The Ontario government, besieged by opposition community groups, has pulled the plug on plans for a 900 MW natural gas-fired generating station in the Toronto area.

Energy Minister Brad Duguid's office Thursday said changes in supply and demand governed the decision.

"When the need for this plant was first identified four years ago, there were higher demand projections for electricity in the area. Since then changes in demand and supply -- including more than 8,000 MW of new, cleaner power and successful conservation efforts -- have made it clear that this proposed natural gas plant is no longer required," Duguid said.

"A transmission solution can ensure that the growing region will have enough electricity to meet future needs of homes, hospitals, schools and businesses." Local community leaders and politicians hailed the decision.

In its initial plans for the power plant, the Ontario government had said it was necessary because of the province's drive to dispense with coal-fired power generation by 2014 (see Power Market Today, Oct. 1, 2009).

TransCanada Corp., which had been awarded the contract to build, own and operate the plant, said, "we acknowledge the government's decision that, in its words, a gas plant in Oakville is no longer needed and, as a result, the plant will not proceed.

"In order to comply with the government's direction, TransCanada has been informed that the Ontario Power Authority (OPA) wishes to begin discussions where both sides mutually agree to terminate the contract and discuss reasonable payments TransCanada is entitled to." It had been estimated the combined-cycle gas plant would have cost C$1.2 billion.

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