March 30, 1999
To:Board of Health
From:Dr. Sheela V. Basrur, Medical Officer of Health
Subject:Changes in Ontario's Electrical Sector and Air Quality
Purpose:
To examine changes in Ontario's electrical sector and how they could affect air quality in
Toronto, as detailed in the attached technical report, "Ontario's Changing Electrical Sector:
Implications for Air Quality and Human Health".
Source of Funds:
Not applicable.
Recommendation:
It is recommended that the Ontario Minister of Environment and the Ontario Minister of
Energy, Science and Technology:
(1)establish the regulatory framework necessary to ensure that competition in Ontario's
electrical sector does not lead to greater reliance on coal-fired generating stations and further
degradation of air quality, human health and the environment in Toronto and the rest of
southern Ontario;
(2)establish annual air emission caps for the entire electrical sector to limit the volume of air
pollutants released each year, ensuring that caps:
(a)apply to companies supplying electricity to Ontario as well as those generating electricity
in Ontario;
(b)encompass carbon dioxide and persistent toxins as well as sulphur dioxide and nitrogen
oxides to encourage a shift towards natural gas and renewable energies for the production of
electricity;
(c)for the year 2002 be set as follows: 17.5 kilotonnes (kt) for sulphur dioxide, 25 kt for
nitrogen oxides, 15,000 kt for carbon dioxide, 19 kilograms (kg) for arsenic, 9 kg for
beryllium, 7 kg for cadmium, 180 kg for chromium, 24 kg for lead, 45 kg for mercury, and
228 kg for nickel, as recommended by the Ontario Clean Air Alliance;
(d)for 2010 reduce the annual air emissions cap for nitrogen oxides to reflect the cap
recommended by the Ontario Medical Association for coal generated electricity;
(3)establish a renewable energy standard which defines the percentage of electricity that
must be generated with renewable energies by electrical suppliers serving Ontario consumers;
and
(4)establish a public benefit fund to support the promotion of energy conservation and the
development of renewable energies with a surcharge on the transmission of electricity.
Background:
At its meeting of September 15, 1998, the Toronto Board of Health requested that the Medical
Officer of Health obtain data from Ontario Hydro on emissions plumed from coal-fired
stations, particularly the Lakeview and Nanticoke Generating Stations, and report back with
its findings.
This Board of Health report is one in a series of reports which addresses actions needed to
reduce smog in Toronto and the rest of southern Ontario. It has been discussed with the
Manager of the Air Quality Improvement Office in the City's Department of Works and
Emergency Services.
Comments:
This Board of Health request reflects concern about two major changes occurring in Ontario's
electrical sector. One change, the shut-down of a large portion of Ontario Hydro's nuclear
division, is a time-limited change that is affecting air quality in Toronto today, and which will
continue to affect air quality until at least the year 2000. The other change, the introduction of
competition to Ontario's electrical market, is a long-term structural change that could have
profound impacts on air quality in Toronto for years to come.
Without the proper regulatory framework, a competitive electrical market could increase the
use of coal-fired generating stations for the production of electricity. This is significant for air
quality, human health and the environment because coal-fired generating stations are major
sources of the particulates and ozone that make up smog, acid rain, greenhouse gases and
persistent toxins such as mercury. The Ministry of Environment has indicated that the current
levels of particulates in Ontario's air are associated with 1800 premature deaths and 1400
cardiac and respiratory hospital admissions in Ontario each year.
Nuclear Asset Optimization Plan
In 1997, Ontario Hydro developed the Nuclear Asset Optimization Plan to upgrade the safety
and efficiency of its nuclear facilities. Implemented in the fall of 1997, this Plan has required
the closure of seven nuclear units while resources are directed at the upgrades required in
twelve other units. The Plan has shifted a substantial portion of electrical generation to all five
coal-fired plants, including the two plants, Nanticoke on Lake Erie and Lakeview on Lake
Ontario, that are upwind and in close proximity to Toronto. This has resulted in significant
increases in air emissions (see Table 1). Air emissions of sulphur dioxide from all five plants
have increased by 68% since 1996 while emissions of nitrogen oxides have increased by 58%.
This is significant for air quality in Toronto because sulphur dioxide is a precursor of the
particulate portion of smog while nitrogen oxides are a precursor of both the ozone and
particulate portion of smog.
Ontario Hydro plans to reduce air emissions over the next few years by reintroducing the
upgraded nuclear units beginning in 2000 and by installing new low NOx burners at the
Nanticoke plant before 2000. However, much depends upon the success of the nuclear
recovery program and the extent to which coal-fired plants are used in the new competitive
market. Historically, Ontario Hydro has used its coal-fired plants primarily to meet peaks in
demand. In a competitive environment, Ontario Hydro may feel economic pressure to
maximize the use of its coal-fired plants.
Table 1: Air Emissions from Ontario Hydro's Coal-Fired Generating Stations, 1996 & 1998
|
Nitrogen
Oxides *
1996 |
Nitrogen
Oxides
1998 * |
Increase |
Sulphur
Dioxide
1996 |
Sulphur
Dioxide
1998 |
Increase |
Five Coal Plants |
35.4 kt |
56 kt |
58% |
84.9 kt |
143 kt |
68% |
Nanticoke |
18.9 kt |
27.5 kt |
46% |
46.2 kt |
78.4 kt |
70% |
Lakeview |
3.3 kt |
7.8 kt |
136% |
9.6 kt |
18.8 kt |
96% |
Personal Communication, Ontario Hydro, February 1999 * expressed as nitric oxide
Introduction of Competition to Ontario's Electrical Market
In October 1998, the provincial government passed Bill 35, the Energy Competition Act,
which will introduce market competition to the production of electricity in Ontario. Under Bill
35, private companies in Canada and the United States will have the opportunity to provide
electricity to consumers in Ontario beginning in the year 2000. The intent of Bill 35 is to
provide cost savings to consumers by providing a competitive market in electricity production.
It is possible that Bill 35 may provide the market conditions necessary to encourage the
development of alternative energies. Without the proper regulatory framework however, Bill
35 could lead to poorer air quality and poorer health in Toronto by encouraging heavier
reliance on coal generated electricity in Ontario and the United States.
When competition was introduced to the electrical market in the United States in 1992, there
was a substantial increase in power generation from coal-fired power plants, particularly from
those with the highest rates of air emissions. In a competitive market in Ontario, coal-fired
plants in the United States may have the advantage because they can produce electricity at
very low prices. Often the lower prices reflect cost savings gained at the expense of the
environment. Ontario's five coal-fired plants currently emit 37% less sulphur dioxide, 7% less
nitrogen oxides, 20% less carbon dioxide, and 76% less mercury per unit of electricity than
coal-fired generating stations operating in the U.S. midwest. If some portion of Ontario's
electrical needs are provided in the United States, air quality in southern Ontario would be
affected. The Ministry of Environment estimates that approximately 50% of southern
Ontario's ground-level ozone is generated as nitrogen oxides in the United States, much of it
from coal-fired generating stations in the Ohio Valley and surrounding states.
Air Quality and Coal-fired Generating Stations
When coal is burned to produce electricity, large quantities of sulphur dioxide, nitrogen
oxides, carbon dioxide and persistent toxins such as mercury are released. In 1995, coal-fired
generating stations in Ontario were responsible for 22% of the province's emissions of
sulphur dioxide, 12% of the nitrogen oxides, 18% of the carbon dioxide, and 10% of the
mercury. In the same year, coal-fired plants in the United States were responsible for 63% of
that nation's sulphur dioxide, 26% of the nitrogen oxides, 31% of the carbon dioxide, and
21% of the mercury. These air pollutants are important contributors to smog, acid rain, global
climate change, and the accumulation of persistent toxins in the environment and the food
chain.
