The Ministry of Energy has released Ontario’s new Long-Term Energy Plan, “Achieving Balance. The document lays out the course of action the province intends to take over the next 20 years to ensure a stable, sustainable, and affordable electricity supply for Ontarians. The Ministry solicited input from industry stakeholders on this review and SPN was among those to contribute. SPN’s recommendation focused on a single key issue: distributed generation.
Ontario has spent $19 billion on transmission and distribution infrastructure investments in the last 10 years, nearly $2 billion per year, and further investments of this magnitude are anticipated. Ontario is a big place and long-distance transmission is expensive. In fact, delivery is the single largest portion of most Ontario electricity bills.
Increasingly jurisdictions are recognizing the fact that one of the greatest advantages of renewable energy, particularly rooftop solar, is the ability to locate it within the communities where power is consumed, thus radically decreasing the need for new transmission and distribution infrastructure investments. California Governor Jerry Brown recently signed into law a bill (AB 327) which mandates that California’s large investor-owned utilities make immediate steps towards implementing a distributed power system. Similarly, the Long Island Power Authority, faced with severe transmission constraints, has begun an initiative to promote distributed generation as a means to ease the strain on the grid.
By similarly focusing on targeted distributed generation procurements, Ontario can reap substantial benefits: lower capital investments, improved system reliability, and increased renewable penetration.
It is a simple and elegant solution: Why build new generation AND new transmission, when you can just build new generation at the point of need? The only thing holding us back is the inertia of the aging electricity grid model: large centralized and monopolized generators controlled by utilities. That model was born of necessity, but advancing technology has rendered it obsolete.
Today’s electricity grid is essentially unchanged since Thomas Edison. Over recent decades, the telephone industry has been thoroughly reinvented, with large remote servers giving way to the distributed cellular smartphone model. Alexander Graham Bell wouldn’t recognize his own invention if he saw it today. Edison would recognize today’s electricity grid immediately. A radical transformation of energy infrastructure is long past due.
We could begin this transformation today, by prioritizing projects in areas that need transmission and distribution capacity upgrades instead of the anywhere-in-Ontario procurement approach used for renewable energy up until today. Doing so would result in avoided infrastructure investments, translating to a lower cost of electricity for ratepayers. The added benefits—system reliability, cleaner air, energy independence—come for free.
Fortunately, the new Long Term Energy Plan recognizes the value of this strategy and reflects the guidance given by SPN.
“When solar PV systems are located on rooftops that are close to electricity users, this reduces the need for the grid to transport electricity long distances, and may help offset future requirements for grid upgrades.”
-“Achieving Balance,” Ontario’s Long-Term Energy Plan, 2013
The question now, is simply a matter of whether forthcoming policies from the Ministry of Energy will reflect this powerful learning. If they do, we may well find that distributed solar has reached grid parity in Ontario already.