Smaller project gets the nod in unwilling host communities 2016, while larger power project simply has to resubmit
No community support for greed in Nation Twp [Photo: Ontario Farmer]
Province okays more wind farms
Ontario Farmer, March 22, 2016 (excerpted)
By Ian Cumming
Sixteen new green energy projects across Ontario, five of them wind turbines and 11 solar farms, were approved by the provincial government on March 10th.
The largest project at 100,000 MW [Editor’s note: this is incorrect–the project is 100 megawatts or 100,000 kilowatts], with the next largest project at 54,000 MW [Editor: 54 MW] was approved for windmills in North Stormont in Eastern Ontario.
That will mean 35 to 50 windmills, depending on their size, says North Stormont mayor Dennis Fife.
They are slated to be hilt about one kilometer west of Finch and head north, just west of Berwick and Chrysler [Crysler], said Fife. For those visiting last fall’s plowing match in North Stormont, the southern end of the project will be about where the event was held.
“We don’t know the farmers who signed the leases,” said Fife.
Being picked was a surprise since the Premier and area MPPs had publicly assured them that no such project would be “forced” on areas such as his, that had declared at council that they were “unwilling hosts,” said Fife.
Wind Concerns Ontario noted in a press release that four of the five windmill projects approved for this round were slated for municipalities that had declared themselves “unwilling hosts.”
WCO also predicted that the windmills just approved under this round will cost consumers $1.3 billion over the next 20 years.
..In nearby St Bernardine, windmills were approved for the 32,000 MW [Correction:32 MW] Gauthier Project in this round, but the adjoining proposal in the same county of over 100,000 MW [Correction:100 MW] in St. Isidore was not approved.
However, a day after the announcement Steve Dick, who had helped lead the massive protest against both projects in his county, was not celebrating.
“We’re a pretty disheartened group right now,” he said. “They pretty much steam-rolled over the township.”
Since the Gauthier project was approved, the wiring infrastructure they neded to install will be dovetailing, as planned, with the soon-to-be-approved St. Isidore project, he predicted.
[Editor’s note: Sorry, this article is not available online. We object to the use of the term ‘windmill’s–these machines are industrial- or utility-scale wind turbines that are used to generate power.]
3-MW turbine south of Ottawa at Brinston: Ontario. Communities had no choice. [Photo by Ray Pilon, Ottawa]
By David Reeveley
The Ontario government has betrayed rural municipalities by approving new wind farms in places that have explicitly voted against them, mayors say — including just east of Ottawa.
“Since we declared ourselves unwilling hosts, we thought we had it made,” says François St. Amour, mayor of The Nation Municipality. “Because there was some talk in the last provincial election that they would honour municipalities that declared themselves unwilling. But I guess that was just another electoral promise.”
The agency that makes the province’s deals for renewable power is readying a contract for a 32-megawatt wind farm there, one of a bunch of bids from private generating companies it’s just accepted. The other in Eastern Ontario is the biggest of the group, a 100-megawatt project in North Stormont.
Both Eastern Ontario councils took votes in 2015 to say they did not want the wind farms on their territories.
The province’s Green Energy Act, meant to kickstart an Ontario industry in manufacturing and maintaining renewable energy technology, gave virtually no say to local governments on where wind and solar farms might go. Many rural residents believed, and still do, they’re being sacrificed for the electricity needs of cities.
The government pulled back. Under the province’s new rules, municipalities don’t get veto power over renewable energy projects but they do formally get asked to say whether new wind or solar farms are welcome or not. Ottawa’s city council regularly votes its formal support for small solar projects, which is worth extra points when would-be operators submit their bids.
“It will be virtually impossible for a wind turbine, for example, or a wind project, to go into a community without some significant level of engagement,” energy minister and Ottawa MPP Bob Chiarelli told a legislature committee in 2013.
“Engagement.” Not “agreement.”
“We will not give a veto, and no jurisdiction gives a veto, to a municipality on any kind of public infrastructure. That should have been clear to them,” Chiarelli says. Wind farms in rural Ontario are like tall buildings downtown, he says: immediate neighbours may hate them but they’re still needed.
Thirteen of the 16 new contracts got local council approval. All of the ones that didn’t are wind farms — the two here and one in Dutton-Dunwich, between London and Windsor, where residents took the issue up in a referendum and voted 84 per cent against. Two wind farms are going to Chatham-Kent, whose council voted to support them.
