OSPE Submission to the MOEE…

OSPE Submission to the MOEE Integrated Energy Resource Plan Consultation - ERO 019-9285

The Ontario Society of Professional Engineers (OSPE) plays a vital role as the advocacy body and voice of the engineering profession in Ontario. With a current membership of over 85,000 professional engineers, 250,000 engineering graduates, 6,600 engineering post-graduate students and 37,000 engineering undergraduate students, OSPE serves as a unifying force for the engineering community in the province.
Historically, OSPE has advocated on behalf of the engineering profession for effective energy policies at all levels of government to ensure a safe, reliable, affordable, sustainable, and abundant energy supply for businesses and residents.
An integrated approach to energy resource planning is something OSPE advocates for and is encouraged to see the Ministry taking action to produce the first Integrated Energy Resource Plan for Ontario. We also welcome the opportunity to submit comments, and recommendations to be considered in the development of the plan.
For this submission as main references we have reviewed the EETP Report of December 2023 – “Ontario’s Clean Energy Opportunity” the IESO “Annual Planning Outlook” of March 2024, the MOEE Report of October 2024 “Ontario’s Affordable Energy Future: The Pressing Case for More Power”, and the procurement direction provided by the Ministry to the IESO in their letter of August 28, 2024.

Electricity Planning and Affordability

The August 28 directive refers to the procurement of 5000 MW of new generation capacity. The IESO are planning to achieve this through their competitive procurement process by issuing Request for Proposals (RFP) in 3 waves. Long Term Procurement, LTP2, for 2000 MW for in service by 2030, LTP3 for 1500 MW for in-service by 2032 and LTP4 for 1500MW for in service by 2034. Clean renewable generation options are eligible for these procurements, which includes wind, solar PV, hydro-electric, and biomass. Procurements LTP2, 3 and 4 permit proponents to submit hybrid projects comprising renewable generation and associated energy storage providing firm capacity in addition to energy. OSPE encourages this alternative.

The evaluation process that the IESO will be using to compare proposals is described in their report of December 2023 “Evaluating Procurement Options for Supply Adequacy
(Report available at: https://www.ieso.ca/Sector-Participants/Resource-Acquisition-and-Contra…)

It is expected that the IESO will be using a Levelized Cost of Energy (LCOE) in the economic evaluation of each generation proposal. The IESO are also aware that each option incurs a different amount of additional costs for their successful integration to the grid, such as increased backup generation, voltage and frequency control support, transmission connections and network impacts. In the case of variable resources such as wind and solar PV there may be a need for additional energy storage resources to ensure the reliability, operability and resiliency of the grid. The IESO are pursuing separate competitive procurement processes for adequate short term (battery) and longer term (pumped hydro) resources.

Costs and economic evaluations along with other considerations such as location and timing are adequate for the comparison of proposals. However, the affordability of options and plans must include their impact on retail costs to customers. The OEB are responsible for the assessment and approval of electricity rates and thus there is the need for cooperation and coordination between the IESO and the OEB to evaluate the impacts on rates.

OSPE Recommendation 1: It is recommended that the OEB and The IESO coordinate to assess the impact of integrated plans on the resultant electricity rates to customers.
This can form part of Recommendation 16 of the EETP Report
“Developing a formal coordination framework involving the Ministry of Energy, OEB, IESO, and other stakeholders to enhance planning and coordination at various energy levels.”

Thermal Energy Technology

The most cost-effective way to provide heat energy to consumers in Ontario, particularly in densely populated areas, remains unclear. While IESO’s 2023 Pathways to Decarbonization report assumes heat pumps for electrification of heating, newer district heating and thermal storage technologies, already deployed in Europe and Asia, may offer more cost-effective solutions. These systems can also recover waste heat from industrial processes, lowering the overall energy demand.

A byproduct at nuclear generating stations is the immense quantity of thermal energy which in most cases goes to waste. In our review of the energy planning reports of the MOEE, the IESO and the OEB, we cannot find any mention of this waste energy and its potential use as an alternative heating resource in the residential, commercial and industry sectors.

Because Ontario’s energy plans include a significant amount of nuclear capacity, there is an opportunity to provide high temperature heat for industry and commercial consumers from the nuclear plant’s main steam system. The government should consider policies that allow a nuclear operator to sell not only electricity but also high and low temperature heat to consumers.

