Wind power: not needed in Ontario, say energy experts

December 8, 2017

The final part of the ICI Radio-Canada series on wind power in Ontario aired December 8.

This is a translation of the E-zine version of the story.

[Photo: Nic Pham, ICI Radio-Canada]

Unserviceable wells, contaminated water, noise, citizens concerned about their health, wind farm issues are increasingly being blamed in southwestern Ontario, and many communities are mobilizing to oppose the development of their homes. New projects. Yet, for two decades, the number of wind farms has been increasing. So why do we need so many wind turbines?

Reportage and photos: Nicolas Pham Text: Marine Lefevre Edim and infographics: Vincent Wallon

 

Experts say that wind energy is not absolutely necessary in Ontario. The province has been experiencing energy surpluses for several years and the intermittent electricity produced by wind turbines is, at the present time, mainly an extra energy source.

A SATURATED MARKET

“We do not need these turbines for the moment,” says Jean-Thomas Bernard, visiting professor at the Department of Economics at the University of Ottawa. A message relayed by Pierre-Olivier Pineau, holder of the HEC Montréal Energy Sector Management Chair.

According to both researchers, demand in Ontario has declined significantly in recent years. The economic crisis of 2008-2009 brought down demand in the industrial sector, and rising prices at the residential level encouraged the public to save energy.

On the supply side, the province relies primarily on nuclear energy and hydroelectricity. The combination of these factors results in the production of wind farms being added to other energy production.

“With a low demand, we have surpluses. ” – Pierre-Olivier Pineau, who holds the Chair sector management Energy HEC Montreal 

 

In addition to this, wind generation does not adequately meet the energy needs of consumers. In any case, this is indicated in a study published in June 2017 by the Council for Clean and Reliable Energy, which deals, among other things, with the effect of installing wind turbines on the province’s electricity grid.

“The analysis shows that the intermittency of the wind makes it an unproductive and expensive choice that does not meet the needs of customers and also compromises the price of electricity exports”, reads the introduction to the report by Marc Brouillette , Senior Consultant at Strategic Policy Economics (Strapolec)

Based on data from the Independent Electricity System Operator (IESO), the author indicates that in 2015 Ontario’s wind farms operated at less than one third of their capacity, approximately 60% of the time.

In addition, the report states that wind turbines are usually in operation when the province’s grid is least in need of electricity.

“Ontarians’ energy consumption is highest in winter and summer, and lowest in spring and late fall, which is almost a mirror image of wind generation models because the wind is the highest in spring and autumn, “says the author.

In conclusion, wind energy does not meet the needs and forces the use of other forms of energy to fill the gaps, but in addition this irregular production contributes to the average surplus of the energy production, which also has a cost.

In 2015, wind energy accounted for one-third of excess core production outside of peak periods in Ontario. That year, the only wind surplus cost consumers $ 370 million on a total bill of about $ 550 million.

In addition, these surpluses have an effect on the price of this energy, especially for exports, where this energy is sold at a loss because it is difficult to store. According to the author, this report puts into question the entire past, present and future deployment of wind resources in the province.

WHY INVEST IN WIND?

One of the reasons for this is the intention of Dalton McGuinty’s government (2003-2013) to make an industrial transformation in Ontario.

In a context where the province’s traditional industries such as pulp and paper, metal refining and even the automobile sector were losing their wings, the Liberal government of the day wanted to convert the province to renewable energy. solar and wind, to create a new industrial sector in Ontario.

At the same time, as the fight against climate change intensified, investments in this green energy sector became natural.

“It was done to encourage renewable energies when we were aiming for the closure of coal plants. ” – Jean-Thomas Bernard, a visiting professor in the Department of Economics at the University of Ottawa 

 

For the government, massive investment in the sector also reflects a desire to diversify energy sources and protect Ontarians from unforeseen events, especially over the long term.

A reasonable approach even if it means having surpluses for several years, says Pierre-Olivier Pineau, particularly in a context where the objective is to have an electricity sector that no longer emits greenhouse gases.

“It may seem like a long time, but in electricity you invest for periods of 20 to 30 years. It is difficult to predict economic conditions and we always keep an extra capacity to be able to meet the demand, “he says.

