World : Canada: Highlights Of Ontario's 2017 Long-Term Energy Plan

After a year of stakeholder consultation, on October 26, 2017, the Government of Ontario released the 2017 Long-Term Energy Plan ("LTEP") entitled "Delivering Fairness and Choice". The LTEP is focused on innovation, electricity affordability and modernization of the electricity sector. This is the first LTEP that has been released by the Minister of Energy since the new statutory framework was implemented by way of Bill 135 which moved long term planning from the Independent Electricity System Operator (the "IESO", formerly the Ontario Power Authority) to the Minister of Energy. The LTEP is intended to give the Ontario electricity sector, its stakeholders and consumers a roadmap of the Ontario Government's priorities for the future of Ontario's electricity sector. The LTEP impacts Ontario's electricity sector in the following ways:

  • Electricity Prices: Ontario's Fair Hydro Plan reduced electricity bills by 25% on average for residential consumers and small businesses across Ontario. The LTEP reaffirms that electricity prices are forecasted to be below projected prices included in the 2013 LTEP. The outlook for electricity prices for large consumers will be, on average, in-line with inflation over the forecast period.
  • Procurement: unlike past LTEP's, the LTEP does not set out specific procurement targets for new supply of generation (or re-contracting existing assets) but instead reinforces the idea of maximizing existing assets through refurbishment (nuclear and hydro) and through the IESO's Market Renewal, relying on competitive markets instead of long-term electricity contracts and relying on conservation demand response and electricity storage.
  • Market Renewal: the LTEP addresses the IESO's current efforts towards transforming Ontario's wholesale electricity markets through Market Renewal and the introduction of a capacity auction in the early to mid-2020s. Market Renewal will also incorporate Ontario's Climate Change Action Plan and will be designed to reduce ratepayer costs by an estimated $5B in the decades between 2021 and 2030, reduce GHG emissions as well as decarbonize the fuel sector.
  • Net Metering: the net metering framework will continue to be enhanced so as to allow consumers the ability to offset the electricity they buy from their Local Distribution Company ("LDC") with electricity generated by their own renewable energy systems. Net-metered customers also receive credits on their electricity bill for the electricity they send to the grid, reducing their total bill charges.
  • Electric Vehicles ("EVs") and LDCs: the LTEP aims to grant LDCs the ability to better integrate EVs, charging stations and storage facilities onto their grids and into consumers' homes.
  • Ontario Energy Board ("OEB") and Condos: the LTEP speaks to new abilities of the OEB to regulate individually-metered condo and apartment units in Ontario. This plan seeks to increase consumer protection and regulate private companies who provide metering services to condo and multi-dwelling units.
  • Electricity Bills and Plans: the LTEP grants the OEB and LDCs the ability to redesign electricity bills to increase transparency and consumer understanding of their energy usage and costs as well as grant consumers greater choice in their electricity price plans by providing alternatives to time-of-use pricing.
  • Innovation, Conservation and Consumers: the LTEP aims to expand the Green Button Initiative to provide consumers with the ability to access their energy usage in real time, manage their use and conserve energy when prices are high.

While Ontario is currently experiencing an adequate supply of electricity, a shortfall in capacity is expected beginning in the early-to-mid 2020s as the Pickering Nuclear Generating Station reaches its end of life, and nuclear units at Darlington and Bruce are temporarily removed from service for refurbishment. The demand for electricity is forecast to be relatively steady over the planning period. In the long-term, the IESO projects an increase in overall demand as electrification of the economy (especially the transportation sector) increases. As stated above, this need for additional capacity will be met through initiatives under the IESO's Market Renewal.

On October 25, 2017, Glenn Thibeault, the Minister of Energy, issued several directives (the "Directives") that require the IESO1 and the OEB2 to undertake activities to support and implement the goals of the LTEP. These Directives focus on conservation and demand management ("CDM"), reducing the cost of electricity for consumers, regulating electricity transmitters and distributors, spurring innovation and supporting indigenous capacity and leadership.

 

Source : http://www.mondaq.com/canada/x/645148/Oil+Gas+Electricity/Highlights+Of+Ontarios+2017+LongTerm+Energy+Plan

SMART GRID Bulletin November 2017


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