Sulphur dioxide is a precursor of both smog and acid rain. It has been estimated that 40% of
the particulates in smog are sulphates formed in the air from sulphur dioxide. Air particulates
have been linked with increased rates of hospitalization and death from respiratory conditions
and cardiovascular disease at levels as low as 20 micrograms per cubic meter of air (ug/m3).
Air levels of particulates commonly exceed 20 ug/m3 in Toronto and can reach levels as high
as 75 ug/m3.
Nitrogen oxides are also a precursor for both smog and acid rain. However, nitrogen oxides
contribute to the development of the ozone portion of smog as well as to the particulates
portion. Ground-level ozone has been associated with increased rates of hospitalizations for
asthma, chronic lung disease and respiratory infections at one-hour readings that averaged 31
parts per billion (ppb). Ozone levels in Toronto frequently exceed 80 ppb. For example, they
exceeded that level 44 times in 1994.
Carbon dioxide is a greenhouse gas which contributes to global climate change that could
affect global temperatures, weather patterns, water levels, food supplies and patterns of
disease around the world. The Intergovernmental Panel on Climate Change established by the
United Nations has indicated that carbon dioxide emissions would have to be reduced by more
than 50% in order to stabilize the level of greenhouse gases in the atmosphere at current
levels. Canada has made a commitment to reduce greenhouse gas emissions by 6% of 1990
levels between 2008 and 2012. The City of Toronto has made a commitment to reduce
municipal carbon dioxide emissions by 20% of 1988 levels by the year 2005, and has made
considerable progress towards that goal.
Mercury is a persistent toxin that accumulates in the food chain. It can affect the intellect and
behaviour of children exposed prenatally. It is responsible for 22% of the consumption
restrictions placed on fish in Lake Ontario and 99% of restrictions placed on fish in inland
waters. Canada, Ontario and the United States have made commitments to reduce mercury
emissions to the Great Lakes by 90% by the year 2000.
Regulatory and Policy Initiatives
Regulation 355 promulgated under the Ontario Environmental Protection Act establishes air
emissions caps for sulphur dioxide and nitrogen oxides. It does not apply to any company
other than Ontario Hydro. Nor does it apply to air pollutants other than sulphur dioxide and
nitrogen oxides. If Regulation 355 is not amended to include other companies producing
electricity in or providing electricity to Ontario, air emissions related to electrical production
will most certainly increase in a competitive environment.
The review of Regulation 355 provides the provincial government with the opportunity to
substantially improve air quality in Ontario by setting more protective air emissions caps for
both sulphur dioxide and nitrogen oxides. By extending air emission caps to carbon dioxide
and seven persistent toxins, including mercury, the provincial government can make
considerable progress towards its smog target for nitrogen oxides and its commitment on
global climate change. It would also encourage a shift away from coal generated electricity
towards natural gas, wind and solar generated electricity because even the "cleanest"
coal-fired plants produce large quantities of carbon dioxide and relatively large quantities of
persistent toxins. When electricity is produced with natural gas, emissions of sulphur dioxide
and persistent toxins are eliminated entirely, while emissions of carbon dioxide and nitrogen
oxides are substantially reduced. When electricity is produced with renewable energies,
emissions are eliminated entirely.
In a feasibility study commissioned by the Ontario Clean Air Alliance (OCAA), a coalition of
54 organizations including Toronto Hydro, the Ontario College of Family Physicians, and the
City of Toronto, it was demonstrated that the sulphur dioxide emissions cap for Ontario's
entire electrical sector could be reduced by 90% (to 17.5 kt) by the year 2002 for a cost of
$1.86 per month for the average residential customer. This could be achieved by shifting a
substantial portion of coal generated electricity projected for that date to natural gas. OCAA
has demonstrated that this fuel shifting scenario could also reduce nitrogen oxides by 57% (to
25 kt), carbon dioxide emissions by 37% (to 15,000 kt), and emissions of the seven persistent
toxins by 78% (to 45 kg for mercury, 19 kg for arsenic, 9 kg for beryllium, 7 kg for cadmium,
180 kg for chromium, 24 kg lead and 228 kg for nickel).
The Ontario Medical Association (OMA) and the OntAIRio Campaign, founded by the
Toronto Environmental Alliance, the David Suzuki Foundation and the Sierra Club, have
recommended that nitrogen oxide emissions from Ontario Hydro and imports should be
capped at 3.9 kt (e.g. 6 kt when expressed as nitrogen dioxide). This number was drawn from
a feasibility study conducted by the Institute of Environmental Studies at the University of
Toronto and Pollution Probe. (It does not apply to the non-utility generators in Ontario that
emit approximately 12 kt of nitrogen oxides each year.) The OntAIRio Campaign has
indicated that its cap could be achieved by increasing conversion to natural gas, reducing
electrical demand, increasing the use of renewable energies and applying best available
control technologies.
In the United States, the federal administration has proposed that its electricity competition
plan should be supported by the establishment of a Renewable Portfolio Standard which
identifies the percentage of electricity that electrical suppliers must generate with renewable
energies, and the creation of a Public Benefit Fund to support energy conservation programs
and to promote the use of renewable energies. Similar proposals should be considered by the
provincial government.
Conclusions:
Without the proper regulatory framework, the introduction of competition to Ontario's
electrical sector could have a profoundly negative effect on air quality and human health in
Toronto. For this reason, it is recommended that the provincial government establish
protective air emissions caps for Ontario's electrical sector that will ensure improvements in
air quality while encouraging a shift to natural gas and renewable energies for the production
of electricity.
Contact Name:
Kim Perrotta, MHSc
Environmental Epidemiologist
Health Promotion & Environmental Protection, Toronto Public Health
Tel: 416-392-6788
Fax: 416-392-7418
E-mail: kperrott@toronto.ca
Dr. Sheela V. Basrur
Medical Officer of Health
Ontario's Changing Electrical Sector:
Implications for Air Quality
& Human Health
Prepared by:
Kim Perrotta, MHSc, Environmental Epidemiologist &
Fe de Leon, Environmental Researcher
Health Promotion & Environmental Protection
Toronto Public Health
March 1999
ACKNOWLEDGMENTS
The authors would like to thank the following people for providing information necessary to
the production of this report: Jack Gibbons, Senior Economic Advisor, with the Ontario Clean
Air Alliance; Peter Love, Principal, and Cristina Giannetas, Consultant, with Lourie and Love
Environmental Management Consulting Inc.; Robert Lyng, Senior Advisor, Environmental
Programming, Fossil, and Ann Douglas, Senior Specialist, Environmental Programming,
Fossil, with Ontario Hydro; David Hall, Senior Program Advisor with the Air Policy and
Climate Change Branch of the Ontario Ministry of Environment; Doug Grano and Kimber
Scavo with the United States Environmental Protection Agency; Manfred Klein, Senior
Program Engineer, Oil Gas & Energy Branch, Environment Canada; and Karl Hemmerich,
Manager of the Air Quality Improvement Office of Toronto Works & Emergency Services.
We would also like to thank the Acting Manager of the Environmental Protection Office,
Steve McKenna, for his role in project initiation and support.
TABLE OF CONTENTS
ACKNOWLEDGMENTS
1.0CHANGES IN ONTARIO'S ELECTRICAL SECTOR
1.1Nuclear Asset Optimization Plan
1.2Introduction of Competition to Ontario's Electrical Market
1.2.1U.S. Experience: Renewable Energies and
Energy Conservation
1.2.2Ontario: Stranded Debt and the Viability of
Renewable Energies
2.0AIR QUALITY AND COAL-FIRED GENERATING STATIONS
2.1Acid Rain: Sulphur Dioxide and Nitric oxides
2.1.1Action Identified for Sulphur Dioxide
2.2Smog: Sulphur Dioxide and Nitrogen Oxides
2.2.1Ozone: Hospital Admissions
2.2.2Particulates: Hospital Admissions and Mortality
2.2.3Smog: Pyramid of Health Effects
2.2.4Action Identified for Nitrogen Oxides in Ontario
2.2.5Action Identified for Nitrogen Oxides in the U.S.