According to him, the government announcements [were] a bit premature in the wind industry in Ontario, and elsewhere in Canada, a response to the positive perception of the electorate towards this [form of] energy.

“For politicians, we still have image gains to make by announcing green policies, focused on sustainable development. And pictures of wind turbines, and green energy contracts, these are beautiful images,” says the researcher.

THE FAILURE OF A POLICY

The wind shift did not happen as planned, however, explains Jean-Thomas Bernard. Ontario has been unable to create a new industrial sector.

“It did not work because Ontario produces little wind equipment. Major turbine manufacturers are Denmark, Germany, the United States and China. The Ontario market is not big enough to provide a foundation for development, “he says.

“We have invested in wind power, but the bill comes later, so it creates a political problem to announce an increase in the price of electricity. » – Pierre-Olivier Pineau 

 

Wind power not justified by the market

The Ontario government put a halt to new project grants in 2016,* but it remains contractually bound to buy electricity from existing wind farms at fixed prices.

“There is no jurisdiction where the market price justifies wind energy investment. Once the government decides to have wind generation capacity, it is obliged to guarantee prices. » – Pierre-Olivier Pineau 

 

This guarantee forces Ontario to purchase electricity at a fixed price, regardless of the demand and lower production costs associated with the technological evolution of the sector.

A difficult situation for the province, which has invested millions of dollars in a sector that looked promising as it faces an economic situation where electricity demand is lower.

“Electricity rates are increasing by 5% per year as a result of this firm price policy for renewable energy. If we had not developed them, today there would be a drop of 5% per year. “Adds Jean-Thomas Bernard.

Ontario is not unique, Quebec and Alberta have also had to guarantee prices to energy companies.

On the other hand, the manner of proceeding, by call for tenders in particular, made it possible to establish lower fixed prices. In addition, the importance of hydroelectricity in Quebec and oil in Alberta makes the wind industry very secondary in these provinces.

A COMPLEX SITUATION

For these experts, the energy sector in Ontario is generally in an unenviable position. Prices are high and the energy policies put in place for several years have not yielded the expected results.

“The current government has chosen to have both nuclear and wind power with the problems we know in terms of price. And these problems will not disappear in the future because the rehabilitation of nuclear power and wind will be very expensive in the years to come, “says Pierre-Olivier Pineau.

And even though over the last year the government has lowered rates twice, including reducing the sales tax, the real question remains: are we able to produce electricity at a lower cost? “Not today,” concludes Jean-Thomas Bernard.

Part 1 | In the land of black water 
Part 2 | Opposition rumbles
Part 3 | Wind turbines: green energy at all costs?

 

  • WCO note: it is not correct to state the the Ontario government has halted its wind power procurement program. The Large Renewable Procurement program has been put on hold due to a surplus of power, but it is not gone. Meanwhile the Ontario Ministry of the Environment and Climate Change (MOECC) is currently processing five more applications for large-scale projects, for 300 megawatts of intermittent, unnecessary power.

Too much wind power means millions wasted for Ontario

December 3, 2017

From Parker Gallant Energy Perspectives

Ontario’s electricity ratepayers paid more than $500 million in 2017 for nothing

With only one month left in the current year, the bad news on the electricity sector keeps getting worse.

Well before the official sources such as IESO report on how much power industrial wind turbines generated and how much was curtailed (constrained, or paid for but not added to the power grid), my friend Scott Luft has published his estimates for both the former and the latter for the month of November.

As he reports (conservatively), curtailed wind in November was over 422,000 megawatt hours (MWh) — that could have supplied 562,000 average Ontario households with free power for the month.

Instead, no one got free power; the cost of the 422,000 MWh of undelivered wind power to Ontario ratepayers was $120/MWh.  That $50.7-million cost for the month was simply added to the costs of the electricity bills ratepayers will be obliged to pay, while some of it will deferred to the future as part of the Fair Hydro Plan.

Somebody’s enjoying cheap power — not you  

No doubt the wasted wind power presented itself when it wasn’t needed; if it had been accepted into the grid, that extra power could have caused blackouts or brownouts, so it was curtailed.  At the same time, much of the grid-accepted wind was exported to our neighbours in New York, Michigan and elsewhere, at discount prices!  Curtailed wind for November 2017 compared to 2016 was almost 55% higher.

