-----

Resources



Market News

 June 20, 2007
Ontario sets GHG reduction targets

 Toronto, Canada (GLOBE-Net) -- The Ontario government has set official targets for reducing greenhouse gas emissions, pledging to bring emissions to 6 percent below 1990 levels by 2014. Many policies that are already in place, as well as the province's long-term energy plan, will contribute to the reductions.

Ontario's GHG emissions targets are:

  • A reduction of GHG emissions to six per cent below 1990 levels by 2014, or 61 megatonnes.
  • A reduction of GHG emissions to 15 per cent below 1990 levels by 2020, or 99 megatonnes.
  • A reduction of GHG emissions to 80 per cent below 1990 levels by 2050.

The majority of the reductions will be achieved by the main component of the province's long term energy supply plan: shutting down all coal-fired generating stations. This alone will account for more than 50% of the initial target, says the government.

Fifteen percent will come from transportation, with increased public transit investments, national fuel-efficiency and auto emissions standards, and other initiatives with the federal government and other partners. A further 15% will result from already established or soon to be announced policies such as home energy audits and incentives for municipalities to reduce their greenhouse gas emissions.

The remaining portion will come from research and innovation into new technologies which would "fight climate change and strengthen the economy". A "similar approach" will be used to meet targets for 2020 and 2050, says the government.

Each year, the government will report on progress towards the goals in the legislature, and the Environment Commissioner will conduct an independent review on GHG emissions reductions.

An energy challenge

The release of emissions targets formalizes what the government expects current and planned policies to achieve, with much of the groundwork -- notably the Ontario Power Authority (OPA) long term energy plan -- already established. There may also be further developments such as a cap-and-trade plan or linkage to an emission trading market set up by a group of U.S. states, but the broad strokes of the plan are in place.

Ontario's long term energy plan includes the phase-out of all coal power, replaced by new natural gas-fired generation, new or refurbished nuclear power, renewable energy sources, and conservation to improve energy efficiency.

The task of shutting down the coal plants may prove to be very difficult, as the province currently receives much of its power from coal and nuclear. Refurbishing nuclear capacity as outlined in the OPA's strategy will be very costly, and closing coal-fired generation will require development of a large number of replacement power sources.

Originally, the government had set a goal of shutting down all coal fired energy generation in the province by 2007, but the OPA has recommended keeping coal as insurance until 2014 in addition to doubling the use of renewables.

Over the long term, Ontario's GHG emissions targets will only be met with substantial development of alternative energy sources, such as wind, solar, run-of-river hydro, and biomass. The province is likely to see a shift to more distributed generation, as centralized coal plants are displaced by smaller facilities and in-house industrial generation.

The OPA's Renewable Energy Standard Offer Program will continue to drive growth in small renewable installations, and the province will also seek larger renewable energy projects, particularly wind power. The newly announced Clean Energy Standard Offer Program - which will provide a set tariff for power from sources such as combined heat and power (CHP) or electricity generated as a by-product of another process - will also have an impact, particularly in the industrial sector.

Ontario also announced the creation of the new Next Generation Jobs Fund, which will make $650-million available to companies looking to invest in the development of clean cars, clean fuels, and clean technologies and products in Ontario. If companies can demonstrate their ability to secure jobs, reduce greenhouse gas emissions, and build Ontario as a clean technology leader, they will qualify for support. The fund will be modeled after the $500 million Ontario Automotive. Ontario's targets for GHG reductions will be hard to meet, and potentially costly. However, it is laudable for the government to set targets that it believes can be achieved within the bounds of its current energy supply and demand equation. Following through on the plan will require commitment from government as well as innovation from the private sector, with Ontario's energy picture sure to change dramatically over the next decade.



For More Information: Government of Ontario