Gas plant developers fight TrAIL power transmission

Ontario TOU Electricity Rate Relief offers 24/7 fixed off-peak pricing at 10.1¢/kWh, suspending time-of-use tiers to support residential customers, small businesses, and farms, coordinated by the Ontario Energy Board during COVID-19.

Key Points

A 45-day policy fixing TOU power at 10.1¢/kWh 24/7 off-peak to ease costs for residents, small businesses, and farms.

✅ Applies 24/7 off-peak 10.1¢/kWh to all TOU electricity customers.

✅ Automatic bill credit; no application or enrollment required.

✅ Covers residential, small businesses, and farms; OEB coordination.

To support Ontarians through the rapidly evolving COVID-19 situation, the Government of Ontario is providing immediate electricity rate relief for families, small businesses and farms paying time-of-use (TOU) rates.

For a 45-day period, the government is working to suspend time-of-use electricity rates, holding electricity prices to the off-peak rate of 10.1 cents-per-kilowatt-hour. This reduced price will be available 24 hours per day, seven days a week to all time-of-use customers, who make up the majority of electricity consumers in the province. By switching to a fixed off-peak rate, time-of-use customers will see rate reductions of over 50 per cent compared to on-peak rates now in effect.

To deliver savings as quickly and conveniently as possible, this discount will be applied automatically to electricity bills without the need for customers to fill out an application form.

"During this unprecedented time, we are providing much-needed relief to Ontarians, specifically helping those who are doing the right thing by staying home and small businesses that have closed or are seeing fewer customers," said Premier Doug Ford. "By adopting a fixed, 24/7 off-peak rate, aligned with ultra-low overnight pricing options, we are making things a little easier during these difficult times and putting more money in people's pockets for other important priorities and necessities."

The Government of Ontario issued an Emergency Order under the Emergency Management and Civil Protection Act to apply the off-peak TOU electricity rate for residential, small businesses, and farm customers who currently pay TOU rates.

"Ontario is fortunate to have a strong electricity system we can rely on during these exceptional times, even as Ottawa's electricity consumption decreased during the pandemic, and our government is proud to provide additional relief to Ontarians who are doing their part to stay home," said Greg Rickford, Minister of Energy, Northern Development and Mines.

"We thank the Ontario Energy Board and our partners at local distribution companies across the province, including initiatives like Hydro One's Ultra-Low Overnight Price Plan that support customers, for taking quick action to make this change and provide immediate support for hardworking people of Ontario," said Bill Walker, Associate Minister of Energy.

Visit Ontario's website to learn more about how the province continues to protect Ontarians from COVID-19.

Quick Facts

• The Ontario Energy Board sets time-of-use electricity rates for residential and small business customers through the Regulated Price Plan, and provides stable electricity pricing for industrial and commercial companies through separate programs.
• Time-of-use prices as of November, 2019 ― Off-Peak: 10.1₵/kWh, Mid-Peak: 14.4₵/kWh, On-Peak: 20.8₵/kWh
• Depending on billing cycles, some customers will see these changes on their next electricity bill. TOU customers whose billing cycle ended before their local distribution company implemented this change will receive the reduced rate as a credit on a future bill.
• The Ontario Electricity Rebate (OER) will continue to provide a 31.8 per cent rebate on the sub-total bill amount for all existing Regulated Price Plan (RPP) consumers.
• There are approximately five million residential consumers, farms and some small businesses billed using time-of-use (TOU) electricity prices under the RPP.
• The Ontario Energy Board has extended the winter ban on disconnections to July 31st.

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Spain Electricity Demand April 2020 saw a 17.3% year-on-year drop as COVID-19 lockdown curbed activity; renewables and wind power lifted the emission-free share, while combined cycle plants dominated islands, per REE data.

Key Points

A 17.3% y/y decline amid COVID-19 lockdown, with 47.9% renewables and wind at 21.3% of the national power mix.

✅ Mainland demand -17%; Balearic -27.6%; Canary -20.3%.

✅ Emission-free share: 49.7% on the peninsula in April.

✅ Combined cycle led islands; coal absent in Balearics.

Demand for electricity in Spain dropped by 17.3% year-on-year to an estimated 17,104 GWh in April, aligning with a 15% global daily demand dip during the pandemic, while the country’s economy slowed down under the national state of emergency and lockdown measures imposed to curb the spread of COVID-19.

