The Premier’s mandate letters (2): why bills are rising so fast

September 28, 2016

More proof of why Ontario’s electricity bills are rising the fastest in North America

Ontario Energy Minister Thibeault has been the centre of media attention over the past several days for his announcement we will save $2.45 every month because he has “suspended” the Large Renewable Procurement process or LRPII, the result of a directive issued by former Energy Minister Bob Chiarelli to acquire 600 megawatts (MW) of wind and 300 MW of solar capacity.

Premier Wynne’s mandate letter to Minister Thibeault contained directions which were previously tied to a press release issued by his Ministry related to building transmission lines to service First Nations communities. The news release dated July 29, 2016 announced: “Ontario has selected Wataynikaneyap Power LP (Watay) to connect 16 remote First Nation communities that currently rely on diesel power to the province’s electricity grid.”

No mention was made about the cost of the project, only that it would create “over 680 jobs” and “save $1 billion over the life of the project” compared to the “use of costly diesel fuel”.   It was subsequently  reported the project was a $1.4 billion dollar build and would service 10,000 people in those 16 communities and save $43 million in annual diesel costs.  In simple terms that works out to be $140,000 per person and a 32.5 year payback.  I am not sure how the government got to the idea of saving “$1 billion over the life of the project.”

To reinforce the Minister’s earlier press release we must presume these extracts from the Premier’s mandate letter are related: “Working within the principles of the recent Political Accord, and upholding commitments to First Nation and Métis communities, to support and participate in new generation and transmission projects, and in conservation and community energy planning initiatives.” And “Expanding transmission to remote First Nation communities in Northwestern Ontario to reduce reliance on diesel-powered generation.” And, “Continuing negotiations with the federal government to secure a fair cost sharing arrangement in support of the remote communities grid connection project.”

Those comments Ontario is moving ahead with the project while counting on the federal government to kick in money. No matter the outcome of  Minister Thibeault’s negotiations with the federal government, it certainly appears it will be up to the province to supply the lion’s share of the $1.4 billion. What does that mean? Ontario’s electricity ratepayers will pick up the costs.

It is ironic that the Province is committed to the transmission build but not to building a road to the “ring of fire” estimated to only cost $550 million according to a joint study by Provincial/Federal officials and reported in the Globe and Mail.  The road would actually create both investments and jobs for the same First Nations communities and presumably allow cheaper construction of transmission lines while generating new taxes.

The actions of the Provincial government continue to remind me of the recent Cadillac ads which show the car moving forward but everything else in the ad moving backwards.

The time has come for Ontario to move forward with some common sense planning.

Parker Gallant

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4 thoughts on “The Premier’s mandate letters (2): why bills are rising so fast”

  1. It would be possible to put wind and solar, with existing diesel for backup, in the remote North to power First Nation communities. But seemingly wind and solar doesn’t work.
    In Dutton Dunwich we pay more for delivery than for electricity. I wonder what the delivery cost would be for First Nation electricity users in Northwestern Ontario.

    Like

  2. Summary of the Proposed Project “Connection of Remote First Nation Communities in Northwest Ontario”

    http://nh3fuel.com/images/documents/Diesel%20Generator%20Alternatives.pdf

    As the global warming and energy issues become important to pics to be considered for the future of remote communities, alternative solutions for power and heat generation need to be investigated.

    Currently, diesel generators running on diesel are utilized for Northwestern Ontario remote
    communities. This is one of the most expensive and environmentally damaging option.

    First Nations request and propose a 1,500 km power transmission line to the remote
    communities instead of diesel generators which is a high cost investment.

    The significance of distributed power generation is emphasized in many studies throughout
    the world. Hence, producing power and heat via stand-alone facilities are being encouraged
    by the governments and decision makers.

    As an alternative and sustainable fuel, ammonia, can be utilized in the diesel generators by minor modifications. Ammonia has no greenhouse gas emission during utilization in the diesel generators. Hence, it is the most environmentally benign fuel among other alternatives.

    Transportation and storage of ammonia is already available and well-known since it is the second largest produced chemical in the world. This implies that instead of diesel, ammonia can easily be transported and stored.
    Ammonia can be produced on-site using renewable energy resources such as wind, solar and hydropower which are already available in these remote communities. This brings minimum transportation cost. However, diesel needs to be transported for long distances.

    The operation of diesel engines with fuel ammonia has the lowest cost based on the current market prices. Considering the technology development of ammonia production, the cost of ammonia will continue to decrease which will bring additional reductions in total cost.

    Production and utilization of ammonia in diesel generators have significantly lower environmental impacts in terms of climate change and global warming.

    As a result, ammonia usage in remote communities for power and heat production will bring significant cost and environmental benefits together with public satisfaction.

    Like

  3. Here is the analysis of how using ammonia to do the same thing would cost 75% less.

    Conclusions of UOIT’s Diesel Generator Alternatives Report:

    As the global warming and energy issues become important topics to be considered for the future of remote communities, alternative solutions for power and heat generation need to be investigated.

    Currently, diesel generators running on diesel are utilized for Northwestern Ontario remote communities. This is one of the most expensive and environmentally damaging option.

    First Nations request and propose a 1,500 km power transmission line to the remote communities instead of diesel generators which is a high cost investment.

    The significance of distributed power generation is emphasized in many studies throughout the world. Hence, producing power and heat via stand-alone facilities are being encouraged by the governments and decision makers.

    As an alternative and sustainable fuel, ammonia, can be utilized in the diesel generators by minor modifications. Ammonia has no greenhouse gas emission during utilization in the diesel generators. Hence, it is the most environmentally benign fuel among other alternatives.

    Transportation and storage of ammonia is already available and well-known since it is the second largest produced chemical in the world. This implies that instead of diesel, ammonia can easily be transported and stored.

    Ammonia can be produced on-site using renewable energy resources such as wind, solar and hydropower which are already available in these remote communities. This brings minimum transportation cost. However, diesel needs to be transported for long distances.

    The operation of diesel engines with fuel ammonia has the lowest cost based on the current market prices. Considering the technology development of ammonia production, the cost of ammonia will continue to decrease which will bring additional reductions in total cost.

    Production and utilization of ammonia in diesel generators have significantly lower environmental impacts in terms of climate change and global warming.

    As a result, ammonia usage in remote communities for power and heat production will bring significant cost and environmental benefits together with public satisfaction.

    Summary of the Proposed Project
    “Connection of Remote First Nation Communities in Northwest Ontario”
    http://nh3fuel.com/images/documents/Diesel%20Generator%20Alternatives.pdf

    Like

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