It makes good sense that thermal energy technologies be included as a part of any integrated energy resource plan. There are feasible, practical, and competitive situations where thermal energy can be used such as in district heating systems and for thermal energy storage. For example, when planning new advanced nuclear SMRs located close to a high heating demand need, an integrated approach should be explored to provide both electricity and heat from the SMR.

Additionally, OSPE, through our Energy Task Force, is monitoring the work of the Boltzmann Institute and the OECD’s Nuclear Energy Agency (NEA) on using heat from nuclear CHP (combined heat and power) plants to supply thermal networks. Given the Province’s commitment to expanding nuclear capacity, this approach could provide an innovative and efficient solution.

The early results of modelling work by the Boltzmann Institute suggests the electrification of heating demand using air sourced heat pumps will result in a drop in the operating capacity factor of installed generation capacity. This has a major impact on electricity rates in the future. Options need to be evaluated to find the optimum mix of various heating technologies so that retail electricity rates do not again begin a rapid and significant increase like we saw in the 2009 to 2017 period.

OSPE Recommendation 2: It is essential for the IESO to remain flexible and keep monitoring and exploring the potential of thermal energy opportunities and evolving technologies to avoid over-procuring generation capacity in inappropriate locations. This includes its integration into Ontario’s energy plan to minimize the risk of selecting pathways that could lead to increased costs for consumers in the long term. Thermal energy can be a small but competitive contributor to meeting heating energy and storage demands.

Artificial Intelligence (AI)

AI applications are becoming increasingly common in a wide variety of industries, including the energy and energy transition sectors. A recent Whitepaper on the “State of AI in Energy and Utilities” was published in T&D World.
https://www.tdworld.com/resources/white-papers/whitepaper/55241382/stat…

Key findings from the study reveal that AI increasingly is seen as a pivotal technology for overcoming industry challenges, such as transitioning to renewable energy, data integration, and addressing aging infrastructure.

AI has the potential to be applied to many aspects of energy systems including planning, design, operations, asset management, and financing to improve efficiency, performance, economics/affordability, reliability, resiliency cyber security, and sustainability.

OSPE Recommendation 3: The MOEE, IESO and OEB should monitor the development and application of AI in the energy industry and encourage industry stakeholders to explore the potential for the use of AI to improve the efficiency, performance, economics/affordability, reliability, resiliency, cyber security, and sustainability of the integrated energy system in Ontario.

EETP Recommendations

While OSPE endorses most of the Recommendations in the EETP Report, we would like to strongly endorse those aimed at enhancing the coordination, cooperation, and transparency among the MOEE, IESO, OEB, LDCs (electric, gas and emerging district heating companies) and consultations with key stakeholders. This includes Recommendations 2, 8, 9, and 16.

Recommendation 2: Convening an internal clean energy economy planning body.

Recommendation 8: Establishing an external Energy Transition Advisory Council to provide ongoing independent advice on Ontario’s energy transition and integration.

Recommendation 9: Ongoing funding for independent energy pathways studies with transparency on costs and stakeholder engagement.

Recommendation 16: Developing a formal coordination framework involving the Ministry of Energy, OEB, IESO, and other stakeholders to enhance planning and coordination among various energy supplies.

Co-dependence of Gas and Electricity

Integrated energy resource planning must recognize the importance of having a reliable supply of either natural gas or renewable natural gas to the gas turbine generation plants. This co-dependence is critical to reliably meeting peak winter and summer capacity demands. Particularly during extreme cold-spell and hot-spell weather conditions. This is essential to ensure the reliability and resiliency of the power grid and safety of residents. A vivid example of the need for this was the Uri storm event with severe cold-spell conditions in Texas in February of the 2021 winter. The consequences included a considerable number of deaths due to the unavailability of electricity for direct heating and for the operation of gas furnaces.

https://www.texastribune.org/2022/02/15/texas-power-grid-winter-storm-2…

OSPE Recommendation 4: The IESO to ensure that the co-dependence of the Gas and Electricity supply systems are included in their studies.

OSPE appreciates this opportunity to participate in the development of the first integrated energy resource plan for Ontario and remain available for meetings or consultations with the MOEE, IESO and OEB.