According to the latest estimates by Spanish grid operator Red Electrica de Espana (REE), the decline in demand was registered across Spain’s entire national territory, similar to a 10% UK drop during lockdown. On the mainland, it decreased by 17% to 16,191 GWh, while on the Balearic and the Canary Islands it plunged by 27.6% and 20.3%, respectively.

Renewables accounted for 47.9% of the total national electricity production in April, echoing Britain’s cleanest electricity trends during lockdown. Wind power production went down 20% year-on-year to 3,730 GWh, representing a 21.3% share in the total power mix.

During April, electricity generation in the peninsula was mostly based on emission-free technologies, reflecting an accelerated power-system transition across Europe, with renewables accounting for 49.7%. Wind farms produced 3,672 GWh, 20.1% less compared to April 2019, while contributing 22% to the power mix, even as global demand later surpassed pre-pandemic levels in subsequent periods.

In the Balearic Islands, electricity demand of 323,296 MWh was for the most part met by combined cycle power plants, even as some European demand held firm in later lockdowns, which accounted for 78.3% of the generation. Renewables and emission-free technologies had a combined share of 6.4%, while coal was again absent from the local power mix, completing now four consecutive months without contributing a single MWh.

In the Canary Islands system, demand for power decreased to 558,619 MWh, even as surging demand elsewhere strained power systems across the world. Renewables and emission-free technologies made up 14.3% of the mix, while combined cycle power plants led with a 45.3% share.

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Ontario Electricity Transition faces surging demand, GHG targets, and federal regulations, balancing natural gas, renewables, battery storage, and grid reliability while pursuing net-zero by 2035 and cost-effective decarbonization for industry, EVs, and growing populations.

Key Points

Ontario Electricity Transition is the province's shift to a reliable, low-GHG grid via renewables, storage, and policy.

✅ Demand up 75% by 2050; procurement adds 4,000 MW capacity.

✅ Gas use rises to 25% by 2030, challenging GHG goals.

✅ Tripling wind and solar with storage can cut costs and emissions.

Ontario's electricity sector stands at a pivotal crossroads. Once a leader in clean energy, the province now faces the dual challenge of meeting surging demand while adhering to stringent greenhouse gas (GHG) reduction targets. Recent developments, including the expansion of natural gas infrastructure and proposed federal regulations, have intensified debates about the future of Ontario's energy landscape, as this analysis explains in detail.

Rising Demand and the Need for Expansion

Ontario's electricity demand is projected to increase by 75% by 2050, equivalent to adding four and a half cities the size of Toronto to the grid. This surge is driven by factors such as industrial electrification, population growth, and the transition to electric vehicles. In response, as Ontario confronts a looming shortfall in the coming years, the provincial government has initiated its most ambitious energy procurement plan to date, aiming to secure an additional 4,000 megawatts of capacity by 2030. This includes investments in battery storage and natural gas generation to ensure grid reliability during peak demand periods.

The Role of Natural Gas: A Controversial Bridge

Natural gas has become a cornerstone of Ontario's strategy to meet immediate energy needs. However, this reliance comes with environmental costs. The Independent Electricity System Operator (IESO) projects that by 2030, natural gas will account for 25% of Ontario's electricity supply, up from 4% in 2017. This shift raises concerns about the province's ability to meet its GHG reduction targets and to embrace clean power in practice. 

The expansion of gas-fired plants, including broader plans for new gas capacity, such as the Portlands Energy Centre in Toronto, has sparked public outcry. Environmental groups argue that these expansions could undermine local emissions reduction goals and exacerbate health issues related to air quality. For instance, emissions from the Portlands plant have surged from 188,000 tonnes in 2017 to over 600,000 tonnes in 2021, with projections indicating a potential increase to 1.65 million tonnes if the expansion proceeds as planned. 

Federal Regulations and Economic Implications

The federal government's proposed clean electricity regulations aim to achieve a net-zero electricity sector by 2035. However, Ontario's government has expressed concerns that these regulations could impose significant financial burdens. An analysis by the IESO suggests that complying with the new rules would require doubling the province's electricity generation capacity, potentially adding $35 billion in costs by 2050, while other estimates suggest that greening Ontario's grid could cost $400 billion over time. This could result in higher residential electricity bills, ranging from $132 to $168 annually starting in 2033.

Pathways to a Sustainable Future

Experts advocate for a diversified approach to decarbonization that balances environmental goals with economic feasibility. Investments in renewable energy sources, such as new wind and solar resources, along with advancements in energy storage technologies, are seen as critical components of a sustainable energy strategy. Additionally, implementing energy efficiency measures and modernizing grid infrastructure can enhance system resilience and reduce emissions. 

