END THE RURAL-URBAN DIVIDE, RESTORE LOCAL DECISION MAKING: MACLEOD
(Queen’s Park)- Nepean- Carleton PC MPP Lisa MacLeod brought the fight against wind turbine developments once again to Queen’s Park today.
“One of the big challenges the government has is credibility in rural and remote communities across the province because of the Green Energy Act. The government should restore local decision making to municipalities in an effort to signal they respect those communities”, said MacLeod
The Green Energy Act overrides 21 different pieces of legislation, including the Heritage Act and the Planning Act, so wind turbine developers can build projects without any push back from municipalities or their residents.
“The rural-urban divide in Ontario is very real as a result of disastrous policies like the Green Energy Act. It is never too late for the Liberal Government to admit it is wrong and make wind turbine developers go through the same processes any other developer would have to in the Province of Ontario”, concluded MacLeod.
New study explains why Ontario has gone from affordable electricity rates to among the highest in N America. Photo: Bloomberg
Ross McKitrick and Tom Adams, The Financial Post, October 30, 2014
Adding renewable generating capacity triggers changes throughout the system that multiply costs for consumers
Ontario’s green energy transformation – initiated a decade ago under then-Premier Dalton McGuinty – is now hitting consumers. The Nov 1 increase for households is the next twist of that screw. As Ontario consumers know all too well, the province has gone from having affordable electricity to having some of the highest and fastest-increasing rates in Canada.
Last year, in a report for the Fraser Institute called “Environmental and Economic Consequences of Ontario’s Green Energy Act,” one of us (McKitrick) explained how the Green Energy Act, passed in 2009, yielded at best tiny environmental benefits that cost at least ten times more than conventional pollution control methods, and was directly harming growth by driving down rates of return in key sectors like manufacturing.
But complex financial structures and a lack of official disclosure around large embedded costs have let supporters of the green energy act deny that green power is responsible for the price hikes. Green industry advocates, including the consulting firm Power Advisory and advocacy group Environmental Defense, have added up the direct payments to new renewable generators, and concluded that since those costs are relatively small, the impact of renewables on the total cost of power is likewise small.
However, such analyses ignore the indirect costs that arise from the way renewables interact with the rest of the power system. Adding renewable generating capacity triggers changes throughout the system that multiply costs for consumers through a mechanism called the Global Adjustment. Our new study, released Wednesday by the Fraser Institute, quantifies the impacts of different types of new generators on the Global Adjustment. The analysis pinpoints what causes the raw deal for consumers.
Here’s how it works: over the last decade, Ontario closed its coal-fired power plants and built a rapidly expanding portfolio of contracts with other generators including renewable energy companies producing power from hydro, wind, solar and biomass. These companies charge the Ontario Power Authority (OPA) higher-than-market-value prices for energy. To make up the difference, the OPA slaps an extra charge – called the Global Adjustment – on the electricity bills of Ontarians.
The Global Adjustment adds to the commodity portion of rates, which combined with charges for delivery, debt recovery, and regulatory factors constitute the overall rate. Elements of the Global Adjustment that are not disclosed include payments to generators to not generate, rates paid to historic non-utility generators, and costs for new hydro-electric developments.
Since 2007, the Global Adjustment has risen six cents per kilowatt-hour in inflation-adjusted terms, pushing up the commodity portion of bills by 50%. Not long ago, Ontario’s total industrial rate was less than six cents per kilowatt-hour. The rising Global Adjustment is by far the biggest driver of the resulting 21% increase in the overall average cost of power in the province over the period 2007-2013. The Global Adjustment’s upward path is a direct consequence of government intervention in the electricity market. Our analysis unpacking the costs of different types of generation shows that the consumer impact of new renewables substantially exceeds the direct payments to those generators by as much as 3 to 1. And renewables are a big part of the problem: Wind and solar systems provided less than 4% of Ontario’s power in 2013 but accounted for 20% of the commodity cost paid by Ontarians.
Getting to the bottom of the rate implications of adding renewables gained new urgency when Premier Wynne declared last month that the 2013 fleet of wind and solar will almost triple by 2021. This is an incredibly reckless decision. In his National Post column recently on the 2014 Ontario Economic Summit, co-chair Kevin Lynch, Vice-Chair of BMO Financial Group, stated bluntly “That Ontario has a serious growth problem is rather difficult to deny, or debate.”
