Wednesday, October 04, 2006



Powering the future

Oct. 2, 2006. 01:00 AM


Ask any question on the subject of Ontario's electricity system and Jan Carr almost always has the answer — and then some.

Driving westbound along the QEW, en route to a tour of the century-old and recently decommissioned Rankine Generating Station at Niagara Falls, Carr rattles off one historical tidbit after another about hydroelectric power and its importance to the province.

With pictures and charts and maps in hand, he's a walking Wikipedia.

"I've always had an interest in the history of it," says Carr, chief executive of the Ontario Power Authority. "I've been in the business, I'm afraid to tell you, for my entire professional life."

Thirty five years to be precise, including executive roles at engineering companies Hatch Acres and Barker Dunn & Rossi Inc., where he lived and breathed power systems — everything from transmission infrastructure to the power plants that connect to it.

Before joining the newly created power authority as its first employee nearly two years ago, Carr spent roughly a year as vice-chairman of the Ontario Energy Board. He holds a PhD in power systems from the University of Waterloo and an electrical engineering degree from the University of Toronto.

His experience could prove crucial for the challenge that lies ahead. Ontario's electricity system is at a crossroads. The power authority estimates that if nothing is done within the next 10 years the province won't have enough power to meet its needs.

By 2025, the outlook is much more bleak. Roughly 80 per cent of existing generating facilities will have to be replaced, refurbished or displaced through energy conservation if rosy projections of economic growth prove correct. Failure to do so would lead to a 10,000-megawatt "energy gap" and certain economic collapse.

Much has changed in a century. Niagara Falls and other renewable hydro sources supplied most of the province's electricity during the first half of the 1900s, but as the province grew, the former Ontario Hydro relied increasingly on coal plants during the 1950s and 1960s and nuclear plants in the 1970s and 1980s to keep the economic engine humming.

Then system planning suffered a bad case of paralysis. Throughout much of the 1990s and up to 2003, the economy grew but the electricity system was largely neglected. It didn't help that 40 per cent of the province's nuclear capacity was suddenly taken offline for repair in 1997, or that price caps kept electricity rates artificially low and discouraged energy conservation.

"We inherited a mess," said Energy Minister Dwight Duncan during a public presentation in June. "Electricity demand grew by 8.5 per cent, but our generating capacity actually fell by 6 per cent. There was little investment in Ontario's transmission infrastructure. . . . There was simply no plan for Ontario's electricity system."

Complicating matters is coal. It's dirty, it contributes to smog and global warming, and the Ontario Medical Association says burning of the fossil fuel for electricity is responsible for thousands of premature deaths and many more illnesses across the province.

The McGuinty government campaigned on an ambitious commitment to shut down all coal plants, but experts warned that taking so much power offline so quickly — about 7,600 megawatts — threatened to bring instability to an already fragile system. The closure plan is now on hold and under study. So far, only the 1,140-megawatt Lakeview coal station in Mississauga has been mothballed.

Nuclear is also a sticky issue. The province's aging and controversial CANDU reactor fleet will need to be refurbished or replaced over the next 10 to 15 years in the absence of alternatives. But nuclear power's track record in Ontario is filled with cost overruns, delays, unanticipated repairs, and massive debt. And a crucial question remains unanswered: Can we safely and permanently dispose of radioactive fuel waste?

"All the roads on this file are rough," Duncan told the Star earlier this summer.

As governments tend to do when faced with difficult questions and choices, the current Liberal regime formed an independent agency in 2004 — the Ontario Power Authority (OPA) — and tapped Carr as its captain.

The power authority has been charged with drafting an electricity system blueprint that will guide the province for the next two decades. Carr assembled a management team and, after a hiring spree, the new planning agency got to work.

"The Liberals came in and recognized we do need to do some planning," says Keith Stewart, manager of the climate change campaign at WWF-Canada and co-author of Hydro: The Decline and Fall of Ontario's Electric Empire. "We're going to have a continued need for planning because electricity is literally a system. If parts of it go down, all of it collapses."

Like it or not, a key part of the estimated $46 billion plan is already complete. In December the power authority submitted recommendations to the government on what the mix of electricity supply should look like between now and 2025, on the assumption the province would need about 45,000 megawatts of supply during peak times — the most energy-demanding days and hours of the year. It also assumed coal is eliminated from the mix.

The government agreed with the power authority that renewables — hydroelectric, wind, biomass and solar energy — should be doubled to 15,700 megawatts. But it kept nuclear's contribution capped at 14,000 megawatts, 1,000 megawatts less than what was suggested, and it doubled recommended conservation targets to 6,300 megawatts.