The Ontario Clean Air Alliance proposes phasing out gas power by 2035 through a combination of tripling wind and solar capacity and investing in energy efficiency and storage solutions. This approach not only aims to reduce emissions but also offers potential cost savings compared to continued reliance on gas-fired generation. 

Ontario's journey toward a decarbonized electricity grid is fraught with challenges, including balancing reliability, clean, affordable electricity, and environmental sustainability. While natural gas currently plays a significant role in meeting the province's energy needs, its long-term viability as a bridge fuel remains contentious. The path forward will require careful consideration of technological innovations, regulatory frameworks, and public engagement to ensure a clean, reliable, and economically viable energy future for all Ontarians.

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European Gas Prices hit pre-invasion lows as LNG inflows, EU storage gains, and softer oil markets ease the energy crisis, while recession risks, windfall taxes, and ExxonMobil's challenge shape demand and policy.

Key Points

European gas prices reflect supply, LNG inflows, storage, and policy, shaping energy costs for households and industry.

✅ Month-ahead hit €76.78/MWh, rebounding to €85.50/MWh.

✅ EU storage 83.2% filled; autumn peak exceeded 95%.

✅ Demand tempered by recession risks; LNG inflows offset Russian cuts.

European gas prices have dipped to a level last seen before Russia launched its invasion of Ukraine in February, after warmer weather across the continent eased concerns over shortages and as coal demand dropped across Europe during winter.

The month-ahead European gas future contract dropped as low as €76.78 per megawatt hour on Wednesday, the lowest level in 10 months, amid EU talks on gas price cap strategies that could shape markets, before closing higher at €83.70, according to Refinitiv, a data company.

The invasion roiled global energy markets, serving as a wake-up call to ditch fossil fuels for policymakers, and forced European countries, including industrial powerhouse Germany, to look for alternative suppliers to those funding the Kremlin. Europe had continued to rely on Russian gas even after its 2014 annexation of Crimea and support for separatists in eastern Ukraine.

On Tuesday 83.2% of EU gas storage was filled, data from industry body Gas Infrastructure Europe showed. The EU in May set a target of filling 80% of its gas storage capacity by the start of November to prepare for winter, and weighed emergency electricity measures to curb prices as needed. It hit that target in August, and by mid-November it had peaked at more than 95%.

Gas prices bounced further off the 10-month low on Thursday to reach €85.50 per megawatt hour.

Europe has several months of domestic heating demand ahead, and some industry bosses believe energy shortages could also be a problem next winter, with a worst energy nightmare still possible if supplies tighten. However, traders have also had to weigh the effects of recessions expected in several big European economies, which could dent energy demand.

UK gas prices have also dropped back from their highs earlier this year, and forecasts suggest UK energy bills to drop in April. The day-ahead gas price closed at 155p per therm on Wednesday, compared with 200p/therm at the start of 2022, and more than 500p/therm in August.

Europe’s response to the prospect of gas shortages also included campaigns to reduce energy use – a strategy belatedly adopted by the UK – and windfall taxes on energy companies to help raise revenues for governments, many of which have started expensive subsidies to cushion the impact of high energy prices for households and consumers. Energy companies have enjoyed huge profits at the expense of businesses and households this year, as EU inflation accelerated, but costs remained much the same.

However, the US oil company ExxonMobil on Wednesday launched a legal challenge against EU plans for a windfall tax on oil companies, according to filings by its German and Dutch subsidiaries at the European general court in Luxembourg. ExxonMobil argued that the windfall tax would be “counter-productive” because it said it would result in lower investment in fossil fuel extraction, and that the EU did not have the legal jurisdiction to impose it.

ExxonMobil’s move has prompted anger among European politicians. A message posted on the Twitter account of Paolo Gentiloni, the EU’s commissioner for the economy, on Thursday stated: “Fairness and solidarity, even for corporate giants. #Exxon.”

Oil prices are significantly lower than they were before the start of Russia’s invasion, and only marginally above where they were at the start of 2022. Brent crude oil futures traded at $100 a barrel on 28 February, but were at $81.84 on Thursday.

Oil prices dropped by 1.7% on Thursday. Prices had risen from 12-month lows in early December as traders hoped for increased demand from China after it relaxed its coronavirus restrictions. However, Covid-19 infection numbers are thought to have surged in the country, prompting the US to require travellers from China to show a negative test for the disease and tempering expectations for a rapid increase in oil demand.

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Ontario electricity emissions forecast highlights rising grid CO2 as nuclear refurbishments and the Pickering closure drive more natural gas, limited renewables, and delayed Quebec hydro imports, pending advances in storage and transmission upgrades.

