AECL future hinges on Ontario deal

Electric power market crisis highlights grid reliability risks as coal and nuclear retire amid subsidies, mandates, and cheap natural gas; intermittent wind and solar raise blackout concerns, resilience costs, and pricing distortions across regulated markets.

Key Points

Reliability and cost risks as coal and nuclear retire; subsidies distort prices; intermittent renewables strain grid.

✅ Coal and nuclear retirements reduce baseload capacity

✅ Subsidies and mandates distort market pricing signals

✅ Intermittent renewables increase blackout and grid risk

Is anyone paying any attention to the crisis that is going on in our electric power markets?

Over the past six months at least four major nuclear power plants have been slated for shutdown, including the last one in operation in California. Meanwhile, dozens of coal plants have been shuttered as well — despite low prices and cleaner coal. Some of our major coal companies may go into bankruptcy.

This is a dangerous game we are playing here with our most valuable resource — outside of clean air and water. Traditionally, we've received almost half our electric power nationwide from coal and nuclear power, and for good reason. They are cheap sources of power and they are highly resilient and reliable.

The disruption to coal and nuclear power wouldn't be disturbing if this were happening as a result of market forces. That's only partially the case.

#google#

The amazing shale oil and gas revolution is providing Americans with cheap gas for home heating and power generation. Hooray. The price of natural gas has fallen by nearly two-thirds over the last decade and this has put enormous price pressure on other forms of power generation.

But this is not a free-market story of Schumpeterian creative destruction. If it were, then wind and solar power would have been shutdown years ago. They can't possibly compete on a level playing field with $3 natural gas.

In most markets solar and wind power survive purely because the states mandate that as much as 30 percent of residential and commercial power come from these sources. The utilities have to buy it regardless of price, even as electricity demand is flat in many regions. What a sweet deal. The California state legislature just mandated that every new home spend $10,000 on solar panels on the roof.

Well over $100 billion of subsidies to big wind and big solar were doled out over the last decade, and even with the avalanche of taxpayer subsidies and bailout funds many of these companies like Solyndra (which received $500 million in handouts) failed, underscoring why a green revolution hasn't materialized as promised.

These industries are not anywhere close to self sufficiency. In 2017 amid utility trends to watch the wind industry admitted that without a continuation of a multi-billion tax credit, the wind turbines would stop turning.

This combines with the left's war on coal through regulations that have destroyed coal plants in many areas. (Thank goodness for the exports of coal or the industry would be in much bigger trouble.)

Bottom line: Our power market is a Soviet central planner's dream come true and it is extinguishing our coal and nuclear industries.

Why should anyone care?

First, because government subsidies, regulations and mandates make electric power more expensive. Natural gas prices have fallen by two-thirds, but electric power costs have still risen in most areas — thanks to the renewable mandates.

More importantly, the electric power market isn't accurately pricing in the value of resilience and reliability. What is the value of making sure the lights don't go off? What is the cost to the economy and human health if we have rolling brownouts and blackouts because the aging U.S. grid doesn't have enough juice during peak demand.

Politicians, utilities and federal regulators are shortsightedly killing our coal and nuclear capacities without considering the risk of future energy shortages and power disruptions. Once a nuclear plant is shutdown, you can't just fire it back up again when you need it.

Wind and solar are notoriously unreliable. Most places where wind power is used, coal plants are needed to back up the system during peak energy use and when the wind isn't blowing.

The first choice to fix energy markets is to finally end the tangled web of layers and layers of taxpayer subsidies and mandates and let the market choose. Alas, that's nearly impossible given the political clout of big wind and solar.

The second best solution is for the regulators and utilities to take into account the grid reliability and safety of our energy. Would people be willing to pay a little more for their power to ensure against brownouts? I sure would. The cost of having too little energy far exceeds the cost of having too much.

A glass of water costs pennies, but if you're in a desert dying of thirst, that water may be worth thousands of dollars.

I'll admit I'm not sure what the best solution is to the power plant closures. But if we have major towns and cities in the country without electric power for stretches of time because of green energy fixation, Americans are going to be mighty angry and our economy will take a major hit.

When our manufacturers, schools, hospitals, the internet and iPhones shut down, we're not going to think wind and solar power are so chic.

If the lights start to go out five or 10 years from now, we will look back at what is happening today and wonder how we could have been so darn stupid.

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Ontario Peak Perks Program boosts energy efficiency with smart thermostats, demand response, and incentives, reducing peak demand, electricity costs, and emissions while supporting grid reliability and Save on Energy initiatives across Ontario businesses and homes.

