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Tag Archives: Auditor General Ontario

Wind power: 22% of the costs for less than 6% of the power

06 Tuesday Dec 2016

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ 1 Comment

Tags

Auditor General Ontario, electricity bills, energy poverty, hydro bills, IESO, Parker Gallant, Scott Luft, wind farms, wind power, wind turbines

Former bank vice-president and vice-president of Wind Concerns Ontario was in Ottawa this past weekend, speaking at a Town Hall in Kanata on the details of Ontario’s electricity bills.

Today, he published an analysis of how much wind power is really costing us, on his Energy Perspectives blog. When the well-financed wind power lobby claims wind power prices are low, they don’t factor in other costs such as wasted hydro, gas, and nuclear, he says.

This is really shocking, given the rise in energy poverty in Ontario.

Here is the post by Parker Gallant.

For the cost to provide a small portion of Ontario’s power, wind is no bargain

Not a chance ...
Not a chance …

Most electricity ratepayers in Ontario are aware that contracts awarded to wind power developers following the Green Energy Act gave them 13.5 cents per kilowatt (kWh) for power generation, no matter when that power was delivered. Last year, the Ontario Auditor General’s report noted that renewable contracts (wind and solar) were handed out at above market prices; as a result, Ontario ratepayers overpaid by billions.

The Auditor General’s findings were vigorously disputed by the wind power lobbyist the Canadian Wind Energy Association or CanWEA, and the Energy Minister of the day, Bob Chiarelli.

Here are some cogent facts about wind power. The U.K. president for German energy giant E.ON stated wind power requires 90% backup from gas or coal plants due to its unreliable and intermittent nature.  The average efficiency of onshore wind power generation, accepted by Ontario’s Independent Electricity System Operator (IESO) and other grid operators, is 30% of their rated capacity; the Ontario Society of Professional Engineers (OSPE) supports that claim.  OSPE also note the actual value of a kWh of wind is 3 cents a kWh (fuel costs) as all it does is displace gas generators when it is generating during high demand periods.  On occasion, wind turbines will generate power at levels over 90% and other times at 0% of capacity.  When wind power is generated during low demand hours, the IESO is forced to spill hydro, steam off nuclear or curtail power from the wind turbines, in order to manage the grid.  When wind turbines operate at lower capacity levels during peak demand times, other suppliers such as gas plants are called on for what is needed to meet demand.

Bearing all that in mind, it is worth looking at wind generation’s effect on costs in the first six months of 2016 and ask, are the costs are reflective of the $135/MWh (+ up to 20% COL [cost of living] increases) 20 year contracts IESO, and the Ontario Power Authority awarded?

As of June 30, 2016, Ontario had 3,823 MW grid-connected wind turbines and 515 MW distributor-connected. The Ontario Energy Reports for the 1st two quarters of 2016 indicate that wind turbines contributed 4.6 terawatts (TWh) of power, which represented 5.9% of Ontario’s consumption of 69.3 TWh.

Missing something important

Not mentioned in those reports is the “curtailed” wind. The cost of curtailed wind (estimated at $120 per/MWh) is part of the electricity line on our bills via the Global Adjustment, or GA.  Estimates by energy analyst Scott Luft have curtailed wind in the first six months of 2016 at 1.228 TWh.

So, based on the foregoing, the GA cost of grid-accepted and curtailed IWT generation in the first six months of 2016 was $759.2 million, made up of a cost of $611.8 million for grid-delivered generation (estimated at $133 million per TWh) and $147.4 million for curtailed generation. Those two costs on their own mean the per kWh cost of wind was 16.5 cents/kWh (3.2 cents about the average of 13.3 cents/kWh).  The $759.2 million was 12% of the GA costs ($6.3 billion) for the six months for 5.9% of the power contributed.

But hold on, that’s not all. We know that wind turbines need gas plant backup, so those costs should be included, too. Those costs (due to the peaking abilities of gas plants) currently are approximately $160/MWh (at 20% of capacity utilization) meaning payments to idling plants for the 4.6 TWh backup was about $662 million. That brings the overall cost of the wind power contribution to the GA to about $1.421 billion, for a per kWh rate of 30.9 cents.   If you add in costs of spilled or wasted hydro power to make way for wind (3.4 TWh in the first six months) and steamed off nuclear generation at Bruce Power (unknown and unreported) the cost per/kWh would be higher still.

