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Pierre Charlebois Chief Operating Officer: Ontario Power Generation

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Presentation on theme: "Pierre Charlebois Chief Operating Officer: Ontario Power Generation"— Presentation transcript:

1 OPG's Contribution to Ontario's Energy Needs: Performance, Projects and Priorities
Pierre Charlebois Chief Operating Officer: Ontario Power Generation Canadian Manufacturers and Exporters Navigating Ontario’s Energy Future February 20, 2008 Mississauga, Ontario

2 OPG’s Contribution to Ont.’s Energy Needs current performance
OPG Profile OPG’s Contribution to Ont.’s Energy Needs current performance environmental contribution OPG’s Contribution Going Forward new hydro projects nuclear refurbishment new build nuclear OPG and Financial Sustainability Priorities

3 OPG: Profile Owned by Province of Ontario
Produces about 70% of electricity consumed in Ontario In-service capacity: 22,147MW 64 Hydroelectric stations: 6,956 MW 10 Nuclear Units: 6,606 MW 5 Fossil Stations: 8,578 MW Approximately 11,500 employees Generating Facilities

4 Safety: OPG’s Fundamental Value
In 2007, OPG achieved its best workplace safety performance in its history CEA Silver Safety Excellence Award for 2005 and 2006 Numerous Safety Milestones achieved at OPG sites

5 Operational Performance: Darlington
Darlington Unit 2 Performance recognized worldwide Most improved performance -- INPO Darlington units in top quartile among CANDU units Approx. 90% unit capability in 2007 Major planned outages completed on, or ahead of, schedule 4 million hours worked without a lost time injury Darlington Unit Capability

6 Operational Performance: Pickering
Pickering A 1.5 million hours without lost time injury Decision to shut down Units 1 & 4 (June 2007) to modify backup electrical system negatively affected production Pickering B: Inspection completed in 2006 on 1,554 fuel channels 4 million hours without lost time injury Production down slightly during 2007 Pickering A & B site 2007: Corporate Habitat of the year 5,000 trees planted over past four years Pickering A Employees Pickering B Employees

7 Operational Performance: Hydroelectric
Availability Availability well above 90% -- best since 1984 -- top quartile industry performance Upgrades have added 427 MW since 1992… …this will increase to 490 MW by 2012 GOOD 100 50 % 92.9 92.4 93 94.2 2007 2006 2005 2004 Q1-Q3 Chats Falls – 75 years of service Beck Hydroelectric Complex

8 Operational Performance: Fossil
Excellent performance during summer all 16 units in southern Ontario operating in June heatwave satisfied 25%-30% of Ont. demand in early August Best reliability since 2000 OPG will continue to operate its coal-plants efficiently and responsibly until their closure in 2014 Forced Outages GOOD 20.0 10.0 0.0 % 11.2 14.1 15.9 18.7 2007 2006 2005 2004 Q1-Q3 Nanticoke –35 years of service Lennox – 30 years of service

9 Public Perception in Ontario of Electricity Generation Sources
Source: Ipsos-Reid July 2007

10 Typical Summer Day (June 21, 2007)
25000 20000 Non-OPG Gas OPG Coal Lennox GS Other Oil and Gas 15000 OPG Coal Other Peaking Hydro OPG Peaking Hydro MW OPG Peaking Hydro Wind Bruce Nuclear 10000 Bruce Nuclear OPG Nuclear OPG Base Hydro 5000 OPG Nuclear OPG Baseload Hydro 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hours

11 Fossil Flexibility: Nanticoke GS Example
Dispatches received by Nanticoke GS in 2007 Fossil plants can start, stop & change output more quickly than most other generation sources Ideal for meeting minute-to-minute changes in demand and peak electricity demand periods In 2007, Nanticoke received over 175,000 dispatches Over 146,000 were “changes in direction” to reduce or increase output This is impressive performance for a station such as Nanticoke: 3,920 MW 8 units (over 600,000 HP per unit) 200,000 Nanticoke G1 -- January 19, 2008 175,116 146,602 150,000 100,000 50,000 # Dispatches on this day for this unit: 191 Unit responds very quickly to fast-changing dispatch pattern. Total Dispatches Changes in Dispatch Direction

12 Emission Rate (Gigagrams/TWh-net)
OPG’s Environmental Performance: SO2 and NOx Fossil Emission Rates 14.00 Low Sulphur Coal Introduced In 1980s 12.00 SO2 Rate 10.00 2 FGD systems at Lambton: 1994 8.00 Lennox GS converts from oil to gas: Emission Rate (Gigagrams/TWh-net) 6.00 4.00 NOx as NO2 Rate 2.00 New Lower NOx Burners Installed 1997 thru 2003 2003: 4 SRCs installed 0.00 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007* Year *approximate estimate for 2007

13 OPG’s Environmental Performance Sources of CO2 in Ontario (2004)
2.6% 4.4% 0.5% 4.6% 1.9% OPG accounts for 15.5% of CO2 produced in Ontario 15.5% OPG 4.3% 0.3% Transportation Stationary 34.4% Combustion - Manufacturing 12.0% 0.3% 8.0% 0.5% Stationary 10.6% Combustion - Agriculture & Stationary Forestry Combustion - Residential

