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.
- 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.