Paul Norris
President, Ontario Waterpower Association
For the first time in more than a decade, Ontario is facing a near-term and enduring deficit in its electricity supply – first in capacity and shortly thereafter in energy. As outlined in Ontario’s Independent Electricity System Operator’s (IESO) December 2021 Annual Planning Outlook, demand for electricity is forecast to rise at rates not seen in many years. Economic growth coming out of the pandemic, along with electrification in many sectors, is driving energy use up across the province.
The IESO has identified the need to secure approximately 7,000 MW of new and existing capacity by 2026, and over 12 GW in the 2030s. And as was the case when this province last faced a demand/supply challenge, Made in Ontario Waterpower is back at the forefront of a reliable, affordable, sustainable electricity system — as demonstrated by the recent policy decisions and directions highlighted below.
Sustaining existing assets
Fundamental to ensuring investment confidence is an assurance of a clear line of sight for return on investment that is aligned with the asset’s characteristics. In January, the Minister of Energy issued a Directive to the IESO focused on key elements of Resource Adequacy and Acquisition. With respect to existing contracted waterpower facilities, the Directive indicates that “Hydroelectric facilities of all sizes play an important role in meeting Ontario’s electricity needs, as well as providing benefits such as recreational opportunities, flood control, irrigation, tourism and facilitating local employment and economic development.” The IESO, working with the OWA is now developing a customized Program to re-contract existing facilities and to set the stage for future procurement and expansion.
Enabling investment in infrastructure
In addition to tailored procurement policy, the regulatory framework that governs the industry plays an important role in encouraging investment in these perpetual assets. Here, too, the province has recently taken a step forward. In February, the Minister of Environment, Conservation and Parks announced that as part of ongoing efforts to modernize the province’s 50-year-old environmental assessment program to better serve the needs of Ontarians now and into the future, the Environmental Assessment process was amended to enable building low-risk waterpower projects faster, such as expansions or changes to an existing facility. The announcement noted that “Hydroelectric power generation has been serving Ontario’s electricity needs for well over a century, helping us to achieve one of the cleanest electricity grids in the world. These changes will help streamline new waterpower opportunities that can further contribute to our province’s clean, reliable and affordable energy future.”
Making room to grow
Finally, efforts are underway to assess the province’s untapped water potential (estimated at 4,000-5,000 MW), with a specific focus on northern Ontario. The government has asked Ontario Power Generation, working with the Ontario Waterpower Association (OWA) to update previous evaluations of hydroelectric potential in the North. The report, due this spring, will include estimates on water availability, annual energy production potential, and life-cycle costs of building and operating new hydroelectric generation while engaging communities during this process. Importantly, the request notes that further hydro development could spur job creation in Indigenous and remote communities, power industries and communities, and will ensure a cleaner future for our province. As has been evidenced through more than a dozen successful waterpower projects in recent years in Northern Ontario, partnership with Indigenous communities is enabling improved development and economic opportunity.
Sustaining existing assets, enabling new infrastructure investment and exploring new opportunities can all make an important contribution to meeting the province’s growing electricity needs. Moreover, the IESO’s initiative to evaluate options and develop a pathway to the decarbonization of the electricity system highlights the growing value of flexible and reliable waterpower. Regardless of the path ahead, a river runs through it.
