Tom Adams
National Post
April 29, 2005

 Ontario begins to phase out coal power on Saturday, starting with the closure of the Lakeview coal-fired generating station west of Toronto. Inefficient and heavily polluting following decades of neglect by its previous owner, Ontario Hydro, Lakeview’s retirement will allow people downwind of it to breathe easier.

For all Ontarians, however, the loss of Lakeview’s electricity output – and that of other coal plants to come – makes an already dark power supply outlook darker still. Ontario urgently needs affordable, reliable, and environmentally acceptable replacement power. Cleaner coal – not no coal – is one of Ontario’s very best options.

Natural gas, once an attractive alternative to coal, has become unaffordable. Ontario missed the North American dash for cheap natural gas-fired power in the mid 1990s when gas was cheap. Instead, with gas prices now up about three times their 1990s level, Ontario is dashing in while most other North American jurisdictions – to avoid the higher and more volatile gas prices – are dashing out. Invenergy, a firm the Ontario government contracted to build a gas-fired unit, recently bought a partly built 620-megawatt unit in Washington State for 11 cents for every dollar sunk in it by its original investor.

Ontario’s vision of a complete phase-out of coal-fired power in Ontario by 2007 will not occur. Coal meets about 30% of Ontario’s power demand. Replacing this output with other forms of power generation would be tough even if cost were no object.

Ontario’s nuclear power production outlook remains poor and its cost outlook fares even worse, particularly after Ontario Power Generation, the reactor owner, discovered yet another unexpected ageing phenomenon recently during the renovation of Pickering 1. The Pickering 4 reactor, which was issued a clean bill of health after a total overhaul two years ago, is now suspect. Three other reactors now in operation are expected to reach retirement age around the end of this decade. Even if Ontario could afford more nuclear power, its poor reliability disqualifies it as a viable alternative to coal. Since Ontario’s nuclear performance went into decline in 1983, coal power has been the backup needed for unexpected and often extended nuclear shutdowns.

The Ontario government claims the province has at least 2,000 MW of new hydroelectric potential – about 30% of the coal capacity slated for shutdown. Yet after two decades of ceaseless promotion and massive subsidization by successive governments, Ontario has only managed to increase hydroelectric power output by about 700 MW, less than 10% of the coal capacity on the chopping block.

Ontario plans to import hydroelectric power from uneconomic new dams in Manitoba and Labrador, made less so thanks to federal government subsidies to their transmission lines. These power projects, if they occur, will come on line after 2013. Last week a political debate broke out in the Quebec National Assembly with the government and opposition both opposing any federal participation in any electricity matters in Quebec. The difficulty of relying on Quebec is further illustrated by the largest Ontario transmission projects in the last 10 years – a new high-voltage connection with Quebec south of Ottawa. After Ontario got the project underway in 1999, Hydro Quebec cancelled its share of the project, failing to build a corresponding transmission line on its side of the border to connect to Ontario’s new line.

Not that transmission line problems start at the Quebec border. Ontario Hydro’s 1989 agreement to buy power from the same remote hydroelectric site in northern Manitoba currently under government review, was cancelled in 1991 by Ontario Hydro due to its excessive cost.

Yet another risk of relying on long-distance transmission was illustrated earlier this week when freezing rain collapsed eight high-voltage transmission powers carrying power to Quebec from Labrador.

Conservation has enormous potential to ease the supply strain. Unfortunately, the Ontario Liberals discourage conservation. Since it froze electricity prices for most customers a month ago, prices at peak demand times – just when Ontario’s coal power are most needed – are routinely double the regulated price that most customers pay.

The Ontario Liberal government is betting heavily on wind power. Although wind can help, that help is muted. The first utility-scale wind farm in Canada, located in Quebec’s Gaspe region, was financially restructured two and a half years ago. The cause: Production results averaged over the first five years of operation were just 60% of the expected output.

That leaves coal, Ontario’s neglected fuel. For decades, Ontario expected nuclear production to be so abundant that coal power would be largely unneeded. As a result, it did little to upgrade emission controls. In contrast, Ontario Hydro’s successor, Ontario Power Generation, has installed scrubbers on four of its remaining 15 coal units, making them among the cleanest conventional coal generators in North America.

Since 2000, Ontario has brought in more electricity than it has sold. With Lakeview gone, Ontario will become more reliant on imports. If Ontario implements its promised coal shutdown, some of the plants Ontario will be closing will be much cleaner than the imported power that will be making up the lost supply.

Earlier this week, the Ontario government released a study to boost its case for complete coal shutdown. None of the scenarios in the study considered high-efficiency uses of coal that capture waste heat, such as have been in common use in Europe for decades. Nuclear power scenarios, on the other hand, were unrealistically optimistic: The authors assumed that the refurbishment of old reactors can be completed for less than 60% of the cost of the last one completed in Ontario. Inexcusably, in determining coal’s environmental merits, the analysis lumped together Ontario’s cleanest coal units with its dirtiest, tarring all with the same brush.

One of the best sites in Ontario for an efficient power station is Toronto’s Lakeview – a refurbished plant there could produce power and inexpensive heating for both homes and businesses. In fact, the emissions of an upgraded Lakeview could approach those from the gas-fired stations the government prefers, without the unreasonable costs for consumers.