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Ontario — The province of Ontario is in a strong position to decarbonize its rapidly growing electricity grid, with a moratorium on new natural gas generation being feasible starting in 2027, provided new storage, nuclear, renewables and expanded conservation efforts are ready.
This conclusion comes from a new report requested by the Minister of Energy and produced by Ontario’s Independent Electricity System Operator (IESO), one of three newly released reports that focus on the transformation of Ontario’s electricity system.
“With one of the cleanest electricity grids in North America, Ontario has a real advantage in enabling the decarbonization of the broader economy,” said Lesley Gallinger, President and CEO of the IESO. “The process of fully eliminating emissions from the grid itself, however, will be a significant and complex undertaking. Through our ongoing commitment to work with a wide range of partners to assess risks and overcome challenges, we believe it is possible to achieve an orderly transition toward a decarbonized electricity system that remains reliable, affordable and sustainable.”
The Pathways to Decarbonization report, undertaken at the request of the Minister of Energy, finds that Ontario could begin moving toward a decarbonized grid starting with a moratorium on new gas generation beginning in 2027, as long as sufficient non-emitting supply were to be in place to meet growing electricity demand.
By 2035, the system could be less reliant on the natural gas fleet, lowering emissions by 60 percent below the IESO’s original forecasts.
The report also finds that attaining a decarbonized electricity sector by 2050, alongside aggressive electrification targets, would require a system more than double the size it is today at an estimated cost of around $400 billion.
These costs could be offset by lower overall energy costs as consumers reduce their reliance on fossil fuels and through energy efficiency.
“In light of today’s report, we are concerned that Ontario is at risk of not meeting its own 2030 climate target for its electricity sector,” said Carolyn Kim, Senior Director for Communities and Decarbonization at the Pembina Institute on the report. “While Ontarians can be proud of the relatively high share of clean energy already powering their grid, emissions have been steadily growing in recent years – and the scenarios outlined in this IESO report indicate that the province is now on track to far exceed its 2030 emissions reduction target for electricity production. Further, while today’s report examined a pathway to removing emissions from Ontario’s electricity system by 2050, Ontario’s grid must be net-zero by 2035 to align with Canada’s climate commitments.”
“While these analyses are an encouraging effort to support informed dialogue on significantly reducing emissions from electricity production in Ontario, they fall short by underestimating the reliability of diverse clean energy portfolios, as well as the rapid decline in costs of renewable power – while overestimating the competitiveness of natural gas in the long-term,” Kim added. “We strongly caution against new gas investments that will be incompatible with forthcoming Clean Electricity Regulations in 2035, with the costs for these stranded assets likely to be loaded on to ratepayers and taxpayers in the province.”
The IESO has identified several “no regret” actions that could be taken as the province moves towards decarbonization.
These actions include: continuing competitive efforts to acquire non-emitting supply; expanding energy-efficiency programming post-2024; beginning planning and siting work for nuclear, storage, hydro and transmission projects that require long-lead times to develop; galvanizing collaboration amongst stakeholders; and continuing support for low-carbon fuels such as hydrogen.
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