Demand Context and the OPO Outlook D

OPO Outlook D Capacity Options

The OPO has identified four capacity options for the Outlook D demand scenario that encompasses most of the traditional generation source options. The capacity options are distinguished by the relative shares of hydro (or waterpower), natural gas-fired generation, nuclear, and wind.

Capacity

This subsection looks at the incremental capacity, production, and costs associated with the OPO Outlook D capacity options, which are summarized in Table

Significant imports from Quebec and amounts of wind generation are assumed in all cases and are inferred to be a common capacity base. Figure 4 identifies the components of this common capacity base and illustrates that it underpins each of the OPO capacity options.

The common capacity base supply will produce the majority of the new production, a total of 39 TWh. The additional production from the Hydro (D1) and Nuclear (D3) options is 25 TWh and 26 TWh respectively. For the Outlook D incremental demand of 49 TWh, these options would result in a significant surplus of electricity. The Hydro and the nuclear options have surpluses of 30% over the projected OPO demand. If these surpluses are attributed to the common capacity base supply, the surplus represents almost 40% of the production for that capacity.

Production

The common capacity base supply will produce the majority of the new production, a total of 39 TWh. The additional production from the Hydro (D1) and Nuclear (D3) options is 25 TWh and 26 TWh respectively. For the Outlook D incremental demand of 49 TWh, these options would result in a significant surplus of electricity.

The Hydro and the nuclear options have surpluses of 30% over the projected OPO demand. If these surpluses are attributed to the common capacity base supply, the surplus represents almost 40% of the production for that capacity.

Cost

Understanding the cost implications of the various options warrants full consideration of all of the cost elements that may be impacted by the options. Figure 5 illustrates the incremental costs with respect to Outlook B, of options D1, D2, and D3.

Special attention is paid to the common elements of each option. Figure 5 shows the Hydro option (D1) to have the highest total cost of $10B/year, which is $1.6B/year more than the lowest cost Nuclear option (D3), with a total cost of $8.3B/year

The implication of Higher Demand with OPO Capacity Options

To develop a baseline for cost comparison purposes, an OPO option needs to be scaled up from a delivery capability of 49 TWh to a level that would deliver the expected 92 TWh of demand in Scenario “S”.

OPO Option D1 was chosen as the reference case to which new capacity will be added. The new scaled-up D1 capacity was built in two steps. First, a reference capacity scenario was developed by adding the OPO D3 nuclear capacity of 3400 MW. The OPO D3 nuclear capacity produces 28 TWh of incremental energy which could provide the supply for the “S” industrial baseload demand.

Adding this product to the original 49 TWh of D1 results in 77 TWh. The original D1 capacity is then scaled-up ~31% to deliver the remaining 15 TWh required to meet the increased heat load and the projected 92 TWh demand.

Ontario’s Existing Capacity

The pending expiry of Ontario’s currently contracted supply represents an opportunity for the LTEP process. The OPO shows how much-contracted capacity is expected to have contracts expire during the time horizon of the LTEP.

Summary

The OPO lays out four supply mix options to address the new Outlook D demand of 49 TWh (~50 TWh). The incremental cost of the OPO D options all exceed $8.5B/year and represent a total system cost that is 25% higher than today. New nuclear capacity is the lowest cost supply option included in the OPO Outlooks, which when included with the OPO D1 supply mix to scale up to the ~90 TWh of demand, lowers the unit cost of D1 from the estimated $204/MWh. A scaled-up OPO supply mix option that would meet the ~90 TWh of demand would have a total incremental cost approaching $16B/year and a unit cost of electricity of $170/MWh.

The expected contract expiry of a large portion of Ontario’s generation capacity over the next 15 years is an opportunity to rethink Ontario’s supply mix in light of the new requirements stemming from Ontario’s climate strategy.

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