So when the moneyed corporate wind power lobbyist CanWEA claims that the latest procurement of IWT is priced at 8.59 cents per kWh, they are purposely ignoring the costs of curtailed wind and the costs of gas plant backup.

22% of the costs for 5.9% of the power

 Effectively, for the first six months of 2016 the $1.421 billion in costs to deliver 4.6 TWh of wind-generated power represented 22.5% of the total GA of $6.3 billion but delivered only 5.9% of the power.  Each of the kWh delivered by IWT, at a cost of 30.9 cents/kWh was 2.8 times the average cost set by the OEB and billed to the ratepayer.  As more wind turbines are added to the grid (Ontario signed contracts for more in April 2016),  the costs described here will grow and be billed to Ontario’s consumers.

CanWEA recently claimed “Ontario’s decision to nurture a clean energy economy was a smart investment and additional investments in wind energy will provide an increasingly good news story for the province’s electricity customers.” 

There is plenty of evidence to counter the claim that wind power is “a smart investment.” But it is true that this is a “good news story” — for the wind power developers, that is. They rushed to Ontario to obtain the generous above-market rates handed out at the expense of Ontario’s residents and businesses. And we’re all paying for it.

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24 Ontario communities say NO new wind power contracts

02 Wednesday Mar 2016

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ 1 Comment

Tags

Auditor General Ontario, community opposition wind power, cost of wind power, electricity bills Ontario, IESO, Wainfleet Resolution, wind energy, wind farm

Ontario municipalities demanding no new wind power contracts now 24

wind contract banner

Huron-Kinloss and West Lincoln have joined 22 other Ontario municipalities supporting the Wainfleet Resolution; the total is now 24.

The resolution refers to the Auditor General’s 2015 report in which Bonnie Lysyk detailed the amount of money Ontario citizens have paid for renewable power in a program that never had  cost-benefit analysis. Ontarians paid twice as much for wind power as they should have, she said, with the result that Ontario consumers have seen their electricity bills skyrocket. Worse, she said, is the fact that Ontario is in a situation of surplus power generation, which means regular losses as power generators are paid to “constrain” production, and surplus power is sold off at bargain-basement process on the electricity market.

The Wainfleet Resolution asks that the province not give out any new wind power contracts; the IESO accepted bids for more than 2,000 megawatts of new wind power generation last year, and planned to let contracts for 300 megawatts of new projects, despite the surplus.

While Ontario has over 400 municipalities, only about 100 are rural/small-town communities vulnerable to wind power development. Wind power projects have also been proposed in Northern Ontario where there are no organized municipalities but “unorganized territories.”

(Re-posted from Wind Concerns Ontario)

Billions spent on electricity projects In Ontario with no oversight: CD Howe Institute

24 Wednesday Feb 2016

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ 1 Comment

Tags

Auditor General Ontario, CD Howe Institute, electricity bills Ontario, George Vegh, Ontario, wind power, wind power technology, Wynne government

Set Limits on Queen’s Park’s Power over Electricity Market

 

“It is remarkable that the expenditure of billions of dollars can be made with the stroke of a pen with virtually no oversight.”

February 24, 2016 – The government of Ontario should move away from controlling electricity planning, according to a new C.D. Howe Institute report. In “Learning from Mistakes: Improving Governance in the Ontario Electricity Sector,” author George Vegh argues that the government should face more checks and balances when spending electricity ratepayer money. The government should only set broad policy objectives and not make choices on which technologies and which suppliers should receive government contracts.

Over the last 10 years, the government has directed the expenditure of billions of dollars of public money on electricity projects with virtually no oversight or checks and balances. During this time, Ontario consumers have seen a large increase in electricity prices, with more to come.

“It is remarkable that the expenditure of billions of dollars can be made with the stroke of a pen with virtually no oversight,” commented Vegh.