“They’ve put municipalities on the sidelines. It seems, though, that municipalities get most of the grief,” St. Amour says. His council first voted in favour of the wind farm in The Nation without a whole lot of thought, he says, treating it like the solar farms councillors have welcomed in the past. Councillors changed their minds after hearing from residents.
“It was rough on council last summer. It was really, really rough. Especially because we can’t do much about it. We thought declaring unwilling hosts was it,” St. Amour says.
Mayor Dennis Fife of North Stormont says his council thought the same. “At one time, the government said that if you came out with something saying you were an unwilling host, that would be respected, but that wasn’t the case,” he says.
The wind farm in North Stormont, near Finch, will probably have between 30 and 50 windmills. “You’re going to see all of them. There’s the health aspect that people are worried about. Noise, blinking lights, all of that,” Fife says.
Community held a voters’ referendum–is getting a huge wind farm built by a U.S. company anyway
Dutton-Dunwich Mayor Cameron McWilliam [Photo Craig Glover, London Free Press]
London Free Press, March 10, 2016
Dutton-Dunwich was the one Ontario municipality that held a referendum on wind farms.
Even though 84 per cent of residents opposed wind turbines, the Elgin County municipality that hugs Lake Erie learned Thursday it will end up with them anyway under a process the government promised would give local sentiments a priority.
“We were totally ignored,” Dutton-Dunwich Mayor Cameron McWilliam said. “We live in the province of Toronto, not the province of Ontario.”
A new round of wind farm development announced Thursday awards a contract to Chicago-based Invenergy to build dozens of industrial turbines in Dutton-Dunwich.
The municipality was the first in Ontario to hold a vote for residents on the issue and subsequently passed a resolution declaring itself an unwilling host for wind farm development. Another 89 Ontario municipalities also have passed the “not a willing host” resolution.
McWilliam said he was stunned Thursday when Dutton-Dunwich was on the list of new green energy projects.
The Ontario government had repeatedly assured McWilliam and other rural leaders that the wishes of local residents would be respected in a new era of public consultation.
In testimony before a legislature committee in November 2013, Energy Minister Bob Chiarelli said municipalities wouldn’t be given a veto over projects but it would be “very rare indeed” for any to be approved without municipal backing.
“It will be almost impossible for somebody to win one of those bidding processes without an engagement with the municipality,” Chiarelli said.
Representatives of Dutton-Dunwich had met with the Ontario government several times to make it clear the industrial wind turbines were unwanted, McWilliam said.
“They talked about local engagement and the need for local support. There wasn’t that support in Dutton-Dunwich. We’re disappointed,” he said.
McWilliam said the decision was particularly odd considering some other municipalities had rolled out the welcome mat for wind farm projects.
Malahide Township, which already has a wind farm, was one of them. Malahide Township Mayor Dave Mennill said he was shocked that a project proposed for Malahide was rejected while one was approved in Dutton-Dunwich.
It is a tough blow for both municipalities, he said.
“If you want to really tick people off, ask them for their input and then ignore it,” Mennill said. “I’m at a loss to explain it. Obviously, pricing trumps (community) support.” …
Fifty-one Ontario municipalities are endorsing a resolution recently passed by the Township of Wainfleet Council that calls on the government of Ontario to stop awarding feed-in tariff (FIT) contracts for power generation from wind.
The resolution, passed in January, was based on December’s auditor general report that claimed Ontario has a surplus of power generation capacity and, under existing contracts, is paying double what other jurisdictions are paying for wind power, explains the Township of Wainfleet.
Thus, adding more surplus generation capacity would add to the already high costs of disposing of surplus electricity, says the township, which adds that the cost of electricity is a key concern for many Ontario residents.
The Ontario Chamber of Commerce has also reported the impact of high electricity costs on their members’ ability to grow their businesses and create jobs in Ontario. Thus, says Wainfleet, this suggests the need for a full, cost-benefit review of the renewable energy program before committing Ontario electricity users to even more surplus power.
According to Wind Concerns Ontario, the resolution also calls attention to the fact that wind power projects cause damage to the environment by killing wildlife.
April Jeffs, mayor of the Township of Wainfleet, is pleased with the support that her council’s resolution is receiving from across the province: “This quick response from other municipalities to the circulation of the resolution indicates that wind turbines are still front and center as an important issue in rural Ontario,” she says.
According to the township, Jeffs reports that at least one of the two projects in the area is the cause of citizen reports of deteriorating health. She is particularly concerned about the second project currently under development in her area – which involves 77 3.0-MW turbines in Wainfleet, West Lincoln and eastern Haldimand County.