Key Points

A demand response initiative offering incentives via smart thermostats to cut peak electricity use and lower costs

✅ $75 sign-up, $20 yearly enrollment incentive

✅ Up to 10 summer temperature events; opt-out anytime

✅ Expanded retrofits, greenhouse support, grid savings

The Ontario government is launching the new Peak Perks program to help families save money by conserving energy, building on bill support during COVID-19 initiatives as part of the government’s $342 million expansion of Ontario’s energy-efficiency programs that will reduce demands on the provincial grid. The government is also launching three new and enhanced programs for businesses, municipalities, and other institutions, including targeted support for greenhouse growers in Southwest Ontario.

“Our government is giving families more ways to lower their energy bills with new energy-efficiency programs like Peak Perks and ultra-low overnight rates available to consumers, which will provide families a $75 financial incentive this year in exchange for lowering their energy use at peak times during the summer,” said Todd Smith, Minister of Energy. “The new programs launched today will also help meet the province’s emerging electricity system needs by providing annual electricity savings equivalent to powering approximately 130,000 homes every year and, alongside electricity cost allocation discussions, reduce costs for consumers by over $650 million by 2025.”

The new Peak Perks program provides a financial incentive for residential customers who are willing to conserve energy and reduce their air conditioning at peak times and have an eligible smart thermostat connected to a central air conditioning system or heat pump unit. Participants will receive $75 for enrolling this year, as well as $20 for each year they stay enrolled in the program starting in 2024.

Residential customers can participate in Peak Perks by enrolling and giving their thermostat manufacturer secure access to their thermostat. Participants will be notified when one of the maximum 10 annual temperature change events occurs directly by their thermostat manufacturer on their mobile app and on their thermostat. Peak Perks has been designed to ensure participants are always in control and customers can opt-out of any temperature change event without impacting their incentive.

The Peak Perks program will be available starting in June. Interested customers can visit SaveOnEnergy.ca/PeakPerks today to sign-up for the program waitlist and receive an email notice with information on how to enroll.

In addition to the financial incentive provided by Peak Perks, reducing electricity use during peak demand hours in the summer months helps customers to lower their monthly electricity bills, and measures such as a temporary off-peak rate freeze have complemented these efforts, as these periods tend to be associated with the highest costs for power. Lowering demand during peak periods also allows the province to reduce electricity sector emissions, by reducing the need for electricity generation facilities that only run at times of peak demand such as natural gas.

Ontario has also launched three new and enhanced programs, including an expanded custom Retrofit program for business, municipalities and other institutions, and industrial electricity rate relief initiatives, targeted support for greenhouse growers in Southwest Ontario, as well enhancements to the existing Local Initiatives Program. The expanded Retrofit program alone will feature over $200 million in dedicated funding to support the new custom energy-efficiency retrofit project stream, that will cover up to 50 percent of the cost of approved projects.

These new and expanded energy-efficiency programs are expected to have a strong impact in Southwest Ontario, with regional peak demand savings of 225 megawatts (MW). This, together with the Ontario-Quebec energy swap agreement, will provide additional capacity for the region and support growing economic development. The overall savings from this energy-efficiency programming will result in an estimated three million tonnes of greenhouse gas emission reductions over its lifetime - the equivalent to taking more than 600,000 vehicles off the road for one year.

“Thanks to energy efficiency efforts over the past 15 years, demand for electricity is today about 12 per cent lower than it otherwise would be,” said Lesley Gallinger, President and CEO, of the Independent Electricity System Operator, Ontario’s grid operator and provider of Save on Energy programs to home and business consumers. “Conservation is a valuable and cost-effective resource that supports system reliability and helps drive economic development as we strive towards compliance with clean electricity regulations for a decarbonized electricity grid.”

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Australia Energy Policy Debate highlights IPCC warnings, Paris Agreement goals, coal phase-out, emissions reduction, renewables, gas, pumped hydro, storage, reliability, and investment certainty amid NEG uncertainty and federal-state tensions over targets.

Key Points

Debate over coal, emissions targets, and grid reliability, guided by IPCC science, Paris goals, and market reforms.

✅ IPCC urges rapid cuts and coal phase-out by 2050

✅ NEG's emissions pillar stalled; reliability obligation alive

✅ States, market operators push investment certainty and storage

The United Nation’s climate body, the Intergovernmental Panel on Climate Change, on Monday said radical emissions reduction across the world’s economies, including a phase-out of coal by 2050, was required to avoid the most devastating climate change impacts.