In response to concerns about the rising cost of electricity and poor governance, most notably from the Auditor General’s report last December, the Ontario government has touted its proposed Bill 135 as the solution. However, far from solving the concerns about electricity-sector governance, the proposed Bill entrenches and expands the status quo and provides no role for oversight of government electricity directives.

The author proposes the following recommendations to improve the system:

  1. Move away from a central planning model towards a locally based supply obligation that aligns accountability with responsibility.
  2. Even if the government is to maintain its central role in setting outcomes, it can reduce its role in picking winners and losers. This requires increased reliance on market mechanisms, including requests for proposals, and capacity markets to meet operational and capacity needs based on demonstrable system requirements.

Vegh concluded: “Rather than extend and entrench the problems, Bill 135 should provide the opportunity to correct them.”

Click here for the full report.

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

For more information contact: George Vegh, Counsel, McCarthy Tétrault, and Adjunct Professor, University of Toronto School of Public Policy and Governance, University of Toronto Law School and Osgoode Hall Law School; 416-865-1904, or email: kmurphy@cdhowe.org.

Ontario electricity customers fleeced of billions by government: Auditor General

02 Wednesday Dec 2015

Posted by ottawawindconcerns in Health, Renewable energy

≈ 1 Comment

Tags

Auditor General Ontario, electricity bills Ontario, Hydro One, Ontario, Ontario economy, wind farms Ontario, wind power Ontario

AG doesn't even mention costs of reduced property values, health problems, but finds billions squandered by Wynne and McGuinty governments

AG doesn’t even mention costs of reduced property values, health problems, but finds billions squandered by Wynne and McGuinty governments

Wind, solar more costly than it needs to be

Toronto Star, December 2, 2015

By: Rob Ferguson Queen’s Park Bureau, Robert Benzie Queen’s Park Bureau Chief, Published on Wed Dec 02 2015

Ontario electricity consumers are being zapped to the tune of tens of billions of dollars due to poor government planning, unnecessarily high green energy costs, and shoddy service from Hydro One, says auditor general Bonnie Lysyk.

Lysyk concluded ratepayers forked over $37 billion more than necessary from 2006 to 2014 and will spend an additional $133 billion by 2032 due to the Liberals’ global adjustment electricity fees.

In 14 value-for-money audits for her 773-page annual report delivered Wednesday at Queen’s Park, the auditor took aim at the electricity sector on the eve of Energy Minister Bob Chiarelli’s announcement on next steps for the province’s aging nuclear reactors.

She also highlighted problems with everything from Ontario’s 47 children’s aid societies — including questionable executive expenses — community care access centres, and school buses to the bungled SAMS social assistance computer system and the lack of a plan for dealing with contaminated waste.

But much of her scorn was reserved for the energy ministry, which is overseeing the sell-off of Hydro One, the provincial electricity transmitter.

“Hydro One’s customers have a power system for which reliability appears to be worsening while costs are increasing,” said Lysyk, echoing Ed Clark, Premier Kathleen Wynne’s privatization czar, who has argued Hydro One can and should be a much more professionally run company.

“Customers are experiencing more frequent power outages, mostly because assets aren’t being fully maintained, aging equipment isn’t being consistently replaced and trees near power lines aren’t being trimmed often enough to prevent outages,” she said, lamenting that this will be her final audit of the company since it will no longer fall under her purview once it is private.

At the same time, Ontario’s controversial push to promote wind and solar energy is proving more costly than it needs to be, and energy conservation is proving unnecessarily expensive because the province has a surplus of electricity.

Lysyk estimated consumers could end up paying $9.2 billion more for renewable energy over 20-year contracts issued under the Green Energy Act with guaranteed prices set at double the U.S. market price for wind and at 3.5 times the going rate for solar last year.

“With wind and solar prices around the world beginning to decline around 2008, a competitive process would have meant much lower costs,” Lysyk wrote, noting the government ignored advice from the now-defunct Ontario Power Authority to seek bids for large renewable energy projects.

