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Ontario’s Electrification and Energy Transition Panel Releases Final Report

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Ontario’s Electrification and Energy Transition Panel (the Panel) has released its final report entitled Ontario’s Clean Energy Opportunity: Report of the Electrification and Energy Transition Panel (the Report). The Panel was established by the Government of Ontario to advise on opportunities for Ontario’s energy sector and identify strategic opportunities and planning reforms to help Ontario’s economy prepare for electrification and the energy transition. The Report provides a comprehensive roadmap for Ontario’s transition to a clean energy economy, emphasizing strategic planning, collaboration, innovation, and the crucial role of Indigenous partnerships.  This bulletin briefly highlights the key findings of the report and outlines the Panel’s key recommendations. Planning for electrification and the energy transition. The Report underscores the urgent and transformative shift in the global energy landscape, emphasizing the need to address climate change and support technological advancements. For example, the Report notes that Ontario faces a significant challenge regarding the future of natural gas, including increasing uncertainty about the feasibility of decarbonizing the natural gas grid and growing doubt about replacing large quantities of natural gas in a cost-effective way with cleaner alternatives such as renewable natural gas (RNG) or hydrogen. Key recommendations include: Recommendation 1 suggests that the provincial government should develop and communicate a commitment and associated policy principles for achieving a clean energy economy for Ontario by 2050 in order to provide clear direction for Ontario’s energy and economic future. Recommendation 3 provides that the provincial government should continue to seek alignment and coordination of clean energy economy objectives, standards, and policies with other governments (within and outside Canada) whenever practical and consistent with the province’s economic and policy interests. Recommendation 6 provides that in order to provide clarity to utilities, investors, and customers, the Ministry of Energy (the Ministry) should provide policy direction on the role of natural gas in Ontario’s future energy system as…

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Canada Releases 2030 Emissions Reduction Plan

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Environment and Climate Change Canada (ECCC) today released the 2030 Emissions Reduction Plan (the Plan) under the Canadian Net-Zero Emissions Accountability Act (the Act; read our earlier bulletin on the Act here). The Plan sets out current actions, additional funding of $9.1B, and several new initiatives to meet Canada’s emissions reduction target of 40-45% below 2005 levels by 2030, as provided last year in an update to Canada’s Nationally Determined Contribution (NDC) under the Paris Agreement (read our earlier bulletin on Canada’s updated NDC targets here).   The Plan also sets a new interim objective of reducing GHGs by 20% below 2005 levels by 2026, noting that this interim objective is not an official target akin to Canada’s 2030 NDC, but that progress towards achieving the objective will be a cornerstone of progress reports associated with the Plan in 2023, 2025, and 2027.   This bulletin highlights key parts of the Plan and summarizes the newly announced funding and initiatives, across the following categories: Carbon pricing Clean fuels Clean growth funding Methane Buildings Electricity Heavy industry Oil and gas Transportation Agriculture Waste Nature-based solutions Clean technology and climate innovation Sustainable finance Jobs, skills, and communities Prime Minister Justin Trudeau launched the Plan in an address at the GLOBE Forum in Vancouver earlier today.  Carbon pricing. The Plan notes the measures undertaken to address economy-wide emissions including the federal fuel charge and the Output-Based Pricing System for industrial emitters under the Greenhouse Gas Pollution Pricing Act. Escalating the federal benchmark price to $170 by 2030 is meant to further support the 2030 targets of the federal government along with continued consultations on a possible border carbon adjustment (read our earlier bulletin here). Very significantly, the Plan puts forward the concept of investment approaches, like carbon contracts for differences, which enshrine future price levels in contracts between the federal government and low-carbon…

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ECCC Consulting on Developing a Clean Electricity Standard

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Environment and Climate Change Canada (ECCC) today released a discussion paper, “A Clean Electricity Standard in support of a net-zero electricity sector” (the Discussion Paper), as part of its first steps in developing and consulting on a Clean Electricity Standard (CES) under the Canadian Environmental Protection Act, 1999. This bulletin summarizes key details of the Discussion Paper and provides important information on ECCC’s consultation on developing a CES.   Purpose. The Discussion Paper indicates that its purpose is to support the government’s intention to introduce regulations to achieve a net-zero electricity system by 2035 and invite comments regarding the scope and design of the CES. The Discussion Paper notes that Canada’s electricity system is currently 82% non-emitting but remains Canada’s 4th largest source of emissions, accounting for 8.4% of total greenhouse gas (GHG) emissions in 2019.   Proposed CES Regulations. The Discussion Paper notes that carbon pricing will be insufficient to ensure that the electricity sector achieves net-zero emissions by 2035 or likely even by 2050. Therefore, a nation-wide CES regulation will complement carbon pricing by requiring the phase-out of all conventional fossil fuel electricity generation and incentivizing fuel switching in other sectors. The scope and design of the CES regulations will also need to provide enough compliance flexibility to allow for the use of natural gas for emergency events, back-up power to complement renewables, and supplying power during seasonal peaks of demand. The proposed CES regulations may, among other things: apply to all sources of emitting electricity generation that sell to the grid; transition the electricity sector to net-zero by 2035 while providing increased supply of electricity to support electrification and the role of available technologies in the provision of clean power to Canadians; be stringent enough to achieve its objectives while including compliance flexibility, such as robust GHG offsets, and allow for the…

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IESO Releases 2021 Annual Acquisition Report

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Ontario’s Independent Electricity System Operator (IESO) earlier this week released its 2021 Annual Acquisition Report (the Report) providing details on  the province’s future reliability needs and how to address them. The Report sets out an approach to address these needs over three planning horizons: operations planning, near-term planning, and long-term planning. The Report is anticipated to lead to demand reductions and increased procurement of lower-carbon power. This bulletin outlines key highlights of the Report:   Understanding Ontario’s Reliability Needs Demand side uncertainties. Energy consumption is predicted to increase 1 percent each year until 2040. This prediction may be affected by the pace of economic recovery from the COVID-19 pandemic, demographic changes, changes in government policy, future energy management initiatives, and increasing electrification. Energy management. The Report indicates that the Industrial Conservation Initiative program is forecasted to reduce demand by 1300 MW with an additional 2.8 TWh and 450 MW of energy and demand savings from the 2021-2024 Conservation and Demand Management (CDM) Framework. Planned Actions to Ensure Resource Adequacy Flow East Towards Toronto (FETT). With the upcoming planned nuclear retirements and recommissioning, the supply capacity east of the FETT is expected to decline considerably and additional supply will be required as early as 2023. As a result, IESO is recommending upgrading the transmission line between North Oakville and Pearson Airport by 2026, reducing capacity needs by 2000 MW. To meet the increased demand, IESO is negotiating a transitional contract for the Lennox Generating Station which ends in April 2029. The Lennox Generating Station provides large-scale and flexible supply from a dual gas and oil generation facility. West of London. Electricity demand in Windsor-Essex and Chatham-Kent is expected to grow from 500 to 2300 MW by 2035. As a result, IESO is recommending development of new transmission infrastructure from Lambton to Chatham and Chatham to Lakeshore, which will require addressing…

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