How bad is it? Let’s review the first 11 months of the current year, compared to 2016.

So far in 2017, curtailed wind is about 786,000 MWh higher (+33.8%) at just over 3.1million MWh.  The cost of all the curtailed wind so far in 2017 is approximately $373.6 million, or $94.3 million more than 2016 costs.

Read the full article here.

 

 

WIND CONCERNS ONTARIO Note: the Ministry of the Environment and Climate Change is currently reviewing documents for five more wind power projects which received contracts in 2016, totaling $3 billion more for electricity costs for intermittent wind power, produced out-of-phase with demand in Ontario

Wind power part of hidden Hydro One costs

The Auditor General for Ontario noted in her recent report that the government has hidden costs of electricity, and not created a fair cost reduction plan. Cancelling wind power contracts would be a good start, says Wind Concerns Ontario

The new Belle River project by Samsung will cost about $700 million. New wind power contracts will add billions more to ratepayers’ bills

October 24

Cancelling wind power contracts would bring real savings

The special report by Ontario’s Auditor General on the government’s Fair Hydro Plan not only stated concerns about the level of debt being incurred by the vote-getting “plan” it also contained this recommendation: the government should “use a financing structure to fund the rate reduction that is least costly for Ontarians.”

If the Ontario government was genuinely interested in reducing electricity bills for Ontario citizens, it would reduce costs.

It’s not doing that.

A case in point concerns the wind power projects given 20-year contracts in 2016, totaling $3.3 billion. Those wind power projects (Dutton Dunwich, The Nation, North Stormont, Otter Creek) will provide unnecessary intermittent power, and force industrial power plants on communities that are actively fighting them over environmental, health and economic concerns.

Cancelling other contracts not yet built, such as Amherst Island, Prince Edward County and North Kent, would save more than one billion, over 20 years.

Ontario has a surplus of power but more important, does not need more wind power which tends to be produced out of phase with demand. On the recently warm October 15th Sunday, for example, Ontario power demand was low, but we were forced to “constrain” almost record-breaking wind power production — we paid millions for power we didn’t need.

In fact, says a Commentary prepared for the Council for Clean & Reliable Energy, 70 per cent of Ontario’s wind power is wasted, because it is produced at night and in mild seasons. Very little of it reaches the urban areas that need power, yet the effects of industrial-scale wind power plants on rural communities are significant.

The Auditor General says the government is hiding the true cost of its politically motivated Fair Hydro Plan which pretends to bring a 25 per cent rate reduction, while actually putting off the costs to the future.

Ontario can make real savings in costs now, by cancelling contracts for unnecessary wind power.

 

Jane Wilson

President

Wind Concerns Ontario

This article appeared in Ontario Farmer, October 23, 2017.

 

Wind wasted again — millions spent on unneeded power last weekend

October 16, 2017

Wind turbines near SS Marie: power not needed but cost us millions (National Post photo)

October 15, 2017 was quite a windy Sunday.   Being a mild fall day too, that meant Ontario’s demand for electricity was low according to the IESO’s Daily Market Summary.  Total Ontario demand was only 313,000 MWh for the whole day.

Unfortunately for ratepayers, it was a beyond the norm windy day — industrial wind turbines spread throughout the province were spinning well beyond their yearly average of 29/30% of capacity.

According to the IESO’s daily generator report, the wind turbines could have supplied almost 84,000 MWh* of power, or about 27% of all the power consumed by Ontario’s ratepayers (approximately 83% of their capacity).  As it turned out, IESO curtailed or did not accept 42,500 MWh for which wind developers were paid $120/MWh anyway, and the 41,200 MWh grid-accepted power generation got them the standard $135/MWh.

What the foregoing means is wind developers were paid approximately $10,660,000 for curtailed wind generation and grid-accepted power.  That works out to a cost per MWh of $260 or 26 cents a kilowatt hour — almost double the current generation cost, for which 25% is being refinanced under the Fair Hydro Act.

As it turned out, the grid-accepted wind generation really wasn’t needed: as the IESO “Summary” report indicates, Ontario’s net exports averaged 2,110MW per hour or 50,640 MW at a negative price of $0.99. That means Ontario’s ratepayers picked up another $50K to provide our neighbours (principally Michigan and New York) with cheap power.