Key Points

A projection that Ontario's grid CO2 will rise as nuclear units refurbish or retire, increasing natural gas use.

✅ Nuclear refurbs and Pickering shutdown cut zero-carbon baseload

✅ Gas plants fill capacity gaps, boosting GHG emissions

✅ Quebec hydro imports face cost, transmission, and timing limits

Ontario's energy grid is among the cleanest in North America — but the province’s nuclear plans mean that some of our progress will be reversed over the next decade.

What was once Canada’s largest single source of greenhouse-gas emissions is now a solar-power plant. The Nanticoke Generating Station, a coal-fired power plant in Haldimand County, was decommissioned in stages from 2010 to 2013 — and even before the last remaining structures were demolished earlier this year, Ontario Power Generation had replaced its nearly 4,000 megawatts with a 44-megawatt solar project in partnership with the Six Nations of the Grand River Development Corporation and the Mississaugas of the Credit First Nation.

But neither wind nor solar has done much to replace coal in Ontario’s hydro sector, a sign of how slowly Ontario is embracing clean power in practice across the province. At Nanticoke, the solar panels make up less than 2 per cent of the capacity that once flowed out to southern Ontario over high-voltage transmission lines. In cleaning up its electricity system, the province relied primarily on nuclear power — but the need to extend the nuclear system’s lifespan will end up making our electricity dirtier again.

“We’ve made some pretty great strides since 2005 with the fuel mix,” says Terry Young, vice-president of corporate communications at the Independent Electricity System Operator, the provincial agency whose job it is to balance supply and demand in Ontario’s electricity sector. “There have been big changes since 2005, but, yes, we will see an increase because of the closure of Pickering and the refurbs coming.”

“The refurbs” is industry-speak for the major rebuilds of both the Darlington and Bruce nuclear-power stations. The two are both in the early stages of major overhauls intended to extend their operating lives into the 2060s: in the coming years, they’ll be taken offline and rebuilt. (The Pickering nuclear plant will not be refurbished and will shut down in 2024.)

The catch is that, as the province loses its nuclear capacity in increments, Ontario will be short of electricity in the coming years and the IESO will need to find capacity elsewhere to make sure the lights stay on. And that could mean burning a lot more natural gas — and creating more greenhouse-gas emissions.

According to the IESO’s planning assumptions, electricity will be responsible for 11 megatonnes of greenhouse-gas emissions annually by 2035 (last year, it was three megatonnes). That’s the “reference case” scenario: if conservation and efficiency policies shave off some electricity demand, we could get it down to something like nine megatonnes. But if demand is higher than expected, it could be as high as 13 megatonnes — more than quadruple Ontario’s 2018 emissions.

Even in the worst-case scenario, the province’s emissions from electricity would still be less than half of what they were in 2005, before the province began phasing out its coal generation. But it’s still a reversal of a trend that both Liberals and Progressive Conservatives have boasted about — the Liberals to justify their energy policies, the PCs to justify their hostility to a federal carbon tax.

Young emphasized that technology can change and that the IESO’s planning assumptions are just that: projections based on the information available today. A revolution in electricity storage could make it possible to store the province’s cleaner power sources overnight for use during the day, but that’s still only in the realm of speculation — and the natural-gas infrastructure exists in the real world, today.

Ontario Power Generation — the Crown corporation that operates many of the province’s power plants, including Pickering and Darlington — recently bought four gas plants, two of them outright (two it already owned in part). All were nearly complete or already operational, so the purchase itself won’t change the province’s emissions prospects. Rather, OPG is simply looking to maintain its share of the electricity market after the Pickering shutdown.

“It will allow us to maintain our scale, with the upcoming end of Pickering’s commercial operations, so that we can continue our role as the driver of Ontario’s lower carbon future,” Neal Kelly, OPG’s director of media, issues, and management, told TVO.org via email. “Further, there is a growing need for flexible gas fired generation to support intermittent wind and solar generation.”

The shift to more gas-fired generation has been coming for a while, and critics say that Ontario has missed an opportunity to replace the lost Pickering capacity with something cleaner. MPP Mike Schreiner, leader of the Green party, has argued for years that Ontario should have pursued an agreement with Quebec to import clean hydroelectricity.

“To me, it’s a cost-effective solution, and it’s a zero-emissions solution,” Schreiner says. “Regardless of your position on sources of electricity, I think everyone could agree that waterpower from Quebec is going to be less expensive.”