The Morrison government dismissed the findings. Treasurer Josh Frydenberg insisted this week that “coal is an important part of the energy mix”.

“If we were to take coal out of the system the lights would go out on the east coast of Australia overnight. It provides more than 60 per cent of our power," he said.

Ms Zibelman, whose organisation operates the nation’s largest gas and electricity markets, said if Australia was to make an orderly transition to low-emissions electricity generation, aligning with the sustainable electric planet vision, “then certainly we would keep the lights on”.

Ms Zibelman said coal assets should be maintained “as long as they are economically viable and we should have a plan to replace them with resources that are lowest cost”.

Those options comprised gas, renewables, pumped hydro and other energy storage, she told ABC radio, as New Zealand weighs electrification to replace fossil fuels.

Under the Paris treaty the government has pledged to lower emissions by 26 per cent by 2030, based on 2005 levels, even as national emissions rose 2% recently according to industry reports.

Labor would increase the goal to a 45 per cent cut - a policy Prime Minister Scott Morrison said last month would " shut down every coal-fired power station in the country and ... increase people’s power bill by about $1,400 on average for every single household”.

The federal government has scrapped its proposed National Energy Guarantee, which would have cut emissions in the electricity sector, but the reliability component of the plan may continue in some form.

The policy was being developed by the Energy Security Board. The group’s chairwoman Kerry Schott has expressed anger at its demise but on Thursday revealed the board was still working on the policy because “nobody told us to stop”.

Speaking at the Melbourne Institute's Outlook conference, she urged the government to revive the emissions reduction component of the plan to provide investment certainty, noting the IEA net-zero report on Canada shows electricity demand rises in decarbonisation.

Energy Minister Angus Taylor, an energy consultant before entering Parliament, on Thursday said the electricity sector would reduce emissions in line with the Paris deal without a mandated target.

Mr Taylor said only a “very brave state” would not support the policy’s reliability obligation.

The federal government has called a COAG energy council meeting for October 26 in Sydney to discuss electricity reliability.

It is understood Mr Taylor has not contacted Victoria, Queensland or the ACT since taking the portfolio, despite needing unanimous support from the states to progress the issue.

The Victorian government goes into caretaker mode on October 30 ahead of that state's election.

Victorian Energy Minister Lily D’Ambrosio said the federal government was “a rabble when it comes to energy policy, and we won’t be signing anything until after the election".

Speaking at the Melbourne Institute conference, prominent business leaders on Thursday bemoaned a lack of political leadership on energy policy and climate change, saying the only way forward appeared to be for companies to take action themselves, with some pointing to Canada's race to net-zero as a case study in the role of renewables.

Jayne Hrdlicka, chief executive of ASX-listed dairy and infant-formula company a2 Milk, said "we all have an obligation to do the very best job we can in managing our carbon footprint".

"We just need to get on doing what we can .. and then hope that policy will catch up. But we can’t wait," she said.

Ms Hrdlicka said the recent federal political turmoil had been frustrating "because if you invest in building relationships as most of us do in Canberra and then overnight they are all changed, you’re starting from scratch".

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Hydroelectric retrofits for unpowered dams leverage turbines to add renewable capacity, bolster grid reliability, and enable low-impact energy storage, supporting U.S. and Canada decarbonization goals with lower costs, minimal habitat disruption, and climate resilience.

Key Points

They add turbines to existing dams to make clean power, stabilize the grid, and offer low-impact storage at lower cost.

✅ Lower capex than new dams; minimal habitat disruption

✅ Adds firming and storage to support wind and solar

✅ New low-head turbines unlock more retrofit sites

As countries race to get their power grids off fossil fuels to fight climate change, there's a big push in the U.S. to upgrade dams built for purposes such as water management or navigation with a feature they never had before — hydroelectric turbines. 

And the strategy is being used in parts of Canada, too, with growing interest in hydropower from Canada supplying New York and New England.

The U.S. Energy Information Administration says only three per cent of 90,000 U.S. dams currently generate electricity. A 2012 report from the U.S. Department of Energy found that those dams have 12,000 megawatts (MW) of potential hydroelectric generation capacity. (According to the National Hydropower Association, 1 MW can power 750 to 1,000 homes. That means 12,000 MW should be able to power more than nine million homes.)

As of May 2019, there were projects planned to convert 32 unpowered dams to add 330 MW to the grid over the next several years.

One that was recently completed was the Red Rock Hydroelectric Project, a 60-year-old flood control dam on the Des Moines River in Iowa that was retrofitted in 2014 to generate 36.4 MW at normal reservoir levels, and up to 55 MW at high reservoir levels and flows. It started feeding power to the grid this spring, and is expected to generate enough annually to supply power to 18,000 homes.

