Ontario's Choice

Ontario's Choice

Location: Ottawa
Author: Ken Silverstein, EnergyBiz Insider, Editor-in-Chief
Date: Thursday, December 4, 2008

Ontario's political path is the one less traveled. But the Canadian province's leaders say that the pioneering route is the one they were elected to pursue.

As they describe it, the province is at a crossroad whereby it can take progressive positions or stand in the way of "necessary" changes. Policymakers there say that their choice is clear, reasoning that a host of global challenges require that they take the lead so that the next generation of economic opportunities can get underway.

Ontario's strategy is premised on making significant investments in clean energy ventures that lead to job creation. The government there has pledged millions to several local "green" programs while one of its business development bureaus has promised hundreds of millions to clean tech enterprises that can demonstrate that their projects will contribute to economic expansion.

"Research is the foundation of innovation -- and in the 21st century, innovation is the key to stronger global competitiveness, good jobs and better lives for Ontario families," says Ontario's Minister of Research and Innovation John Wilkinson. "And that's why our government has made innovation a key part of our five-point economic plan."

In a telephone interview, Wilkinson says that Ontario is absolutely committed to the new international paradigm -- the one that dictates reductions in greenhouse gas emissions tied to global warming and to do so through the creation of sustainable energy forms. The province is in the process of cutting its heat trapping emissions to 6 percent below the 1990 levels by 2014. The goal is then reduce them to 15 percent below 1990 levels by 2020 and then ultimately to cut them 80 percent below 1990 levels by 2050.

To reach the initial targets in 2014, the minister says that Ontario will finish the job of phasing out its entire coal fleet that has provided about 16 percent of its electric generation. Wilkinson says that the province has already closed a third of its coal facilities, noting renewable energy will replace most of its existing coal sources. After the conversion, Ontario will be half way to meeting its 2014 goals.

Another 15 percent cut in greenhouse gases will come from making changes in national fuel efficiency and auto emission standards while also placing investments in the transit industry. A further 15 percent reduction will result from providing home energy audits and giving incentives to municipalities to change their ways, all by 2014.

The remaining portion, or 20 percent , will come from investing in new technologies -- the leadership role that the province says it must assume. The province, for instance, is already backing hydrogen-based energy technologies projects as well as fuel cells that run on both traditional fuels and renewable sources such as hydrogen and biogas.

Key Innovation

The investments are already paying off, says Wilkinson. The minister's office along with an economic development fund has provided capital for a company called 6NSilicon. This company has developed processes to make extremely thin silicon wafers used for solar energy, which has been a limiting factor to future expansion. The business now has a commercial facility that produces such silicon wafers and it employs 84 people there.

Menova is another such venture. This company is focused on improving solar cell efficiency. It does so by concentrating the energy using curved mirrors to attract the sun. As the technology has gotten over the hump, it has attracted other private sector capitalists. And now Menova is helping to build a superstore for Wal-Mart in Ontario.

All good stuff. But critics of the government's chosen path say that it is expensive and unrealistic. Electricity growth there is expected to increase at 1.3 percent a year. And while the province has at least 10,000 megawatts under construction -- on top of the 31,000 that now exist -- some estimates suggest it will still fall short of what is needed. Altogether, it may be 15,000 megawatts shy of what it requires by 2025.

That's why many experts say that Ontario ought to think twice about phasing out its coal generation. Instead, they say that it should implement new clean coal technologies. Natural gas, meanwhile, supplies about 8 percent of the province's energy mix -- an amount that is expected to double by 2018. But flat production and increasing demand have put upward pressure on prices, which may diminish its appeal.

The province's energy issues are compounded even further because of its aging nuclear fleet, which provides about 51 percent of Ontario's daily requirement. Wilkinson says that the province will modernize its entire nuclear stock of 16 power plants. But it will not be building any new nuclear facilities. In the end, nuclear power's percentage of the overall generation mix will not change.

Many are dubious of the broad energy plan, saying it sounds like a lot of wishful thinking. But the Ontario's government says otherwise. The province says that while its blueprint must be flexible so as to adjust to changing conditions, it will remain committed to its primary objective -- to notably bring down greenhouse gas emissions. And it emphasizes that it can do so without compromising reliability.

"The people re-elected us last year," says Minister Wilkinson. "We have a clear mandate to make it happen. We are committed. They expect their government to embrace this new paradigm -- the green economy. It has already generated high quality and well paying jobs on top of our world class manufacturing base. One has to understand that we were re-elected to another four year term on this platform. Our job is to implement this."

By putting Ontario at the helm of the climate change battle, its leadership that it will create economic opportunities for generations to come. It's a noble goal. But those ideals will assuredly get tested by a multitude of political, economic and energy realities.