BACKGROUND:
Often flying under the radar of the general public’s interest, the Ontario government has been working to transform the province’s energy grid to support growing demand from residents and businesses. For example, you may have seen the government’s “The Future is Electric” ads on social media highlighting investments in electric vehicle production in the province; more electricity will be needed to reliably power those manufacturing plants and charge the cars being built there. Ontario’s Independent Electricity System Operator has forecast that the province will need to more than double its electricity capacity within the next 30 years. In response to these mounting pressures, the government has been implementing a plan, called Powering Ontario’s Growth, to make long-term investments into the electricity grid.
Nuclear power generation is a key pillar of the government’s plans to expand the province’s generating capacity. Recently, Energy Minister Todd Smith announced an expansion of the Darlington nuclear site, with plans to produce enough energy to power 1.2 million homes. The project at Darlington will use grid-scale small-modular nuclear reactors, which will be the first such use in a G7 country. Small modular reactors are easier to build and more affordable than traditional nuclear projects allowing more nimble construction of the physical power infrastructure, which is often a limiting factor for expanding nuclear power generation. In addition to the Darlington expansion, Ontario Power Generation is funding the continued safe operation of the Pickering nuclear plant until 2026, and Bruce Power is beginning the early planning stages of expanding its capacity. In total, nuclear power provides over 50 per cent of Ontario’s electricity, making it a key driver of the province’s successes in energy production.
Capturing excess energy produced for future use during peak hours is another key component to Ontario’s strategy. Using innovative technology that captures and stores otherwise wasted energy produced through natural gas plants, storing it for future use and preventing waste from otherwise non-renewable energy sources. Along with policy changes providing “ultra-low” cost overnight rates that encourages off-peak electricity usage, the government is clearly determined to ensure that the electricity grid is prepared to meet long-term demands for energy.
POLITICAL CONTEXT:
While the nitty-gritty of energy policy may be lost on most people who are understandably concerned with their day-to-day financial pressures, the impact of a well-run electricity grid is essential to Ontario’s long-term economic success. In addition to powering electric vehicles as uptake continues, projected population and manufacturing growth will also add demand to the electricity grid. If supply is not able to keep up with demand, the government can be quick to face the heat of voters.
Prior to the defeat of the Wynne Liberal government in 2018, the cost of energy was a key driver of peoples’ political decision-making. At the time, the Ontario PCs used the high cost of energy prices as an effective attack against the Liberals and noted that under the Liberals’ policy of raising electricity prices during after-work hours, people needed to choose between “heating and eating”. The cost of energy may continue to be a thorn in the side of successive governments as the province continues population growth, so the current PCs have good reason to make steady progress on this front.
WHAT THE GOVERNMENT IS SAYING
- “Our government’s open for business approach has resulted in unprecedented investments and job creation, from electric vehicles and battery manufacturing to critical minerals to green steel. Powering Ontario’s Growth lays out the province’s plan to build the clean electricity generation, storage, and transmission we need to power the next major international investment, the new homes we are building, and industries as they grow and electrify.” – Todd Smith, Minister of Energy.
- “Ontario has attracted billions of dollars in investments from both domestic and international companies over the last two and a half years. Powering Ontario’s Growth ensures that the province will be able to build on that success and continue to attract major investments that will create more good-paying jobs. As our province moves toward an electric future with a strong end-to-end EV supply chain, there has never been a greater need for clean, affordable energy that companies can rely on. This plan brings us one step closer to being a world-leading energy powerhouse.” – Vic Fedeli, Minister of Economic Development, Job Creation and Trade.
WHAT EXPERTS ARE SAYING
- “Nuclear power has been the stable backbone of Ontario’s clean electricity system for decades and Bruce Power is ready to play an integral role in addressing the province’s future needs, while supporting good jobs and economic prosperity for the future. We are starting the federal Impact Assessment process to look at new nuclear generation on our site now, to maximize the future optionality for clean electricity in the province.” – Mike Rencheck, President and CEO of Bruce Power.
- “The introduction of Ontario’s new Ultra-Low Overnight Electricity Pricing Plan provides customers another pricing option to fit their business and lifestyle needs. Customers now have additional choice and flexibility to manage their energy costs and consumption. We welcome this initiative as a positive step towards supporting electrification and a sustainable energy future in Ontario.” – Teresa Sarkesian, President and CEO, Electricity Distributors Association
NEXT STEPS:
Many of the current government’s projects will take many years to build and see tangible results. If the government successfully expands the electricity grid’s capacity, many people would likely not notice, since they would continue to be able to access electricity when needed at a relatively affordable rate. However, as the former Liberal government learned, failure on the energy file can turn voters against a government exceptionally quickly. As such, the results of the government’s investments into the energy sector, while not as immediately visible as its building of highways and subways, will likely prove equally as important for the long-term growth of Ontario.
JB+A Senior Management Team:
Jenni Byrne