The auditor shines a light on energy conservation efforts slated to cost $4.9 billion from 2006 to 2020, saying the investment does “not necessarily” lead to savings because excess electricity must be exported at a loss.

“We are concerned,” Lysyk wrote. “Investing in conservation at a time of surplus actually costs us more.”

Read more here

Impact analysis shows no benefit from solar panels on North Grenville building

17 Thursday Sep 2015

Posted by ottawawindconcerns in Renewable energy

≈ 7 Comments

Tags

Auditor General Ontario, cost-benefit analysis renewable energy, fire safety solar panels, FIT program, green energy, Kemptville, liability solar panels, North Grenville, North Grenville Municipal Centre, solar panels, SunSmart Solar

Facility Rental

Renting roof for solar panels? Not worth the risk, North Grenville decides

This story is about solar power, not wind, but is remarkable for two reasons: first, a municipality actually took a measured approach to a decision about “green” energy, and second, the results of the thorough impact analysis showed there was little or no benefit to the municipality from putting solar panels on a public building. In fact, there were substantial liabilities.

If the same approach were to be taken for wind power projects, including an analysis of such impacts as property value loss and social costs, we believe the result could be the same: wind power is high-impact for low benefit.

Two Auditors General have recommended that the province undertake a cost-benefit analysis for its whole green energy program—this has never been done. Kudos to North Grenville.

Kemptville Advance, September 17, 2016

MUNICIPALITY SAYS NO TO SOLAR PANELS

Jennifer Westendorp

Staff have recommended to council not to proceed with the proposal to install solar panels on the North Grenville Municipal Centre arena roof.

SunSmart Solar, a company located in Kemptville, made the presentation at the Aug. 24 committee of the whole meeting, requesting the municipality consider leasing the arena roof for 20 years for the installation of solar panels as part of the provincial Feed-In-Tariff Program (FIT).

… Mark Guy, director of parks, recreation and culture, conducted an analysis of the benfits and risk involved with the proposal which he presented September 8.

“There are many factors to consider when assessing the installation of solar panels onto the NGMC roof,” the document read, “as part of the FIT program, including the insurance and risk tolerance, safety of fire personnel, approval from the building owner, installation and maintenance, terms of the proposal under the FIT program and the procurement process.”

…the municipality’s risk manager, Frank Cowan Company, expressed concerns about liability exposures and more particularly the tenant’s legal liability and the general liability coverage…. Guy added the municipality’s insurance premium would increase as a result of the installation.

He [Guy] said the second things staff considered when looking over the proposal was the safety of fire personnel, such as the ability to shut down the electricity in the event of a fire in a building equipped with a solar panel system that generates electricity.

He said the third factor considered was approval from the building owner. Guy explained the NGMC is not owned solely by the municipality, but rather a separate and distinct corporation known as the North Grenville Community Care Corporation … a P3 Partnership…This separate corporation is owned by the municipality and the Taggart Group of Companies. Guy said the NGMC was not designed based on climatic data for the area and certain collateral loads, which didn’t include solar panels. [Editor’s note: Translation–the roof wasn’t designed to bear the additional load of solar panels.]

…SunSmart anticipates never having to go on the roof for maintenance. “The panels will not be cleaned off in the winter months,” said Guy. “The issue of falling snow would be a concern because the surface of the panels are less resistant, allowing snow to fall on the parking lot area, possibly damaging vehicles or injuring pedestrians.”

The final factor considered was the terms of the proposal under the FIT program. Guy said SunSmart proposed after 20 years, ownership of the panels would pass to the municipality at no cost, with a projection the panels would be at mid-life by then.

 

 

Economist summary of the A G report on “smart meters”: astounding incompetence

31 Wednesday Dec 2014

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ Leave a comment

Tags

Auditor General Ontario, Auditor General Report, Bob Chiarelli, energy issues, Ontario, Ontario consumers, Ontario economy, Ontario electricity bills, Ontario power rates, Robert Lyman, smart meters

Ottawa-based economist Robert Lyman, who specializes in energy issues, has provided us with a summary of the highlights of the recently released Auditor General report, on the energy sector in Ontario. The government’s handling of this portfolio is astounding for its mismanagement, and wasted taxpayer and ratepayer dollars.

