TL: A THREE POINT PLAN TO SOLVE ONTARIO'S ELECTRICITY CRISIS SO: GREENPEACE CANADA, (GP) DT: AUGUST, 1997 1. CREATE A CONSERVATION UTILITY Numerous studies, including those done for the City of Toronto, during the Ontario Hydro Demand-Supply Plan hearings and the Climate Action Network's Rational Energy Program, have concluded that at least a 30 percent cut in energy (and electricity) consumption is cost-effective using existing technologies. (And the Electric Power Research Institute, the research arm of the U.S. electric utilities, estimates that a 75 percent cut will be cost effective in the longer term.) The most comprehensive of these studies (John J. Plunkett, et.al., "Building Ontario's Conservation Power Plant", Coalition of Environmental Groups for a Sustainable Energy Future, November 1992) concluded that these measures would average 7 cents per kilowatt-hour saved (including program overhead), less than the residential rate for electricity, and with even cheaper rates for the commercial and industrial sectors. The reason why these cost effective savings are not being achieved are obvious, and have been often repeated by environmental groups and others: - the energy efficiency industry is fragmented and individual companies cannot afford a unified "whole building" marketing program - as a result, the public is unaware of the opportunities - financing is limited because lightbulbs and insulation are not repossessible assets, unlike cars or power plants A Conservation Utility would: - promote door-to-door audits of residential and commercial buildings, and hire specialists to analyze industrial facilities - organize a competitive bidding process to retrofit buildings and factories - help finance efficiency measures, to be paid back on the local utility bill The beginnings of a Conservation Utility already exist in Ontario - the Green Community Initiative (GCI) now exists in more than a dozen Ontario communities. As a first step, the government should provide funds to the GCI to launch a major marketing campaign, to help diversify from residential buildings to commercial and industrial sectors, and to establish offices in new communities. In addition, Ontario Hydro itself should be immediately required to eliminate the $1 billion in annual energy waste identified in the Ontario Hydro-commissioned McNeill-Runnalls report. 2. GO SOLAR. At the Rio+5 meeting in New York this June, U.S. President Clinton announced that the U.S. government program was launching a program to put solar panels on one million rooftops around the U.S. The program was similar to others previously announced by Germany and Japan. It is widely accepted that any sustainable energy future must be based around solar power. Fossil fuels and nuclear power produce too much pollution to be sustainable. Wind, hydroelectricity and biomass energy are all appropriate in some contexts, but are very site dependent - and all also ultimately derive from the sun. Only an energy system based on the almost unlimited energy from the sun can be truly sustainable. The price of solar power has dropped by 99 percent over the last 25 years, and yet it is still roughly four times more expensive than electricity from Ontario Hydro. Essentially the only barrier remaining to reducing this price to cost effectiveness is the size of the solar market - the larger the market, the lower the price. Unfortunately, there is a chicken and a egg problem, because the current high price for solar ensures that it has a small market. There is a clearly an important role for government intervention to increase the size of the solar market and drive down the price. It is in the long term interests of everyone that this occur. This is why the U.S., Germany and Japan all have sizable solar programs. Recently, after an extensive Greenpeace campaign, the government of Greece approved the first 5 MW stage of what will eventually be a 50 MW solar photovoltaics (PV) power plant. The very size of the plant (a world record for solar) helped to drive down the price of the solar panels used in the project by 66 percent - very close to the edge of cost effectiveness. Greenpeace proposes that the Ontario government set a 50 MW solar target. This is enough electricity for about 15,000 Ontario homes - a small fraction of a million rooftops, but at least a start. Half of this could come from only three percent of the $8 billion Hydro plans to spend to replace the seven reactors and upgrade the others, and the other half could come from the homes and companies that acquire the panels. Although this goal appears tiny compared to the 4400 MW capacity of the seven defunct reactors, it makes sense in the context of a much larger international effort to build the market for solar power. 3. INTRODUCE CONSUMER CHOICE. For too many years, Ontario Hydro has forced its customers to buy its dirty and expensive coal and nuclear power. It is obvious that this needs to change, and that the grid needs to be opened up to other generators - including municipal utilities and independent generators. However, the devil is in the details. A simple minded competitive system would simply result in a lot of gas-fired power stations - which is undeniably the cheapest form of generation, if environmental costs are not considered. Gas is not clean. The production of natural gas in western Canada is a major source of acid rain and greenhouse gases, and the gas industry has built thousands of miles of pipelines and roadways, creating massive wilderness disruption. Even the consumption of natural gas creates air pollution, including NOx and greenhouse gases. Moreover, there are limited supplies of natural gas in Canada, and transportation of natural gas from outside of North America requires an extremely expensive liquification process. The construction of large numbers of gas turbines would waste a valuable resource, and inevitably drive up the price. One of the key lessons Ontarians should learn from the nuclear fiasco is that it is a bad idea to put all of our eggs in one basket - whether it is a nuclear basket or a gas basket. It is already largely accepted that Ontario Hydro will have to charge a toll to generators (including itself) transporting electricity to customers. The toll would pay for the grid and would help to retire and decommission uneconomic nuclear plants. In order to encourage a diversity of supply and to protect the environment, Greenpeace proposes that this toll depend on the environmental damage caused by the energy source. There are a number of studies on how to calculate these "environmental externalities". The resulting pricing system would encourage gas to be used most efficiently in combined heat and power cogeneration systems, and would also encourage wind and biomass energy systems. A recent study by the Canadian Wind Energy Association found more than 2000 MW of cost effective wind power in Ontario, and the economic potential has been estimated at more than 6000 MW. Municipal organic waste could fuel downtown cogeneration and cooling systems. Conclusion The current electricity crisis has been caused by a consistent refusal to consider the environmental and economic consequences of our electricity system. As a result, we now have a dangerous, polluting and expensive system. Major changes are needed, both to correct the current problems and to ensure that they do not occur again. Government initiatives to launch a conservation utility, promote solar power, and to restructure the electricity system to include consumer choice and environmental costs, would all make major contributions to ensuring a more sustainable energy future.