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Market News

 April 11, 2007
Clean Air, Climate Change, and Clean Energy in Ontario

 Toronto, Canada (GLOBE-Net) -- Perhaps nowhere else in the world is the intersection of energy and environmental issues more pressing than in Ontario and the Great Lakes region. The industrial epicentre of North America is at the forefront of the greatest challenges that business and society may face in the next century: the need to balance economic growth and energy supplies with clean air and climate change.

One cannot minimize the challenge of reconciling the economic and environmental imperatives of a region that accounts for 12% of the world's GDP, generates 30% of US and 45% of Canada's exports, and has a population of over 48 million people.

Industry is firmly entrenched in the area, and moving these activities and the people dependent on them is simply not an option. Business and government leaders must therefore deal with the issues of energy, air pollution, and climate change and develop sustainable, competitive solutions.

Ontario's Energy Challenge

It would not be a stretch to suggest that for the past several years, Ontario has been experiencing an energy crisis. During the hot summer months of 2006, electricity demand repeatedly reached record levels and the province relied heavily on imported power.

At that point, a provincial government plan was already underway to make substantial changes to the energy supply. The Ontario Power Authority's long-term plan includes approximately 15,000 Megawatts (MW) of energy supply or conservation resources that will be needed to meet energy demands before 2015, and a further 15,000 MW by 2030.

This will mainly be met by new renewable energy sources, natural gas-fired generation, refurbished nuclear power, and conservation programs to improve energy efficiency. The plan includes a goal of making Ontario North America's leading renewable energy producer, with 15,700 MW installed by 2025. At least 5,000 MW of that is expected to be wind power, a huge jump from the 415 MW of current capacity.

A major policy lever for encouraging small-scale renewable energy producers is the OPA's Standard Offer Program, which gives small scale (less than 10 MW) renewable energy generators a fixed price for electricity generated to the provincial power grid. The first contracts were signed recently, adding 140 MW of wind power, hydroelectricity, bio-mass, and solar photovoltaic.

To accommodate such growth as well as larger projects, Hydro One, the province's electricity transmission system operator, is planning a $600 million expansion of the existing transmission corridor from the Bruce region. The project will allow access to 1,700 MW of new renewable generation identified in the region, mostly wind power, as well as the Bruce nuclear station.

Clean Air and Climate Change

Ontario's long term energy plan will do much to address the province's greenhouse gas emissions, which place it second in the country behind Alberta. Under the latest OPA plan, coal power will be phased out within the next few years, with some capacity left in place as backup power until 2014.

Shutting down coal plants will also help reduce other air pollutants, but Ontario continues to struggle with high levels of smog. The Southern region of the province consistently has the highest recorded levels of ground-level ozone and particulate matter in the country.

Much of this pollution comes from the industry that drives Ontario's economy, but emissions in the entire Great Lakes region affect cities on either side of the border with the United States. The Ontario Ministry of Environment estimates that transboundary air pollution is responsible for over 2,700 premature deaths, almost 14,000 emergency room visits and more than $5.2 billion in health and environmental damages each year.

Accordingly, Ontario is working with Northeast States to address issues such as smog, airborne toxics including mercury, acid deposition, and climate change. This follows a long history of regional collaboration, highlighted by an international agreement to reduce air pollution that leads to acid rain.

Ontario Premier Dalton McGuinty recently opened the door for further cooperation, expressing interest in joining the Regional Greenhouse Gas Initiative (RGGI), a group of seven Northeast states that have established a regional cap-and-trade system to limit greenhouse gas emissions to current levels beginning in 2009. Ontario's own emissions trading program for nitrous oxides (NOx) and sulphur dioxide (SO2) could lead to technical improvements in both programs and a possible future cross-border program for all emissions, he said.

Emissions trading, urban smog, renewable energy, nuclear power, coal, industrial growth and population expansion -- there is no doubt that Ontario is at the nexus of energy and the environment. Businesses, governments, and individuals are seeking creative solutions to these challenges, pushing the province and the region towards a sustainable economy.