No doubt Ontario was also spilling hydro and steaming off Bruce Nuclear which ratepayers were also paying for on that windy October Sunday.

More proof that wind power provides costly, intermittent and unneeded power. More proof that the Green Energy and Economy Act should be tossed out!

 

 

*All numbers are rounded.

More proof: wind power produced out of sync with demand in Ontario

Wasted. [Photo Gary Moon/Moonlight Photography]
October 11, 2017

Friday October 6th, 2017 was a work day just before the Thanksgiving weekend. At 10 AM that morning, Ontario’s electricity ratepayers had much to be thankful for. Power generation from wind amounted to just 27 MWh, but that 27 MWh wasn’t really needed as nuclear, hydro and a little gas were providing all the power we needed.  And, both hydro and gas were capable of producing lots more if Ontario demand required it.

The hourly Ontario energy price (HOEP) during that hour was $13.50/MWh (megawatt hour) so the value of the 27 MWh that wind produced in that hour cost ratepayers about $365.

Two days later, Thanksgiving Sunday was a different story: at 3 AM wind power was working in the night, generating 1,145 MWh with another 2,797 MWh curtailed (wasted, held back, not added to the grid). Ontario’s ratepayers were paying $135/MWh for the grid-accepted wind and $120/MWh for the curtailed wind.

The HOEP was a negative $3/MWh so the grid-delivered wind was costing ratepayers $415.95/MWh or 41.6 cents/kWh! In total, that one hour cost ratepayers $476,274 for unneeded generation. On top of that, because Ontario demand for power was low (most of us were fast asleep so the LED lights were out), Bruce nuclear was steaming off excess generation (we pay for that), OPG was probably spilling water (we also pay for that), and we were exporting 2,802 MWh to Michigan, New York and Quebec and picking up the $3/MWh cost.

So, comparing the two hours suggests we didn’t need wind generation on October 6th during a business day and we didn’t need it on October 8th in the middle of the night!

This is more proof that wind power is produced out of sync with demand.

The time has come to stop all contracting for additional wind generation and to cancel any that are not under construction.

 

Parker Gallant

Something ‘not right’ with Ontario government push for wind power

Wynne government “moves the goalposts,” bends the rules to get wind power through … and nobody knows why, says prominent Prince Edward County businessman

The Wynne government ignores economic, environmental and health reasons to cancel wind power, but pushes forward anyway: why? “Back-handed deals,” says a businessman

October 3, 2017

One of the questions Wind Concerns Ontario routinely gets from the media, after we’ve detailed the lack of environmental benefit from industrial-scale wind power developments, the harm being done to the environment, and the physical harm being done by exposure to the noise emissions from wind turbines to some people, is WHY does the government persist in this policy, in the face of all the evidence — even just the questions — about it?

WHY, when the government admits it has a surplus of power (and is selling off wind power at a loss to other jurisdictions) is it continuing to sign contracts and grant approvals for new projects?

WHY, when the Minister of Energy has admitted there are problems and “sub-optimal siting” does the government have plans to inflict unwanted and unneeded wind power projects on more Ontario communities like Otter Creek, The Nation, North Stormont and Dutton Dunwich?

Our answer has been, there is something else going on here, agreements that have been made, contracts signed that we may never know about, that prevents the Ontario government from responding rationally.

That thought was echoed yesterday in an interview Jerry Agar of CFRB 1010 did with Norm Hardie, owner of the renowned Norman Hardie Wines in Prince Edward County.

On the sensible side, Hardie says in his interview, the government could pay $500,000 to get out of the White PInes contract and save $100 million in costs to electricity consumers … but it won’t. They know all the objections, Hardie says, but he can’t help but feeling “there is a back-handed deal …there is something creepy going on we will probably never know about … something is not right.”

Despite the money being lost, the damage to the environment, community and potentially to the local community in Prince Edward County for example, Hardie says, “they are intent on destroying us.”

Wind power: nowhere to be seen during Ontario heat wave

In fact, wind power generators probably used more power than they produced, says Parker Gallant.