What’s the solution? If the Province wants to contain electricity rate increases it needs to halt new hydroelectric, wind and solar projects. In order to reverse rate increases, the province should seek opportunities to terminate existing contracts between renewable energy companies and the OPA. Alas, as the Premier has indicated, that’s not where they’re headed.
Alternatives to costly new renewables include using some imported electricity from Quebec while Ontario refurbishes its nuclear power plants and maintaining 4 of 12 coal-fired power units at Lambton and Nanticoke that had been outfitted with advanced air pollution control equipment just prior to their closure, making them effectively as clean to operate as natural gas plants. Costly conservation programs encouraging consumers to use less electricity make particularly little sense these days in Ontario. Right now, Ontario is exporting vast amounts of electricity at prices that yield only pennies on the dollar, and also paying vast but undisclosed sums to generators to not generate.
Many European countries made costly commitments to renewable energy but are now winding them back. Germany is investing in new smog-free coal power generation. Environmentalists often suggested that following Europe is the way to go. Perhaps Ontario should consider following them now.
Ross McKitrick is a Professor of Economics at the University of Guelph and Senior Fellow of the Fraser Institute. Tom Adams is an independent energy consultant and advisor.
It’s clean, it’s “green,” and it wants your land and your money too
Here from The Hill, a US blog for policy-makers, a posting on wind power and the US form of subsidy, the Production Tax Credit.
July 25, 2014, 10:00 am
Wind power production tax credit: Wall St. wolf in green clothing
By Curtis Ellis, The Hill, July 25, 2014
The tax incentive for wind power expired last year, and the battle over its extension is now underway. Opponents say the wind power production tax credit, PTC, is a wasteful boondoggle while supporters say it’s crucial for renewable energy and jobs. The Sierra Club calls it “one of the best bets we’ve made on clean, domestic energy.”
But it’s a misplaced bet. The PTC actually blocks the green energy technologies that hold the most promise. Rather than helping an infant industry, the PTC is a handout to Wall Street.
Congress created the PTC in 1992, a tax credit of roughly 2 cents per kilowatt-hour of wind electricity, to nurture the infant wind energy industry. Government incentives to promote crucial industries are time-honored. That’s not the problem with the PTC.What’s important is that only big investors who want to offset tax liabilities on other investments need apply. The PTC can only be taken against “passive income” – income from other investments. Private equity firms put together investors who need a tax write-off courtesy of the PTC. Warren Buffett admits he uses the PTC to lower his Berkshire taxes: “we get a tax credit if we build a lot of wind farms. That’s the only reason to build them.”
The PTC doesn’t help the average Joe who wants to put a small wind turbine on his ranch to generate electricity and reduce the taxes he pays on his farm income.
But while the PTC boosts Wall Street investment schemes in large-scale wind farms, the fact is small-scale, individually owned generation facilities hold the most promise for renewable energy.
Noted environmentalist Bill McKibben writes, “One of the great side effects of moving to renewable power is that we will replace vulnerable, brittle centralized systems that are too big to fail with spread out democratic energy sources.” Unfortunately, the PTC only encourages more “brittle centralized systems.”
California’s Local Clean Energy Alliance (which includes the San Francisco Bay Area chapter of the Sierra Club) concurs. It’s report, Community Power, states “local, decentralized generation of electricity offers many benefits to California’s communities relative to large central-station solar or wind power plants in remote areas.”
The Institute for Local Self Reliance, a green energy cheerleader, says renewables work best “at small scales across the country,” what’s known as distributed generation, “a network of independently-owned and widely dispersed renewable energy generators” rather than “a 20th century grid dominated by large, centralized utilities.”
In fact the Institute explicitly says the PTC is a significant barrier to greater investment in renewable energy. Removing this barrier “makes smaller projects more accessible to the local community, and draws local investors back into the process,” says John Farrell of the Institute for Local Self-Reliance.
Utilities are also taking local-scale renewable energy seriously. A report by the Edison Electric Institute, Disruptive Challenges expects small-scale solar and wind “to challenge and transform the electric utility industry” with “adverse impacts on revenues, as well as on investor returns.”
David Crane, CEO of NRG Energy, a wholesale power company that operates coal-fired plants, told Blooomberg Businessweek “the grid will become increasingly irrelevant as customers move toward decentralized homegrown green energy.”