2.3Global Climate Change: Carbon Dioxide
2.3.1Action Identified for Carbon Dioxide
2.4Air Toxins: Mercury and Others
2.4.1Action Identified for Mercury
3.0EMISSIONS REDUCTIONS SCENARIOS
3.1Feasibility Study: North America
3.2Feasibility Study: Ontario
3.3Feasibility Study: Lakeview
4.0ONTARIO: REGULATORY AND POLICY ACTIONS
4.1Air Emissions Caps
4.1.1Sulphur Dioxide Cap
4.1.2Nitrogen Oxides Cap
4.1.3Carbon Dioxide Cap
4.1.4Mercury, Persistent Toxins Caps
4.1.5Recommendations
4.2Promote Energy Conservation and Renewables
4.3Disclosure of Information
5.0UNITED STATES: REGULATORY ACTION
6.0SUMMARY OF RECOMMENDATIONS
REFERENCES
1.0CHANGES IN ONTARIO'S ELECTRICAL SECTOR
At its meeting of September 15, 1998, the Toronto Board of Health requested that the Medical
Officer of Health obtain data from Ontario Hydro on air emission from coal-fired stations,
particularly from Lakeview and Nanticoke Generating Stations and report back with its
findings. This request reflects concerns about how two major changes in Ontario's electrical
sector may affect air quality. One change, the implementation of the Nuclear Asset
Optimization Plan, is a time limited change that is currently affecting air quality in Toronto,
and which will continue to affect air quality until at least 2000. The other change, the
introduction of competition to Ontario's electrical market, is a long-term structural change
that could have profound impacts on air quality in Toronto and the rest of Ontario for years to
come.
1.1 Nuclear Asset Optimization Plan
In 1997, Ontario Hydro's Board of Directors developed the Nuclear Asset Optimization Plan
(NAOP) to upgrade the performance and safety of nuclear facilities. The NAOP requires the
closure of seven nuclear units while resources are directed at upgrading the efficiency and
safety of the other 12 nuclear units. (Bruce A unit has been shut down since October 1995.)
The NAOP, which came into effect late in 1997, has reduced power generation from the
nuclear division by about 4000 megawatts (MW). It will continue to do so until at least 2001
(Select Committee, 1997).
Since late 1997, the electrical load from the nuclear division has been shifted to the fossil
fuels division. In 1998, the five coal-fired plants and one oil/gas-fired plant in this division
generated 34 million of the 145 million MW-hours of electricity produced in 1998. This
represents an increase of 15 million MW-hours from 1996. The increased production from
coal-fired plants has been accompanied by a significant increase in annual air emissions of
sulphur dioxide and nitrogen oxides from all five coal-fired plants and from the two coal-fired
plants that are upwind and in close proximity to Toronto, Nanticoke and Lakeview (see Table
1) (Ontario Hydro, Meeting, February 1999).
Table 1: Air Emissions from Ontario Hydro's Coal-Fired Generating Stations, 1996 &
1998
|
Nitrogen
Oxides *
1996 |
Nitrogen
Oxides
1998 * |
Increase |
Sulphur
Dioxide
1996 |
Sulphur
Dioxide
1998 |
Increase |
Five Coal
Plants |
35.4 kt |
56 kt |
58% |
84.9 kt |
143 kt |
68% |
Nanticoke |
18.9 kt |
27.5 kt |
46% |
46.2 kt |
78.4 kt |
70% |
Lakeview |
3.3 kt |
7.8 kt |
136% |
9.6 kt |
18.8 kt |
96% |
Ontario Hydro, Meeting, February 1999 * expressed as nitric oxide
Ontario Hydro expects to maximize energy production from its nuclear reactors when
upgrades to those units are completed. The Pickering units are supposed to be phased into
service between 2000 and 2002, while the Bruce units are supposed to be phased into service
between 2003 and 2009. While electrical generation at the coal-fired stations could decrease
once the nuclear units are back on line, Ontario Hydro has indicated that the scenario may
look different in a competitive market. The company will then be hoping to "maximize
revenues by optimizing utilization of all of its generating stations within the environmental
and market design restraints" (Ontario Hydro, Meeting, February 1999).
1.2Introduction of Competition to Ontario's Electrical Market
In October 1998, the Government of Ontario proclaimed Bill 35, the Energy Competition Act,
which introduces market competition to the production of electricity in the province of
Ontario. Under Bill 35, new companies from Canada and the U.S. will have the opportunity to
supply electricity to consumers in Ontario beginning in the year 2000. The intent of Bill 35 is
to provide cost savings to consumers by providing a competitive market in electricity
production. It is possible that Bill 35 may provide the market conditions necessary to promote
alternative energy sources such as co-generation, and solar and wind-powered electricity.
However, without the proper regulatory framework, Bill 35 could lead to further degradation
of air quality in southern Ontario and eastern Canada.
Under Bill 35, electrical power companies from the U.S. may enter Ontario's electrical
market. Many of these companies, particularly those from the Ohio Valley, are able to produce
electricity at very low prices. Many of these facilities in the U.S. are coal-fired generating
stations which produce greater quantities of air pollutants per unit of energy than similar
plants in Ontario. Ontario's five coal-fired plants currently emit 37% less sulphur dioxide, 7%
less nitrogen oxide, 20% less carbon dioxide, 31% less particulate matter, and 76% less
mercury per unit of electricity than coal-fired generating stations in the U.S. Ohio Valley and
Great Lake states (Institute for Environmental Studies, August 1998).
The introduction of competition to the electrical market in the United States in 1992 has
increased the use of electricity produced in coal-fired plants that have the highest levels of
emissions. A report prepared by the Northeast States for Coordinated Air Use Management
demonstrates that several large electric power companies in the mid-western United States
substantially increased their wholesale electricity sales between 1995 and 1996, with increases
ranging from 23 to 84%. These increases were accompanied by substantial increases in power
generation at the companies' highest polluting coal-fired power plants and resulted in
substantial increases in emissions of nitrogen oxides and other air pollutants (Natural
Resources Defense Council, 1998).
This U.S. experience is significant for Ontario residents both for what it demonstrates about a
competitive electrical market, and for its direct implications for air quality in Ontario. Trans-
boundary pollution from the mid-western U.S. contributes significantly to smog and acid rain
in Ontario. Estimates indicate that 50% of the ozone that affects Ontario in the summer is
generated as nitrogen oxides in the U.S. and that 90-95% of the sulphates that are deposited as
acid rain in southwestern Ontario are generated as sulphur dioxide in the U.S. (Ontario
Ministry of Environment and Energy, 1996; Acidifying Emissions Task Group, 1997). Given
that air emissions have increased in mid-western U.S. as a result of competition in the U.S.
electrical market, it can be assumed that air quality, the environment and human health in
Ontario have been, and will continue to be, adversely affected. Furthermore, given that
reliance on coal-fired generating stations has increased since competition has been introduced
to electrical generation in the U.S., the same can be expected to occur in Ontario unless
regulatory action is taken to actively discourage it.
1.2.1U.S. Experience: Renewable Energies and Energy Conservation
Before market competition was introduced in the U.S., electrical utilities in that country spent
$6 to 7.5 billion in 1995 for "public-purpose programs" such as energy efficiency, renewable
energy generation, and low-income assistance. Under the cost-cutting pressures created by
competition, many companies have reduced their investments in these programs because of
the belief that the programs place them at a disadvantage in a competitive environment
(Institute for Environmental Studies, August 1998).
