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Posted in: Energy Policy | Ontario | Climate Change / Renewables

Oct 20, 2016

Ahead of the LTEP, Fuels Technical Report Looks at Current and Future State of Ontario's Fuels Sector

By David Stevens

In late September, Ontario's Ministry of Energy issued the Fuels Technical Report (FTR), which looks at the current and future state of fuels demand and consumption in Ontario. The FTR is intended to be an important document to inform the Ministry's formal consultation process for the development of the LTEP. The FTR is a complement to the Ontario Planning Outlook that looked at electricity demand and consumption (discussed here). We discussed the LTEP consultation process in a recent post.

As set out in its overview, the FTR establishes a comprehensive view of the current state of the fuels sector in Ontario, including a review of fuels consumption and a set of outlooks for the 2016 through 2035 period. In order to be consistent with the Ontario Planning Outlook, the FTR uses the same assumption and inputs about items such as economic activity, demographic data and the uptake of electric equipment and transportation options.

The FTR explains that in Ontario, fuels are necessary for two main uses, as a source of energy and as feedstock in the manufacture of consumer products. From a consumer use standpoint, a variety of fuels are used for various energy and non-energy purposes, ranging from space and water heating and cooking, to transportation, industrial processes and electricity generation. A focus of the FTR is the goals and impacts of Ontario's climate change policies, including cap and trade and the Climate Change Action Plan (CCAP). The FTR notes that Ontario's fuels system can and will evolve in supplying "greener" fuels and meeting different future demands.

The FTR highlights the important links between Ontario's fuels and electricity sectors. In part, this is because electricity can be an alternative for many current fuels uses, including space heating and transportation. According to the FTR, in the future it is likely that a growing number of transportation options will offer electric alternatives to fuel-based options. Choices made around these products and services will influence the demand for both electricity and fuel energy.

As is the case with the Ontario Planning Outlook, the FTR includes a variety of demand outlooks for the 2016 to 2035 period. In each scenario, the forecast is that fuels demand will decrease - the magnitude of the decrease depends on assumptions about economic activity, demand side management and alternative fuels uptake. On the supply side, the FTR notes that there are no concerns with meeting future demand for conventional fuels. The interesting question is around how to meet demand for alternative low GHG emitting fuels such as renewable natural gas, biodiesel, ethanol and hydrogen. The FTR explains that significant increases in processing and delivery infrastructure will be required to support future higher consumption of alternative fuels.

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