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Electricity Supply Projections Hinge on Transmission Upgrades Delays in Approvals Pose Cascading Risks
January, 2008
The following is an excerpt from the Independent Electricity System Operator's December 2007 update on electricity system reliability in the longer term - Editor.
Ontario's longer-term reliability picture is positive. Generation, transmission and demand-side initiatives necessary to maintain future reliability have been identified and address the areas of concern highlighted by Independent Electricity System Operator (IESO) in previous issues of the Ontario Reliability Outlook. Going forward, the focus will need to shift to ensuring that these projects are implemented in time to meet needs, as well as addressing the integration and operational challenges of a changing generation mix.
Delays to the scheduled in-service dates for Phase One of the Goreway Generating Station in the Greater Toronto Area and unplanned outages at the Pickering Nuclear Station resulted in more than 1,500 megawatts (MW) of supply being unavailable over the summer of 2007. Despite this, there was no major disruption in service as the IESO continued to reliably operate the power system with strong performances from generation and transmission facilities, increased demand management efforts and more moderate weather.
NEW SUPPLY
Almost 4,000 MW of new gas-fired supply is expected to come into service over the next three years. This includes more than 1,000 MW at the Greenfield Energy Centre near Sarnia, 540 MW from the Portlands Energy Centre in Toronto, 860 MW from the Sithe Gorway facility in Brampton and 600 MW from the Halton Hills Generating Station northeast of Milton. Approximately 630 MW of grid-connected wind power is also expected to come into service before the end of 2008.
Four hundred and seventy five megawatts of wind resources are currently installed in the province and wind power is expected to take on an increasingly significant presence in Ontario's supply mix over the next decade. This could present future operating challenges given the intermittent nature of wind and the fact that the highest levels of wind output do not often correlate with demand peaks.
Since the publication of the last Ontario Reliability Outlook, the IESO's Wind Integration Standing Committee has developed recommendations and implemented decisions on operational and forecasting issues aimed at reducing barriers to the successful integration of wind. Through collaboration, the IESO anticipates that wind-related issues will be resolved in a timely manner.
OPERABILITY
The IESO previously identified operability as the key parameter for future supply mix. Since that time, the OPA has submitted the Integrated Power System Plan (IPSP) to the Ontario Energy Board (OEB) for approval.
Ontario's future supply includes increased amounts of less flexible generation - resources that cannot as easily be ramped up to meet increasing load, or reduced as demand drops off. Flexibility is particularly important in the morning hours when significant increases in demand occur and in the late evening hours when demand quickly drops off.
In addition to wind and solar generation, resources include new and refurbished nuclear, co-generation and combined cycle gas generators that have high minimum loading points. The IESO discussed operability matters with the OPA throughout the preparation of the IPSP.
Following the publication of that plan, the IESO is undertaking an operability review, simulating future operating conditions under the proposed supply portfolio to assess whether there is enough operating flexibility to meet the ever-changing demand for electricity and continue to operate the electricity system reliability. The IESO will release the findings of the study during the first part of 2008.
TRANSMISSION
Timely implementation of proposed transmission facilities remains a key component to addressing future reliability needs and a major risk to the successful implementation of the IPSP. Over the next decade transmission enhancements, some of which are major and extensive, must be implemented in:
( Southwestern Ontario to deliver additional nuclear and wind supply from the Bruce area
( Northern Ontario (including the north-south transmission corridor) to enable the expansion of hydroelectric capability and wind projects
( The GTA in order to improve reliability of supply to Toronto
( York Region, Kitchener-Waterloo-Cambridge-Guelph and Windsor-Essex to enhance the adequacy of local load supply.
( South Central Ontario, to reconfigure the Cherrywood and Claireville stations to improve reliability at these critical facilities.
The development of new transmission facilities in southwestern Ontario remains a high priority. These new facilities are needed to deliver the planned and future increases for the expected wind developments in that area and the expanded capacity of the Bruce nuclear complex in the short term, but the new 500 kilovolt (kV) Bruce to Milton line proposed by Hydro One is needed to deliver the full capability of the Bruce refurbishment and the expected new wind resources.
Until new transmission facilities are operable in the identified areas, the IESO will need to operate existing facilities near their maximum capabilities, with little margin for unexpected events and requiring complex arrangements and procedures to do routine maintenance on critical facilities. A number of local transmission initiatives are also needed to maintain local reliability in areas throughout Ontario.
Transmission enhancements are required to enable the replacement of the coal-fired stations with cleaner resources.
CONSERVATION AND DEMAND MANAGEMENT
Addressing Ontario's supply challenge over the next 20 years will not only require new generation and transmission facilities, but also achieving substantial load reduction through electricity conservation. The Ontario government has set aggressive load reduction targets for the near future, targeting a 2,700 MW reduction in peak demand by 2010. While conservation measures are a cleaner way to help address Ontario's supply needs, achieving this target may require fundamental changes in the way electricity is used.
For residential and small business consumers, Ontario's Smart Metering Initiative can help enhance the reliability of the power system by providing customers with the tools they need to help shift their electricity use to off-peak hours. This shift in use would reduce the need for expensive forms of generation to meet demand. The initiative calls for smart meters to be installed in homes and small businesses throughout the province by 2010.
As conservation and demand response measures become more prominent, the IESO will closely monitor their contribution during the peak demand in order to reliably and efficiently schedule resources and operate the system.
APPROVALS PROCESS
The filing of the IPSP with the OEB represented a major milestone in the program to address Ontario's supply needs over the next two decades. However, as has been identified in previous Outlooks, the IESO remains concerned about uncertainty around the length of the approvals process, which presents risks to the timely implementation of the planned generation and transmission projects.
Substantial work is underway by a number of stakeholders, including the provincial government, to address the inefficiencies in the current approval process. Given the risks to reliability, there is an urgent need to implement a comprehensive strategy for streamlining the relevant regulatory approvals process.
Approvals process improvements should ensure appropriate public review of infrastructure proposals, while reducing the redundancy of the existing processes and ensuring reasonable and defined timelines to allow the projects to be implemented when needed.
Proponents of new generation and transmission projects continue to express concerns about potential delays created by the approvals process that could delay successful implementation of the necessary infrastructure changes needed to ensure reliability. Earlier in 2007, the Ontario Waterpower Association (OWA) undertook a benchmarking study focused on requirements and timelines for new waterpower developments. Among the findings:
( The existing process is not well documented, leaving project proponents unsure of what permits are required and by whom.
( Working with regulatory agencies often entails long waits, during which time proponents are poorly informed about the status of the project.
( Multiple government and regulatory agencies administer permits and specific requirements are occasionally contradictory.
( Regulatory agencies often have located fields of vision and influence, which results in a failure to identify "big picture" opportunities for streamlining.
( Requirements for environmental assessments and supporting studies are not identified in advance but instead, build throughout the approvals process.
( There is no fixed and timely endpoint to the public consultation process.
Pointing to the fact that construction of a new hydroelectric facility can require dozens of separate permits, the study suggests that proponents could get new projects off the ground more quickly while still providing a venue for stakeholder concerns if there were an integrated and time-bound approach to regulations and approvals. The OWA has also recently filed a Class Environmental Assessment for waterpower projects designed, in part, to help achieve this objective.
The complete text of the Ontario Reliability Outlook can be found at www.ieso.ca.
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