunities
for the longer term. This leads to a near-term action plan that the OPA will
carry out over the 2008-2010 period, including the following components:

    Conservation: The directive goal is 1,350 MW of savings; the OPA program
target is 1,410 MW of conservation and demand management. It will also invest
in market capability and market transformation activities.

    Renewable Supply: The OPA will work to procure up to 10,402 MW of new
renewable supply. (This is in addition to what is achieved through the OPA's
Standard Offer Program.)

    Gas-Fired Generation: The OPA will procure gas-fired projects that are
required for local area supply and transmission relief. The capacity targets
for these projects are as follows:

    850 MW of combined-cycle gas-fired capacity in the Southwest Greater
    Toronto Area (GTA);
    550 MW of simple-cycle gas-fired capacity in the GTA;
    300 MW of simple-cycle gas-fired capacity in Northern York Region; and
    450 MW of simple-cycle gas-fired capacity in Kitchener-

    In addition, it will be necessary for transmission proponents to carry
out development work with respect to the transmission projects recommended in
the IPSP. Certain of these transmission projects, in addition to meeting the
supply mix goals, are aimed at ensuring regional and local area reliability in
Windsor Essex, Central and Downtown Toronto and Milton. It is not expected
that any of these projects will result in project decisions and applications
during this near-term period of 2008-2010.

For further information:

For further information: The Ontario Power Authority: (416) 969-6307,
Toll Free: 1-800-797-9604

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