Big Wind says “the wind is always blowing somewhere!” Except when it’s not. Exactly when it’s needed, not there.

Parker Gallant Energy Perspectives

September 26, 2017

The impact of the well above normal temperatures Ontario has been experiencing for the past several days in September was seen in hour 17 (5 pm) yesterday, September 25, 2017.

From all appearances, hour 17 set the record for high peak demand in the province for the current year as businesses and homes had air conditioners and fans blasting away, drawing power from the grid.

Peak demand for hour 17 was 21,639 MWh.

Nuclear and hydro along with gas generated 20,091 MWh during that 60 minutes and was supplemented by net imports of 1,221 MWh from Manitoba and Quebec.

Where were “renewables” (excluding hydro), wind, solar and biomass? Together, they generated a miserly 307 MWh. In fact, wind power generators probably consumed more then they contributed with a minuscule 67 MWh. That 67 MWh represented about 1.5% of their grid connected capacity of 4,213 MW.

Put another way, wind power contributed .3% of peak demand!

All this simply proves industrial wind turbines (IWT) are unreliable and intermittent. If they can’t be counted on when we need the power, why does our Minister of Energy Glenn Thibeault and Premier Wynne continue to support them? Why not cancel contracts for wind power plants that have not commenced construction?

The time has come for the Ontario Liberal government to admit that industrial-scale wind turbines deliver nothing more than unreliable, intermittent power that must be backed up with reliable power in the form of nuclear, hydro and gas.

The dream is over.

(C) Parker Gallant

Ontario a world leader in wasted wind power

Scottish electricity customers are upset that they are paying millions to wind power producers not to produce — Parker Gallant says Ontario has that beat … by a long shot.

Here’s his latest on how Ontario pays millions (added to our electricity bills) to wind power producers, because wind power is produced when it’s not needed.

Samsung Belle River project racing for completion: Ontario doesn’t need more wind power

And the winner (loser) is … Ontario

A recent article appearing in Energy Voice was all about the costs of “constraint” payments to onshore industrial wind developments in Scotland.  It started with the following bad news:

“According to figures received by Energy Voice, the cost of paying wind farm operators to power down in order to prevent the generation of excess energy is stacking up with more than £300million* paid out since 2010.”  (£300 million at the current exchange rate is equal to about CAD $500 million. ) 

What Scotland refers to as “constrained” Ontario calls “curtailed,” but they mean exactly the same thing. Ontario didn’t start constraining/curtailing generation until mid-September 2013, or almost three full years after the article’s reference date for Scotland. Curtailment prevents the grid from breaking down and causing blackout or brownouts.

The article from Energy Voice goes on: “In 2016 alone, Scottish onshore wind farms received £69million in constraint payments for limiting 1,048,890MWh worth of energy”.

Ontario in 2016, curtailed 2,327,228 MWh (megawatt hours). That figure comes from Scott Luft who uses data supplied by IESO (Independent Electricity System Operator) for grid-connected wind power projects and conservatively estimates curtailed wind for distributor-connected turbines to compile the information.

What that means: in 2016 it cost Ontario’s ratepayers CAD $$279.2 million** versus £69 million (CAD equivalent $115.2 million) for Scottish ratepayers. So, Ontario easily beat Scotland in both the amount of constrained wind generation as well as the subsidy cost for ratepayers who in both cases paid handsomely for the non-delivery of power!

The article went on to note: “By August 2017, the bill had already reached in excess of £55million in payments for 800,000MWh”!

Once again Ontario’s ratepayers easily took the subsidy title by curtailing 2.1 million MWh in the first eight months of the current year, coughing up over $252.5 million Canadian versus the equivalent of CAD $92 million by Scottish ratepayers.

In fact, since September 2013, Ontario has curtailed about 5.5 million MWh and ratepayers picked up subsidy costs of over $660 million.

Ratepayers in both Ontario and Scotland are victims of government mismanagement and wind power industry propaganda, and are paying to subsidize the intermittent and unreliable generation of electricity by industrial wind turbines.

(C) Parker Gallant

* One British Pound is currently equal to approximately CAD $1.67.

