SUBJECT: Environmental…

SUBJECT: Environmental Registry Posting - IESO Pathways to Decarbonization Study
ERO 019-6647

Thank you for the opportunity to provide input and advice on the Environmental Registry posting regarding the IESO’s Pathways to Decarbonization Report (P2D). By way of introduction, Hatch is a global, employee-owned engineering, project delivery and professional services firm headquartered in Mississauga, Ontario that serves the energy, mining and metals, and infrastructure sectors. Hatch will celebrate 100 years in the hydroelectricity industry in 2024. As such, we are pleased to see specific reference in the posting to Ontario Power Generation’s “Northern Ontario Hydroelectric Opportunities” Report (NOHO). In our view, taken together, these reports and the government’s policy response can and should provide the basis for strategic and sustained investment in realizing the province’s waterpower potential in the immediate, near and long term.
Our comments on the posting are as follows:
1. Realizing the potential of new hydroelectric generation in Ontario.
Hatch fully supports the development of new hydroelectric generation in Ontario by private, Indigenous, municipal and government owned developers as well as partnerships between the range of owners. This range and diversity of ownership is already the case for Ontario’s 224 existing hydroelectric facilities and is a core strength of the industry in the province. Ontario’s heritage hydroelectric fleet moderates electricity prices today and the planned and predictable addition of new hydro (expansions, upgrades, retrofits and greenfield) will have the same effect for decades to come.
Importantly, new investment in “Made in Ontario” hydroelectricity – already the backbone of system reliability – is investment that stays in communities, regions and the province. An estimated seventy five percent (75%) of investment in new hydro and ninety percent (90%) of investment in sustaining existing assets remains in Ontario.
2. Recognizing the imperative of Indigenous and Community participation.
It is our expectation that, particularly for new northern hydro development, Indigenous and other communities will be proponents of or partners in new hydroelectric projects. While “early” engagement is certainly expected, just as important is “ongoing” engagement as a project moves from a high-level concept to the planning and potential development stages. It is insufficient to limit engagement to only the early stages of a potential project.
Hydroelectric development can create lasting economic and social benefits to Indigenous communities and enable other significant regional economic benefits. Though every community has unique needs and perspectives on specific projects, the public and communities are generally supportive of hydroelectric development, provided it is done responsibly, there is meaningful, early participation, and community benefits that further economic and social progress.

3. Beginning work now on planning and siting for new waterpower facilities.
Based on our experience, we strongly agree with the P2D recommendations that “Sector partners should begin planning and siting work to identify potential new hydroelectric projects”, and “Preliminary work should begin now so that options are available for the future.” In addition to early engagement, per above, this will require policy alignment and capacity across provincial government agencies with regulatory responsibilities relevant to predevelopment, environmental assessment and permitting. In the case of hydroelectricity, the Ministries of Natural Resources and Forestry and the Ministry of Environment and Parks are of particular importance. Similarly, procurement mechanisms from the IESO must be designed to support long lead-time, long lifespan assets.
4. Taking a planned and measured approach to reduce costs.
Experience suggests that a planned and predictable cadenced approach to predevelopment, procurement and permitting that begins now and is implemented over a period of a decade or more will best ensure a cost-effective build out of hydroelectric resources. Ontario has experienced the “boom and bust” approach and witnessed its negative effects on prices and on the loss of expertise and skills in the system. There is a need now to re-establish and sustain the capacity of the industry, partners, and communities to reduce costs over time.
5. Climate Resilience and Environmental Stewardship
As we face mounting challenges due to climate change, it is critical to invest in resilient and sustainable energy sources. Hydroelectricity, as a renewable and clean energy source, is a key player in this effort. When developed responsibly, hydroelectric projects have the potential to deliver significant greenhouse gas emission reductions while maintaining a high standard of environmental stewardship.
6. Innovation and Efficiency
The hydroelectric sector has an incredible opportunity to leverage innovative technologies and practices to optimize generation, improve efficiency, and reduce environmental impacts. From advanced turbine designs to digital solutions for operation and maintenance, embracing innovation will be key to the sector's future success.
7. Energy Security and Independence
Hydroelectric power presents a path towards enhanced energy security and independence for Ontario. It is not subject to price volatility or supply disruptions, making it a reliable and stable energy source. By leveraging our local water resources, we can diversify our energy mix and ensure a secure energy future for Ontario.
8. Long-Term Affordability
Despite the higher initial costs, hydroelectric plants offer competitive electricity rates over their long lifespan. Their low operating and maintenance costs coupled with the lack of fuel expenses mean that the overall costs can become very competitive over time. This affordability over the long term provides significant economic benefits.
9. Multifaceted Value
Hydroelectric facilities often extend their utility beyond power generation. They frequently provide additional benefits like water supply, irrigation, and recreational opportunities. These ancillary benefits significantly enhance their societal value and further strengthen the case for investing in hydroelectric power.
10. Economic Prosperity and Job Creation
The construction of hydroelectric projects offers much more than just power generation. It fuels economic growth and job creation across various sectors, including construction, engineering, and manufacturing. Moreover, the long-term operation and maintenance of these facilities can offer ongoing local employment opportunities. This dual advantage significantly strengthens the case for further investment in hydroelectricity.
Again, thank you for the opportunity to comment.
Sincerely;
Jim Sarvinis
Managing Director Power, Hatch