The decision still means at least 1,000 megawatts of new nuclear reactors will be needed, and possibly more if refurbishments of existing units prove too costly.

Critics say new reactors and some refurbishments wouldn't be necessary if the government put more money and emphasis on energy efficiency, conservation and the strategic use of natural and by-product gases.

`There are a range of variables at work in

trying to make long-

term predictions like

this . . . It makes accurate predictions very hard'

Mark Winfield, director of environmental governance at the Pembina Institute

Many are outraged that the government is not putting its nuclear-dependent supply mix plan through an environmental assessment — as was done when the last plan was drafted in 1989 — while others say coal and technologies to clean it up are getting short shrift. Environmentalists say we need to up the conservation goals; others consider the current target a pipe dream.

Amid the controversy, Carr has his marching orders. "The supply mix is a policy prescribed by the government," he says. "It's our plan to draw up a physical plan to achieve it."

That's what the power authority is busily working toward today. A team of 25 employees, sleeves rolled up and armed with a $4.5 million budget, aims to release a draft of the "Integrated Power System Plan" later this fall.

The final plan, a hefty document that is sure to be the subject of intense debate, goes to the Ontario Energy Board for approval in the winter. It will be the first plan of its kind in 17 years.

Developing a 20-year electricity plan for a large province like Ontario is a mammoth exercise with many layers of complexity. It's called an "integrated" system plan because all the pieces — transmission, power generation, and conservation efforts — must be placed in a delicate, sustainable balance that's also flexible enough to change over time.

Difficult questions need to be asked, and every answer is like a move on a Rubik's Cube that alters the face of the puzzle. Consider some of the following:

· We need to build and upgrade transmission, but how much and where? Building a transmission line to Manitoba could unlock a bounty of clean hydropower and open up renewable wind power and hydro resources in northern Ontario. But what's the cost, and is it worth it?

· How will NIMBYism and Indian land claims affect transmission planning? What's the immediate and long-term impact on the environment?

· The way in which conservation targets are met will need to be laid out in detail, as will the new schedule for closing down coal plants and the strategy for replacing all that lost power. Do we demolish the coal plants, convert them to natural gas, or keep them on standby as backup generation?

· How will the coal plant closures and conservation, which can vary from region to region, influence decisions on transmission? The location and size of new nuclear reactors and the schedule for building them, as well as refurbishing old ones, needs to be factored in.

There are no easy answers.

From the outset, the plan must also anticipate long-term energy demands, make assumptions about the economic health of the province, and take into account likely advancements in technology.

Even the weather — for example, the impact of global warming on hydroelectric resources and air conditioning demand — has to figure into the equation.

Last month, the power authority released a "load forecast" discussion paper, which estimates growth in energy consumption will rise 1 per cent annually between 2005 and 2015, after which it says the forecast becomes "more uncertain."

Mark Winfield, director of environmental governance at the Pembina Institute, an energy and environmental think tank in Toronto, is leery of any attempts at a long-term forecast. He believes the power authority is not giving enough credit to technological innovation or conservation, and is being overly optimistic about economic growth and the health of industries that are in visible decline.

"There are a range of variables at work in trying to make long-term predictions like this," says Winfield, pointing to previous forecasts that fell far from the mark. "It makes accurate predictions very hard."

Stewart of WWF-Canada has similar concerns. "The thing with models is that they're dependent on the assumptions you make, and they're making assumptions that aren't realistic," he says. "Any academic will tell you if you get to control the initial assumptions, you'll get the results you want."

During the mid-1970s, for example, Ontario Hydro told the Ontario Energy Board that peak electricity demand would rise 8.2 per cent annually for the following five years, sparking approval of the Darlington nuclear station and construction of a 2,000-megawatt oil-fired plant at Wesleyville.

The demand never came, and a half-built Wesleyville was mothballed. Darlington went ahead, but the province had a power glut by the time the nuclear station became operational in the early 1990s — more than four times over budget.

In 1989, Hydro requested permission to build three new nuclear stations, two coal-powered stations and other facilities as part of a plan to double its generating network by 2014, again because of high projected electricity demand and a fear of shortages. Four years later it dropped the plan and said no major generating plants would be needed until 2009. It was the last system plan completed in the province.

`The supply mix is a

policy prescribed by the government. It's our plan

to draw up a physical

plan to achieve it'

Jan Carr, chief executive,

Ontario Power Authority

Winfield says the past teaches us a valuable lesson: "Don't commit to large, inflexible, non-incrementally expandable or shrinkable projects with very long lead times, as the assumptions on which they are planned may turn out to be sand. Then you may have a very hard time changing course."

