Green power in Ontario: A dynamic model-based analysis

Adequate supply of cleaner, affordable, and reliable electricity is critical for the growth and prosperity of any economy. The Government of Ontario, Canada's largest province both by population and by electricity generation capacity, has enacted a long-term energy plan in 2007 to ensure reliable, sustainable and cost-effective supply of electricity. To better understand the long-term dynamics of Ontario's electricity system in socio-economic and CO2 emissions dimensions, this research develops, validates, and applies a dynamic simulation model. The dynamic model endogenously represents Ontario's supply mix and demand side initiatives, and their interactions with pricing, profitability, investments, and electricity intensity sectors. Model-based results show that the current plan (i) will continue to increase the share of “green power” but Ontarians, even with “excess capacity” at hand, will continue to face rising rates of electricity for a long time, and (ii) is not likely to achieve the expected improvements in electricity consumption intensity and level of imports of electricity in the next decade. On the other hand, model-based results point to an alternative plan, focused on the reduction of thermal generation, addition of renewable generation, and investments in research and development of electricity system, which can lead Ontario towards a future with “more” and affordable “green power”.