It's an approach that advocates say can convert more of the grid from fossil fuels to clean energy, often with a lower cost and environmental impact than building new dams.

Hydroelectric facilities can also be used for energy storage, complementing intermittent clean energy sources such as wind and solar with pumped storage to help maintain a more reliable, resilient grid.

The Nature Conservancy and the World Wildlife Fund are two environmental groups that oppose new hydro dams because they can block fish migration, harm water quality, damage surrounding ecosystems and release methane and CO2, and in some regions, Western Canada drought has reduced hydropower output as reservoirs run low. But they say adding turbines to non-powered dams can be part of a shift toward low-impact hydro projects that can support expansion of solar and wind power.

Paul Norris, president of the Ontario Waterpower Association, said there's typically widespread community support for such projects in his province amid ongoing debate over whether Ontario is embracing clean power in its future plans. "Any time that you can better use existing assets, I think that's a good thing."

New turbine technology means water doesn't need to fall from as great a height to generate power, providing opportunities at sites that weren't commercially viable in the past, Norris said, with recent investments such as new turbines in Manitoba showing what is possible.

In Ontario, about 1,000 unpowered dams are owned by various levels of government. "With the appropriate policy framework, many of these assets have the potential to be retrofitted for small hydro," Norris wrote in a letter to Ontario's Independent Electricity System Operator this year as part of a discussion on small-scale local energy generation resources.

He told CBC that several such projects are already in operation, such as a 950 kW retrofit of the McLeod Dam at the Moira River in Belleville, Ont., in 2008. 

Four hydro stations were going to be added during dam refurbishment on the Trent-Severn Waterway, but they were among 758 renewable energy projects cancelled by Premier Doug Ford's government after his election in 2018, a move examined in an analysis of Ontario's dirtier electricity outlook and its implications.

Patrick Bateman, senior vice-president of Waterpower Canada, said such dam retrofit projects are uncommon in most provinces. "I don't see it being a large part of the future electricity generation capacity."

He said there has been less movement on retrofitting unpowered dams in Canada compared to the U.S., because:

There are a lot more opportunities in Canada to refurbish large, existing hydro-generating stations to boost capacity on a bigger scale.

There's less growth in demand for clean energy, because more of Canada's grid is already non-carbon-emitting (80 per cent) compared to the U.S. (40 per cent).

Even so, Norris thinks Canadians should be looking at all opportunities and options when it comes to transitioning the grid away from fossil fuels, including retrofitting non-powered dams, especially as a recent report highlights Canada's looming power problem over the coming decades.

"If we're going to be serious about addressing the inevitable challenges associated with climate change targets and net zero, it really is an all-of-the-above approach."

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Wylfa Nuclear Project Cancellation reflects Hitachi's withdrawal, pulling £16bn from North Wales, risking jobs, reshaping UK nuclear power plans as renewables grow and Chinese involvement rises amid shifting energy market policies.

Key Points

An indefinite halt to Hitachi's Wylfa Newydd nuclear plant, removing about £16bn investment and jobs from North Wales.

✅ Hitachi withdraws funding amid changing energy market costs

✅ Puts 400 local roles and up to 10,000 construction jobs at risk

✅ UK shifts toward renewables as nuclear project support stalls

Chris Ruane said Japanese firm Hitachi’s announcement this morning about the Wylfa project would take £16 billion of investment out of the region.

He said it was the latest in a list of energy projects which had been scrapped as he responded to a statement from business secretary Greg Clark.

Mr Ruane, the Labour member for the Vale of Clywd, said: “In his statement he said the Government are relying now more on renewables, can I put the North Wales picture to him; 1,500 wind turbines were planned off the coast of North Wales. They were removed, those plans were cancelled by the private sector.

“The tidal lagoons for Wales were key to the development of the Welsh economy – the Government itself pulled the support for the Swansea Bay tidal lagoon. That had a knock-on effect for the huge lagoon planned off the coast of North Wales.

“And now today we hear of the cancellation of a £16 billion investment in the North Wales economy. This will devastate the North Wales economy. The people of North Wales need to know that the Prime Minister is batting for them and batting for the UK.”

Mr Clark blamed the changing landscape of the energy market for today’s announcement, and said Wales has been a “substantial and proud leader” in renewable energy during the UK’s green industrial revolution over recent years.

