BUSINESS REPORT: Ontario Unveils Plans To Achieve An Energy Balance
By Business Facilities Editorial Staff
From the January/February 2014 issue
Ontario’s updated Long-Term Energy Plan (LTEP), Achieving Balance, reflects input from thousands of Ontarians and looks at a ramp-up in renewable energy and pullback in nuclear. The plan encourages conservation and provides the clean, reliable and affordable energy Ontario will need now and into the future. It balances five principles that will guide future decisions: cost effectiveness, reliability, clean energy, community engagement and an emphasis on conservation and demand management before building new generation.
- Ontario’s estimated 2013 electricity production mix is 59 percent nuclear, 28 percent renewables, 11 percent natural gas, and 2 percent coal. The forecasted 2025 electricity production mix: 42 percent nuclear, 46 percent renewables, and 12 percent natural gas. Ontario already has committed to completely eliminating coal-generated power, fulfilling a decade-long goal.
- Underscoring stability and predictability, the LTEP commits to a new competitive procurement process with the Ontario Power Authority (OPA). Procurements for 2014 electric capacity are 300 MW wind, 140 MW solar, 50 MW bioenergy and 50 MW hydro; 2015 procurements are identical except a slight narrowing of hydro to 45 MW. Anything developed but not procured or under contract will be reallocated into 2016 targets.
The Ministry of Energy will work with its agencies to ensure they put conservation first in their planning, approval and procurement processes. The ministry will also work with the Ontario Energy Board (OEB) to incorporate the policy of conservation first into distributor planning processes for both electricity and natural gas utilities.
The province expects to offset almost all of the growth in electricity demand to 2032 by using programs and improved codes and standards with the long-term conservation target of 30 terawatt-hours (TWh). Ontario is aiming to use Demand Response (DR) to meet 10% of peak demand by 2025, equivalent to approximately 2,400 megawatts (MW) under forecast conditions.
Key elements of the LTEP include:
- The government will work to make new financing tools available to consumers starting in 2015, including on-bill financing for energy efficiency retrofits.
- To help consumers choose the most efficient products for their homes and businesses, Ontario will provide information and incentives; it will also continue to show leadership in establishing minimum efficiency requirements for products such as water heaters, clothes dryers, televisions, fluorescent lamps, motors and boilers.
- The Green Button Initiative will give consumers access to their energy data and the ability to connect to mobile and web-based applications so they can analyze and manage their energy use.
- A social benchmarking pilot program is under way, led by the Ontario Power Authority (OPA) to test different approaches that enable consumers to compare their energy consumption with similar consumers.
- Ontario plans to bring 20 GW of renewable energy online by 2025, representing nearly half of installed capacity.
- Targets for hydroelectric, which represent the vast majority of Ontario’s renewable energy portfolio, are being expanded from 9.0 GW to 9.3 GW.
- Ontario will phase in wind, solar and bioenergy with 10,700 MW online by 2021.
- The Ministry of Energy and the OPA are developing a new competitive procurement process for future renewable energy projects larger than 500 kilowatts (kW), which will take into account local needs and considerations. The ministry will seek to launch this procurement process in early 2014.
- Ontario will examine the potential for the microFIT program to evolve from a generation purchasing program to a net metering program.
- Natural gas-fired generation will be used flexibly to respond to changes in provincial supply and demand and to support the operation of the system.
- The OPA will undertake targeted procurements for Combined Heat and Power (CHP) projects that focus on efficiency or regional capacity needs, including a new program targeting greenhouse operations, agri-food and district energy.
- Significant ratepayer savings will be realized as a result of reduced Feed-in Tariff (FIT) prices, the ability to dispatch wind generation, the amended Green Energy Investment Agreement, and the decision to defer new nuclear.
- The government will continue to work with its agencies—Hydro One, OPG, the IESO, the OPA and the OEB—to develop business plans and efficiency targets that will reduce agency costs and result in significant ratepayer savings.
- The government will encourage OPG and Hydro One to explore new business lines and opportunities inside and outside Ontario. These opportunities will help leverage existing areas of expertise and grow revenues for the benefit of Ontarians.
- The government will seek to expand the Smart Grid Fund, which has created more than 600 jobs and supported 11 projects developing innovative technologies.
- By the end of 2014, the government will include storage technologies in their procurement process, starting with 50 MW and assessing additional engagement on an ongoing basis.
- The new competitive procurement process for renewable energy projects larger than 500 kW will also provide an opportunity to consider proposals that integrate energy storage with renewable energy generation.
An annual Ontario Energy Report will be issued to update the public on changing supply and demand conditions, and to outline the progress to date on the LTEP.
THE RAIN THAT TURNED TO WINE
With some help from the rain, Ontario saw an amazing grape harvest in the fall of 2013. The Grape Growers of Ontario reports a record harvest of 79,756 metric tons of grapes, valued at $99.7 million and 55.8 million liters of wine, enough to fill more than 20 Olympic-size swimming pools.
