Ontario has been a world leader in low-carbon energy through its embrace of CANDU nuclear technology, which powered us through the coal phaseout and earned us one of the cleanest electric grids in the world. We recently took another commendable step to reduce emissions by creating a carbon tax through the provincial Emission Performance Standards (EPS) program, following the lead of the federal Output-Based Pricing System (OBPS) program. But Ontario’s leadership is slipping on both of these fronts. By failing to tax the emissions from gas plants at an adequate level, and by shutting down nuclear power that could be refurbished, we are incentivizing our way to a dirtier, less reliable grid at the expense of Canadian industry and jobs.
We call on you to support two related initiatives that are critical for Ontario’s climate commitments, economy, and secure energy supply:
1. Tax the Gas Plants
2. Save Pickering
1. Tax the Gas Plants. On its face, the EPS program is the type of bold action needed to address the climate crisis. However, the program’s goal is undermined by an excessively high performance standard for Ontario’s only large emitters on the electric grid: fossil gas plants.
According to official data, between 2014 and 2019 Ontario gas plants emitted an average of 407 gCO2e/kWh. The current EPS performance standard for natural gas of 420 gCO2e/kWh will exempt practically all gas plant emissions. We expect this standard to be amended to 370 gCO2e/kWh, mirroring the federal OBPS, yet this would still exempt over 90% of gas plant emissions from taxation.
We understand that the EPS program has not been developed beyond 2022. This provides an opportunity to correct the current shortcoming. Unless the EPS performance standard for new and existing gas plants is gradually lowered to 0 gCO2e/kWh by a reasonable date, the program will continue to mislead Ontarians and threaten Canada’s progress on climate commitments. It is vital that both old and new gas generation be held to the same performance standard. Otherwise, it would merely incentivize the use of Ontario’s existing gas fleet: 10 GW of capacity that currently runs at very low capacity factors and would remain 90% exempt from the EPS tax.
2. Save Pickering. Nuclear power is Ontario’s most valuable clean energy asset. During the coal phaseout, Ontario built new gas plants that ended up sitting mostly idle, but it was the restoration of reactor units at Bruce and Pickering that provided 90% of the generation required for the coal phaseout, which the Ontario Power Authority calls the greatest greenhouse gas reduction in North America. The decision not to refurbish Pickering Nuclear Generating Station (PNGS), scheduled to close in 2024-2025, will force its lost output of 21-23 TWh per year to be replaced mostly by gas generation, creating almost 10 megatonnes of carbon emissions per year. This would constitute at least a 1% increase in Canada’s overall emissions at a time when the country has committed to lowering its emissions by 30% from 2005 levels under the Paris Agreement.
Furthermore, by failing to refurbish PNGS, the Ontario government will turn its back on Canadian jobs, industry, and energy security. According to the Ontario Chamber of Commerce, PNGS provides nearly 7,600 direct and indirect full-time equivalent jobs, many of them highly skilled. This number is thanks to the 95% made-in-Ontario CANDU nuclear supply chain. Nearly every dollar spent on nuclear power stays in Ontario, guaranteeing clean air and clean electricity for future generations and providing economic opportunity as we recover from the COVID-19 pandemic. In contrast, the fracked gas needed to replace Pickering’s lost output will be mainly imported from the United States to burn in gas plants that employ a small fraction of the people that Pickering does.
The loss of Pickering will also destabilize the province’s electricity supply at a time when electrification goals are set to dramatically increase electricity demand. There is no feasible clean or reliable alternative to nuclear power in Ontario, despite misleading claims that we could cover our needs with imported hydropower from Quebec. Unless PNGS is refurbished or its 3,100 MW capacity is fully replaced with new made-in-Canada nuclear, Ontario’s polluting gas plants will dominate electricity generation at the expense of jobs, energy security, and climate commitments.
Abandoning one-quarter of Ontario’s nuclear fleet is the path to a worse Ontario, an Ontario where basic needs such as jobs and clean, reliable power are ignored, and imported fracked natural gas gets a free pass. We ask you to stand up for the best interests of Ontario:
1. Lower the EPS performance standard for new and existing gas plants to 0 gCO2e/kWh by 2030.
2. Refurbish Pickering Nuclear Generating Station or establish plans to fully replace its 3100 MW capacity with new nuclear generation as soon as possible.