Ontario coal-fired power plants to stay open for now

Washington (Platts)--14Jun2006

The Ontario government will not close its remaining coal-fired power plants as
planned, Energy Minister Dwight Duncan said in a statement Tuesday.

The minister directed the Ontario Power Authority to proceed with its 20-year
electricity plan. OPA released a report in 2005 in which it outlined the
energy sources Ontario should use in 2015, 2020 and 2025. The report also
recommended the government slow down its closure of coal plants, maintain
nuclear generation and increase gas-fired generation (PCT 12/12/05).

US coal companies, particularly Central Appalachia coal producers, provide
millions of short tons/year of coal to the Ontario plants, so the closings
would have been a big economic hit for the region.

Duncan's decision to keep the plants open was prompted by a revised
electricity reliability report from the Independent Electricity System
Operator last week. The report recommended the government keep the 1,975-MW
Lambton and the 3,938-MW Nanticoke coal-fired plants open until replacement
generation and transmission facilities could come online (PCT 6/12).

"That [report] has prompted the government to decide it cannot proceed with
its timetable to close all coal-fired generation by 2009," the government
statement said.

"[The ministry] went back to OPA and asked them to work with IESO on a time
table for closing the coal plants," George Nutter, a ministry spokesman told
Platts.

Duncan asked them to "develop a revised plan for replacing coal-fired
generation in the earliest practical timeframe without compromising
reliability" and "recommend cost-effective measures to reduce air emissions"
from the coal plants.

"In 2025, we're not expecting to see a lot of coal usage, and we don't see a
technology able to meet our carbon reducing needs," Nutter said. "If
technology changes in the interim, then the supply mix could change. But,
based on what we know today, we are not including coal in our energy mix for
2025."

Ontario has five coal-fired plants. So far the 1,140-MW Lakeview is the only
one to have been shut down. The Lambton plant was scheduled to close in 2007,
the 215-MW Atikokan was to be switched to burn biomass, the 310-MW Thunder Bay
was to be converted to burn natural gas and Nanticoke was to close in 2009.

This makes the second time the Ontario government has delayed closing the
plants. Nanticoke was originally scheduled to close in 2007 (PCT 6/16/05).

For more information, take a trial to Platts Coal Trader at
http://www.coaltrader.platts.com.


 

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