**Industrial wind generators are strongly rumored to be paid $120 per MWh for curtailed generation.

Modern day larceny: independent editor on Ontario’s wind power push

Rick Conroy, editor of the independent Wellington Times news paper in Prince Edward County, has had a front-row seat to at least three, probably four, wind power projects in The County. All have been vanquished save for the “White Pines” unwanted, unneeded power project which has been reduced from 29 turbines to 27 then to nine, and still, the power developer threatens to proceed.

Conroy has an interesting perspective, including a view across the water to nearby Amherst Island, where a tiny island community will almost certainly be destroyed by the Windlectric unwanted, unneeded wind power project … that will take a whole lot of wildlife down with the island, too.

Here is his editorial from the most recent edition of the paper.

No matter how you look at it, Ontario’s energy policy doesn’t make any sense

Ontario is currently working toward another electricity import deal with Quebec. It is likely a good thing. Most of our neighbour’s electricity is generated by massive hydro dams on the James Bay and St. Lawrence watershed—so, by today’s convoluted meaning of the word, it is clean. It is also reliable and manageable—the opposite of the wind and solar power sources in which Ontario has invested billions over the past 15 years. The deal is expensive, however, about 40 per cent richer than Quebec earns from other exported electricity contracts.

But here is the interesting bit.

Coincidentally, the quantity of imported power represented in this deal, combined with another with Quebec in 2015— equals almost precisely the total electricity generated by wind and solar in Ontario. Ten terawatt hours of wind and solar are being made redundant by ten terawatt hours of hydro electricity. Maybe coincidence is the wrong word.

Put another away—the nearly useless intermittent power generated by wind and solar has been replaced by two power deals with Quebec. Electricity that is cheaper, cleaner and manageable.

It’s a sign, perhaps, the adults have wrested control of the province’s energy management away from the politicians.

The deal illustrates rather bluntly that Ontario’s wind and solar power projects are like costume jewellery—showy and glittery to a distracted public, but bearing little actual value.

Worse, these intermittent electricity trinkets are a persistent headache to the electricity system operator. Each year we spill enough electricity through exports to neighbouring jurisdictions, including Michigan and New York, to power a large part of their economies. We regularly export this power at a loss—sometimes we pay them to take it.

Sickeningly we spend as much as a $1 billion each year for others to take our unwanted electricity. Without these outlets, however, Ontario’s power grid would succumb to the variability of wind and sunlight on an electrical grid ill-equipped to endure it. And electrical systems operators in Michigan and New York know it.

So, they take advantage.

It is sophisticated modernday larceny. Here is how it works. Lacking formal purchase agreements, Michigan buys Ontario electricity mostly on the spot market, typically paying between one and two cents per kilowatt hour (kWh)—a fraction of what it costs the state to generate its own electricity. (The County’s Parker Gallant does a much more thorough job of explaining how this works in his regular contributions to the Wind Concerns Ontario blog, the Financial Post and other publications.)

To its credit and downfall, Ontario’s electricity market is utterly transparent—anyone with a computer can monitor the demand for electricity and the supply available at any given moment (as well as many other facets of the system). They can see plainly when the province is headed for a critical system overload— when Ontario must shed power or risk catastrophe. Folks in Michigan know it too. They know when Ontario will be calling them to offload electricity. They are happy and ready to oblige.

From time to time, the imbalance between too little demand and too much uncontrollable supply in Ontario’s electricity system becomes so precarious that grid operators in Michigan and New York can actually compel Ontario to pay them to take it the power. It is how it came about that today Ontario now powers about 10 per cent of Michigan’s electricity needs. And we lose money on every kilowatt.

All this has been said and explained before by others. The facts are uncontested. It is all easily verifiable thanks to Ontario’s transparent electricity operations.

Yet we continue to build useless wind and solar projects. We continue to make the problem worse.

Across the channel from Cressy, Amherst Island residents are bracing for a disheartening defeat. Their local government has recently conceded that it has secured the most it is likely to get from the developer of 26 industrial wind turbines and the province in order to protect the residents, the delicate waterway, the roads and other infrastructure as well as the endangered species that reside there. Any lingering regret over its own shortcomings at Loyalist Township hall, however, is likely to be eased by the $500,000 payment it has been promised each year by the industrial wind project owner.