Read the summary from Mr Lyman Here: Ontario Auditor General Report on the Smart Metering Initiative

10 years of “irrational” energy planning in Ontario

03 Tuesday Jun 2014

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ 1 Comment

Tags

Auditor General Ontario, cost-benefit analysis renewables, Dalton McGuinty, electricity bills Ontario, Green Energy Act, Ontario, Ontario Hydro, Ontario Power Authority, Parker Gallant, power costs Ontario, wind energy

Here from former banker Parker Gallant, an analysis of what has gone wrong on the energy file in Ontario over the last 10 years.

Ontario’s Power Trip: Irrational energy planning has tripled power rates under the Liberals’ direction

Parker Gallant, Special to Financial Post | June 2, 2014 | Last Updated:Jun 3 8:17 AM ET

Dalton McGuinty's Liberals claimed the province’s electricity sector was in a mess when they took over in 2003. Look at it today.

Ontario Hydro may well have been a mess. But it was a mess that produced less expensive electricity

In the summer of 2003, just before Dalton McGuinty’s Liberals gained power in Ontario, 50 million people in the U.S. Eastern Seaboard and Ontario suffered an electricity blackout caused “when a tree branch in Ohio started an outage that cascaded across a broad swath from Michigan to New England and Canada.” Back in 2003 Ontario’s electricity prices were 4.3 cents a kilowatt hour (kWh) and delivery costs added 1.5 cents per kWh. An additional charge of 0.7 cents — known as the debt retirement charge to pay back Ontario Hydro’s legacy debt of $7.8-billion — brought all-in costs to the average consumer to 6.5 cents per kWh.

The McGuinty Liberals claimed the province’s electricity sector was in a mess when they took over in 2003. The Liberals’ first Energy minister, Dwight Duncan, said then that he rejected the old Ontario Hydro model. “It didn’t work. We’re fixing it. We’re cleaning up the mess.”

Fast forward 11 years. Today, Ontario electricity costs average over 9 cents per kWh, delivery costs 3 cents per kWh or more, the 0.7-cent debt retirement charge is still being charged, plus a new 8% provincial sales tax. Additional regulatory charges take all-in costs to well over 15 cents per kWh.. The increase in the past 10 years averaged over 11% annually. Recently, the Energy Minister forecast the final consumer electricity bill will jump another 33% over the next three years and 42% in the next 5 years.

Summing up: Whatever mess existed in 2003 is billions of dollars worse today. The cost of electricity for the average Ontario consumer went from $780 on the day Dalton McGuinty’s Liberals took power to more than $1,800, with more increases to come. The additional $1,020 in after-tax dollars extracted from the province’s 4.5 million ratepayers is $4.6 billion – per year!

Why?

First, the Liberal Party fell under the influence of the Green Energy Act Alliance (GEAA), a green activist group that evolved into a corporate industry lobby group that adopted anthropogenic global warming as a business strategy. The strategy: Get government subsidies for renewable energy. The GEAA convinced the McGuinty Liberals to follow the European model. That model was: Replace fossil-fuel-generated electricity with renewable energy from wind, solar and biomass (wood chips to zoo poo). In the minds of those who framed the Liberal’s energy policies, electricity generated from wind, solar, biomass – green energy – was the way of the future.

The plan was implemented through the 2009 Green Energy and Green Economy Act (GEA), a sweeping, even draconian, legislative intervention that included conservation spending and massive subsidies for wind, solar and biomass via a euro-style feed-in-tariff scheme. The GEA created a rush to Ontario by international companies seeking above market prices, a rush that pushed the price of electricity higher. The greater the increase in green energy investment, the higher prices would go.

At the same time, Liberals forced installation of smart meters, a measure that added $2-billion to distribution costs. Billions more were needed for transmission lines to hook up the new wind and solar generators. At the same time, wind and solar generation – being unstable – needed back-up generation, which forced the construction of new gas plants. The gas plants themselves became the target of further government intervention, leading to the $1-billion gas plant scandal.

