MPA 877 ENERGY POLICY: COURSE SYLLABUS, SUMMER 2018

Instructor:

Bryne Purchase is an Adjunct Professor at the School of Policy Studies. He holds a Ph.d. in economics from the University of Toronto and is a former Chief Economist of Ontario and a former Deputy Minister of the Ontario Ministry of Finance and Revenue and the Ontario Ministry of Energy, Science and Technology.

Dr Purchase is also a former Chairman of the Board of the Ontario Financing Authority and the Ontario Electricity Financial Corporation as well as a former Director of OPG Ventures Inc., Ontario Genomics Institute, Ontario Super-Build Corporation and the Ontario Innovation Trust. He can be reached at 613-256-5816; e-mail [email protected]

Course Objectives:

The Energy Policy Course is designed to:

• Review Canadian, North American and Global energy policy as it relates to economic growth, energy security and the environment (including climate change). • Review the technologies and economics of electricity production, transmission, distribution and consumption/conservation; • Review current policy issues in Ontario’s electricity policy, particularly in respect of the use of coal, natural gas, renewable and nuclear energy; and • Maximize the interaction with practicing policy advisers on current energy policy issues and options.

Energy Policy 877 is divided into two major themes.

One theme develops an overview on global energy sources, their implications for global society and energy policy. In particular, it outlines the overwhelming role of fossil fuels, the basic micro and macroeconomics of these fuels and their critical role in economic

1 growth to date. Global security and geopolitical risks related to fossil energy are also outlined along with the risks related to the ultimate public policy challenge – global climate change.

In addition, we examine the economics and politics of Canada’s aspirations to be an “energy superpower”, especially now that the politics of pipeline construction have proven so disputatious.

The second theme of Energy Policy 877 deals with one of the most common, yet essential forms of energy – electricity. While oil is a global industry (with markets interconnected by trade flows) and natural gas (currently continental) is rapidly on its way to becoming global, electricity supply (production, transmission and distribution) is a regional industry. Accordingly, policy related to electricity supply and demand is largely in the hands of provincial and state governments. Energy Policy 877 uses Ontario as a case study.

The fundamentals of electricity supply and demand for electricity will be reviewed. The class will then examine the role of politics and public policy in the transmission and distribution of electricity as well as in decisions to generate electricity using nuclear, coal, natural gas, hydroelectric or other renewable sources of energy.

Ontario’s ill-fated attempt to introduce competition into electricity generation will be examined along with more recent policy driven efforts to eliminate coal and expand the use of renewable energy. Ontario’s commitment to nuclear power and the prospects for alternative sources of supply will also be examined in depth.

The Course will be animated by guest lectures from leading energy policy practitioners in Ontario and Canada.

Course Assignments and Grading:

• Class Participation – 10 percent. Marks will be given for attendance and separately for active participation in all lectures. A number of external policy practitioners will give presentations followed by Q & A’s. All students are expected to participate in the discussions.

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• Group Project – 35 percent. Students will form groups of 3 to 5 students and make a class presentation based on their deliberations. Possible topics will be circulated. In addition, students may, with the instructor’s prior approval, choose their own topic. These assignments are due as scheduled below.

• Individual Assignment – 55 percent. Each student will write a short essay of 2,500 to 3,000 words. Possible topics will be circulated. In addition, students may, with the instructor’s prior approval, choose their own topic. These are due two weeks after the end of the last lecture in this course.

• Required reading assignments are minimal. Students are encouraged to read Bryne Purchase, Navigating on the Titanic: Economic Growth, Energy and the Failure of Governance, McGill-Queen’s Press. I circulate my lecture notes at the end of each class as typically do the guest lecturers. A list of additional sources will be circulated to those who enroll. Students are also encouraged to find their own reference material from the wealth of reading materials available on line.

ENERGY POLICY, MPA 877: LECTURE OUTLINE

Lecture 1 (April 27): GLOBAL ENERGY POLICY OVERVIEW (B Purchase) o Introduction to Energy and Society: Without energy, nothing works o Energy and Economic Growth o Energy, Security and Geopolitics o Energy and Business Cycles o Energy and Environment

Lecture 2 (April 28): ONTARIO’s ELECTRICITY SECTOR (B. Purchase) • Ontario’s electricity sector and its regulatory structure: MOE, IESO, OEB and the PO.

3 • Electricity demand matters: The load curve and peak load economics • Electricity supply matters: Generation sources, mega projects and mega risk • The “wires” business: transmission/distribution and regulated natural monopolies.

Lecture 3 (May 14): ONTARIO’s ELECTRICITY POLICY: A TRAINWRECK IN SLOW MOTION (B. Purchase)

• Political decision making and electricity costs. The story of three “mega-policies” and their effects: o Death of Ontario Hydro: Market opening (1999-2003); o Coal phase-out and Green Energy Act (2005-2015); o The Fair Hydro Plan (2017)

Lecture 4 (May 15): ONTARIO’s INDEPENDENT ELECTRICITY SYSTEM OPERATOR and CONTRACTING FOR ENERGY RESOURCES (Michael Killeavy, Director, Contract Management, IESO).

Lecture 5 (May 16): ONTARIO’S CLIMATE OBJECTIVES, CAP and TRADE POLICY and the LONG TERM ENERGY PLAN (B Purchase)

o Climate Change Action Plan and the Electrification of Ontario (2016-2035)? o Ontario’s Long Term Energy Plan 2017

Lecture 6 (May 17): ONTARIO’S 2017 LONG TERM ENERGY PLAN (Serge Imbrogno, Deputy Minister of the Ontario Ministry of Energy):

Lecture 7 (May 18): THE COMPARATIVE ECONOMICS of NUCLEAR, LARGE SCALE HYDRO and DISTRIBUTED ENERGY RESOURCES (Marc Brouillette P.Eng., MBA, Principal Consultant, Strategic Policy Economics).

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Lecture 8 (June 4): OILSANDS’ FUTURES: A VIEW FROM ALBERTA (Shane Pospisil, President and CEO of New West Opportunities in Edmonton, Alberta and former President of the Ontario Energy Association).

Lecture 9 (June 5): GLOBAL and CANADIAN ENERGY POLICY REVISITED (B. Purchase) o Oil: From “peak” supply to “peak” demand o Natural gas o Coal o The political and regulatory quagmire of energy projects

Lecture 10 (June 6): STUDENT GROUP PRESENTATIONS

o Electric vehicles and the future of oil? o Future of nuclear energy?

Lecture 11 (June 7): STUDENT GROUP PRESENTATIONS

o The importance and future of energy storage? o Future of electric distribution utilities?

Lecture 12 (June 8): ENERGY POLICY REVIEW (B. Purchase)

Adjourn

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