Radio station CFRA is holding an online poll on the economics of renewable power–wind and solar–take the poll here
Here, from energy economist Robert Lyman, an excellent view of the situation we are in because of the Ontario government’s “green energy” tactic. never mind that has failed as an economic driver and job creation mechanism, did it ever have a hope of what it was supposed to do? “Save” the environment?
Will Ontario’s Green Power plan save the planet?
The Ontario government has to date committed almost $60 billion over the next 20 years to building industrial wind turbines and solar power generators. In the case of wind turbines, the construction of hundreds of plants across the province has given rise to major conflicts between those who stand to benefit from the huge electricity ratepayer subsidies and those whose health and property values are threatened. Ontario’s electricity generation capacity is already 40% above the peak requirements, and yet the provincial government continues to contract for more power. When those concerned about the economic, social and health impacts of adding so much “green” energy complain, they are often confronted with an argument expressed with almost religious conviction. Supporters of green energy insist we need it to “save the planet” from the threat of climate change.
There are many reasons to question the scientific arguments behind the thesis that human beings are responsible for what may be “catastrophic” climate change 100 years hence. The arguments about this are highly technical. Instead, let us examine two things:
The primary source of expert advice to governments concerning climate change is the United Nations Intergovernmental Panel on Climate Change (IPCC). It advises the governments that are party to the 1992 Framework Convention on Climate Change and subsequent related agreements. In the 2009 Copenhagen Accord, these parties agreed that, to avoid what they considered a dangerous level of “global warming”, it would be necessary to limit increases in the average global temperature to no more than two degrees Celsius relative to pre-industrial times. To accomplish this, atmospheric concentrations of carbon dioxide, now about 395 parts per million (ppm), would have to be reduced to at least 350 ppm. As stated by the United States Presidential Climate Change Action Project and other sources, this means that global emissions would have to decline by 60% by 2050 and that emissions in the industrialized countries of the Organization for Economic Cooperation and Development (OECD) would have to decline by 80%. These reductions are from current levels. In the case of industrialized countries, an 80% reduction from current levels by 2050 means the virtual elimination of fossil fuel use, except in certain areas where this is technically impossible. The advocates insist that nothing less than this reduction is enough.
The best current estimates of present and future global energy supply and demand and related emissions are those produced by the United States Energy Information Administration (EIA) and the OECD International Energy Agency (IEA). Both organizations issued updated projections in 2013. The EIA analysis uses a “reference case” that includes assumptions concerning economic growth but not changes in current policies and laws; its projection period runs to 2040. The IEA analysis uses a reference case that assumes significant changes in policies and laws, especially in the OECD, to reduce GHG emissions; its projection period runs to 2035.
The results of the two studies are similar in several respects. Notably:
In short, the best available expert projections of global energy use and GHG emissions shows that these are moving significantly counter to the direction that the IPCC regards as essential. This growth is driven by the desire of people in the developing countries to attain higher levels of income, economic development and wellbeing, much of which is directly tied to increased energy use.
Those who are persuaded that climate change mitigation must be pursued at all costs to “save the planet” are left with radical solutions. James Hansen, the former head of the U.S. National Aeronautics and Space administration who is now perhaps the most prominent advocate for dramatic action, has recommended immediately taking steps to “leave all fossil fuels in the ground” which presumably means banning all future exploration, production, distribution and consumption of coal, oil and natural gas either through regulation or taxation (Hansen recommends a tax of up to $1000 per tonne of carbon dioxide, but is willing to contemplate a beginning tax of $15 per tonne, rising $10 per year indefinitely.). Unfortunately for Dr. Hansen, the world is not listening.
In these circumstances, people in Canada and the rest of the OECD have to question the rationale for costly emission-reduction measures that have relatively modest effects. To illustrate this point, if one takes as accurate the EIA estimate of 31.2 billion metric tons of annual global GHG emissions in 2010, and accepts the need for a 60% reduction in that level by 2050, this would mean that the world would have to achieve an 18.7 billion metric ton reduction in 36 years. If one further assumes that the non-OECD countries will continue their present path of emissions growth related to their desire for economic development and improvement in standards of living, then all OECD countries could suddenly disappear from the planet, thereby emitting not one whiff of CO2, and the target still would not be attained!
