The role of coal in electricity generation

Last week saw the release of two reports regarding the current state of Ontario Power Generation (OPG), and the confirmation of the Liberal plan to close down Ontario’s coal-fire electricity plants by 2007. With jobs, higher electricity prices, and power supply hanging in the balance, it is vital to communicate the impact this plan will have on the future of Ontario. 

I continue to take every opportunity to explain what’s at stake – just this month during pre-budget meetings of the Finance Committee, I reminded members of the short-sightedness of closing down 25 per cent of Ontario’s electricity generation.                        

My comments followed a recent meeting with members of the Power Workers’ Union who have represented a large majority of Ontario electrical employees for nearly 60 years. They had a clear message they wanted me to take to Queen’s Park – the 2007 coal-fire deadline doesn’t make any sense and is clearly not doable.

In their brief, “The Role of Coal”, the union advocates the rapid commercialization of

new clean coal technology, and supports the installation of Selective Catalytic Reduction (SCR) technology to further reduce emissions.

The union’s argument covers cost, supply, and environmental concerns.

To begin with, the union maintains, coal-fired electricity costs about half that of natural gas. With natural gas being touted as the most likely fuel candidate for conversion of coal plants, its price will necessarily increase as demand increases. In fact, the Power Worker’s Union maintains that a wholesale switch to natural gas from coal would drive up electricity costs for consumers and businesses by 15 per cent.

As well, the final report of the government’s Electricity and Conservation Supply Task Force states, “the potential economic impact of a major increase in dependence on natural gas fired generation is magnified by the ongoing volatility in gas prices and growing concern about the availability of affordable natural gas supplies over the next ten years.”

Over the last five years, gas prices have seen steep increases of nearly 200 per cent. Much of the increase is due to the lack of known gas reserves.  According to the US Department of Energy, of North America’s proven hydrocarbon reserves, coal represents 85 per cent, and natural gas only 10 per cent. Analysts believe North America is running out of natural gas and that untapped reserves will take 8-10 years to bring on line. 

The Power Workers’ Union points out that, “since OPG fossil generation accounts for only 14.7 per cent of all NOx emissions originating in Ontario, gas conversion would reduce aggregate Ontario-source NOx levels by only about 1.5 per cent more than SCR technology.”  With 50 per cent of NOx emissions originating in other jurisdictions (mainly the U.S) the union argues that, “the [overall] impact of conversion to gas would be less than 1 per cent.”

To ignore the lack of natural gas reserves, and expected severe price increases, for only a 1 per cent reduction in NOx emissions, is simply short-sighted.

Locally, OPG Nanticoke provides 600 jobs, $5.7 million in spending, and $2.66 million in Haldimand County property taxes.

As the clock ticks closer to a decision, it’s crucial that government understands the true nature and impacts of coal-closure in Ontario.