So, if local-scale wind and solar generated close to the end user makes the most sense, why do we have a PTC pushing large-scale wind farms? It’s a Wall Street play.
Environmentalists supporting the PTC mean well, but they fail to see the wolf of Wall Street hiding beneath the green clothes. Ironically, the national green organizations are fighting for the kind of massive generating stations and power lines their local chapters often fight against.
The PTC is an anachronism and an obstacle to developing the decentralized, independently owned power generation system appropriate for wind, solar and other renewables.
Anyone who believes in renewable energy should be happy to see the PTC expire. It’s time to replace this tax write-off for the financial services cabal with something that benefits everyone.
Ellis is executive director of the American Jobs Alliance.
It’s hard to visit Toronto and NOT see the single wind turbine at Exhibition Place. Today, at about 600 kW and 90 meters tall, that turbine is very small compared to what is being built and approved all over Ontario—and yet, the people of Toronto and visitors to that city, believe it is a symbol of all that is good about “green” power developed from wind energy.
The truth is a little more complicated.
Former bank vice-president Parker Gallant has written an examination of the Exhibition Place turbine: all is not what it seems. His article is in two parts.
A note: whenever wind power developer executives are asked by small town residents whether THEY live anywhere near a turbine, many of them (including Prowind’s president for 5 minutes, Jeffrey Segal, speaking in South Dundas) respond, yes. They mean they live in downtown Toronto, and can see the Ex Place turbine. Not quite the same thing, is it?
Wednesday June 4 at 8 PM on Sun News, is the debut of the documentary film Down Wind.
The film features interviews with Ontario residents living near wind power projects, economics professor Ross McKitrick, human rights lawyer Julian Faulkner, energy analyst Tom Adams, Human Rights Charter appellant Shawn Drennan, activist Esther Wrightman, and Wind Concerns Ontario president Jane Wilson.
The Ottawa Citizen has a Riding Profile for Nepean-Carleton today, and senior writer Don Butler asked about proposed wind power projects, and opinions on “green” energy generally. Here are the responses.
Q: What is your position on the role green energy in Ontario’s power mix, including the creation of new wind farms in Nepean-Carleton?
LISA MACLEOD
Party: Progressive Conservative
Occupation: Current MPP for Nepean-Carleton
Green energy: MacLeod opposes the proposed wind turbine development in North Gower. “While I am not opposed to green energy, it is unsustainable, unaffordable, unreliable and, in many places, like our community, unwanted,” she says. A PC government would restore locally based decision-making about wind and solar projects and impose a moratorium on new industrial wind farms pending an independent health and environmental review. MacLeod points out that on any given day, wind and solar generate only one-to-three per cent of the province’s power supply. Nuclear power — which the PC’s would expand — accounts for more than half, supported by “cheap, affordable and green” water power and natural gas, she says.
JACK UPPAL
Party: Liberal
Occupation: Real estate agent
Green energy: Uppal says the Liberal government has modernized an electricity system that was “left in disarray” by the Mike Harris Conservatives. “We have ensured that Ontarians have the power they need, when they need it.” The Liberals have closed dirty coal generating plants and replaced them with clean energy such as wind and solar, Uppal says. By contrast, the PCs want to spend $15 billion on new nuclear power generation and cancel wind contracts — which could cost the province $20 billion in cancellation fees, he warns. In his response to the Citizen, Uppal didn’t say what his position is on the creation of new wind farms in the riding.
RIC DAGENAIS
Party: NDP
Occupation: Analyst with the Canadian Union of Public Employees
Green energy: Dagenais says the NDP supports renewable energy projects, but “will not force projects where communities are opposed and will ensure that communities are consulted.” The party would also ensure that contracts for small community-based energy projects aren’t automatically awarded to large corporations. As well, Dagenais says the party is committed to a full environmental assessment of all pipeline projects, would replace old buses with new efficient ones and would provide low-interest loans to property owners for energy-efficient retrofits, including the cost of solar panels.
GORDON KUBANEK
Party: Green
Occupation: High school teacher
Green energy: The Green party is “very supportive” of green energy generation that can be shown to be cost-effective and has the support of those who live near it, Kubanek says. Large wind turbines need to be a safe distance from people, which “excludes most regions of Nepean-Carleton,” he says. Even if all conditions are met, the provincial government should compensate homeowners near wind turbines if the value of their property declines, Kubanek says. One possible approach would be to reduce hydro rates by at least 50 per cent to compensate for any loss in home value, he says. “That would enable a market to be created for those homes and thus meet the needs of both the individual and the community.”