Those who believe the science may perhaps be persuaded that it makes far more sense to give up on mitigation approaches and concentrate instead on investing in adapting to what they view as inevitable climate change impacts. The investments may be large, but they could be tailored to the specific effects that occur and they would be within each country’s control. Those of us who fundamentally question the science and economic projections of the IPCC have less cause for concern.
There are those who argue that, even if the emissions reductions that are likely to occur are nowhere close to enough to affect the (alleged) path of global warming, the people of Ontario have a “moral obligation” to incur those costs anyway. The author admits to being completely baffled by this logic, but it may be useful to examine just how much, in fact, Ontario’s $40 billion in renewable wind and solar generation is likely to affect global emissions.
According to the United Nations Statistics Division, Canada’s share of greenhouse gas emissions represents 1.8 % of global emissions. Environment Canada’s National Emissions Inventory shows that electricity and heat generation from all provinces totals 98 megatonnes (Mt) of GHGs, or 14% of Canada’s total emissions of 690 Mt. Emissions from Ontario’s electricity production and consumption represent about 15 % of those from all electricity in Canada. Therefore, all of Ontario’s electricity-related emissions represent 0.039% of global emissions. If Ontario ceased to produce and consume all electricity overnight, it would reduce global emissions by less than one twenty-fifth of one per cent.
In fact, all of the renewable energy associated with Ontario’s Green Energy Plan would only decrease Ontario’s electricity emissions by 20% in the most optimistic scenario. In other words, this would reduce global emissions by 0.008%.
However, there are reasons to question whether the massive investment in renewable generation sources would have been needed to achieve even this small effect. The Fraser Institute published a report in 2013 entitled, “Environmental and Economic Consequences of Ontario’s Green Energy Act”. Here is an excerpt from that report:
“Electricity supply is divided into base-load capacity, which comes from sources like hydroelectric and nuclear that deliver a fixed amount of power that cannot easily be adjusted up or down on short notice, and peak capacity, which can be scaled up and down as system demand changes through the day. Ontario power demand currently averages about 18,000 MW and reaches a maximum annual peak of about 26,000 MW. Using figures from the Ontario Power Authority and the Independent Electricity System Operator, the Provincial Auditor General projects average demand to decline to about 16,000 MW and peak demand to fall to about 24,000 MW. Nuclear and hydroelectric facilities alone currently provide 18,000 MW of base-load capacity. In addition, Ontario has 9,500 MW of gas capacity as well as 4,500 MW of the coal-fired power plants much of which is unused. The AGO estimates Ontario will have at least 10,000 MW of surplus generating capacity through 2025.”
In other words, Ontario’s electrical generating capacity already so far exceeds needs that the coal-burning power plants (the principal sources of GHG emissions) could have been shut down without adding a single new wind or solar plant.
The net effect of these plants on reducing Ontario GHG emissions was zero.
Ottawa, March 2014
Here from today’s Financial Post, Peter Foster on the International Energy Agency, and its report on renewable power sources.
At the International Energy Agency, ”Variable Renewable Energy” is Orwellian Newspeak for “Unreliable Renewable Energy”
It was depressing to read this week of Caisse de depot head Michael Sabia regurgitating the foundational myths of economic nationalism: that markets are too short-term, and that takeovers by foreign “tourist” corporations should be resisted.
That was the precisely the kind of thinking that, a generation ago, got us PetroCanada and the National Energy Program. Petrocan relentlessly spouted that its perspective was broader and longer than that of its market rivals. The result was a carnival of waste and a gusher of red ink. The NEP got every far-sighted projection dead wrong. Government-promoted takeovers sunk the acquirers, not the targets.
How soon we forget, if, that is, we ever knew. The self-serving misrepresentation of capitalism that was at the heart of both nationalism/fascism and Communism is still with us, only now it’s gone global, is called sustainable development, and is focused on climate change. This allegedly demands a carefully-coordinated decarbonization of the global economy, balanced with wise guidance of poor country development.
