Ontario Climate and Energy Policy

Ontario's Emission Reduction Challenge

Since the global community of nations emerged from the COP21 Paris Climate Conference and subsequently ratified the Paris Accord at COP22 (Nov 2016), the urgency to combat climate change is now fully acknowledged by all key actors. To reverse the impacts of global warming, deep decarbonization of the global economy is now a priority for government action. Electrification across all economic sectors is considered a critical enabler for transitioning Ontario to a low carbon energy future.

In 2016, Strategic Policy Economics undertook a study entitled “Ontario’s Emissions and the Long-Term Energy Plan”. The study was intended to inform Ontario’s Long-Term Energy Plan (LTEP) consultation with background analyses that relate to the province’s emission reduction targets, the costs of emission reducing technologies, the carbon price within Ontario’s Cap and Trade (C&T) program, and the supply mix choices being developed for the next LTEP.

This study was inspired by two factors: several key government leaders urged industry to come forward with integrated solutions to Ontario’s climate and energy challenge; and (2) there was a significant gap in available information that could tie the government’s environment policies to energy planning.

Phase 1 of the study “Understanding the Challenge” showed that the current planning frameworks would lead to an increase of $27B/year in the cost of how Ontarians use energy.

The LTEP’s role is to provide for the energy infrastructure that will facilitate the transition to a low carbon economy and is critical to lowering costs and meeting emission targets in a timely manner. The study recommended that the LTEP should seek out the lowest cost emission free energy solutions that reflect the integrated costs of generation, transmission, and distribution.

Phase 2 of the study, “Meeting the Challenge” laid out an Smart Energy supply mix option based on four electricity system design paradigm shifts identified through research and summarizes their associated cost, implementation, and economic considerations.

A Smart Energy option was developed to meet three key objectives: 

o  Reduce dramatically the estimated annual cost of meeting Ontario's 2030 emission reduction targets;
o  Support the timely achievement of Ontario’s emission targets and minimize the need to purchase emission credit allowances from other jurisdictions; and,
o  Ensure Ontario’s competitive advantage through strategic investments in “made-in-Ontario” solutions that achieve the province’s emission reduction targets and yield the highest payback for Ontarians.

More details are available at www.poweringontario.ca.
How Ontario's Stakeholders Are Reacting to the Findings

Council of the Great Lakes Region
Ontario’s Long-term Energy Plan: Understanding Carbon Emissions, the Role of Nuclear, and Electricity Trade with Quebec

QP Briefing
• Purchase: Ontario's Long-term Energy Plan at odds with climate goals
• Purchase: Hydro power vs. nuclear power

Energy stakeholders to the Wynne government: the new plan should focus on costs

Globe and Mail OpEd
Tango between climate change and energy policy

Other Publications
• CCRE Commentary, June 2017, Ontario's High-Cost Wind Millstone
• CCRE Commentary, April 2017, Buying Electricity from Quebec: The Case Against New Intertie Capacity
• CCRE Commentary, December 2014, Rethinking Ontario's Long-Term Energy Plan

• Council for Clean and Reliable Energy: Energy Leaders Roundtable, April 2017
Ontario Network for Sustainable Energy Policy, April 2017
Ontario Climate Consortium Symposium, May 2017