The NDP has not released its official platform yet for the election, and has been sparing with details, especially on the energy sector. Some clues may be had, however, in this report from Sarnia where the NDP leader appeared yesterday. She was greeted by sign-bearing members of WAIT-PW/We’re Against Wind Turbines-Plympton Wyoming, a community that is facing multiple turbines.
Here is the report from the Sarnia Observer:
Paul Morden, Sarnia Observer, May 16, 2014
Horwath talked about electricity when her campaign bus stopped next to the St. Clair River and the Blue Water Bridge Friday morning after a meet-and-greet the night before at the Ups ‘N’ Downs pub downtown where she was greeted by anti-wind turbine protestors.
A 92-turbine wind project is current under construction in Lambton County, and another 46-turbine project is awaiting provincial environmental approval.
Both have led to protests by opponents of wind energy and the province’s Green Energy Act.
“We believe that the Liberals have made a mess of the green energy sector, as well,” Horwath said.
“It’s a sad day in Ontario when we have families pitted against each other, when we have neighbours pitted against each other, when we have communities pitted against each other.”
Renewable energy is something most people believe is a good thing but the Liberals decided to shut down community participation, “ignore the voices of local residents and rammed through projects,” Horwath said.
“That’s a wrong-headed way of doing things.”
She said the NDP believes there’s no need to call in international companies to get green energy up and running in Ontario. Instead, Horwath said she would encourage municipalities, farm co-ops and First Nations to develop projects that are scaled to their communities and benefit local residents.
“Instead we have this situation that has pitted people against each other,” she said.
“Its very divisive and, frankly, is a failure of the Liberals.”
According to the Eastern edition of Farmers Forum, the paper did a survey at the recent Farm Show in Ottawa and asked people whether they “approve” of wind turbines.
The startling result is the majority of those responding said they did NOT approve of large-scale wind turbines, and the reason for most was that wind power was expensive and inefficient. Several remarked on what having turbines would do to their community (thank you! You are the good guys!) and others said that the economics just didn’t make any sense. The Auditor General for Ontario said that to the government in 2011, but it still has not done any cost-benefit analysis.
Note that one North Gower area farm owner said he is “not allergic to money” and would still put one on his property—not where he lives, we venture.
Farmers not sold on wind turbines, survey says
By Brandy Harrison
OTTAWA — While farmers are among the few who can directly benefit financially from hosting wind turbines, Eastern Ontario farmers are more likely to oppose than support them, a Farmers Forum survey shows.
In a random survey of 100 farmers at the Ottawa Valley Farm Show from March 11 to 13, nearly half — 48 per cent — disapproved of wind turbines. Another 29 per cent approved and the remaining 23 per cent said they were neutral.
But positions on the issue weren’t always clear cut. Even when farmers threw their lot in with one side of the debate or the other, their reasoning was peppered with pros and cons.
It’s in stark contrast to a Farmers Forum survey of 50 Western Ontario farmers at the London Farm Show in early March, where 58 per cent were strongly opposed to wind turbines. Farmers opposed outnumbered those who approved by nearly three-to-one.
The number of turbines reveal the difference: Of the 67 wind projects representing more than 1,200 turbines province-wide, almost all the turbines dot the landscape of Western Ontario. Only two projects are in Eastern Ontario, an 86-turbine project on Wolfe Island, south of Kingston, and another 10 turbines near Brinston, south of Winchester, which were completed in January.
Wind power is so controversial that 13 farmers polled at the farm show wanted to remain anonymous, unwilling to come out publicly as a supporter or a critic.
Nearly three-quarters of farmers who disapproved liked green energy in theory but panned turbines — and sometimes the Green Energy Act as a whole — as a too-costly, inefficient electricity source that’s driving up their power bill.
Eric VanDenBroek doesn’t mind the look of the turbines that are only a short drive from his Winchester dairy farm but isn’t a fan of the way the program was rolled out.
“Financially, it’s already proving to be a disaster,” …
Read the full story and see the chart of responses here.
Ottawa Wind Concerns 