The U.S. federal government has responded to this trend by announcing a comprehensive
electricity competition plan which proposes, among other things: 1) the establishment by the
U.S. EPA of a nitrogen oxides emissions cap and trading system; 2) the preparation of a
Ruling which requires the disclosure of information related to issues such as air emissions by
suppliers of electricity; 3) the adoption of a federal Renewable Portfolio Standard be adopted
which requires that electricity sellers ensure that a certain percentage of their electricity sales
are generated with renewable energies such as wind, solar, biomass or geothermal
technologies; and 4) the creation of a Public Benefit Fund of $3 billion per year to fund
consumer education programs, energy efficiency programs, and the development of renewable
energies (U.S. Department of Energy, March 1998).
1.2.2Ontario: Stranded Debt and the Viability of Renewable Energies
Under the Energy Competition Act , Ontario Hydro will be divided into three companies. Two
will be commercial enterprises: Ontario Power Generation (formerly identified as Genco)
which will own and operate power generation facilities, and Ontario Hydro Services Company
(formerly identified as Servco) which will own and operate the transmission and distribution
systems. One will be a non-profit organization: the Independent Electricity Market Operator
(IMO), which will dispatch power on the new electrical market in Ontario (Ontario Hydro,
Meeting, February 1999).
The extent to which alternative energies such as wind, solar and co-generation, will be able to
compete with Ontario Hydro's two successor companies will depend upon decisions made by
the provincial government about the way to divide Ontario Hydro's accumulated debt of $39
billion. In order to keep Ontario Power Generation viable, it has been decided that some
portion of Ontario Hydro's debt must be declared "stranded" and will be born equally by all
consumers as a surcharge on all electricity that enters the electrical distribution system
(Ontario Ministry of Finance, 1998).
Currently, estimates for the stranded debt range from $10 to $30 billion dollars depending on
a number of factors, including the value given to the nuclear facilities. If the value of the
stranded debt is set too low, Ontario Power Generation will not be viable. If the value of the
stranded debt is set too high, Ontario Power Generation will be able to produce power at an
artificially low price and alternative energies will not be able to compete in the marketplace.
When City Council considered the issue at its December 16, 1998 meeting, it recommended to
the provincial government that a gradual approach be used when estimating the stranded debt
for Ontario Hydro to ensure that competitors, including those offering renewable energy, are
not placed at an unfair disadvantage (Toronto Works & Emergency Services, November 4,
1998).
2.0AIR QUALITY AND COAL-FIRED GENERATING STATIONS
When coal is burned to generate electricity, large quantities of sulphur dioxide, nitrogen
oxides, carbon dioxide and persistent toxins are released into the atmosphere. In 1995,
coal-fired generating stations in Ontario were responsible for 22% of the province's emissions
of sulphur dioxide, 12% of the nitrogen oxides, 18% of the carbon dioxide, and 10% of the
mercury. In the same year, coal-fired generating stations in the U.S. were responsible for 63%
of that nation's sulphur dioxide, 26% of the nitrogen oxides, 31% of the carbon dioxide, and
21% of the mercury (see Table 2)(Institute for Environmental Studies, January 1998). Sulphur
dioxide and nitrogen oxides are both precursors for acid rain and smog. Carbon dioxide is a
greenhouse gas which contributes to global climate change. Persistent toxins are toxic
substances such as mercury which can accumulate in the environment and in the food chain.
Table 2: Emissions Contributed by Coal-Fired Generating Stations in 1995
|
Sulphur
Dioxide |
Nitrogen Oxides |
Mercury |
Carbon Dioxide |
Ontario
|
22%
(74 kt) |
12%
(43 kt) *** |
10%
(484 kg) ** |
18%*
(15,387 kt) |
United States |
63% |
26% |
21% |
31% |
Institute for Environmental Studies, January 1998.
* in 1990 ** kilograms (kg) *** expressed as nitrogen dioxide
2.1Acid Rain: Sulphur Dioxide and Nitrogen Oxides
In the last two decades, great strides have been made in both Canada and the U.S. to reduce
acid rain caused by emissions of sulphur dioxide. Between 1980 and 1996, the seven eastern
provinces of Canada (including Ontario) reduced their sulphur dioxide emissions by 46% to
1,700 kt per year, while the U.S. reduced its sulphur dioxide emissions by about 30% to
16,500 kt per year in 1995 (Acidifying Emissions Task Group, 1997).
The Acidifying Emissions Task Group, established on behalf of the Environment and Energy
Ministers of the federal, provincial and territorial governments in Canada, has determined that
much more must be done about acid rain. In its 1997 report, "Towards a National Acid Rain
Strategy," the Task Group indicates that, with full implementation of the Canadian and U.S.
programs for acid rain, 800,000 square kilometers of land and 95,000 lakes in southeastern
Canada will receive harmful levels of acid rain in the year 2010. In order to protect eastern
Canada from acid rain, the Task Group concluded that sulphur dioxide emissions in both
Canada and the U.S. would have to be reduced by 75% from current emission caps.
The Task Group estimated that a 75% reduction in sulphur dioxide emissions in both Canada
and the U.S. could prevent approximately 13,000 deaths and 5 million asthma symptoms days
in Canada over a 15 year period. The Task Group estimated that the 75% reduction scenario
could be worth $32 billion in health effects avoided in Canada over a 15 year period
(Acidifying Emissions Task Group, 1997).
The Task Group has also reported that acid rain resulting from emissions of nitrogen oxides
may be undermining the benefits from controlling sulphur dioxide emissions. While sulphur
dioxide emissions have been reduced substantially in the past twenty years on both sides of
the border, nitrogen oxide emissions have remained the same, at 2 million tonnes per year in
Canada, and 20 million tonnes per year in the U.S. (Acidifying Emissions Task Group, 1997).
2.1.1Action Identified for Sulphur Dioxide
The Acidifying Emissions Task Group has recommended that Canada and the U.S. should
reduce sulphur dioxide emissions by 75% beyond their existing caps. For Ontario, the 75%
reduction would result in an emission cap of 221 kt for sulphur dioxide from all sources. If the
75% reduction were applied to Ontario's electrical sector, the emission cap for sulphur
dioxide would be reduced to 43.75 kt per year.
2.2Smog: Sulphur Dioxide and Nitrogen Oxides
As major contributors of nitrogen oxides and sulphur dioxide, coal-fired plants contribute to
smog in two significant ways. First of all, nitrogen oxides react with volatile organic
compounds in the atmosphere to produce ground-level ozone, one of the two major
components of smog. Secondly, both nitrogen oxides and sulphur oxide interact with other
elements in the atmosphere to produce sulphates and nitrates, which contribute to the
particulate portion of smog.
Particulates are solid and liquid particles that are small enough to be inhaled into the lungs.
The particulate portion of smog can be composed of road dust, acid mists such as nitrates and
sulphates, and metals such as mercury and lead. It has been estimated that about 25% of
inhalable particulates (those smaller than 10 microns or PM10) and 40% of respirable
particulates (those smaller than 2.5 microns or PM2.5) are sulphates that have been derived
from sulphur dioxide (Ontario Ministry of Environment and Energy, 1996).
2.2.1Ozone: Hospital Admissions
Smog is strongly influenced by weather. In the summer, when it is sunny, hot and dry, ozone
levels are high and can trigger smog alerts. In the winter, particulates form the main
component of smog. Both ground-level ozone and particulates have been associated with a
broad range of health effects. Several large scale studies have demonstrated a highly
significant relationship between low readings of ground-level ozone and hospital admissions
for asthma, chronic lung disease, and respiratory infections. In one study conducted in 16
cities across Canada, increased hospital admissions were documented with maximum ozone
readings that averaged 31 parts per billion (ppb). These findings are significant for Toronto
residents because ozone levels in Toronto frequently exceed the 1-hour air quality criterion of
80 ppb. For example, ozone levels in Toronto exceeded 80 ppb, 44 times in 1994 (Ontario
Ministry of Environment and Energy, 1996; Ontario Ministry of Environment and Energy,
1995).
