Ontario needs to replace coal plants with gas, nuclear: study

Philadelphia (Platts)--27Apr2005

The most cost-effective way for Ontario to secure its future capacity needs
would be to shut down its coal-fired plants and replace them with new
gas-fired plants and refurbished nuclear plants, according to a study by DSS
Management Consultants, RWDI Air and Peter Victor, former head of the Faculty
of Environmental Studies at York University. 

The study, for the province's energy ministry, compared the financial, health
and environmental costs of four scenarios. It found that the combined health
and generation-cost impact of the continued operation of Ontario Power
Generation's coal-fired fleet would be more than twice that of replacing it
with new gas plant and refurbished nuclear plant. The study said the annual
health and generation cost of continued reliance on coal would be about
C$4.4-bil ($3.5-bil), while replacing coal with gas-fired and nuclear
generation would cost C$1.9-bil; replacing coal with gas-fired generation only
would cost C$2.6-bil, and fitting the coal plants with emissions control
equipment would cost C$2.8-bil.

Ontario Energy Minister Dwight Duncan said at the release of the study that
coal-fired generation "is costing the people of Ontario more than the number
on their electricity bills. This study shows the true cost of coal is in air
pollution-related illness, hospital visits and premature deaths. That's why we
are committed to replacing coal-fired generation with cleaner sources of
electricity." 

Ontario's ruling Liberal Party government has promised to shut down all of
OPG's coal plants by the end of 2007 as long as there is sufficient
replacement capacity in operation, but has been under pressure from some local
governments to keep coal plants in their area in operation and to fit them
with emission-control equipment to reduce their environmental impact.

This story was originally published in Platts Natural Gas Alert
http://www.naturalgasalert.platts.com

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