Ontario’s Independent Electricity System Operator (IESO) is asking for more time and flexibility to implement the federal government’s proposed Clean Electricity Regulations (CER), in a submission that analysts say downplays the province’s renewable energy potential but is still a model for the way other jurisdictions could respond to the new rules.

“The IESO is aware that the single most important contribution the electricity system can make towards broader decarbonization efforts is to support the electrification of key sectors, such as transportation and industry, by remaining safe, reliable, and cost effective,” President and CEO Lesley Gallinger wrote earlier this month, in a letter to federal Environment and Climate Minister Steven Guilbeault. But the grid operator maintains Ontario will still need power from natural gas after 2035, the deadline in the draft regulations for phasing out electricity from unabated fossil fuel plants.

Without “suitable alternatives to replace natural gas generation and build transmission infrastructure at the scale required,” Gallinger added, “the CER as drafted is unachievable in Ontario by 2035 without putting at risk the reliability of the electricity system, electrification of the broader economy, and economic growth.”

The IESO asks Ottawa to:

• Extend the permitted operating lifespan of gas plants built in the late 2000s from 20 to 30 years and allow them to operate beyond 2035;

• Allow those plants to operate for more hours each year to keep the grid reliable;

• Change the way emergency power requirements are met to confirm with North American grid reliability standards.

The 15-page letter traces Ontario’s recent efforts to procure new renewable energy supplies and battery storage, while tapping into distributed energy resources and planning for 8,200 megawatts of nuclear generation, including 1,200 MW from small modular reactors slated to go into service between 2032 and 2039. “The IESO is also investing in hydrogen and low-carbon fuels to determine how they can provide flexibility,” Gallinger wrote. “On the demand side, incentives through Save-on-Energy conservation programs have doubled, with a focus on developing programs to promote load flexibility.”

But the IESO still projects that Ontario will need 8,000 MW of gas-fired generation in 2035, down from 10,500 MW today. “The CER, as drafted, will severely restrict the ability of the natural gas generating fleet to contribute to these reliability needs, creating a significant capacity deficit for Ontario’s system,” the letter stated. “Currently, there are no like-for-like replacements, at scale and with similar operating flexibility, for natural gas generation on the system.”

Evan Pivnick, clean energy program manager at Clean Energy Canada, identified gaps in the IESO position, but gave the grid operator and the Ontario government credit for engaging constructively with the federal consultation on the draft CER.

“This document is exactly what we would hope for in a discussion of how we navigate a very difficult thing like the energy transition,” he told The Energy Mix. “It stands in contrast to what we’ve seen from some other jurisdictions” that have simply written off a clean electricity grid as impossible. [Then mounted a factually challenged ad campaign claiming that a net-zero grid would leave Canadians freezing in the dark.—Ed.]

“There are going to be all sorts of agreements and disagreements when it comes to Ontario’s pathway,” Pivnick added. “What we need to see is a pathway that moves as soon as possible to seeing natural gas as a resource of last resort,” with the CER working in concert with policies like carbon pricing to shift the economics of electricity production away from fossil fuels.

He added that Clean Energy Canada issued its own call for flexibility on the CER, in a submission prepared jointly with the Canadian Climate Institute. “But that’s in part because we see the CER as one of a series of tools that are needed to achieve the 2035 target. It’s a mistake to think of the CER as a silver bullet or design it that way,” particularly given the stringency of some of its provisions.

At the same time, Pivnick said no Canadian jurisdiction has “done a good enough job of properly modelling some of the solutions like distributed energy resources (DERs), demand management solutions, and some of the actual structural changes,” to see how much added reliability they can bring to the grid. The IESO’s response to the Clean Electricity Regulations “really focuses on this notion of a ‘like for like’ replacement,” with some other technology on the scale of a big gas plant stepping up to replace it. The alternative is to replace the grid services that gas currently provides, like the ability to ramp up on short notice and dispatch reliably, and to “make sure we still have those same services,” since “there’s no silver bullet. It’s a suite of technologies and approaches.”

Mark Winfield, co-chair of York University’s Sustainable Energy Initiative, agreed that the IESO missed an opportunity to focus on alternatives to gas.

“The obvious question that is out there is, does Ontario really need to expand and extend the size and role of its natural gas generation fleet, given the range of the alternatives that have been identified and modelled as being available to it—efficiency and demand management, DERs, renewables,” he wrote in an email. “The situation again highlights the need for a meaningful policy framework around climate change in Ontario and a rational, accountable, transparent, and evidence-based approach to energy planning.”

He recalled that the IESO’s own study of the province’s potential for distributed solar, small hydro, and energy storage, produced last year by Montreal-based Dunsky Energy + Climate Advisors, concluded that Ontario could clear a looming electricity shortage without relying more on methane-heavy gas plants, or extending the operating life of the aging Pickering nuclear station outside Toronto.

Winfield noted that Ontario’s last energy efficiency potential study was published in 2019, and the update is overdue. Gallinger didn’t refer to that study in her letter to Guilbeault. But she acknowledged that “electricity system plans that look out over a decade will change” and encouraged Ottawa to review the CER to ensure that it “reflects the latest information, including the state of non-emitting technologies.”

The IESO’s release of Gallinger’s letter coincided with a Toronto Star op ed by Dr. Mili Roy, Ontario co-chair of the Canadian Association of Physicians for the Environment, warning that gas plant expansions today will lock in “unnecessary risks to public health, infrastructure, the economy, and affordability” for generations.

“The health harms and resulting economic costs of gas-fired electricity are staggering,” Roy wrote. “The few studies specific to gas plant exposure suggest emergency room visits, asthma, pregnancy risks, disability, and premature deaths may all be increased.”

With other jurisdictions around the world “successfully combining energy conservation, storage, and safe, large-scale renewable energy transitions using solar, wind, and hydro,” she added, “Ontario risks being left behind, mired in declining public health and an obsolete economy dependent on volatile, spiking fossil fuel prices.”