The township says the more powerful turbines are located in areas with a sizeable residential population with an estimated 2,000 households living within 2 kilometers of the towers. The project will operate under one of the older, expensive FIT contracts criticized by the auditor general; the Wainfleet resolution asks the government to review options under the contract to cancel the project.
Now that coal-fired power plants have closed, says Wainfleet, the government should have met its carbon-reduction goals for the electrical power system in Ontario – which is now largely based on carbon-free hydroelectricity and nuclear power. This gives the province an opportunity to assess renewable generation alternatives that have less impact on the host communities, according to the township.
In addition, clauses in the 2015 RFP documents issued by the Independent Electricity System Operator do not commit the government to issue any wind contracts, so the government is protected against lawsuits from the bidders should it change course at this time, Wainfleet adds.
“Wind power is produced out of phase with demand in Ontario,” says Jane Wilson, president of Wind Concerns Ontario. “According to the Ontario Society of Professional Engineers, that can mean more greenhouse gas emissions, not less, because of the need for backup by natural gas power plants. Everyone wants to help the environment, but utility-scale wind power is not the answer.”
Brandy Giannetta, the Canadian Wind Energy Association’s (CanWEA) regional director for Ontario, calls the resolution a “political statement at the municipal level.”
Although it’s “unfortunate that it’s out there,” Giannetta tells NAW, she notes the importance of the province’s Large Renewable Procurement (LRP) process in showing the cost-competitiveness of wind power. The process calls for the procurement of utility-scale renewables projects; specifically, the LRP I requested up to 300 MW of wind.
The LRP, led by the Independent Electricity System Operator (IESO), aims to “strike a balance between early community engagement and achieving value for ratepayers,” according to the IESO. Giannetta says the LRP contracts will be awarded as soon as this week.
In March 2015, when the first request for proposals under the LRP was issued, Robert Hornung, president of CanWEA, said, “An important part of the RFP process will be early and meaningful community engagement. Effective community engagement is fundamental to the success of wind energy projects, and the wind industry values the right of individuals to have an important role in discussions about developments in their community.”
A full list of the municipalities supporting the resolution can be found here.
EDITOR’S NOTE: As of this writing the number of municipalities is now 61. See the list here.
What would your family have done with the money you paid–and the government wasted on its green energy policy last year?
January 23, 2016
This “Op-Ed” appears in the current edition of Ontario Farmer. It is not available online.
Good money after bad: how mismanagement of Ontario’s power system affects you
By Parker Gallant
It’s been several months now since the Auditor General of Ontario released her 2015 report, in which she levelled scathing criticism of how the Ontario government has mismanaged the electricity sector. In what will be her last report to include the management of Hydro One because the government has partially privatized the electricity distributor, Auditor General Bonnie Lysyk condemned the planning and policy implementation processes that have resulted in Ontario’s electricity consumers paying too much for power.
The report made specific mention of the fact that Ontario has a surplus of power, a situation that is likely to continue, if the government continues to give out expensive contracts for “renewable” power sources wind and solar, which provide only a small amount of Ontario’s power and then only intermittently.
The Auditor General said, “The Ministry’s attractive guaranteed prices program has been one of the main contributors to the surplus power situation Ontario has faced since 2009, in that it has procured too many renewable projects, too quickly, and at too high a cost.” The Auditor General’s office also found that Ontario paid “double the current average cost” in North America for wind power.
Her estimate was that Ontario’s electricity customers paid out $9.2 billion just for wind and solar contracts. Worst of all, perhaps, is the fact that Ontario is paying top dollar for renewables –and then selling the power at bargain bin prices—because of the power surplus.
Readers may recall that in most parts of Ontario, we had a very windy Christmas Eve. That breezy situation cost us plenty; because we are forced to buy wind power even when we don’t need it, wind power makes up a substantial portion of the surplus power we sell off. On Christmas Eve, that was about $9.4 million, which is not counting what we paid Bruce Nuclear to “steam off” power, or what we paid some wind power producers to limit or “curtail” power production.
What would your local hospital have done with even a small part of that $9.4 million?
What could Ontario have done with the $339 million the Auditor General says we paid for curtailing surplus electricity between 2009 and 2014?
What would you have done with the $360 extra you paid last year (assuming you use only 800 KwH per month of power)?