How’s that going?
A report this week from the International Energy Agency – The Power of Transformation – Wind, Sun and the Economics of Flexible Power Systems – is a classic example of the immutability of bureaucratic pretension and its infinite ability to explain away failure, even as it promotes more of the same.
Here’s the opening of the report’s Executive Summary:
Wind power and solar photovoltaic (PV) are expected to make a substantial contribution to a more secure and sustainable energy system. However, electricity generation from both technologies is constrained by the varying availability of wind and sunshine. This can make it challenging to maintain the necessary balance of electricity supply and consumption at all times. Consequently, the cost effective integration of variable renewable energy (VRE) has become a pressing challenge for the energy sector.
Translation: renewable energy is a practical disaster.
Everywhere, policies based on subsidization of “technologies of the future” are in crisis. “Variable Renewable Energy,” VRE, is Orwellian Newspeak for “Unreliable Renewable Energy,” URE.
Unintended results have been piling up like a mountain of biomass, hoisting prices, undermining manufacturing, and creating fuel poverty among consumers, including now even those in Germany, which is still Europe’s richest country despite some of the continent’s most perverse energy policies.
As the summary says, wind and solar are obviously unreliable because the wind does not always blow, nor the sun shine. They are also very expensive. Solving the latter problem is always just over the horizon, not least because those short-sighted agents of the market keep coming up with new and cheaper sources of fossil fuel, such as shale gas, a development which far-sighted bureaucrats somehow failed to spot.
So what’s the IEA’s answer to the unreliability problem? Bigger and better-coordinated plans, bolstered by positive verbiage. According to the report, any country can reach high shares of wind and solar power “cost-effectively.” All that’s required is to forget history, economics and, while we’re about it, developments in climate science. The science is settled.
According to IEA Executive Director Maria van der Hoeven “Integrating high shares of variable renewables is really about transforming our power systems.” What is required is a “change of perspective,” which is to say the same old perspective dressed up in new imperial costume. Which is to say, the same old new imperial costume.
You see, the problem was never really unreliability per se, it was that wind and solar were introduced piecemeal on top of all those awful “business as usual” systems. So what is needed is transformation of energy systems “as a whole.” You know, like the Soviets’ Gosplan.
The IEA notes that wind and solar now account for just 3 percent of world electricity generation. However, a few bold leaders generate 10-30% of their electricity, albeit spottily and expensively, from wind and sun. These champions include Germany, Italy, Ireland, Spain, Portugal, and Denmark. All are struggling with policy perversity. Germany’s abandonment of nuclear has – due to aforementioned wind and solar unreliability – led to a boom in one of the “dirtiest” power sources, brown coal.
The IEA grudgingly admits that renewables have wreaked havoc among “incumbent generators.” Where the transformational challenge comes is in working out how to reduce the existing economic part of the system while boosting investment in the new non-economic (not to mention climatically pointless) part. What “flexibility” thus means is the flexibility to accommodate dumb ideas, and in particular to execute the policy pretzel positions necessary to kill those “inflexible” (economic) parts of the system. This will require a “collaborative effort by policy makers and the industry.” Translation: the taxpayer will get screwed. Again.
Still, the important thing is to keep green bureaucratic dreams alive, aided by those positive semantics. The IEA wants the world to deploy wind and solar “in a system-friendly way using state-of-the art technology, improving the day-to-day operation of power systems and markets, and finally investing in additional flexible resources.”
I wonder why they never thought of that before.
Wind Power Project Approvals Driving Up Cost of Ontario’s Electricity
By Parker Gallant
The provincial government would have us believe it is taking steps to manage rapidly rising electricity costs. Meanwhile, in the background, they are pushing 55 wind turbine projects through the Renewable Energy Approval process, projects that will add $1.1 billion per year to Ontario’s electricity costs. The impact of these turbine projects is 20 times the cost of the gas plant relocations.
