Canadian Plastics

Concern Grows Over Predicted Ontario Energy Shortage

A particular sound happens when the power goes out. For most people, it's the sound of electricity's hum winding down to silence....

April 1, 2006   By Dave Lazzarino



A particular sound happens when the power goes out. For most people, it’s the sound of electricity’s hum winding down to silence.

For those on the factory floor, however, it’s the sound of money trickling down the drain. And for Ontario’s plastics processors and moldmakers, the fear of that sound is growing.

That’s because the Ontario government’s closure of the Lakeview coal-fired power plant in April 2005 and its plans to shut down all other coal plants by 2009 have fuelled concerns of an energy shortage that could lead to rolling blackouts.

For a plastics processor, even the shortest of shutdowns could mean huge costs, said Larry Herod, manager of energy resources at Royal Group Technologies Ltd., in Vaughan, Ont.

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“Whether (the power) is off for an hour or a minute or two, it has a large impact on the plastics industry,” Herod, who has 30 years experience working for the government’s energy sector, added.

Atul Sharma, the Canadian Plastics Industry Association’s (CPIA) regional director in Ontario, agreed.

“We have an example where one of our members had a 17-second brownout, had to shut the entire plant down and restart it, and that cost them several millions of dollars,” Sharma said.

And many in the manufacturing community think the government is focusing too much on devising tactics for manufacturers to mitigate the financial damage from these predicted rolling black-outs rather than addressing the energy shortage itself.

“They really don’t look at the whole (power) generation picture,” Herod said, noting that backup generators are too cost-prohibitive for the processing community to deploy.

Some plants are equipped with generators, he added, but they exist mainly to supply a small amount of power to avoid any environmental problems should a shutdown occur.

Despite the skepticism of the manufacturing industry, the Ontario government holds that it is taking measures to avoid rolling blackouts.

Donna Cansfield, energy minister for Ontario, said development of the proposed Portlands Energy Centre (PEC), to be located in downtown Toronto, has been approved.

Portlands is set to produce 550 megawatts of gas-fired energy, enough to cover the 250 megawatts that the Independent Electricity System Operator (IESO) says is needed to cover Ontario’s energy needs by 2009.

Plus, the government says it is working on conservation measures to avoid further shortages.

For the government to successfully dodge power outages, it will be doing so, to some degree, with gas-fired plants like the PEC.

However, the volatility of the natural gas market makes the costs associated with gas-fired plants uncertain.

“We cannot predict price,” Terry Young, director of external relations at the IESO, said. The IESO is responsible for balancing supply and demand of electricity in Ontario and allocating it accordingly. Price depends on the demand at any given time, he explained, but rebate programs offset higher prices for consumers.

These rebates, meant to regulate price fluctuations, are offered to those companies who have a contract with a licensed energy retailer and consume more than 250,000 kilowatt-hours (kWh) a year, he said.

One tactic, Young suggested, is to minimize cost and energy usage by load-shifting.

In other words, increasing production during off-peak hours will allow processors to avoid times when overall energy use is high — that’s when blackouts are more prevalent — and lower their costs, because a lower demand for energy will result in lower overall prices.

Sharma says the CPIA is attempting to find other solutions to the energy woes than load-shifting.

“We’re doing the consultation on the supply mix and trying to get the government to ensure that they have a diversity of supply available,” he says.

Sharma also says the CPIA will be conducting seminars on energy conservation geared towards small- to medium-sized enterprises — as they could stand to benefit the most from cost-cutting measures — and the CPIA has been talking to the government about breaking down plastic waste, as well as other recycled materials, into their basic elements to produce fuel.

“The importance of having the plastics in there is that it is almost like a fossil fuel — it retains 94 per cent of its BTU value so it gives it a very high, clean burn,” he explained.


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