But another Labour MP from North Wales, Albert Owen, of Ynys Mon, said the Wylfa plant’s cancellation in his constituency is putting 400 jobs at risk, as well as the “potential of 8-10,000 construction jobs”, as well as hundreds of operational jobs and 33 apprenticeships.

He asked Mr Clark: “Can I say straightly can we work together to keep this project alive, to ensure that we create the momentum so it can be ready for a future developer or this developer with the right mechanism?”

The minister replied that he and his officials would “work together in a completely open-book way on the options” to try and salvage the project.

But in the Lords, Labour former security minister Lord West of Spithead said the UK’s nuclear industry was in crisis, noting that Europe is losing nuclear power as well.

“In the 1950s our nation led the world in nuclear power generation and decisions by successive governments, of all hues, have got us in the position today where we cannot even construct a large civil nuclear reaction,” he told peers at question time.

Lord West asked: “Are we content that now the only player seems to be Chinese and that by 2035… we are happy for the Chinese to control one third of the energy supply of our nation?”

Business, Energy and Industrial Strategy minister Lord Henley said the Government had hoped for a better announcement from Hitachi but that was not the case.

He said costs in the nuclear sector were rising, amid setbacks at Hinkley Point C, while costs for many renewables were coming down and this was one of the reasons for the problem.

Tory former energy secretary Lord Howell of Guildford said the Chinese were in “pole position” for the rebuilding and replacement “of our nuclear fleet” and this would have a major impact on UK energy policy and plans to meet net zero targets in the 2030s.

Plaid Cymru’s Lord Wigley warned that putting the Wylfa Newydd on indefinite hold would cause economic planning blight in north-west Wales and urged the Government to raise the level of support allocated to the region.

Lord Henley acknowledged the announcement was not welcome but added: “We remain committed to nuclear power. We will look to see what we can do. We still have a great deal of expertise in this country and we can work on that.”

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Indonesia Coal Production Cuts reflect weaker China demand, COVID-19 impacts, falling HBA reference prices, and DMO sales to PLN, pressuring thermal coal output, miner budgets, and investment plans under the 2020 RKAB.

Key Points

Planned 2020 coal output reductions from China demand slump, lower HBA prices, and DMO constraints impacting miners.

✅ China demand drop reduces exports and thermal coal shipments.

✅ HBA reference price decline pressures margins and cash flow.

✅ DMO sales to PLN limit revenue; investment plans may slow.

The Energy and Mineral Resources (ESDM) Ministry is considering lowering the coal production target this year as demand from China has shown a significant decline, with China power demand drops reported, since the start of the outbreak of the novel coronavirus in the country late last year, a senior ministry official has said.

The ministry’s coal and mineral director general Bambang Gatot Ariyono said in Jakarta on March 12 that the decline in the demand had also caused a sharp drop in coal prices on the world market, and China's plan to reduce coal power has further weighed on sentiment, which could cause the country’s miners to reduce their production.

The 2020 minerals and coal mining program and budget (RKAB) has set a current production goal of 550 million tons of coal, a 10 percent increase from last year’s target. As of March 6, 94.7 million tons of coal had been mined in the country in the year.

“With the existing demand, revision to this year’s production is almost certain,” he said, adding that the drop in demand had also caused a decline in coal prices.

Indonesia’s thermal coal reference price (HBA) fell by 26 percent year-on-year to US$67.08 per metric ton in March, according to a Standards & Poor press release on March 5.  At home, the coal price is also unattractive for local producers. Under the domestic market obligation (DMO) policy, miners are required to sell a quarter of their production to state-owned electricity company PLN at a government-set price, even as imported coal volumes rise in some markets. This year’s coal reference price is $70 per metric ton, far below the internal prices before the coronavirus outbreak hit China.

The ministry’s expert staff member Irwandy Arif said China had reduced its coal demand by 200,000 tons so far, as six of its coal-fired power plants had suspended operation due to the significant drop in electricity demand. Many factories in the country were closed as the government tried to halt the spread of the new coronavirus, which caused the decline in energy demand and created electric power woes for international supply chains.

“At present, all mines in Indonesia are still operating normally, while India is rationing coal supplies amid surging electricity demand. But we have to see what will happen in June,” he said.

The ministry predicted that the low demand would also result in a decline in coal mining investment, as clean energy investment has slipped across many developing nations.

The ministry set a $7.6 billion investment target for the mining sector this year, up from $6.17 billion last year, even as Israel reduces coal use in its power sector, which may influence regional demand. The year’s total investment realization was $192 million as of March 6, or around 2.5 percent of the annual target. 

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