This abundance could help sustain local wineries if the recent cold weather causes shortages in 2014. And Grape Growers of Ontario Chair, Bill George, said this year’s crop is almost all sold.
Statistics from the Grape Growers of Ontario indicate that winemaking was the dominant use for Ontario grapes in 2012. Over 97 percent of production was used for wine products and under 3 percent for juice, jams and other grape products. Sales of Ontario VQA wines produced entirely from Ontario grown grapes amount to $268 million per year (an increase of $100 since 2008).
According to a 2013 report in Canada’s Wine Economy—Ripe, Robust, Remarkable:
- The wine industry generated $662 million in retail sales in Ontario in 2012.
- More than 14,000 jobs are created in Ontario as a result of the Grape and Wine Industry.
- The wine industry generated $602 million in tax revenues and mark-ups in 2012.
- On average, one bottle of Ontario wine generates $39.67 of economic impact in the province.
- $3.3 billion is the total economic impact of the Ontario Grape and Wine Industry.
- As a tourist destination, Ontario wineries welcome over 1,900,000 visitors, generating $644 million of tourism and tourism employment related economic impact.
Cisco and the Ontario government recently announced an agreement that could see the San Jose, Ca.-based networking equipment giant spend as much as $4 billion over the next 10 years to expand its operations in the province. According to Cisco Canada President, Nitin Kawale, the company plans to make Ontario one of its global research and development centers for its next-generation technologies.
The 10-year agreement could create up to 1,700 new jobs in Ontario, primarily focused on research and development and located predominantly in Toronto and Ottawa. The province would make a total investment of $190 million over that time (about $111,000 per job), which is contingent upon Cisco meeting certain investment and job targets.
Karin Scott, a Cisco Canada spokeswoman, said the company will focus its hiring on recent engineering graduates and will add jobs at a new headquarters under construction in downtown Toronto, along with at its research facility in Scarborough. She said new hires will be involved in research and development of high end routers used in mobile computing and video technology.
“We are building on Ontario’s position as a global leader in research and innovation and creating important tech sector jobs across the province,” said Premier Kathleen Wynne.
Cisco says the deal could help it expand its workforce in the province to 5,000 by 2024. The government called the plan “the largest job-creating investment in the history of Ontario’s technology sector.”
Rob Lloyd, a Canadian and Cisco’s California-based president of development and sales, noted many countries, states and provinces woo him “to…bring the kind of knowledge-based jobs that we bring to an economy.”
“They come to us with different ideas—the president of Poland or the governor of North Carolina, they’re visiting us every day,” he said. “We look at those investments or opportunities to partner with a very clear filter, Do we see a supportive government? Do we see rich capabilities in the university system? Do we see a very competitive tax rate for a company to do business in? Do we see a great business climate and a predictable environment? Do we find loyal employees that like to stay and develop in a company?”
He added, “We find all of that in Ontario. That’s exactly why we made this decision over all other choices we have every day.”
With 250,000 people employed in information and communications technology in Ontario, the province is the third-largest hub in North America in the sector, behind California and Texas.
AIR CANADA OPENS $60-MILLION GLOBAL OPERATIONS CENTER IN BRAMPTON STAFFED BY 400 WORKERS
Air Canada has opened a new state-of-the-art global Operations Center (OC) in Brampton, Ontario which is expected to improve its operational capabilities and efficiencies significantly. The new facility is the result of a two-year, $60-million project and will serve as the central control for the airline’s operations, with 400 employees overseeing, on a 24/7 basis, nearly 600 Air Canada flights each day.
“Air Canada is already recognized as one of the world’s best airlines and our new, leading-edge OC will further strengthen our position. This new mission control center incorporates the latest in technological and other design elements. Further, we can expect important efficiencies with teams from all areas of the operation…working under one roof to get our customers to their destinations safely, on-time and comfortably,” said Calin Rovinescu, president and chief executive officer.
The new, 75,000-square-foot facility has been completed on-time and within budget. It will be fully operational in the first quarter of 2014 following a period of testing, training and transition. Once in service, it will become the global nerve center for Air Canada’s operations ensuring delivery of Air Canada’s schedule and safe transport of approximately 35 million Air Canada customers annually.
Air Canada maintains its corporate headquarters in Montreal, Quebec where it employs more than 5,000 people and it is Canada’s largest domestic and international airline. Canada’s flag carrier is the 15th-largest commercial airline in the world.
Air Canada has a fleet of Airbus A330, Boeing 767, and Boeing 777 wide-body jetliners on long-haul routes and uses the Airbus A320 family aircraft, including the A319, A320, and A321 variations, and Embraer E170/E190 family aircraft on short-haul routes. The carrier’s operating divisions include Air Canada Cargo and Air Canada Jetz. Together with regional partners, the airline operates on average more than 1,530 scheduled flights daily.