How generation choices are influenced by costs, risks and externalities: the generation planning process in Ontario, Canada

Ontario Hydro is responsible for generating, supplying and delivering electricity throughout Ontario, Canada. Installed generation capacity of 32 GW consists of 20% hydro-electric (6.4 GW), 35% fossil (11.3 GW) and 40% nuclear (14.2 GW). Ontario Hydro' s planning process has evolved significantly since its decision in the late 1970's to build the 4-unit 3500 MW Darlington Nuclear Station. The emergence of environmental issues as a primary consideration, increased awareness of financial and regulatory risks, and uncertainty about the load forecast and the impact of demand management programs on the load have all contributed to the changed planning process. This paper discusses Ontario Hydro's responses to these changes such as: increased public involvement in the decision-making process; the use of a broader range of options including demand management and non-utility generation; optimizing the use of the existing system; more complete risk analyses of generation options, and recent attempts to incorporate externalities into the decision-making process. (authors). 3 figs