Premier McGuinty no doubt has good political reasons to once again announce the retirement of Ontario's coal-fired power plants. Canadians may want the moral satisfaction of being able to say "Okay, so it's still warming, but at least, we're not contributing as much to the problem." But this moral satisfaction will come at a high price, as Ontarians see higher energy costs and reduced economic competitiveness, with no genuine compensating improvement in health or environmental quality.

Ontario Premier Dalton McGuinty has once again pledged to shut down Ontario's four remaining coal power plants in Lambton, Nanticoke, Thunder Bay, and Atikokan. The four plants, which generate over 6,000 MW of electricity, account for 20 percent of Ontario's current supply of electricity, and are now slated for shut down in 2014 (Urquhart, 2007). Demonizing coal is a popular pastime of late, and the public has generally become convinced that the coal which powers their televisions and computers is too dirty for the sensibilities of the environmentally-concerned. People cheered recently when the Lakeview Generating Station on the shore of Lake Ontario was demolished in a controlled implosion (CBC, 2007). Such optics are hard for politicians to resist.

The new shut-down pledge is McGuinty's third kick at this particular can. In 2003, he pledged to shut down coal-fired power plants by 2007 to reduce emissions of conventional air pollutants, such as particulate matter and mercury. Later, he changed the date to 2009, and now, he's pushed the date back, dropped the plan to scrub out regular pollutants, and refocused the mission on reducing greenhouse gas emissions (Howlett, 2007).

Premier McGuinty brags that, "There is only one place in the world that is phasing out coal-fired generation. We're doing that right here in Ontario" (Puxley, 2007). But this is a boast that cuts both ways: if nobody else in the world thinks that coal power plant shut-downs are a good idea, who is more likely right--all the electricitygenerating regions on Earth, or Premier McGuinty? In fact, the coal shut-down idea was bad in 2003, is bad in 2007, and will still be bad in 2014.

Two studies produced after the 2003 pledge to shut down Ontario's coal power plants demonstrated that shutting down these plants offers no health or environmental benefits, but is likely to impose significant hardship through higher energy costs and reduced energy reliability.

The first study, Pain Without Gain, written by Ross McKitrick, Joel Schwartz, and me (McKitrick et al., 2005), shows that sharp air pollution declines of recent decades have left few people exposed to harmful levels of air pollution, even with the emissions that coal-fired power generation adds to the mix. As for the mercury emissions associated with coal-fired electricity production, these turn out to be a tiny fraction of the mercury flows found naturally in the environment, and studies in the scientific literature suggest that exposure to current mercury levels from all sources is unlikely to cause significant harm to humans or other organisms.

Now, as Canada feels pressure to comply with the eleventh-hour Kyoto commitment legacy of Jean Chrétien, the rationale for shutting down Ontario's coal power plants is that it will provide some benefit in terms of reducing climate change. But Ontario's coal power plants account for a trivial percentage of global greenhouse gas emissions. Shutting them down will not make a perceptible difference in greenhouse gas concentrations for two reasons. First, unless McGuinty can overcome resistance to new nuclear or hydro capacity (which is unlikely, given the historic opposition to such technologies by environmental and NIMBY groups), any useful replacement energy source will produce significant greenhouse gas emissions. Second, with China now building a new coal-fired power plant every week (Oster, 2007), anything that Canada could do to reduce the global atmospheric burden of greenhouse gases by shutting off a few power plants recedes into insignificance.

As we showed in Pain Without Gain, the decision to shut down Ontario coal power generation doesn't look any better from the cost side of the ledger. Coal's abundance and lower cost make it the "price setter" for Ontario electricity costs over half the time, while using other fuels results in electricity prices more than twice as high as coal.[1] The increase in energy prices due to retiring coal power plants might be tolerable to Ontario's wealthier citizens, but lower-income Ontarians could feel the bite as energy costs rise to consume more of their already limited income, and as jobs disappear due to the impact of higher energy prices on Ontario's economy.

Another study damning the Ontario government's decision is a paper called Ontario's Energy Crunch: Why Phasing Out Coal is an Unwise Strategy published in February, 2005 by energy analyst Peter Savage. Savage comes to similar conclusions with regard to the lack of clear benefits of retiring coal power, and the likelihood that displacing coal will boost energy prices. He also extends his analysis to a discussion of "renewable energy," such as wind power, the oft-proposed alternative to coal. After evaluating wind power efficiencies, Savage points out that wind power is certainly not going to replace Ontario's coal power, observing that ". . . to replace Nanticoke's coal-fired effective capacity and energy generation with wind power would require . . . between 8,000 and 12,000 turbines."

Even if all of the known renewable potential is developed by January 2008 (a dubious proposition for many reasons), Savage observes that the contribution to Ontario's electricity supply would be about 4,000 megawatts, which is 2,000 megawatts short of what is produced by Ontario's coal power plants.

Premier McGuinty no doubt has good political reasons to once again announce the retirement of Ontario's coal-fired power plants. Canadians may want the moral satisfaction of being able to say "Okay, so it's still warming, but at least, we're not contributing as much to the problem." But this moral satisfaction will come at a high price, as Ontarians see higher energy costs and reduced economic competitiveness, with no genuine compensating improvement in health or environmental quality.

Kenneth P. Green is a resident scholar at AEI.

Note

1. If there is not enough coal readily available when Ontario Power wants to buy it, the company turns to higher priced fuels such as natural gas, which then become the "price setter."

References

CBC (2007). "Crowd Cheers as Coal Plant Crashes Down." CBC News (June 28).

Howlett, Karen (2007). "McGuinty Lays Out Plan to Cut Emissions." Globe and Mail Update (June 18).

McKitrick, Ross, Kenneth Green, and Joel Schwartz (2005). Pain without Gain: Shutting Down Coal-Fired Power Plants Would Hurt Ontario. Vancouver: The Fraser Institute.

Puxley, Chinta (2007). "Ontario Promises to Close Coal Plants by 2014, Reduce Greenhouse Gas Emissions." Canadian Press (June 18).

Savage, Peter (2005). Ontario's Energy Crunch, Why Phasing Out Coal is an Unwise Strategy. (February). Research and Markets. Digital document available at http://researchandmarkets.com/reportinfo.asp?at_id=0&report_id=307834&q=Ontario&p=1.

Oster, Shai (2007). "China to Ramp Up Greenhouse-gas Efforts." Wall Street Journal (June 15): A8.

Urquhart, Ian (2007). "Much Assumed in Plan to Close Coal-fired Plants." thestar.com (June 20).

Web link: http://www.aei.org/publications/filter.all,pubID.2...