2.2.2Particulates: Hospital Admissions and Mortality
A number of large scale studies have linked particulates (PM10) with asthma, pneumonia,
respiratory and cardiac disease, hospital admissions and premature mortality. When
researchers summarized data from eight U.S. studies which examined the relationship
between short-term increases in inhalable particulates and death rates, they found that for
every 10 ug/m3 increase in PM10, there was a 1% increase in the overall death rate, a 1.4%
increase in the cardiovascular death rate, and a 3.4% increase in the respiratory death rate.
These increases were seen at PM10 concentrations just above 20 ug/m3. In a Toronto study,
hospital admissions for general respiratory conditions and asthma increased 3.4% and 2.1%
respectively for each 10 ug/m3 increase in inhalable particulates. As with mortality, increases
in hospital admissions were observed at PM10 concentrations just above 20 ug/m3. These
findings are significant for Toronto because air levels of PM10 commonly exceed 20 ug/m3 and
can reach levels as high as 75 ug/m3 (Ontario Ministry of Environment and Energy, 1996;
Ontario Ministry of Environment and Energy, 1995).
2.2.3Smog: Pyramid of Health Effects
While it has long been recognized that high levels of smog can aggravate a wide range of
serious health problems including bronchitis, asthma and other respiratory diseases, there is a
growing body of evidence which indicates that healthy people, particularly children, are
affected by relatively low levels of ozone (Steib, 1995; Ontario Medical Association, 1998). It
is generally accepted that air pollution produces a pyramid of health effects ranging from
severe, uncommon events (ie. death) at the top of the pyramid to mild, common events (eye,
nose and throat irritation) at the bottom of the pyramid. In between these two extremes are a
range of health effects including hospitalizations for respiratory and cardiac distress, reduced
lung function, and an increased rate of respiratory infections, with the less severe effects
affecting larger numbers of people. The pyramid model helps to illustrate that the increased
death rates and hospital admissions that are relatively easy to measure, represent a very small
portion of the overall burden that poor air quality places on human health (Steib, 1995).
2.2.4Action Identified for Nitrogen Oxides in Ontario
The Ontario Ministry of Environment has set an air quality target for Smog. By 2015, there is
to be a 75% reduction in the number of times that the 80 ppm criterion for ozone is exceeded
using 1990-1994 as the base years. In order to achieve the Air Quality Target, it has been
estimated that nitrogen oxide and volatile organic compound emissions must be reduced by
45% of 1990 levels by the year 2015 (Ontario Ministry of Environment, 1998).
In 1991, Ontario Hydro made a voluntary commitment to reduce its nitrogen oxide emissions
to 38 kt by the year 2000. In 1996, Ontario Hydro emitted 36 kt of nitrogen oxide emissions.
In 1998, nitrogen oxide emissions increased to 56 kt reflecting Ontario Hydro's increase
reliance on coal-fired plants during those years. Ontario Hydro plans to achieve its nitrogen
oxide target by 2000 by upgrading the low NOx burners at the Nanticoke plant. In 1998, the
Nanticoke plant emitted 27 kt of nitrogen oxides. When the new low NOx burners are
installed, Ontario Hydro expects that Nanticoke will emit 30% fewer nitrogen oxides per
MW-hour of electricity produced. However, the emission reductions gained with the new low
NOx burners will be off-set by increased utilization of the plant. Nanticoke is expected to
produce about 20 million MW-hours of electricity in 2000 compared with 10.4 million
MW-hours in 1996 (Ontario Hydro, Meeting). Hydro's ability to meet its nitrogen oxides
target in 2000 will depend upon the success of its nuclear recovery plan.
2.2.5Action Identified for Nitrogen Oxides in the U.S.
In the fall of 1998, the U.S. government passed a Rule entitled, "Final Rule Requiring
Regional NOx Reductions in the Eastern U.S." This Rule aims to reduce ground-level ozone
by reducing nitrogen oxide emissions in 22 U.S. states and the District of Columbia by the
year 2007. Each of the affected jurisdictions must develop a State Implementation Plan by
September 1999 which outlines the measures that will be taken to meet the assigned state
budget for nitrogen oxides by 2003. When the Rule is fully implemented, it is expected to
reduce nitrogen oxides from those 23 jurisdictions by about 28% in the ozone seasons (U.S.
Environmental Protection Agency, 1998).
While each jurisdiction is free to determine the mix of control measures necessary to meet its
nitrogen oxide budget, the EPA has suggested that significant reductions could be achieved in
a cost effective manner if an emission rate of 0.15 pounds per million BTU (or 1.5 pounds per
MW-hour) were applied to large electrical generating stations. The U.S. EPA has estimated
that nitrogen oxide emissions from the electrical sector in the 23 jurisdictions could be
reduced by 64% if the recommended emission rate is adopted by all 23 jurisdictions (U.S.
Environmental Protection Agency, Personal Communication).
Thirty petitions have been filed against the Ruling including petitions from eight states
covered under the Ruling and by a number of utilities. The Government of Ontario, as well as
a number of states, have filed in support of EPA's action. Briefs for those supporting the EPA
action must be submitted to the Court by June 1999. There is no injunction against the EPA
and its Ruling at this time (Ministry of Environment, Personal Communication).
2.3Global Climate Change: Carbon Dioxide
When fossil fuels such as coal, oil and gas are burned, carbon dioxide is released into the
earth's atmosphere. Carbon dioxide is a greenhouse gas which contributes to global climate
change. As the concentration of carbon dioxide in the atmosphere increases, the mean
temperature on the planet is expected to increase. This increase in temperature is expected to
have profound impacts on weather patterns, water levels, air quality and economies around the
world. Consequently, global climate change is expected to have significant impacts, directly
and indirectly, on human health.
The direct health effects of global climate change include those associated with increased air
pollution, more frequent and more severe heat waves, and more frequent "extreme weather
events" such as tornadoes and ice storms. For example, global climate change is expected to
increase the rate of chronic illnesses such as heart and lung disease that are associated with
declining air quality. The indirect health effects of global climate change are many and varied,
and could include a significant increase in insect-borne diseases such as malaria, an increase
in food-borne and water-borne diseases, and food shortages (Toronto Public Health, 1997).
2.3.1Action Identified for Carbon Dioxide
The Intergovernmental Panel on Climate Change, a panel of experts established by the United
Nations, has indicated that global carbon dioxide emissions will have to be reduced by more
than 50% to stabilize the concentration of greenhouse gases in the atmosphere at their present
levels (McMichael, 1996). At the international conference on global climate change convened
in Kyoto, Japan, Canada committed to reduce greenhouse gas emissions by 6% of 1990 levels
between 2008 and 2012. The City of Toronto has made a commitment to cut municipal carbon
dioxide emissions by 20% of 1988 levels by the year 2005, and has made considerable
progress towards that commitment (Toronto Public Health, 1997).
Ontario Hydro has developed a voluntary action plan which commits Ontario Hydro to
stabilize its greenhouse gas emissions at 1990 levels by the year 2000 and to reduce emissions
by a further 10% by the year 2005. Reporting trends show that Ontario Hydro's carbon
dioxide emissions have increased since 1994 from 18,400 kt to 23,500 kt in 1997. This
reflects the increased reliance on coal-fired plants in recent years due to the temporary closure
of several of Ontario Hydro's nuclear units (Ontario Hydro, Towards Sustainable
Development, 1997; Ontario Hydro, Meeting, February 1999).
2.4Air Toxins: Mercury and Others
Coal-fired generating stations emit a number of toxic pollutants that are persistent in the
environment, including lead, cadmium, chromium, arsenic, nickel, beryllium and mercury.
