Ontario’s Conservative government released the second phase of an ambitious supply-side strategy to boost “next generation” automobile manufacturing in the province—including connected, autonomous, and electric vehicles. But the province’s Driving Prosperity initiative does not yet include complementary demand-side measures to stimulate market penetration of low-emission vehicles, nor is the government promoting increased electrical generation from renewable sources.
The apparent disconnect contrasts with a small series of recent announcements of projects designed to test “smart grid” development at the household level and harness potential system benefits from distributed generation and storage, including EVs.
Driving Prosperity, issued in two phases in March and November, proclaims that “the future of vehicle production is electric.” The strategy focuses on supply-side enablers for Ontario’s automobile manufacturing sector, including research and development investments, improved work force skills, and in the Ford government’s framing, deregulation, tax cuts, freezing the minimum wage, and eliminating carbon cap and trade.
The auto industry accounts for 2.4% of Ontario’s GDP, and Driving Prosperity aims to reverse a decline that has seen the province lose one-quarter of its share of the North American market in the past 20 years. The Toronto Star says “Buy American” policies being implemented by the Biden administration are a shared concern for Ontario and other provinces, all of whom have declared their support for Prime Minister Justin Trudeau in urging access to American markets for made-in-Ontario EVs and related goods.
Battery electric vehicles have a relatively modest (though growing) market share in Ontario: 1.81% in the first quarter of 2021, compared to 9.48% in British Columbia and 5.51% in Quebec.
Driving Prosperity includes the development of battery supply chain minerals from northern Ontario, which is cited as “a key producer of nickel, cobalt, and copper and home to several advanced lithium and graphite development projects.”
But the strategy sidesteps associated environmental and Indigenous rights issues, assuring companies that “the province’s mining practices, EV-related or otherwise, are among the most ethical on the planet.”
A brief section in the strategy on encouraging EV adoption announced the establishment of a Transportation Electrification Council, as previously urged by the Pembina Institute. The council will “identify opportunities in the areas of charging infrastructure, information and awareness, upfront cost, and supply of EVs in Ontario.” As part of Driving Prosperity, the government says it will provide information and guidance on transit solutions, including vehicle technologies and digital management systems.
Pembina praised the phase two Driving Prosperity strategy, stating that “the objective in Phase 2 to build a minimum of 400,000 electric and hybrid vehicles as of 2030 will help advance growth in Ontario’s auto sector in ways that also support important climate action.”
But Ontario cancelled the previous Liberal government’s subsidies for EV adoption three years ago, and Ford recently reiterated his opposition to “giving millionaires rebates on… $100,000 Tesla cars.” He did signal that he may reconsider rebates for made-in-Ontario EVs if US trade barriers are not resolved, the Star writes.
Driving Prosperity does not include government-led renewables development to power a growing electrified vehicle fleet. Instead, it celebrates Ontario’s existing grid as “94% emissions-free”, and “one of the cleanest electricity grids in the world.” Manufacturers will be free to sign their own private renewables contracts, the strategy says. But the conversation so far sidesteps continuing controversy over the province’s use of gas-fired power plants to meet peak electricity needs, after more than 30 municipalities passed resolutions demanding a gas plant ban.
Meanwhile, EV owners may one day be able to use their vehicle batteries to provide emergency power during blackouts, or to sell energy back to the grid when the price is high, the Star writes. Ontario’s Independent Electricity System Operator is supporting three pilot smart grid projects with community and corporate partners.
The projects point toward greater recognition o EVs, photovoltaics, and other forms of local generation as “distributed energy resources” that can be mobilized to increase grid resilience and reduce system costs. One pilot project will explore use of technology and financial incentives for EV owners to avoid charging their vehicles to sell back to the grids at others.
With explosive growth in EVs just over the horizon, “we can see the tsunami now,” said local utility executive Neetika Sathe in Guelph, Ontario. Cost parity between electric and internal combustion vehicles is only four to five years out, she added, so “now it’s not a question of if, it’s a question of when.”
Technologies for bi-directional charging are not yet cost-effective, but should play a major role in future, she Sathe added.