Quebec is eager to sell Ontario its surplus hydro power, but not everyone agrees that importing power would be cheaper. A study published by the Ontario Chamber of Commerce (and commissioned by Ontario Power Generation) calls the claim a “myth” and states that upgrading electric-transmission wires between Ontario and Quebec would cost $1.2 billion and take 10 years, while some estimates suggest fully greening Ontario's grid would cost far more overall.

With Quebec imports seemingly a non-starter and major changes to Ontario’s nuclear fleet already underway, there’s only one path left for this province’s greenhouse-gas emissions: upwards.

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UK Energy Price Guarantee Cost forecasts from Cornwall Insight suggest an £89bn bill, tied to wholesale gas prices, OBR projections, and fiscal policy, to shield households amid the cost of living crisis.

Key Points

It is the projected government spend to cap household bills, driven by wholesale gas prices and OBR market forecasts.

✅ Base case: £89bn over two years, per Cornwall Insight

✅ Range: £72bn to £140bn, volatile wholesale gas costs

✅ Excludes 6-month business support estimated at £22bn-£48bn

Liz Truss’s intervention to freeze energy prices for households for two years is expected to cost the government £89bn, according to the first major costing of the policy by the sector’s leading consultancy.

The analysis from Cornwall Insight, seen exclusively by the Guardian, shows the prime minister’s plan to tackle the cost of living crisis could cost as much as £140bn in a worst-case scenario.

Truss announced in early September that the average annual bill for a typical household would be capped at £2,500 to protect consumers from the intensifying cost of living crisis amid high winter energy costs and a scheduled 80% rise in the cap to £3,549.

The ultimate cost of the policy is uncertain as it is highly dependent on the wholesale cost of gas, including UK natural gas prices which have soared since Russia’s invasion of Ukraine put a squeeze on already-volatile international markets. Ballpark projections had put the cost anywhere from £100bn to £150bn.

The Office for Budget Responsibility is expected to give its forecast for the bill when it provides its independent assessment of Kwasi Kwarteng’s medium-term fiscal plan, which the chancellor said on Tuesday would still happen on 23 November despite previous reports that it would be brought forward.

Cornwall Insight analysed projections of wholesale market moves to cost the intervention. In its base case scenario, analysts expect the policy to cost £89bn. That assumes the cost of supporting each household would be just over £1,000 in the first year, and about £2,000 in the second year.

The study’s authors said the wholesale price of gas would be influenced by energy demand, the severity of weather, “geo-political uncertainty” and prices for liquified natural gas as Europe seeks to refill storage facilities, which countries have rushed to fill up this winter but which could be relatively empty by next spring.

In the best-case outcome, the policy would cost £72bn, with some projections pointing to a 16% decrease in energy bills in April for households, while the “extreme high” outlook would see the government shell out £140bn to protect 29m UK households.

Gas prices are expected to push even higher if the Kremlin decides to completely cut off Russian gas exports into Europe.

Cornwall Insight’s projection does not include a separate six-month initiative to cap costs for companies, charities and public sector organisations, which is forecast to cost £22bn to £48bn.

The consultancy’s chief executive, Gareth Miller, said the £70bn range in its forecasts reflected “a febrile wholesale market continuing to be beset by geopolitical instability, sensitivity to demand, weather and infrastructure resilience”.

He said: “Fortune befriends the bold, but it also favours the prepared. The large uncertainties around commodity markets over the next two years means that the government could get lucky with costs coming out at the low end of the range, but the opposite could also be true.

“In each case, the government may find itself passengers to circumstances outside its control, having made policy that is a hostage to surprises, events and volatile factors. That’s a difficult position to be in.”

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The government has faced criticism, as some British MPs urge tighter limits on prices, that the policy is effectively a “blank cheque” and is not targeted at the most vulnerable in society.

Concerns over how Truss and Kwarteng intend to fund a series of measures, including the price guarantee, have spooked financial markets.

The EU, which has outlined possible gas price cap strategies in recent proposals, said last week it planned to cap the revenues of low-carbon electricity generators at €180 a megawatt hour, which is less than half current market prices. Truss has so far resisted calls to extend a levy on North Sea oil and gas operators to electricity generators, who have benefited from a link between gas and electricity prices in Britain.

Truss hopes to strike voluntary long-term deals with generators including Centrica and EDF, alongside the government’s Energy Security Bill measures, to bring down wholesale prices.

The Financial Times reported on Tuesday that the government has threatened companies with legislation to cap their revenues if voluntary deals cannot be agreed.

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