On the opposite side of the debate is the Power Workers' Union, which represents employees in the power industry across the province. It believes the power authority's load forecast "incorporates a good dose of reality" but could even go a bit further — say, 1.8 per cent growth annually.

Amir Shalaby, vice-president of power system planning for the power authority, says a reliable plan can be created if its foundation is based on facts. We know, for instance, that certain nuclear reactors will come of age between now and 2025.

"There will be three million more people living in Ontario in 20 years. That is fact. This is immigration policy. We know the income streams, we know people's preferences," says Shalaby. "There are many things that are not going to change dramatically if you do your homework."

Shalaby, like Carr, is a three-decade veteran of the industry who has worked in senior roles at the former Ontario Hydro and the Independent Electricity System Operator. He helped prepare Hydro's 1989 system plan, and is now overseeing development of the current plan.

"Our hope is to agree on what we consider the facts, rather than choices of destiny or development patterns," he says. "If we can agree on the facts we can do a huge amount of improvement on the debate."

The Rankine station is a beautiful and grand structure overlooking the crest of the Horseshoe Falls, and Carr is like a kid in a candy store as we walk along on our private tour. He stops frequently along the way to admire the brass railings, stone archways and architectural detailing of a bygone era.

Built by U.S.-owned Canadian Niagara Power Corp., the Rankine station was opened on Jan. 2, 1905 as the most sophisticated hydroelectric generating station in the world. It was modeled after the now-demolished Adams Station on the American side of the Falls, and used technology based on the innovations of electricity pioneers George Westinghouse and Nikola Tesla.

FortisOntario, the current owner of the Rankine station, chose to shut down the facility last year and its water rights on the Niagara River come to an end in 2009. The structure will be handed over to the Niagara Parks Commission, which, if it can get the funding, plans to turn it into a museum.

Carr, in 1983, attempted to do the same for the slightly younger but poorly kept Toronto Power Generating Station just down the road. That station began operation in 1906 but Ontario Hydro shut it down in 1973 and left it to deteriorate.

"It was built to supply the city of Toronto, and they built a long transmission line from Niagara Falls to Toronto," says Carr, who wanted to turn the station into a science and technology museum. "It didn't work. The Bill Davis government of the time decided to build Science North in Sudbury instead. So I moved on to other things."

Carr is like many veterans of the industry who admire engineering achievements of the past, when the construction of bigger, better and more powerful structures was a testament to the innovation of the time.

Huge, centralized hydroelectric, coal and nuclear projects fit that mould.

"Up until the 1970s there was increasing benefits to scale. The bigger the plant you built, the cheaper it was. That's very much an engineering mindset, but that also is no longer where the technology is," says Stewart.

"Our planning is all about how we generate, and it's an afterthought in looking at how it's used. This is something that has deep roots in how the system was originally built."

A fundamental issue is whether we continue to build gigawatt-sized plants in anticipation of future demand that will rise to meet supply, or focus on a more distributed, targeted generation closer to the point of consumption that's highly efficient and can be built as need arises.

WWF's Stewart fears the process is tilted in favour of old-school thinking. "I can't turn on my TV without seeing an ad from the Ontario Nuclear Association," he says. "There are those kinds of crass political forces at work, and that will and already has had an influence on the outcome."

OPA's Shalaby is aware of such criticism, and he acknowledges that his deep roots with old Hydro aren't considered an asset in some corners. But the person overseeing planning for Ontario's electricity system is more multidimensional than he may appear. A staunch believer in early childhood education, he operates a not-for-profit daycare in Markham.

Shalaby is also a friend and fan of U.S. energy-efficiency guru Amory Lovins, chief executive of the progressive Rocky Mountain Institute in Colorado.

He insists the process he's leading will be transparent, inclusive and will work toward a plan that's sustainable. "We have to be open-minded, and we are open-minded," says Shalaby, who immigrated to Canada from Egypt when he was 17.

"Being of third-world country origin, I'm very cognizant of how badly things can go if you mismanage either societal institutions or your national resources. I've seen first hand what harvesting your environment can do. Sustainability to me is not just a textbook concept."

The open question is whether the power authority can learn from the past without repeating its errors.

Meanwhile, there's still time for citizens of the province to add their voice. One way: go to the OPA's power system plan website at, and click on "submissions."


At 12:17 p.m., Blogger Tom Gray said...

Thanks, interesting article. From a strategic point of view, emphasizing conservation/efficiency and renewables is a good way to maintain flexibility in the face of a volatile global energy market.

Thomas O. Gray
American Wind Energy Association

At 11:35 a.m., Blogger James said...

I haven't trusted Dwight Duncan since his questionable Liberal party fundraisers including people who got provincial hydro contracts!


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