This article was written by Adam Radwanski and was published in the Globe & Mail on March 16, 2024.
Mayor Drew Dilkens was in the midst of an interview about the push to meet the electricity needs of Windsor’s resurgent manufacturing economy when he turned to a large aerial map of the city on his boardroom wall.
First, he pointed to a patch of industrial land near the airport. Largely vacant when the image was captured in 2021, he expects it to be completely filled within a few years, including with suppliers for Windsor’s new electric-vehicle battery plant. And courtesy of significant new provincial investment in local power generation and transmission lines from elsewhere, he’s confident about its energy needs being met.
Then he pointed to another underdeveloped area, known as Sandwich South. It sits alongside Highway 401, not far from the soon-to-open Gordie Howe International Bridge to Michigan, and he envisions a new industrial park in the area as the next frontier, around the early 2030s. But even the new electricity capacity coming online won’t be enough to power it – which means, he said, that typically slow planning and approvals for further infrastructure need to start soon.
It was a neat encapsulation of the current electricity situation in Ontario’s industrial heartland – an extreme version of the catch-up game that the power sector is currently embarked upon, around the province and beyond.
As elsewhere, Windsor and surrounding Essex County must adjust to the shift to EVs, electric heating of buildings and other moves away from fossil fuels in daily life, which are expected to double if not triple power demand by 2050.
But this region is also growing in sudden and unique ways, as new low-carbon industries move in, greenhouses boom in place of traditional agriculture, established sectors overhaul their energy uses and decades of depopulation give way to a housing boom.
“There’s such a big convergence,” said John Avdoulos, the chief executive officer of Essex Power, one of the area’s bigger utilities. “You need a crystal ball to say where it’s all going to end up.”
Recent interviews with officials from various agencies, industry and government suggested that – absent such clairvoyance – everyone involved in shaping the grid’s future here is trying to rethink how they will go about their business. It means changing how they forecast demand; embracing new ways to meet it, including time-of-use policies and opportunities for energy consumers to generate power themselves; and improving how they interact with each other.
The region is currently only a short way along the path to keeping pace with the industrial and energy revolutions under way, although it is in much better shape than it was a couple of years ago.
It was only in 2022 when the head of the economic development agency Invest WindsorEssex publicly suggested that the area was losing out on investments – in that instance a $2.5billion plant that Korea’s LG Chem was considering – because of insufficient electricity capacity.
The remark was controversial, partly because it was made during a provincial election campaign, and the agency subsequently played down the concern. (Invest WindsorEssex declined an interview request for this story.) But it reflected a reality that supply had been neglected for nearly a decade.
That was to some extent the case provincewide, as the pendulum swung hard toward cost containment after a period of heavy investment under Dalton McGuinty, Ontario’s premier from 2003 to 2013, but it was especially acute around Windsor. A long decline of traditional manufacturing that had driven the local economy and its energy needs, worsened by the 2008-09 recession and its fallout, made it a low-priority area for investment. And provincial governments and agencies were caught off guard by new sectors moving in.
That first happened with the emergence, around the Essex County town of Leamington, of North America’s largest hub of (highly-energy intensive) vegetable-growing greenhouses. Then came the EV-oriented rebirth of the automotive sector, highlighted by the announcement of the battery plant being built in Windsor by Stellantis NV and LG Energy Solution.
That’s led to strains in trying to accommodate new customers. “We’re sort of getting to the limit of what the current system can connect,” said Chuck Farmer, a vice-president and chief transition officer with the Independent Electricity System Operator (IESO), the provincial grid manager.
The good news is that Mr. Farmer could point to new infrastructure that will soon provide near-term relief, and additional plans on the horizon.
That includes several promised new transmission lines into the region. The first of them, running from the city of Chatham into the Essex County municipality of Lakeshore, has proceeded ahead of schedule and completion is expected this year.
The most significant transmission prospect beyond that project is another pair of new lines running into Lakeshore from near London, Ont. The transmission and distribution utility Hydro One just began community consultations to help determine the route those lines will take, and is aiming for the first one to be completed by 2030.
Meanwhile, nearly 800 megawatts of new locally-generated power were committed to the region through a provincewide procurement process run by the IESO last year. They take the form of additional natural gas generating capacity (most notably an expansion of Capital Power’s East Windsor Cogeneration Centre), and an array of new battery storage facilities, the province’s first major investment in that technology.
Some further local generation capacity will likely come from new provincewide procurement of non-emitting power, mostly wind and solar, that the IESO is now in the process of launching. (There could also be an opportunity to boost output from wind and solar developments currently dotting Essex County, built under Mr. McGuinty’s controversial Green Energy Act, through refurbishments as generating contracts start expiring later this decade.)