14 OPG’s Environmental Performance: Biomass Testing
Biomass provides an option for reducing net CO2 OPG is currently testing biomass co-firing with coal Biomass fuels being used: wood pellets, agricultural by-products; milling by-products Nanticoke testing produced electricity to power 1,000 households for one month OPG is host for provincial Atikokan Biomass Energy Centre Nanticoke GS

15 OPG’s Environmental Performance: GHG Management
Increase generation from nuclear and hydroelectric plants Promote energy efficiency and GHG reductions at plants Increase use of biofuels to displace coal Expand biodiversity program as a GHG mitigation and adaptation strategy Research impacts of climate change on our existing and future operations

16 New Generation Projects: Niagara Tunnel
10.4 KM long 1.6 TWh average annual energy Over 1,600 metres excavated Design build approach reduces OPG financial risk Contractor has extended the completion date

17 New Generation Projects: Lac Seul
12.5 MW Located in Northwest Ontario Design-Build arrangement with contractor reduces OPG’s financial risk Contractor has extended completion date Lac Seul Powerhouse: Fall 2007

18 Proposed New Hydroelectric Projects
Lower Mattagami Definition stage Consultations continuing with First Nations Study process required under CEAA regulations Small Hydro Projects Approved by OPG Board Redevelopment of Upper Mattagami hydro stations Redevelopment of Hound Chute on the Montreal River. Expansion of Healy Falls GS Ont. Govt. directive to OPA in Dec 2007 allows OPG to move forward on these projects Potential New Capacity – 500 MW Smoky Falls: Lower Mattagami Hound Chute Generating Station Mattagami Lake Control Dam

19 New Generation Projects: Portlands Energy Centre
Summer 2006 Located in Toronto 550 MW On schedule/On budget First power in 2008 Fully operational by 2009 November. 2007

20 Potential Gas Opportunities: Lakeview Site
Lakeview Station shut down in 2005 Demolition OPG is exploring potential development of gas-fired facility at the site Lakeview station prior to demolition

21 Pickering B Refurbished Pickering B Not Refurbished
IPSP - 10,000 MW of Nuclear Power through Replacement and/or Refurbishment Pickering B Refurbished Pickering B Not Refurbished Add over 6000 MW of fossil generation to be removed in 2014

22 Nuclear Refurbishment
Darlington Pickering B Pickering B Plant condition assessment Preliminary cost estimates on construction Independent integrated safety review -- continuing CNSC to provide feedback in late 2008 OPG submits EA Study Report to CNSC (Dec ) Management will make a recommendation to the Board Solid business case is a prerequisite. Darlington Work on the refurbishment business case to start in 2008.

23 Nuclear New Build Q1 2007 EA support initiatives underway Q2 2007
Project Description filed Q3 2007 new build planning continues, including public consultation OPG/Bruce Power joint assessment of potential nuclear technologies Province’s technology assessment Q4 2007 Phase 2 community information sessions – 200 individuals attended over 1,200 individuals reached during the year through OPG communications initiatives Q1 2008 CNSC requests federal Environment Ministry to refer EA to a review panel. Darlington Site

24 OPG Helps Moderate Electricity Prices
¢/kWh 7.2 4.9 4.6 2006 ~ 4.6 2007 5.1 2005 Ontario Market Price OPG’s Average Price Difference between Market price & OPG’s price ~ $3 billion OPG’s regulated rates were set in 2005 ROE was set at 5% OEB hearings planned in 2008 for rate adjustment

25 Focus on Financial Sustainability
Early Nov. 2007: OPG conducts pre-submission stakeholder consultation to discuss business factors underpinning a proposal to increase rates for its regulated nuclear & baseload hydro output Late Nov. 2007: OPG submits a rate application to the OEB OPG seeks rate of return consistent with scope and type of business risks associated with reliably operating its regulated assets If approved by OEB, the application will result in a 14% rate increase on output from OPG’s regulated assets This will be OPG’s first rate increase in three years

26 Key Drivers of Rate Increase Application
Nuclear Change in ROE and capital structure Increased costs associated with the nuclear used fuel and decommissioning liability Changes in Post Employment Benefit costs Inflation and nuclear fuel costs Projects: Nuclear New Build Nuclear Refurbishment Studies Hydroelectric Upgrade and rehabilitation of two older units at Sir Adam Beck I

27 Priorities Going Forward
Maintain strong performance Continue to operate coal-fired stations in an efficient and environmentally responsible manner until their closure Continue hydroelectric expansion program Explore opportunities for gas-fired generation Continue with nuclear new build process “Time is of the Essence” Achieve financial sustainability

28 OPG's Contribution to Ontario's Energy Needs: Performance, Projects and Priorities
Pierre Charlebois Chief Operating Officer: Ontario Power Generation Canadian Manufacturers and Exporters Navigating Ontario’s Energy Future February 20, 2008 Mississauga, Ontario

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