There was a time when a growing population and economy meant growing electricity use. Those times are gone. Instead, we are seeing a strong trend toward declining electricity use despite continued population and economic growth in Ontario.
Electricity use dropped 10% between 2005 and 2012 despite GDP growth of 7.4% over this period. And the Independent Electricity System Operator (IESO) projects that electricity use will continue to decline until at least 2017 – at an average annual rate of 1.6% per year between 2005 and 2017.
This is big news: Ontario is entering a new economic phase where increasing energy productivity (dollars of goods and services produced per unit of energy consumed) is becoming a key economic driver. And this is no recessionary blip – this change is being driven by factors like new technology, a greater emphasis on energy efficiency, including self-generation in some industries, and permanent changes to our economic profile (less heavy manufacturing, more services).
It is critical that our energy planners catch up with this trend toward lower overall consumption. If electricity demand continues to fall by 1.6% a year until 2030, it would reduce our electricity generation requirements by 35.9 billion kilowatt-hours (kWh) per year – 1.3 times the output of the Darlington Nuclear Station. That means this is the worst possible time to lock into costly and inflexible generation mega-projects like re-building the Darlington Station.
Instead, we need to keep our options open by working harder to close the electricity productivity gap with some of our key competitors. New York State, for example, produces 50% more economic output per kWh than Ontario. In Ontario, we still have a long way to go to fully exploit our cost-effective energy savings opportunities.
We also have a neighbour – Quebec – with a huge surplus of low-cost hydro power ready for export. This is a cheaper, more reliable and more flexible solution to meeting our changing electricity needs than another over budget and long delayed nuclear project. The existing transmission connection between Ontario and Quebec can carry enough power to displace 86% of the power currently produced by Darlington.
The times, they are a changin’. Sticking to yesterday’s solutions will leave us paying too much for too much power.
Please click here to download our new report: Efficient Growth: Breaking the link between economic growth and rising electricity usage
And click here to read our Toronto Star op-ed: Repairing Pickering nuclear plant is a waste of money