Utility Week

Utility Week 27th September 2013

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Markets & trading operators installing the technology, because those functions are both covered by "local distribution companies", of which there are about 90. There is also a grants programme for industrial projects that can demonstrate big energy savings. Carrying out the strategy is simplified by the fact that most of the market is under central command. Around 70 per cent of power comes from provincially owned Ontario Power Generation. The rest is provided by small players and one private nuclear operator. Ontario came late to deregulation, opening up the sector to competition in 2002. After a backlash from consumers newly exposed to price volatility, a body was set up to reassert strategic oversight. The Ontario Power Authority (OPA) has a remit to promote energy saving, plan for the long term and make sure there is a "reliable, costeffective and sustainable" power supply. It administers feed-in tariffs for small-scale renewable generation and has recently moved to a competitive procurement process for large-scale renewables. Critics say this heavily managed market delivers poor value for money. A study by London Economics International published this month was scathing. It reads: "The Ontario power sector today is characterised by oversupply, a mismatch of generator capabilities and needs, rising prices to final consumers, a lack of transparency in price formation, and volatile and contradictory policies. Consequently, private sector actors are unable to justify investment without some form of government-backed contract. While various governments have announced laudable goals, failure to rely on either sound planning or market principles has meant that generation capacity has not been procured at a long-run least cost." On the upside, the report says "commonsense solutions exist" to cut power costs in the long term without compromising policy goals. The government of Ontario is on the brink of achieving its goal of eliminating coal power. That is a distant prospect for most developed economies, while developing nations such as China are going the opposite way. The next challenge is to get a handle on the cost. Historic and forecast coal emissions Vital statistics The largest province of Canada's ten provinces, Ontario has a GDP the size of Switzerland. It accounts for 40 per cent of the country's economy and population. It is a net exporter of power to neighbouring provinces and the US, delivering 9.9TWh in 2012. Nuclear will continue to make up the lion's share of the mix. Most of the 13GW fleet will need substantial refurbishment in the next decade. In 2010, the government was planning to build another 2GW, but lower than expected demand growth has prompted a rethink. Hydro also provides a reliable chunk of generation. The OPA is contracting to bring on another gigawatt by 2018. Gas has ramped up, particularly in the past half-decade, to 10GW of capacity. Wind has already outstripped coal in terms of power generated. Another 5GW of renewable power capacity, mostly wind, is expected to come online in the next 18 months. Total generation capacity, April 2013 Other 122 0.3% 40 35 Megatonnes of carbon dioxide (CO2 Mt) 30 Nuclear 12,998 36% Coal 3,293 9% 25 35,899MW 20 15 Gas 9,987 28% 10 5 Hydro 7,939 22% Wind 1,560 5% 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 0 Smart meters: Build it and they will come In 2004, the Ontario government committed to roll out smart meters to all consumers. By 2010, it was done. Some 4.8 million smart meters have been installed, covering 99 per cent of households and small business customers. The installations were carried out by local distribution companies, which cover retail functions as well as owning and operating distribution networks. At the same time, time-of-use pricing was introduced. The intention was to have a 3:1 spread between peak and off-peak rates. At present it is closer to 2:1, while consumers adjust. Half the province has access to the "Green Button" scheme, which allows consumers to share their data with third parties such as app developers, with the rest set to follow. A number of pilot schemes are running over the coming year. Total power generated, 2012 Other 1.3 1% Nuclear 85.6 56% Coal 4.3 3% 151.8TWh Gas 22.2 15% Wind 4.6 3% Hydro 33.8 22% UTILITY WEEK | 27TH SEPTEMBER - 3rd OCTOBER 2013 | 29

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