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To force adoption of often unpopular wind and solar plants, the GEA took away municipal rights relating to all generation projects, stripping rural communities of their authority to accept or reject them.

To pay for the rising subsidies to wind and solar, the Liberals adopted an accounting device that would spread the cost over all electricity consumers. The device was called the “Global Adjustment.” The Global Adjustment draw on consumers grew fast and will continue its upward movement. In effect, the Global Adjustment is a dump on ratepayers for energy costs that are above market rates. During 2013, the total global adjustment was $7.8-billion. Of that, 52% went to gas/wind/solar/biomass.

The GA for 2014 is expected to rise to $8.6-billion, adding another 2.9 cents per kWh for each electricity consumer.

To oversee all this, the Liberals established the Ontario Power Authority to do long-term energy planning (LTEP) and to contract renewable generation under the feed-in tariff (FIT) program that guaranteed wind and solar generators above-market prices for 20 years or more. In 10 years Ontarians have seen four versions of the so-called long-term plan, suggesting there is nothing long-term or planned. The Auditor General’s report of Dec 5, 2011, disclosed that no cost/benefit analysis was completed in respect to those feed-in tariff contracts.

Whatever mess existed in 2003 is billions of dollars worse today

The numerous Liberals who have sat in the Energy Minister’s chair have had a penchant for believing how the sector should function, issuing “directives” from the cabinet. The directives created the most complex and expensive electricity sector in North America. The Association of Major Power Consumers issued a “Benchmarking” report in which they stated: “Our analysis shows that Ontario has the highest industrial rates in North America. Ontario not only has the highest delivered rates of all these jurisdictions; the disparity in rates also is growing.”

The almost 100 directives over the past 11 years from Liberal energy ministers have instructed the OPA, the Ontario Energy Board, Ontario Power Generation and Hydro One on a wide variety of issues from building a tunnel under Niagara Falls to paying producers for not generating power, subsidizing industrial clients for conservation while subsidizing other industrial clients for consumption. Numerous new programs have been created that support clients in Northern Ontario, urban clients for purchasing EVs (electric vehicles), homeowners for purchasing CFL light bulbs and a host of other concepts without weighing the effect on employers or taxpayers.
Aside from the burden on consumers, Ontario’s Power Trip has cost jobs as companies – Caterpillar, Heinz, Unilever and others – closed Ontario operations while others, such as Magna, failed to invest in Ontario due to high electricity prices and high taxes that would have created private sector jobs.

Were “green energy” jobs created? Government claims hit 31,000 in a press release in June 2013 but since then no mention of green job claims appears in releases. The recent budget of Finance Minister Charles Sousa reported 10,100 jobs in the “clean tech” sector, a far cry from earlier claims.

Ontario Hydro may well have been a mess a decade ago. But it was a mess that produced electricity priced to consumers at 6.5 cents a kWh. Current prices of 15 cents a kWh will rise to over 20 cents a kWh by 2018/19, forcing the average Ontario ratepayer to pay an additional $700 annually. By that date the cost of “renewable energy” to Ontario’s 4.5 million ratepayers will result in an annual extraction of $8-billion to satisfy the perceived benefits of wind, solar and biomass. Over the 20 years of the FIT contracts, $160-billion in disposable income will be removed from ratepayer’s pockets to access a basic commodity, all in the name of “global warming” and renewable power without use of a cost/benefit analysis.

Perhaps it is time for a change in the governing of Ontario and particularly the way the electricity sector is overseen.

Parker Gallant is a former Canadian banker who looked at his local electricity bill and didn’t like what he saw.

Read the full opinion and comments here.

Email us at ottawawindconcerns@gmail.com

Ontario Government’s green power policy: an “abject failure”

25 Tuesday Jun 2013

Posted by ottawawindconcerns in Health, Ottawa, Renewable energy, Wind power

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Tags

Auditor General Ontario, cost benefit wind power, cost-benefit renewable power, Dalton McGuinty, Feed In Tariff Ontario, Green Energy Act, Kathleen Wynne, Ottawa wind concerns, Waterloo Region Record, wind farms Ontario, wind power Ontario

Here today from the Waterloo Region Record, a comment on the McGuinty government’s “green energy” program which was meant to bring jobs and prosperity to Ontario, while cleaning up our air (never mind that the air pollution in Southern Ontario is from cars and trucks).