Lead is a neurotoxin that can affect the mental development of children at extremely low
levels of exposure. Cadmium is toxic to the kidneys, the lungs and the bones, and is present in
the environment in quantities that are considered hazardous to human health. Both lead and
cadmium are suspected carcinogens while chromium, arsenic, nickel and beryllium are well
recognized as human carcinogens (Health Canada, 1997; Government of Canada, 1994;
NIOSH, 1990).
As an environmental toxin, mercury is particularly worrisome because of its mobility in the
environment. In both its metallic and inorganic forms, mercury combines readily with organic
materials to become organic mercury which can accumulate in the food chain. Mercury is
toxic to birds, mammals and humans upon ingestion. Prenatal life (the embryo and fetus) is
particularly sensitive to the toxic effects of mercury. Organic mercury crosses the placenta and
can affect the development of the brain and nervous system of the fetus. Behavioural changes,
reduced intellectual abilities and reduced motor skills have been observed in children exposed
while in utero (Health Canada, 1997). Mercury is responsible for 22% of the fish consumption
restrictions placed on fish in Lake Ontario and for 99% of the restrictions placed on fish from
inland locations in Ontario (Ontario Ministry of Natural Resources, 1997-98).
2.4.1Action Identified for Mercury
Mercury is one of four substances identified under the North American Free Trade Agreement
to be banned or phased out by the governments of Canada, the U.S. and Mexico. Canada,
Ontario and the U.S. have made a commitment under the Canada-Ontario Agreement and
under the Binational Toxics Strategy to reduce mercury emissions to the Great Lakes by 90%
by the year 2000. The International Joint Commission (IJC) has called for the virtual
elimination of mercury from the Great Lakes Basin.
3.0EMISSIONS REDUCTIONS SCENARIOS
Air emissions from coal-fired generating stations are related to a number of factors: the age of
the facility, the quality of the emission control technology, and the sulphur content of the coal
burned. Older plants that have not been upgraded with newer emission control technologies
tend to have higher emission rates for sulphur dioxide, nitrogen oxides and air toxins. When
high sulphur coal is burned, between 5 and 50 pounds of sulphur dioxide can be emitted for
every MW-hour of electricity generated, depending upon the emission control technologies
employed. When low sulphur coal is burned, sulphur dioxide emissions can be reduced below
10 pounds per MW-hour (Institute for Environmental Studies, January 1998).
Emissions of toxic metals such as mercury, chromium, cadmium and arsenic are directly
related to the existence of these metals in the coal. The emissions of these toxins are not
reduced by the use of low sulphur coal. Nor are they greatly affected by emission control
technologies directed at sulphur dioxide or nitrogen oxides. As a rule, carbon dioxide
emissions increase when best available control technologies are employed on coal-fired plants
because more coal has to be burned to produce the same amount of electricity. In those
situations where the utilization of the plant increases after the investment is made to upgrade
emissions control technologies, carbon dioxide emissions can increase very substantially
(Personal Communication, Environment Canada).
When electricity is generated with natural gas, sulphur dioxide and the persistent toxins are
eliminated entirely while carbon dioxide and nitrogen oxide are reduced substantially. When
electricity is generated with renewable energies, air emissions are eliminated entirely.
3.1Feasibility Study: North America
In a study commissioned jointly by the Institute for Environmental Studies (IES) at the
University of Toronto and Pollution Probe, it was determined that sulphur dioxide and
nitrogen oxide emissions from coal-fired generating stations in eastern Canada, Ontario, the
northeastern U.S., the Ohio Valley and surrounding states, could be reduced by 80%,
particulate emissions by 50% and mercury emissions by 50 to 90% by 2010, if all of the
coal-fired stations were retrofitted with best available control technologies. Under this
scenario, carbon dioxide emissions would only be reduced by 16% because even the
"cleanest" coal-fired plant produces large quantities of carbon dioxide (see Table 3)(Institute
for Environmental Studies, January 1998).
Table 3: Eastern Canada, Ontario, Northeastern U.S., Ohio Valley & Surrounding
States, Emissions Reductions from Coal-Fired Plants, 2010
|
Sulphur
Dioxide |
Nitrogen
Oxides |
Particulates |
Carbon
Dioxide |
Mercury |
Other
Toxins |
Best Available Control
Technologies (BACT) |
80% |
80 % |
50% |
16% |
50-90% |
May
increase |
BACT & shift older
plants off coal |
90% |
90% |
76% |
61% |
95% |
Will
decrease |
Institute for Environmental Studies, January 1998
If however, all of the coal-fired generating stations built before 1970 were replaced with
non-coal-fired stations, and all other coal-fired stations were retrofitted with the best available
control technology, it was determined that carbon dioxide emissions could be reduced by 61%
because natural gas produces much less carbon dioxide than coal. Under this scenario,
reductions in sulphur dioxide, nitrogen oxides, particulates and mercury would be much
greater as well because natural gas releases no sulphur dioxide, much less particulate matter,
and none of the persistent toxins (see Table 3) (Institute for Environmental Studies, January
1998).
3.2 Feasibility Study: Ontario
The IES study demonstrated that nitrogen oxide emissions from Ontario Hydro's coal-fired
generating stations could be reduced from 48 kt to less than 6 kt per year by 2010 if the two
plants built before 1969 were closed (ie. Thunder Bay and Lakeview) and if the three plants
built after 1969 (ie. Nanticoke, Lambton and Atikokan) were retrofitted with best available
control technologies. In this study, it was assumed that the three remaining plants would
produce 14.4 million MW-hour of electricity and that the best control technologies would
result in a nitrogen oxides emission rate of 0.9 pounds per MW-hour of electricity generated.
In 1995, emission rates from Ontario Hydro's five coal-fired generating stations ranged from 3
to 5 pounds per MW-hour for nitrogen oxides (Institute for Environmental Studies, January
1998).
The Ontario Clean Air Alliance (OCAA), a coalition of 54 organizations including the
Canadian Institute of Environmental Law & Policy, Toronto Hydro, the Ontario College of
Family Physicians, and the City of Toronto, commissioned a feasibility study using data
provided by Ontario Hydro, Environment Canada and Natural Resources Canada. This study
demonstrated that in 2014, sulphur dioxide emissions from Ontario Hydro's coal-fired
generating stations could be reduced by 90% by shifting 90% of coal-generated electricity
projected for that date to natural gas (38.6 of 42.5 million MW-hour). This scenario would
reduce emissions of nitrogen oxides by 84%, carbon dioxide by about 57%, mercury
emissions by 90%, and arsenic, beryllium, cadmium, chromium, lead and nickel by 90% (see
Table 4). The cost for these reductions was estimated at $1,819 million or $1.86 per month for
the average residential customer. Under this scenario, approximately 3.9 million MW-hours of
electricity would still be provided by coal-fired generators (Ontario Clean Air Alliance,
November 1998; Ontario Clean Air Alliance, Letter, February 23, 1999).
