Ontario is urging the federal government to modify proposed electricity regulations after an analysis by the province’s system operator concluded the rules would mean $35 billion in additional costs by 2050.
A new analysis by the Independent Electricity System Operator looking at upcoming regulations on restrictions on emissions from electricity generation found that Ontario would have to add twice as much new generation as it is already planning, which is “not feasible” in that period of time.
But if the province did it somehow, building enough new electricity generation to offset natural gas restrictions would add $35 billion in costs by 2050, increasing residential bills by $132 to $168 per year starting in 2033, the IESO said. .
Ontario Energy Minister Stephen Lecce has written to federal Environment and Energy ministers, urging them to make rule changes.
“Ontario cannot support any regulatory approach that imposes thousands of dollars in new costs on consumers while compromising system reliability,” Lecce wrote to Steven Guilbeault and Jonathan Wilkinson.
“While still on track to meet its emissions targets, Ontario continues to attract transformative investments in sectors such as the automotive and electric vehicle supply chain, life sciences and advanced manufacturing. “Therefore, it is imperative that regulatory frameworks support, not hinder, our economic competitiveness.”
Guilbeault and Wilkinson say they are also keeping affordability in mind when designing the new rules, which will soon be finalized.
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“By taking into account the estimated $15 billion Ontario will receive from the federal government through the Canada Clean Electricity Investment Tax Credit by 2050, we are ensuring there are no impacts on Ontario ratepayers, at the same time that we will build a clean, reliable grid that will create countless good, sustainable jobs for the middle class for decades to come,” they wrote in a joint statement.
The federal government also points to billions of dollars in investments it has made to support emissions reductions on Ontario’s grid, including nuclear projects, battery storage and electrification of steel manufacturing processes.
Stephen Thomas, director of clean energy at the David Suzuki Foundation, said in a statement that Ontario’s position is “disappointing.”
“It’s time for some provinces to stop looking for ways to delay or weaken climate policies and start joining the work of creating solutions that deliver energy cost savings, good jobs and better health outcomes for all,” Thomas wrote.
“Affordability research and numerous modeling studies, including research conducted by the David Suzuki Foundation, show that consumers will benefit from cheaper energy bills as we move toward clean electricity and away from high-cost fossil fuels. cost”.
Ontario has been adding more natural gas generation to the electricity system, which the province says is needed to ensure the grid remains reliable as nuclear plants renew and demand grows faster than new ones can come online. nuclear and battery storage facilities.
But that has also caused emissions from the electricity sector to grow. In 2021, the electrical system was 94 percent emissions-free, but now that figure has dropped to 87 percent.
The province says natural gas generation will ultimately help reduce emissions in the province overall by supporting broader electrification.
The IESO says in its analysis that Ontario may have to add more gas plants to meet federal standards, since emissions limits are based on total gas capacity, so the greater the capacity, the greater the emissions permit.
Ontario will reach net-zero by 2050 without federal regulations, the IESO says, with new nuclear and renewable resources expected to come into service in the 2040s.
© 2024 The Canadian Press
