Supply and demand in an electricity system must always be the same. When you produce too much, you have to figure out how to curtail production or export the excess. In Ontario we often curtail nuclear from the Bruce plant. To do this, we simply send the heat from the nuclear reactor into Lake Huron, but we don't save any nuclear fuel. We curtail wind. And we pay generators to not produce. In 2014, Ontario paid them $200 million to not produce. Sometimes we pay neighbours to take it. Or we sell it to them real cheap — under two cents/kWh. Ontario exported 12 per cent of what it produced last year, and sold much of it at very low prices.
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How did it get this way? It is actually a good news story. Ontario has reduced its demand for electricity by 12 per cent since 2005. Demand has been going down throughout the western world. Appliances are more efficient. Variable speed motors and fans are more efficient. Efficient LED lighting is exploding in popularity. Conservation programs have worked. GDP is up. Population is up. But we are using less juice.
Ontario's inflexible nuclear plants continue to operate. We also added wind, solar and gas to replace coal. And we had an unanticipated and ongoing decrease in demand. So we have surplus power.
Importantly, greenhouse gas emissions from Ontario's electricity sector are very low. Only 10 per cent of Ontario's electricity comes from a fossil fuel, gas.
What if we turned this surplus electricity "problem" into an opportunity? Instead of paying to curtail electricity production, or exporting power at low prices, what if instead we used this surplus to heat our buildings and drive our plug-in vehicles. Instead of using oil, propane or natural gas to provide heat, we could use low-emission electricity to run ultra-efficient geothermal heat pumps. Instead of using gasoline or diesel, we could use electricity to drive our vehicles.
We can also produce hydrogen by hydrolysis. Hydrogen can be mixed up to a few per cent with natural gas in our pipelines with no change in consumer appliances. Our surplus electricity could thereby reduce our demand for natural gas. This is being done in Europe now.
But we need to create this new demand for electricity to drive our cars, heat our homes and produce hydrogen. It won't just happen. How do marketers approach this? They have a good old-fashioned sale — 50 per cent off. If you buy an electric car, or install a geothermal heating system, or make hydrogen from hydrolysis, then you get a discount on part of your power. After all, it's better to sell at half price to new customers than to pay someone not to produce. Better to sell at half price than to export at 80 per cent off.
What would be the result of switching to electricity for building heat, or for driving, or for hydrogen production? We would have lower emissions and higher electricity demand using up surplus that we are wasting today.
The second U.S. president, John Adams, has been quoted as saying, "Every problem is an opportunity in disguise."
The opportunity is staring us in the face.