The 230-megawatt (MW) Niagara Region Wind Project proposed for West Lincoln and Wainfleet in the Niagara Region alone will add $78 million annually to Ontario’s electricity costs when approved. The cost over its 20-year contract is $1.6 Billion. Rather than declining or delaying these 55 projects, the provincial government continues to issue approvals and increasing electricity costs to levels that Ontario household and business users cannot afford.
In fact, wind power projects continue to be approved almost weekly despite Ontario’s current surplus of electricity. Some operators of existing wind power generation facilities are actually being paid not to produce electricity, and neighbouring jurisdictions like New York and Michigan are being paid to take Ontario’s surplus power, which they in turn use to attract jobs away from Ontario with cheap electricity. To create capacity on the grid for the expensive power generated by wind turbines, Ontario is also idling the Niagara hydro plants which in the past have powered Ontario’s economy by supplying cheap clean electricity.
The truth is that wind is not a reliable source of electric power. In Ontario, wind turbines generate most of their electricity at night, and in the fall and winter months—exactly when we don’t need it. To provide the electricity needed by the province during the day, and in the hot summers, Ontario has had to supplement wind turbines with gas plants to provide electricity when the wind is not blowing. This means that the average Ontario electricity user will not only pay about $220 annually for the cost of the wind turbine contracts but also another $200 annually to pay for the base costs of the gas plants needed to back them up. Ontario electricity ratepayers could do a lot with that $420.
While the government argues that it has no option but to proceed with these projects, Ontario court have confirmed that the Feed-in-Tariff contracts issued for these projects only allow the proponent to enter a “complex regulatory process that might have led to approvals” and that the Environmental Project Act gives the Ministry of the Environment Director “broad powers to issue, reject, or amend Renewable Energy Approvals.” The known impacts of existing wind power projects on communities in rural Ontario give the Ministry of the Environment Director a basis for rejecting or delaying these projects. The Ontario government is pursuing wind power without a proper cost-benefit analysis, as was pointed out by the Auditor-General in 2011; no analysis was done before launching into the wind power program, or since. Citing benefits to the environment, is not an appropriate rationale: with the coal plants closed, there is no need for concern about pollution from them, and there are also valid concerns about environmental damage and harm to wildlife from wind power plants.
For example, the government’s own Environmental Review Tribunal revoked approval to construct the Ostrander Point project last July because the project would cause “serious and irreversible harm” to the endangered Blanding’s turtles native to the area. Rather than accepting that decision, however, the Ministry of the Environment partnered with the wind industry in January to appeal this ruling in the Ontario Superior Court of Justice in Toronto; the Ministry is trying to overturn the decision to protect the turtles. Similarly, the Ministry continues to support the Wainfleet Wind Energy project, despite the obvious dangers presented to users of the nearby Skydive Burnaby facility.
Electricity costs in Ontario are now among the highest in North America. Ontario households and businesses have reached the limit of their capacity to pay for this Green Energy experiment. It is time for the Ontario government to stop approving more wind turbine projects, like the Niagara Region Wind Project, that will drive up the cost of electricity in the province for the next 20 years while generating electricity we do not need.
Parker Gallant is a former vice-president with the TD Bank, a former director with Energy Probe, and currently an energy analyst and commentator. He is vice-president of Wind Concerns Ontario.
cost benefit wind power, cost of renewables, cost of tind power, Feed In Tariff Ontario, FIT Ontario, Green Energy Act, moratorium wind power projects, Ontario green energy plan, Ottawa wind concerns, Robert Lyman, Ross McKitrick, Wind Concerns Ontario
It’s not pretty.
It’s actually endangering the economic health of this province.
What is it? Ontario’s poorly thought out Green Energy and Green Economy Act.
Here is a summary of the report released by the Fraser Institute, written by University of Guelph ENVIRONMENTAL AND ECONOMIC CONSEQUENCES economics prof Ross McKitrick, prepared by Ottawa energy economist Robert Lyman.
This a short summary worthy of forwarding to your friends and family who may be unaware the high costs of Ontario’s renewable power plan.
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