It should also help that, as local and provincial officials attested, Windsor-Essex’s industrial history makes it less prone to the NIMBYism that often slows grid investment elsewhere. Getting support from municipal councils for projects to proceed within their jurisdictions, which Ontario Premier Doug Ford’s government requires, has proven easier here than elsewhere in the province.
Reactions to the recent flurry of activity have nevertheless been mixed.
While Mr. Dilkens praised Mr. Ford’s government for a “brilliant” response to the pressure it faced a couple of years ago, Ontario Greenhouse Vegetable Growers association executive director Richard Lee said there remains “a huge shortfall” for his industry, in terms of having enough available electricity to enable it to continue growing at a high rate. Mr. Lee said that the extra capacity from the imminent transmission line has already been committed, preventing proponents of new greenhouse projects or expansions from tapping into it, and is primarily going toward a Windsor-centred manufacturing sector that he believes is being prioritized.
But a through-line is that constant, urgent activity is now needed to avoid the gap between supply and demand growing again. And nearly everyone involved in grid planning acknowledges that that requires fresh thinking and approaches to overcome some big barriers to getting and staying ahead of the game.
One obstacle is a chicken-andegg problem, in which utilities are reluctant to fully commit to major new projects until they have firm offtake commitments from industrial customers to purchase additional electricity supply.
“It’s hard to say build it and they’ll come,” said Rupp Carriveau, the director of the University of Windsor’s environmental energy institute, because of the risk of expensive stranded assets. At the same time, it’s difficult for companies to firmly decide on new investments with high energy needs without certainty about whether and when sufficient power will be available.
That may be getting easier to deal with, as the expectation of continued demand growth from widespread electrification puts utilities on less of a limb if they pro-actively build.
But it’s not quite that simple, since specific energy needs – exactly when, where and in what quantity – are less predictable.
Another, perhaps even bigger challenge involves shifting away from addressing those needs only through investment in the grid, and embracing fundamental changes to how power is produced and consumed.
As most everywhere, electricity policy experts recognize that managing electrification in the coming decades will also require managing demand in new ways, including time-of-use policies, and encouraging consumers to generate their own power and sell excess supply to others.
The ideal is that, as new companies come to the region and established ones reinvest, they include on-site generation as part of their business model.
There is some of that going on already, such as greenhouses with gas generators (which may not be a viable long-term option, particularly if proposed federal Clean Electricity Regulations take effect) and factories with solar facilities.
But the general sense, although it is hard to determine exactly how many such arrangements are in place, is that decision makers are only scratching the surface of how those units can feed back into the grid.
Encouraging and facilitating it requires system operators to pivot from many decades spent managing a more straightforward, controllable, one-way flow of power, and consider technical changes to distribution infrastructure, regulatory modernization and new market structures.
“Our role as a utility is no longer a poles and wires company,” Mr. Avdoulos said. He says Essex Power already devotes about 10 per cent of its annual budget to grid modernization and automation. “We’re an energy management services enablement company.”
Standing in the way of meeting all these challenges – both getting grid-scale investments onto the right economic timeline, and empowering consumers to reduce the pressure on traditional infrastructure – has been a heretofore disjointed planning process in which there often hasn’t been enough continuing communication between and within governments, utilities and the private sector.
Doing things differently, on all fronts, may start with modernizing those relationships – and there is now some concerted if overdue effort.
Mr. Dilkens’s municipal administration, for instance, has in the past couple of years tried to involve itself in energy policy in which it previously took a more passive role. That has included contracting the energy-consulting firm Power Advisory to educate the city government on planning processes and how it might steer them, and delegating staffers to stay atop those often byzantine goings-on – from directly engaging with utilities to monitoring public feedback processes.
The Windsor official in charge of that engagement effort, Karina Richters, said that it reflects the IESO now “looking to municipalities more to say what is happening in your cities.”
Mr. Farmer indicated as much, while also saying that the IESO is now encouraging companies themselves to get in touch when they first start considering investments in the area, rather than closer to making their decisions.
“I do think things are improving,” Mr. Carriveau said. “There is more communication happening between key players.”
He added, however, that it so far seems mostly informal. Something more structured, such as a formal committee consistently bringing the different sides together to share economic and energy intelligence and jointly develop planning strategies, could be a next step.
Some officials have more potentially contentious suggestions.
Mr. Avdoulos, for instance, made the case for power to be decentralized to utilities such as his, which he contended are best positioned to respond to the evolving and fluctuating needs of local customers.
That view is not universally shared, including among the provincial government and its agencies, which currently have the bulk of authority.
But the more they engage with each other, the more that all concerned will at least have to be open-minded about shifting roles and responsibilities, as they try to avoid being caught short again.
“A hundred years of how we did business,” Mr. Avdoulos said, striking a more common chord, “has to go out the door.”
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