CABA Information Series

(IS-2013-75) Behind The Switch: Pricing Ontario Electricity Options


This report from the Pembina institute provides an integrated and dynamic model of realistic scenarios for electricity prices in Ontario, including projected growth rates for renewable power, various sensitivities to key price parameters, as well as realistic potential of natural gas generation development possibilities. The model examines the 20-year time period between 2010 and 2030. This study’s results illustrate that electricity prices will increase in Ontario as the major infrastructure investments, system refurbishments and changes to the electricity generation fleet are developed. Given the long-term nature of much of the electricity contracts in Ontario, be they nuclear, natural gas or renewable energy, relatively few realistic alternatives can be foreseen, particularly as nuclear and hydroelectricity continue to dominate the overall generation fleet. The analysis for this study indicates that there is little to gain in cancelling Ontario’s feed-in tariff, particularly just prior to a pricing review which is likely to result in decreases to original rates. There is at best a small savings to be made by shifting from more natural gas, and would result in likely to be no noticeable impact on consumer rates in the short term, and which poses modest consumer risks if the system grows increasingly dependent on natural gas markets.

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IS-2013-75
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