It’s a high-stakes legal battle over London-area wind farms that pits a self-proclaimed, Canada-loving, Texas oil tycoon against the federal government.
Mesa Power Group LLC vs. Government of Canada, a case that could leave taxpayers on the hook for hundreds of millions of dollars in damages, is expected to be ruled on within weeks, four years after the claim was launched by T. Boone Pickens under the North American Free Trade Agreement.
Though the federal government is the defendant, Pickens’ real quarrel is with Ontario.
In submissions and testimony before the NAFTA panel hearing the arbitration case, Pickens’ company claims it failed to win contracts for four massive wind farms in Huron and Bruce counties in Southwestern Ontario because of political interference at the highest level.
“This whole process was not carried out in good faith. This was not honesty. This was not fairness. This process was infused with raw politics, arbitrariness, and an egregious abuse of authority,” Mesa lawyer Barry Appleton said in his closing submission to the panel’s three arbitrators at a hearing in Toronto in October 2014.
The claim contains allegations that have not been proven.
In his own testimony before the NAFTA arbitrators, Pickens described how he was a big fan of Canada because of its rule of law.
“My experiences were so good that I enjoyed telling people about it,” he said, relating how he came to Canada with less than $100,000 in 1959 and sold out 20 years later for $610 million.
But his experience in Ontario left him disappointed, he said.
“You always feel bad when you lose, and then you look to see why you lost, and here we lost because we didn’t have a level playing field,” Pickens testified.
Home to Ontario’s largest wind farms with its largest number of the highrise-sized turbines, Southwestern Ontario is no stranger to the controversies generated by the power-producing windmills. Critics have decried them as a threat to human health, divisive to rural communities and a financial blow to a province that signed up producers with early sweetheart deals paying them far more to generate power than consumers pay.
Details of this latest dust-up are found on a federal government website containing submissions by Mesa, the governments of Canada, the U.S. and Mexico, and transcripts of the claim heard before a NAFTA tribunal last fall.
Mesa argued that other wind farm companies, Florida-based NextEra Energy and Korean-based Samsung — both, industry giants — were given illegal, preferential treatment and inside information that doomed Mesa’s projects.
“It was a cesspool. It was shameful. I feel very badly after seeing what went on here for my fellow Ontarians and the ratepayers of Ontario. They are having to bear the burden of the shameful behaviour,” Appleton said in a transcript from the hearing.
Responding to Mesa’s arguments, also at the hearing, Canada’s lawyers rejected Mesa’s assertions and said the company’s failures were self-inflicted.
“This is a case which is, as the expression goes, about sour grapes. It is a case about an investor who took a business risk and is unwilling to accept that that risk did not pay off,” government of Canada lawyer Shane Spelliscy said.
Spelliscy said Mesa’s applications for contracts with the Ontario Power Corp. were “sloppy” and “poorly done.”
When contracts were handed out, Mesa didn’t get one because its proposals weren’t highly ranked in a process monitored by an independent third party, Spelliscy said.
If they had put together better applications, they may have been successful, the federal lawyer said.
“There was no discrimination,” he said.
According to Mesa’s submissions, it decided to develop wind farms in Ontario — one, a 200-megawatt proposal in Bruce County would have been the largest in Ontario — after learning the province was offering 20-year contracts at a fixed price of 13.5 cents per kilowatt-hour.
“Make no doubt about this, this was a highly attractive rate,” said Appleton.
The rate meant there was no shortage of competing applications. A critical factor for companies became whether there would be enough transmission capacity for wind energy in the areas where they’d selected to build.
Appleton said Mesa had no idea that Ontario had cut a separate deal to allocate transmission capacity to Samsung, a Korean industrial giant, which promised to build manufacturing plants in Ontario.
And Mesa, unlike some of its competitors, was never informed about rule changes, a chance to switch its transmission points in order to increase its chances, he said.
Part of Mesa’s case was based on e-mails from Bob Lopinski, a registered lobbyist for NextEra, to Energy Ministry officials during the allocation process.
Lopinksi, a principal at Counsel Public Affairs, had previously served as director of issues management and legislative affairs to then-premier Dalton McGuinty and advised the Liberal leader on selecting cabinet ministers.
Appleton said though Lopinski and NextEra executives were communicating with Ontario government and Hydro One officials, Mesa understood no such communication was allowed.
Canada’s response filed with the NAFTA panel was there isn’t any evidence NextEra was ever provided with non-public information.
Mesa has asked for damages of $653 million plus interest.
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.