Table 4: Ontario, Emission Reductions from Ontario Coal-fired Plants, 2014
Scenario |
Sulphur
Dioxide |
Nitrogen
Oxides |
Carbon
Dioxide |
Mercury |
Other
Toxins |
Shifting 90% from coal to
natural gas |
90%
|
84%
|
57%
|
90%
|
90%
|
Ontario Clean Air Alliance, Spreadsheet, November 1998
When the OCAA added the air emissions from all other sources of electricity in the province,
including those from non-utility generators, it concluded that air emissions from the entire
electrical sector could be capped at the levels identified in Table 5 by 2002 by shifting 78% of
projected coal-generated electricity to natural gas (14.3 of 18.3 million MW-hour). This
would require building an additional 2,595 MW of gas-fired capacity by 2002. Under this
scenario, approximately 4 million MW-hours of electricity would still be produced by coal
(Ontario Clean Air Alliance, Letter, February 24, 1999):
Table 5: Annual Air Emission Caps for Ontario's Entire Electrical Sector, 2002
Pollutant |
Caps |
Pollutant |
Caps |
Pollutant |
Caps |
Sulphur dioxide |
17.5 kt |
Arsenic |
19 kg |
Chromium |
180 kg |
Nitrogen oxides |
25 kt |
Beryllium |
9 kg |
Lead |
24 kg |
Carbon dioxide |
15,000 kt |
Cadmium |
7 kg |
Nickel |
228 kg |
Mercury |
45 kg |
|
|
|
|
Ontario Clean Air Alliance, November 1998 * expressed as nitric oxide
3.3Feasibility Study: Lakeview
In the fall of 1998, Ontario Hydro announced a proposal to produce 550 MW of gas-fired
electrical generating capacity at the Lakeview plant. Ontario Hydro has indicated that this is a
proposal and that no commitment has been made to this project yet. A feasibility study is
being conducted to determine if it is financially feasible. Ontario Hydro has indicated that the
gas-fired generating capacity could be added to the coal-fired capacity of the plant or used to
displace some of the coal-fired capacity. If the gas-fired generator is used to displace
coal-fired capacity, the proposal could result in reduced emissions of nitrogen oxide emissions
because combined-cycle gas turbines produce 80% less nitrogen oxide emissions than
coal-fired generators. If however, the gas-fired generator is added to the coal-fired capacity of
the station, the proposal could increase emissions because the emissions from the gas-fired
generator would be added to those from the coal-fired generator. Ontario Hydro indicated that,
in a competitive environment, utilization of this plant could increase in the future (Ontario
Hydro, Meeting, February 1999).
4.0ONTARIO: REGULATORY AND POLICY ACTIONS
The Market Design Committee was the group established in January 1998 to provide advice to
the Minister of Energy, Science and Technology on the market rules, powers and
responsibilities that any regulatory agency would need to ensure support for a competitive
electrical market. On environmental matters, the Market Design Committee indicated the
need: 1) to establish an air emission cap and trading system; 2) for increased Ministry support
to promote consumer energy conservation programs; 3) to develop a mechanism to verify
company claims of "green" power; and 4) for public disclosure by electrical suppliers on
sources of electricity and pollution emissions. In its Final Report, the Market Design
Committee recommended that an environmental panel be established by the Ontario Ministry
of Energy, Science and Technology to implement the above recommendations (Market Design
Committee, February 1999).
4.1Air Emission Caps
Bill 35 makes only one reference to the Market Design Committee's recommendation
respecting air emission caps and emissions trading. It indicates that the Environmental
Protection Act will be amended to allow the development of regulations that will essentially
establish "an emission trading system for environmental and cost benefits". Currently, in
Ontario, there is one regulation which applies air emission caps to the generation of
electricity. Regulation 355, established under the Environmental Protection Act requires that
Ontario Hydro limit its release of sulphur dioxide to 175 kt per year, and its total emissions of
sulphur dioxide and nitrogen oxides to 215 kt per year, after 1993. Regulation 355 does not
apply to any other air pollutants emitted by Ontario Hydro. Nor does it apply to any other
generator of electricity in or out of the province. Consequently, unless Regulation 355 is
revised, air emissions related to the production of electricity for Ontario consumers could
actually increase in the future under a competitive electricity market (Select Committee,
December 1997).
The Ministry of Environment is currently reviewing Regulation 355 to determine how best to
proceed on this issue. This review presents the provincial government with the opportunity to
improve air quality in Ontario by setting air emissions caps for sulphur dioxide and nitrogen
oxides that are more protective than those which currently exist. By extending air emissions
cap to carbon dioxide and seven persistent toxins including mercury, the provincial
government could make considerable progress towards its smog target for nitrogen oxides and
towards its commitment on global climate change. It would also be encouraging a shift away
from coal generated electricity towards natural gas, solar and wind generated electricity.
4.1.1Sulphur Dioxide Cap
The Acidifying Emissions Task Group recommended that Canada and the U.S. should reduce
sulphur dioxide emissions by 75% beyond existing caps. This recommendation has been
adopted by the Toronto Environmental Alliance (TEA), the Sierra Club, and the David Suzuki
Foundation, which have founded a coalition called the OntAIRio Campaign, and the Ontario
Medical Association. The study commissioned by the OCAA has demonstrated that it is
financially feasible to reduce the sulphur dioxide emissions cap for all companies providing
electricity in Ontario by 90% to 17.5 kt by the year 2002. This would be achieved by shifting
78% of coal-fired electricity projected for that date to natural gas.
4.1.2Nitrogen Oxides Cap
The Ontario government has determined that nitrogen oxide levels in Ontario must be reduced
by 45% of 1990 levels by the year 2015 in order to reduce the number of times that the health
based criterion for ground level ozone is exceeded. Given that Ontario's coal-fired generating
stations were responsible for 12% of Ontario's nitrogen oxide emissions in 1995, and that its
share of those emissions has increased in the past two years due to an increased reliance on
coal-fired plants, it is fair to seek greater reductions in this sector.
In a 1998 position paper on air quality, the OMA recommended that Ontario Hydro's
voluntary commitment to nitrogen oxide reductions should be replaced with a regulation
which would limit emissions from Ontario Hydro and imported electricity to no more than 6
kt annually. The OntAIRio Campaign has recommended that nitrogen oxide emissions from
all companies providing electricity to Ontario consumers (excluding non-utility generators)
should be capped at 6 kt by 2005. The 6 kt recommendation is based upon the feasibility study
conducted by IES. The OntAIRio Campaign is promoting the idea that the 6 kt cap can be
achieved with a mix of policy initiatives including an aggressive energy conservation program
to reduce the demand for electricity, the promotion of renewable technologies, fuel
conversion, and the application of best available control technology (Toronto Environmental
Alliance, Personal Communication).
The OCAA maintains that nitrogen oxide emissions from all companies producing electricity
in Ontario (including non-utility generators) could be reduced to 25 kt by the year 2002 by
shifting 78% of coal-fired electricity to natural gas. It assumes that 12 kt of nitrogen oxide
emissions would be produced by what are currently considered non-utility generators, that 3 kt
would be emitted from the new gas-fired generators, and that another 10 kt would be produced
by the remaining coal-fired generators. When the 12 kt estimate for non-utility generators is
added to the 6 kt recommendation (which is 3.9 kt when converted to nitric oxide) the
difference between the OCAA cap and the OMA cap is only 9.1 kt of nitrogen oxides (when
expressed as nitric oxide).
4.1.3Carbon Dioxide Cap
The Intergovernmental Panel on Climate Change, established internationally, has indicated
that global carbon dioxide emissions would have to be reduced by more than 50% to stabilize
the concentration of greenhouse gases in the atmosphere at their present levels. Toronto has
committed to reduce greenhouse gas emissions by 20% of 1988 levels by 2005, and has made
considerable progress towards that goal. In 1990, coal-fired plants in Ontario were responsible
for 18% of the carbon dioxide emissions in Ontario at 15,387 kt. By 1997, carbon dioxide
emissions increased by about 50% to 23,50 kt due to increased reliance on coal-fired plants.
The OCAA study demonstrated that, by shifting 78% of coal-fired electricity to natural gas,
carbon dioxide emissions could be reduced by 48% to 9,200 kt by 2002. When emissions
from existing non-utility generators are added to these emissions, the total carbon dioxide
emissions in 2002 would be 15,000 kt.
4.1.4Mercury, Persistent Toxins Caps
Ontario, Canada and the U.S. have made a commitment under the Canada-Ontario Agreement
and under the Binational Toxics Strategy to reduce mercury emissions to the Great Lakes by
90% by the year 2000. The IJC has called for the virtual elimination of mercury from the
Great Lakes Basin. The OntAIRio Campaign has asked the provincial government to commit
to the virtual elimination of mercury emissions by 2005. The OCAA study has demonstrated
that air emissions of mercury and six other persistent toxins from Ontario's electrical sector
could be reduced by 78% by 2002 by shifting 78% of coal-fired generation to natural gas.