Meanwhile on the ground, the developer’s actions sometimes bear little resemblance to the plans it submitted and promises made when asking from provincial approvals. For example, it told the Environmental Review Tribunal that it would widen only about three kilometres of road. Now it figures it will need to widen more than six times that length—a threat to the Blanding’s turtles and other animals. It is also threatening to fundamentally change the character of this pastoral island for a generation or more.

Folks on Amherst Island have begun to mourn the looming decimation of the quiet, rural island life that drew them to this place. We mourn with them.

Michigan residents, meanwhile, are likely unaware of the sacrifices that some Ontario residents on a wee island are making to subsidize their electricity bills.Will we connect these dots next June?

 

rick@wellingtontimes.ca

The sobering lesson of Ontario’s green energy experiment

Ontario’s experiment with green energy via the Green Energy and Green Economy Act has not had the rosy effects the McGuinty-Wynne governments said it would: electricity prices up dramatically, promised jobs did not materialize, and all this has had “modest” environmental benefits, says Michael Trebilcock in a report released by the C.D. Howe Institute today.

Mr. Trebilcock’s language is somewhat reserved compared to what he said at the time when the Green Energy Act was passed. Then he remarked, “This combination of irresponsibility and venality has produced a lethal brew of policies.”

Focus on electricity is out of proportion with other areas of the economy in need of closer scrutiny, such as transportation – Michael Trebilcock

Excerpt:

With the enactment of the Green Energy and Green Economy Act (Green Energy Act) in 2009, the Ontario government committed ratepayers to massive subsidization of various forms of renewable energy, especially wind power and solar energy, along with the phasing out of coalfired generation in the province – a goal achieved in 2014. In the eight years since the initiation of these policies, what tentative assessment can we make of their impact? Such a review is especially important in light of recent commitments by the federal government and most provinces to adopt a minimum carbon tax (or its equivalent) across Canada and to provide a variety of subsidies to users of low-emission technology.

Any evaluation of the impact of Ontario’s green energy policies to date should focus on three factors: i) the costs of renewable energy; ii) the environmental impact of these policies; and iii) their impact on employment in the province. On the evidence to date, these policies have had a dramatic impact on electricity costs in the province, but they have generated very limited environmental benefits and have had a negligible to negative effect on economic growth and employment. In short, the current Ontario green energy policies have run up against Pielke’s iron law of climate change: when citizens are faced with a major trade-off between the economy and the environment, the former will almost always prevail (Pielke 2010). Ontario’s experience shows that, rather than an extensive reliance on technology or activity-specific subsidies, the best approach by far is a carbon tax (or its cap-and-trade equivalent) that is technology-, activity-, and revenue-neutral.

Environmental Effects

About 60 percent of Ontario’s current generation capacity is already accounted for by low-emission hydro or nuclear-generated electricity, with the balance provided by natural-gas generation and to a lesser extent by renewables. Wind power and solar energy, because of their intermittency and unpredictability, require back-up generation, especially during peak-load capacity, and that has generally entailed the construction of natural-gas plants. In Ontario, the phasing out of coal-fired generation has likewise led to the construction of more natural-gas– fired generation.

The electricity sector’s share of greenhouse gas emissions in Ontario in 2012 was only about 9 percent of total emissions, compared to the transportation sector with 34 percent and the industrial sector with 30 percent (Ontario, Auditor General 2015), meaning that further environmental gains in the electricity sector are inherently limited.4 In any event, this impact needs to be compared to other alternatives, such as further enhancing transmission connections and expanding power purchase agreements with neighbouring jurisdictions, in particular Quebec and Manitoba, which have substantial clean hydroelectric resources. More generally, developing a competitively structured capacity market in Ontario may be a preferable long-term alternative strategy (Goulding 2013).

The focus on electricity is out of proportion with the areas of the economy that are most in need of closer scrutiny, such as transportation. Although the industrial sector accounts for the largest share of energy use in Canada,5 the growth in use in the transportation sector outpaced all other sectors between 1990 and 2013 with a 43 percent growth, compared to 7 percent in the residential sector, 30 percent in the industrial sector, and 23 percent in the commercial sector (Natural Resources Canada 2016).

Read the news release and link to the full report here.