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CHP provides a strategic energy solution for Ontario

The Sarnia Regional Cogeneration Plant – on the St Clair River in Sarnia, Ontario – is a 444 MW natural gas fired cogeneration power plant. The plant produces electricity and thermal energy in the form of steam for the following steam hosts: Dow, Bayer, Suncor and NOVA.
The plant’s major equipment consists of three Alstom gas turbines; three Nooter-Eriksen supplementary fired heat recovery steam generators (HRSGs); and one Westinghouse and two Alstom steam turbines. Natural gas supplied by Union Gas Distribution infrastructure fuels the facility.
The plant delivers 230 kV power to circuits N6S and N7S on the Hydro One grid, which feeds into the Ontario electricity market administered by the Independent Electricity System Operator.

The Canadian province of Ontario already has a substantial amount of CHP generating capacity and has launched a long-term plan for further CHP growth. Here, Ontario Power Authority’s Colin Andersen describes how two new CHP support programmes will help to deliver this growth.

Ontario has adopted a strategic focus and disciplined approach to project siting for further investment in combined heat and power (CHP), or cogeneration, projects in the province.

These criteria will have even greater influence on CHP procurements planned for the future, which will be based on Ontario’s Long-Term Energy Plan (LTEP) and the detailed Integrated Power System Plan (IPSP) now in development. In an electricity system with a capacity of about 35 GW, CHP is intended to play a relatively small but important role.

In November 2010, the Government of Ontario released its LTEP that will help guide the province as it continues to build a clean, modern and reliable electricity system. It will ensure Ontario is a North American leader for clean energy jobs and technology and becomes coal-free by 2014. The plan is available to read at www.ontario.ca/energyplan.

The Ontario Power Authority is responsible for developing an electricity plan that integrates conservation, supply and transmission to implement the LTEP and the electricity supply mix determined by the government. The IPSP will be submitted for review to the Ontario Energy Board, the regulator of the province’s electricity and natural gas sectors.

CURRENT CHP FACILITIES IN ONTARIO

The Ontario Power Authority (OPA) is responsible for implementing Ontario’s electricity plan, which includes conservation and clean energy programmes, such as those for CHP. It has procured almost 500 MW of CHP since it began operating in 2005. It now manages contracts for almost 1000 MW overall, including those entered into by the Ontario government before the OPA began operations.

Ontario is home to CHP facilities of many different sizes and in many different types of environments – colleges, hospitals, even Toronto Pearson International Airport. A summary of OPA-managed CHP contracts, their capacities and commercial operation dates is provided in Table 1.

Beyond these operating entities, the OPA also holds contracts for three new biomass-fuelled CHP initiatives in Northern Ontario, each pursuing its own development path. These facilities are associated with pulp and paper mills located in Sault Ste Marie, Thunder Bay and Hornepayne.

Ontario’s LTEP estimates that the total industrial CHP capacity in Ontario is about 2000 MW, or about 6% of the province’s installed capacity.

CHP OFFERS A HIGH EFFICIENCY NICHE SOURCE

Ontario aims to develop North America’s most reliable, cost-effective and sustainable electricity system. These core principles, articulated by the OPA and expressed in both the LTEP and IPSP, determine the province’s approach to CHP. Building on this foundation, the province is making steady progress on diversifying its supply mix toward eliminating all coal-fired generation by the end of 2014. Until recently, coal comprised 20% of Ontario’s fuel mix, and the province will be one of the first jurisdictions to remove coal from its supply mix.

Given Ontario’s diverse electricity supply mix, market structure and system operability needs, the ability to dispatch CHP has been a requirement for most of the CHP facilities OPA has under contract and will procure in the future.

The inherently high efficiency of CHP creates a natural niche opportunity for it in Ontario. That is why the LTEP and IPSP call for a total future target procurement of 1000 MW, affirming that properly sited CHP can contribute tangibly to Ontario’s emerging electricity supply needs.

The potential for CHP growth was given a significant boost earlier this year through the OPA’s introduction of two new programmes: Combined Heat and Power IV (CHP IV) and the Clean Energy Standard Offer Program (CESOP). An overview of each is provided in Table 2.

RIGHT SIZE, RIGHT LOCATION, RIGHT PRICE

To be successful, it is critical that new CHP projects are cost-effective – that they be the right size, in the right location and at the right price.

Based on these parameters, projects that are likely to succeed will feature a stable heat host, offer high efficiency and strong economics, and will target urban areas, municipalities, hospitals, industrial parks and campuses. District energy projects that can tap into the local distribution system are ideal candidates under these circumstances because they provide value to developers and ratepayers alike, and mesh well with the sustainability goals of the LTEP and IPSP.

As I told delegates attending the joint conference of the Canadian District Energy Association and the International District Energy Association in June: ‘A local approach with local benefits is key to building a more sustainable future.’ The OPA is committed to this concept, and we are excited about the interest that has been shown in the current procurement programmes.

Colin Andersen is CEO of the Ontario Power Authority.

For more information about the CHP IV and CESOP programmes, visit the OPA’s website at www.powerauthority.on.ca

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