QUEST Canada appreciates the…

QUEST Canada appreciates the opportunity to provide feedback on the development of Ontario's Natural Gas Policy Statement. As a national organization dedicated to advancing Smart Energy Communities, QUEST Canada advocates for integrated community energy planning that prioritizes local solutions, including renewable energy, energy storage, and thermal solutions.

Ontario's energy future must transition from top-down, utility-driven Integrated Energy Resource Planning (IERP) to holistic, community-centered Integrated Energy System Planning (IESP). This foundational shift is essential for creating a resilient, inclusive, and sustainable energy future for Ontarians, a need further emphasized in the Climate Institute's Heat Exchange research, which highlights the critical role of integrated heat planning in achieving decarbonization goals.

Germany's recent Heat Planning Act mandates municipalities to develop comprehensive heat plans to decarbonize their heating sectors by 2045. Municipalities with populations over 100,000 must submit their plans by June 30, 2026, while smaller municipalities have until June 30, 2028. This structured approach ensures that local priorities are integrated into energy planning, providing a model Ontario could adopt to guide the evolution of its natural gas and broader energy systems. Denmark's widespread use of district energy systems and the Netherlands' municipal-led phase-out offer further examples of successful community-driven energy transitions.

Overall our submission stresses the importance of prioritizing local energy solutions that are aligned with community goals as a critical element in creating a resilient, inclusive and sustainable energy future for Ontarians.

Response to consultation questions
1. Principles for OEB Natural Gas Connection Policies
The following principles should guide Ontario Energy Board (OEB) policies:
- Community-Centered Planning: Mandate integrated community energy planning (similar to Germany's Heat Planning Act) to assess the sustainability and long-term viability of new natural gas connections.
- Lifecycle Emissions Assessment: Incorporate full lifecycle GHG emissions assessments for all energy infrastructure projects, prioritizing solutions that contribute to Ontario's emissions reduction targets.
- Equitable Access to Clean Energy: Ensure policies support equitable access to affordable, clean energy solutions, particularly for rural and underserved communities.
- Future-Proofing Infrastructure: Require that new infrastructure investments are adaptable for integration with low-carbon technologies, such as district energy systems and renewable gas blends.

2. Role of Natural Gas in Residential and Small Commercial Applications
Natural gas should serve a limited, transitional role in supporting energy affordability and customer choice. Ontario should:
- Accelerate Transition to Low-Carbon Thermal Energy: Implement policies and financial incentives to support the shift from fossil natural gas to diverse low-carbon thermal energy solutions, including heat pumps, district energy networks, and systems that harness renewable and waste heat sources, such as combined heat and power (CHP).
- Scale Up Renewable Natural Gas (RNG): Mandate a gradual increase in RNG blending into the natural gas supply to lower carbon intensity.

3. Role of Natural Gas in Industrial and Agricultural Sectors
Natural gas can play a targeted, transitional role in hard-to-electrify industrial and agricultural applications by:
- Fostering Hydrogen Adoption: Develop regional hydrogen hubs, similar to Germany's Hydrogen Strategy, to replace natural gas in high-heat industrial processes.
- Supporting Carbon Capture and Storage (CCS): Incentivize CCS deployment for industries where fuel-switching is not yet viable.
- Expanding Waste-to-Energy Systems: Encourage bioenergy solutions utilizing agricultural and industrial waste streams to produce biogas and RNG.

4. Government's Role in Natural Gas System Expansion
The government should adopt a targeted, strategic approach to natural gas expansion:
- Integrate with Community Energy Plans: Expansion should only occur where it aligns with integrated community energy planning outcomes, similar to Germany's heat planning model.
- Advance District Energy and Microgrids: Prioritize funding for decentralized energy systems that reduce reliance on centralized natural gas infrastructure.
- Implement Transition Pathways: Require clear decarbonization roadmaps for any expansion projects, ensuring alignment with long-term emissions reduction targets.
- Prioritize Industrial Sector: Focus on how the natural gas system together with renewable natural gas and hydrogen can contribute to achieving industrial sector emissions reduction goals.

5. Streamlining Approvals for Expansion Projects
Streamlining approvals should be conditional and aligned with sustainability goals:
- Prioritize Sustainable Projects: Expedite approval for projects that demonstrate alignment with community energy plans and include clear decarbonization pathways.
- Comprehensive Environmental Reviews: Maintain rigorous environmental assessments for all projects, ensuring long-term environmental and economic sustainability.
- Transparent Community Engagement: Require meaningful community consultation as part of the approval process.

6. Role of Natural Gas in Power System Security and Resiliency
Natural gas should play a transitional, backup role as Ontario transitions to a resilient energy system:
- Diversify Grid Resources: Expand energy storage, renewable generation, and demand response programs to reduce reliance on natural gas.
- Develop Resilient Microgrids: Invest in community microgrids that provide localized, renewable energy solutions for energy security and energy sovereignty for Indigenous communities.
- Flexible Peaking Capacity: Utilize biogas and hydrogen-ready generation as cleaner, flexible peaking resources.

7. Role of Natural Gas in Offsetting Higher GHG-Emitting Fuels
Natural gas can serve a transitional role in offsetting higher-emitting fuels by:
- Accelerating RNG and Hydrogen Integration: Set mandatory blending targets for RNG and low-carbon hydrogen.
- Phased Transition Plans: Implement clear phase-out timelines for fossil natural gas in favour of renewable alternatives.
- Enhancing Efficiency: Continue to invest in energy efficiency programs that reduce overall gas demand.

8. Opportunities for Emission Reduction in the Natural Gas System
Opportunities:
- Mandated Thermal Energy Planning: Implement municipal heat planning, similar to Germany, to optimize local energy resource use.
- Support Clean Fuel Innovation: Expand funding for RNG, hydrogen, and waste-to-energy pilot projects.
- Boost Energy Efficiency: Strengthen policies for building retrofits and industrial efficiency improvements.

Conclusion
In conclusion, Ontario’s transition to a resilient, inclusive, and sustainable energy future requires a strategic shift toward Integrated Energy System Planning (IESP) that empowers communities and prioritizes local solutions.

Ontario should adopt forward-thinking transitional natural gas policies that balance economic growth with environmental responsibility and community goals by fostering trust and social license through early and continuous engagement.

QUEST Canada remains committed to supporting Ontario’s efforts to modernize its energy system through community-driven planning, equitable access to clean energy, and future-proof infrastructure. Through collaborative action and adaptive policy frameworks, Ontario can build an affordable and sustainable energy system that benefits all Ontarians.