The author rightly points out that the government continues to put a brave face on its policy, even as it disintegrates daily. What the author of this comment doesn’t know, is that the Ontario government continues to approve giant wind power projects weekly. In fact, this month has seen a record number of project approvals, including one at West Lincoln, which had passed a resolution at Council declaring itself not to be a “willing host” to wind power on this scale.

Here is the comment. Email us at ottawawindconcerns@gmail.com and donations are most welcome for legal and other costs at PO Box 3, North Gower ON  K0A 2T0

http://www.therecord.com/opinion-story/3854511-a-white-flag-for-green-energy/
TheRecord

A white flag for green energy

Waterloo Region Record

The Ontario Liberals are striving mightily to portray their disastrous green energy program as a rousing success. Do not believe them. It is an abject failure that inflated electricity costs, alienated rural communities and never lived up to its billing as the engine not just of more jobs but an entirely new manufacturing sector.

This is the context in which to understand last week’s announcement that the province had downsized a multi-billion dollar deal it signed with Samsung Group in 2010 to produce electricity from wind and solar projects.

Instead of giving the South Korean corporate giant $9.7 billion for 2,500 megawatts of electricity, Ontario will spend $6 billion for 1,369 megawatts. We pay less. We also get less. Samsung is cutting its investment in new green energy plants and components in Ontario from the $7 billion it originally pledged to $5 billion.

Although the government once boasted that Samsung would create 16,000 new manufacturing jobs, the number of new workers being talked about last week was just 900. That’s a flimsy foundation for an economic renaissance.

Energy Minister Bob Chiarelli defended the latest Samsung agreement as a way “to bend the cost curve (down) for ratepayers.” But even he can’t make a silk purse out of a sow’s ear. The best that can be said of his accomplishment is that the government’s ill-conceived and poorly delivered green energy crusade will leave ratepayers battered but not comatose.

Go back a few years and remember then-premier Dalton McGuinty’s grand and hubristic vision of turning this province into a green utopia. Making everyone pay far more for wind and solar energy than other sources of electricity was the key to his plan. Sure it would hurt consumers — but it would be worth it.

Not only would the McGuinty brain trust produce more energy for Ontario, it would do so in an environmentally friendly way. To top it all off, in the wake of the devastating recession of 2008-09 in which thousands of the province’s factory jobs were lost, the Liberals were going to create a thriving green energy industry that would sell to a global market.

It turns out McGuinty was a modern-day Don Quixote tilting at wind turbines. He was off on just about every premise. The World Trade Organization recently struck down the made-in-Ontario provision in McGuinty’s program.

The Liberals overestimated Ontario’s energy needs. The recession drove down demand for electricity and the province wound up with a surplus of it. We don’t need all the electricity Samsung was originally contracted to deliver.

The job boom never materialized either. As it happens, China can make solar panels far cheaper than Ontario. No wonder one of Canada’s most touted solar power firms, Arise Technology Corporation of Cambridge, went bankrupt last year while solar energy equipment maker Silken SA closed its Windsor operation.

And the bloated cost of this energy scheme will hurt for years to come. In 2011, Auditor General Jim McCarter estimated Ontario’s green energy policies were adding $220 million a year to the province’s already soaring hydro bills which were now among the most expensive in North America. No wonder the government scaled back its rates for green energy.

With McGuinty now gone and Kathleen Wynne in the premier’s office, the government is running away from the green energy program as fast as it can. The Samsung agreement has been overhauled. In future, priority will be given to wind turbine projects where there is community support.

For months, Ontarians have been justifiably outraged by the same government’s cavalier cancellation of two gas-fired electricity plants, arguably for political reasons and at a cost to the public of at least $585 million. The green energy program is as big a fiasco — and will cost more in the long-run.

 

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