May 9, 2005

Lakeview plant closes as study confirms benefits of replacing coal-fired power

On April 28, the Lakeview generating station in Mississauga became the first of Ontario's five coal-fired power plants to close, under the provincial government's plan to phase out these facilities and replace coal with more environmentally sound sources of electricity.

Closing Lakeview means eliminating 26% of the sulfur dioxide and 8% of the nitrogen oxide emissions in the Greater Toronto Area; this is equivalent to taking 500,000 cars off the road. It will also eliminate more than two million tonnes of greenhouse gas emissions and represents an important contribution to meeting Canada's Kyoto commitment.

"We've shut down the single-biggest source of air pollution in the Greater Toronto Area," said Premier Dalton McGuinty. "We're closing Lakeview for good-for good air, for good health and for the good of Ontario families."

The Ontario government is pursuing a diverse range of power generation alternatives, including refurbishing nuclear plants and increasing natural gas and renewable generation capacity. The province has contracted for 2,000 megawatts (MW) of new supply from renewable energy, cleaner natural gas generation and demand management projects. It is also developing conservation programs and agreements with neighbouring provinces to import hydroelectric power.

Meanwhile, a study released the same week has revealed the hidden health and environmental costs of coal-fired generation and clarified the benefits of replacing coal-fired electricity. The independent study found a relationship between increased air pollution due to coal-fired emissions and up to 668 premature deaths, 928 hospital admissions and 1,100 emergency room visits in Ontario per year. The study sets the dollar value associated with these health costs at $3 billion annually.

"The true cost of using coal to create electricity is unacceptably high," Energy Minister Dwight Duncan stated. "Our plan to phase out coal will reduce greenhouse gas emissions in Canada by 30 megatonnes a year-more than all the greenhouse gases produced by either Manitoba or New Brunswick," he added.

The study was carried out by a team of experts in emissions modeling and cost-benefit analysis, including DSS Management Consultants, RWDI Air, and York University professor Peter Victor, former dean of York's Faculty of Environmental Studies.

The analysts compared the financial, health and environmental costs of four different scenarios of electricity generation in Ontario. They concluded that, with an annual cost of nearly $4.4 billion, coal-fired electricity generation is significantly more expensive than the other options considered.

"Determining the health damages from existing coal-fired generation is a complex task, because air pollution comes from many other sources, such as vehicle emissions and transboundary sources," said Dr Victor. "But our rigorous analysis of health and environmental impacts makes a strong case for replacing coal-fired generation in the province, spelling out the high costs of staying with the status quo," he continued.

The scenarios examined included:

1. The status quo, a mix of coal, nuclear and natural gas generation facilities operated within the current regulatory regime (total cost: $4.38 billion);

2. Building new natural gas plants to replace coal-fired electricity (total cost: $2.6 billion);

3. A combination of refurbishing the nuclear plants and building new natural gas plants to replace coal-fired electricity (total cost: $1.94 billion); and

4. Retrofitting existing coal-fired facilities with clean-coal emission control technology (total cost: $2.8 billion).

The study concludes that the lowest cost scenario for Ontario's electricity future is a combination of refurbished nuclear and new natural gas generation. Including health and environmental impacts, this option would cost $1.9 billion annually, less than half the annual cost of existing coal generation. The net benefit compared to coal would be $2.4 billion.

Moreover, the study found that producing power from a mix of refurbished nuclear and new natural gas sources could cut the cost of health damages by 88%, or $2.7 billion, while avoiding $323 million per year in environmental damages. "No other scenario can match this performance," the study states.

Ontario's coal-fired plants are the largest industrial source of greenhouse gas (GHG) emissions, sulfur dioxide (SO2) and nitrogen oxides (NOX) in the province. The cost of greenhouse gas control and carbon sequestration from coal-fired emissions is $371 million annually.

The full study may be viewed on the Ministry of Energy Web site, www.energy.gov.on.ca/english/pdf/electricity/coal_cost_benefit_analysis_april2005.pdf.

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