4.1.5Recommendations
Given that it appears technically and financially feasible to reduce emissions of sulphur
dioxide, nitrogen oxides, carbon dioxide, mercury, arsenic, beryllium, cadmium, chromium,
lead and nickel from the entire electrical sector to 17.5 kt, 25 kt, 15,000 kt, 45 kg, 19 kg, 9 kg,
7 kg, 180 kg, 24 kg and 228 kg respectively, and the compelling human health and
environmental arguments in favour of doing so, it is strongly recommended that the provincial
government move to adopt these levels recommended by the OCAA as air emission caps for
Ontario's electrical sector for the year 2002.
Furthermore, it is recommended that a reduced annual air emission cap for nitrogen oxides be
established for the year 2010, which reflects the cap recommended by the OMA for coal
generated electricity.
4.2Promote Energy Conservation and Renewables
Bill 35 captures the Market Design Committee's recommendation respecting energy
conservation and renewables with rather vague language. It indicates that it will be the Ontario
Energy Board's (OEB) responsibility "to facilitate energy efficiency and the use of cleaner,
more environmentally benign energy sources in a manner consistent with the policies of the
Government of Ontario." The OEB should examine the Renewable Portfolio Standard and the
Public Benefit Fund proposed by the U.S. Administration when developing a strategy to
ensure that energy conservation and renewable energies are promoted in the new competitive
market place.
4.3Disclosure of Information
Several sections of Bill 35 have captured the Market Design Committee's recommendations
respecting disclosure of information. The Ministry of Environment is considering developing
regulations that require energy producers to report on 28 air pollutants. At this time, the
Ministry does not know whether it would have the legal authority to apply these regulations to
electricity producers in the U.S.. It is seeking a legal opinion on that issue. The Ministry may
initiate a consultation process to discuss the nature of the information to be disclosed and the
process by which disclosure occurs (Ministry of Environment, Personal Communication).
The Ministry of Energy, Science and Technology under the Ontario Energy Board Act is
developing regulations for energy labeling. It is the Ministry's intent to ensure that
information on environmental emissions is provided to allow consumers to make
environmentally informed choices (Ontario Ministry of Energy, Science and Technology,
Personal Communication). The effectiveness of these regulations will depend however upon
details that have not yet been developed.
5.0UNITED STATES: REGULATORY ACTION
In 1998, the OMA recommended that electrical generators in the U.S. should not be allowed
to release more than 0.15 pounds of nitrogen oxides per million BTU of electrical power
generated, and that no exemptions should be allowed for older plants. The emission rate
recommended by OMA is the same rate recommended for coal-fired plants by the U.S. EPA
in its proposed Rule for nitrogen oxides. The U.S. EPA considers this rate to be cost-effective
for large electric generators while providing improvements in air quality during ozone seasons
(Ontario Medical Association, 1998; U.S. Environmental Protection Agency, Personal
Communication).
The 0.15 pound per million BTU emission rate is the equivalent of 1.5 pounds per MW-hour
which is more than 50% greater than the 0.9 pounds per MW-hour emission rate applied in the
feasibility study conducted by IES. The U.S. EPA emission rate does, however, represent a
substantial reduction in the emission rates of companies currently operating in the U.S..
According to the National Resources Defense Council, the 10 top producing electrical
companies in the U.S. are currently performing at emissions rates ranging from 5.5 to 10
pounds per MW-hour (National Resources Defense Council, 1998). The U.S. EPA
recommended emission rate is also much lower than the current emission rates for Ontario's
five coal-fired plants of 3 to 5 pounds per MW-hour. If the U.S. EPA successfully defends its
proposed Rule for nitrogen oxides, it could substantially improve air quality with respect to
ground level ozone. However, a great deal depends upon how the 23 affected jurisdictions
implement the federal Rule.
Before the U.S. EPA announced its Rule for nitrogen oxides, the OMA recommended that the
Canadian government, the Ontario government or an appropriate municipal government
should petition the U.S. EPA Administrator to use Section 115 of the U.S. Clean Air Act to
require the sulphur dioxide and nitrogen oxides reductions necessary in the U.S.. If the U.S.
EPA successfully defends its proposed Ruling for nitrogen oxides and its 1.5 pounds per
MW-hour emission rate is adopted by a number of the 23 jurisdictions, the U.S. will be
moving ahead of Ontario on air quality related to its electrical sector. For this reason, it is
recommended that all levels of government monitor the progress of the U.S. EPA Rule to
determine what actions, if any, should be taken in the future to encourage action on air
emissions in the U.S..
6.0SUMMARY OF RECOMMENDATIONS
It is recommended that the Ontario Minister of Environment and the Ontario Minister of
Energy, Science and Technology:
- establish the regulatory framework necessary to ensure that competition in Ontario's
electrical sector does not lead to greater reliance on coal-fired generating stations and
further degradation of air quality, human health and the environment in Toronto and the
rest of southern Ontario;
2.establish annual air emission caps for the entire electrical sector to limit the volume of air
pollutants released each year, ensuring that caps:
a) apply to companies supplying electricity to Ontario as well as those generating electricity in
Ontario;
b)encompass carbon dioxide and persistent toxins as well as sulphur dioxide and nitrogen
oxides to encourage a shift towards natural gas and renewable energies for the production of
electricity;
c) for the year 2002 be set as follows: 17.5 kilotonnes (kt) for sulphur dioxide, 25 kt for
nitrogen oxides, 15,000 kt for carbon dioxide, 19 kilograms (kg) for arsenic, 9 kg for
beryllium, 7 kg for cadmium, 180 kg for chromium, 24 kg for lead, 45 kg for mercury, and
228 kg for nickel, as recommended by the Ontario Clean Air Alliance;
d)for 2010 reduce the annual air emissions cap for nitrogen oxides to reflect the cap
recommended by the Ontario Medical Association for coal generated electricity;
3.establish a renewable energy standard which defines the percentage of electricity that must
be generated with renewable energies by electrical suppliers serving Ontario consumers; and
4.establish a public benefit fund to support the promotion of energy conservation and the
development of renewable energies with a surcharge on the transmission of electricity.
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Acidifying Emissions Task Group, Towards a National Acid Rain Strategy, Submitted to the
National Air Issues Coordinating Committee, October 1997.
Environment Canada, Manfred Klein, Senior Program Engineer, Oil, Gas & Energy Branch,
personal communication, March 18, 1999.
Government of Canada, Canadian Environmental Protection Act: Priority Substances List
Assessment Report Cadmium and its Compounds, 1994.
Health Canada, Great Lakes Health Effects Program, State of the Knowledge Report on
Environmental Contaminants and Human Health in the Great Lakes Basin, Edited by D.
Riedel, N. Tremblay and E. Tompkins, 1997.
Institute for Environmental Studies, University of Toronto, and Pollution Probe,
Environmental Protection in a Competitive Electricity Market in Ontario: Analysis of
Environmental Policy Options, August 1998.
Institute for Environment Studies, University of Toronto, and Pollution Probe, Emissions
From Coal-Fired Electric Stations: Environmental Health Effects and Reduction Options,
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Market Design Committee, List of Recommendations from Second Interim Report, Chapter 5,
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McMichael, A.J. et al.,Task Group of the World Health Organization, the World
Meteorological Organization, and the United Nations Environment Programme, Climate
Change and Human Health, WHO, Geneva, 1997.
NIOSH, U.S. Department of Health and Human Services, NOSH Pocket Guide to Chemical
Hazards, June 1990.
Natural Resources Defense Council, Benchmarking Air Emissions of Electric Utility
Generators, June 1998.
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