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Ross McKitrick: Natural gas is vital to fuelling Ontario

Financial Post logo Financial Post 2021-02-02 Special to Financial Post
a sunset over a city: Ontario’s electricity system, like every other jurisdiction’s, needs two kinds of power — baseload and peaking. © Provided by Financial Post Ontario’s electricity system, like every other jurisdiction’s, needs two kinds of power — baseload and peaking.

Environmentalists are urging Toronto to join 13 other Ontario city councils that want the province to stop using natural gas for electricity generation. There’s an old saying that in a democracy, the people deserve to get what they vote for — good and hard. It’s tempting to ask Ontario’s electricity system operator to give these cities what they want by no longer supplying any power generated by natural gas plants. But I’m sure the power system staff are too kind-hearted to do that. Because it would create a lot of problems.

For example, anyone with surgery scheduled on a hot summer day would face the risk of “brownouts” during the procedure. City residents would lose their air conditioning and space heating just when they needed them most. And, without gas as a backup supply stabilizer, all those wind turbines that have sprung up over the past decade would need to be dismantled (though that might be considered a plus by most locals).

We use natural gas in Ontario because it is variable on short notice. Power consumption rises through the day and drops overnight. That cycle overlays distinct seasonal patterns, with summertime demand surges for cooling, wintertime surges for heating, and predictable demand reductions on mild days in the shoulder seasons.

If you draw a chart of the seasonal and daily cycles, you see a minimum level of demand the system must always be able to satisfy, and then within each season and each 24-hour span there are temporary peaks that also need to be handled. And within those cycles there are further variations that can change minute-by-minute.

Ontario’s electricity system, like every other jurisdiction’s, therefore needs two kinds of power — baseload and peaking. Baseload involves running power generation facilities at a constant output level, which is the most economical way for them to operate. And for some facilities, especially nuclear plants and hydroelectric dams, it may be the only way they can run. Peaking facilities, on the other hand, can ramp their output up and down minute-by-minute.

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In Ontario, natural gas is the most flexible type of power in this regard. Hydro dams can spill or withhold water to vary production but are constrained in this behaviour by conservation authorities. And they can’t guarantee increased production if the water flow isn’t available. Nor can we count on importing electricity whenever we need it: adjacent jurisdictions may face high demand at the same time we do. The Ontario nuclear fleet does have some ability to adjust its output, though reactors require a few days’ notice. For speed and reliability of scaling production throughout the day, having a margin of natural gas power is essential.

If that flexibility is missing, a heat wave or a cold snap can mean a sudden shortage of power. So can a sudden increase in power demand somewhere else on the grid. Likewise, a sudden unexpected drop in demand can cause instability in the system if the supply cannot also quickly be scaled back.

To make the situation even more complex, add a fleet of wind turbines into the mix. The wind varies from hour to hour and can gust or vanish without warning. No electricity system can accommodate such intermittent variations in production without another part of the generator fleet being able, on a moment’s notice, to compensate by varying in the opposite direction. In Ontario, the most effective compensator is gas. Power systems that add a lot of wind energy must therefore add a lot of natural gas capacity as a reserve supply.

Finally, the environmental benefits from eliminating gas would be minimal. Ontario already eliminated 85 per cent of its electricity-related greenhouse gases between 1991 and 2018 by phasing out coal — at a very high cost . As for ordinary pollutants, our air quality is very good now. In a typical year, particulate levels never exceed even the most stringent standards. And while we occasionally do exceed ozone standards, analysis by Ontario’s Ministry of the Environment shows that’s due to U.S.-based sources , not domestic ones.

If we phase out gas, we risk creating intolerable costs and inconvenience for all electricity users in exchange for imperceptibly small environmental gains. City councils can get rid of gas as soon as they figure out how to phase out summer heat, winter cold, daytime, nighttime and the vagaries of wind.

Ross McKitrick is a professor of economics at the University of Guelph and a senior fellow at the Fraser Institute.


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