The Premier of Ontario put out a news release on March 2, claiming the government was going to reduce Ontario’s electricity or “hydro” bills substantially.“I’ve heard from you loud and clear,” Kathleen Wynne said in her statement. “Nobody should have to choose between keeping the lights on or buying groceries.”
The Ontario Liberal government still claims the high electricity prices were because of improvements it “had to” make to the system. The news release concluded with these statements.
“We are – and always will be – committed to making Ontario a fairer and more inclusive place for everyone. And fairness means ensuring government investments don’t disproportionately affect today’s electricity ratepayers. One generation of ratepayers should not have to pay for the sins of the past and for a system that will benefit Ontario for decades to come. So our plan reduces costs today and stretches out costs over the long term so rates are fairer for everyone.”
Fairness. We’ve heard that before, like “transparency.” But again, the government is being disingenuous. Its latest move is simply stretching out the costs of its policy decisions, not taking action to reduce costs. (Our favourite pronouncement on this comes from electricity analyst Bruce Sharp who calls this tactic, “delay and pray.”)
Not reducing costs
The truth is, the government has signed more expensive wind power contracts for power the province doesn’t need.
At the moment, these six contracts, awarded in 2016, total $3.3 billion in costs over 20 years. In addition, there are five more contracts for wind power projects that were approved but which are not yet on the grid –including White Pines, Amherst Island and Fairview Wind which are all in legal contests– that add up to another $1.8 billion.
The total for wind power contracts awarded, which represents new costs no yet on Ontario electricity ratepayer bills, is $5.1 billion.
That is not “reducing costs today”.
The government needs to cancel the 2016 wind power contracts (which contain clauses for pre-construction liability should the government cancel), and buy out of other contracts.
Public declaration demands cancellation of wind power procurement, and re-focus of energy policy by the Wynne government
January 9, 2017
The Ontario Multi Municipal Group has issued a public declaration stating it wants the “exploitation” of rural Ontario by the wind power industry, aided by the Ontario government, to end.
“The implementation and expansion of renewable energy (industrial-scale wind turbines and large solar power projects) has developed to the point that it has caused hydro costs to increase, caused a division between rural and urban municipalities, and caused the citizens of Ontario to lose faith in democracy,” says Ron Higgins, Mayor of North Frontenac, in the document.
The municipal group was formed at the last meeting of the Association of Municipalities of Ontario (AMO) after 115 municipalities, or 25 percent of all municipalities in Ontario, passed resolutions demanding that municipalities get final say in the siting of renewable power projects.
“We are now speaking out on behalf of all those communities,” Higgins says.
Rights of communities ‘neutralized’
The Green Energy Act of 2009 removed the right to carry out local land-use planning for power projects –the Multi Municipal Group says that’s wrong. “It neutralizes the rights of residents of rural Ontario to advocate for, rely on and claim the benefit of sound land-use planning principles,” Higgins says. “It amounts to a form of discrimination.”
In the public declaration document, the group lists the impact of Ontario’s wind power program, saying it has not brought the economic benefits promised by the McGuinty government and in fact has resulted in an economic burden and energy poverty. They also say that no environmental benefit has been demonstrated and that “the natural world is suffering” because of large-scale turbines which are disrupting the natural environment and harming wildlife such as migratory birds and endangered species of bats.
Wind power a ‘false hope’ for the environment
Wind power has created “false hope” of steps to be taken to combat climate change and protect the environment, says the Multi Municipal Group. And, the Government of Ontario has ignored knowledge of the negative impacts of invasive wind power technology.
The group demands that all procurement of wind power be stopped, and the Green Energy Act repealed. They also recommend that the government base future policies on generation capacity and conservation, and use current energy supply assets.
“Our rural communities are unprotected against the exploitation [by] renewable energy,” Higgins concludes. The municipalities have no choice but to declare their position to the government and the public formally.
Former banker and now energy analyst Parker Gallant has prepared a summary of submissions to the Ontario Ministry of Energy, which last fall asked for input to a new Long-Term Energy Plan (LTEP).
Aside from the vested interests in wind power, the stakeholder groups like the Canadian Federation of Independent Business, Canadian Manufacturers and Exporters, and the Ontario Society of Professional Engineers all recommended the government act now to get costs down. And that includes, getting rid of wind power.
From the article, an excerpt on two of the submissions made to the government.
Strategic Policy Economics – Marc Brouillette’s excellent submission on behalf of Bruce Nuclear also carries some sane observations such as “Wind generation has not matched demand since its introduction in Ontario” and, “Over 70% of wind generation does not benefit Ontario’s supply capability.” And this one, which is becoming more evident as ratepayers are forced to pay for curtailed generation: “Wind generation will not match demand in the OPO Outlook future projections as 50% of the forecasted production is expected to be surplus.”
The recommendation that will cause the most handwringing will be: “The LTEP should integrate the objectives of Ontario’s environmental, energy, industrial, and economic policies for the long-term future benefit of Ontarians.”
Wind Concerns Ontario – The coalition of community groups and individuals throughout Ontario had this to say by way of advice to the Ministry: “The government policy to promote “renewables” such as wind and solar have been a critical factor in the grave economic situation today. Wind power for example, now represents 22% of electricity cost, while providing only 5.9% of the power. Worse, that power is produced out-of-phase with demand, as has been detailed by two Auditors General; so much of it is wasted. This is unsustainable.
“Clearly,” WCO continued, “the direction for the Ministry of Energy is to formulate a new Long-Term Energy Plan that will take immediate action on reducing electricity costs. Those actions must include a review of all contractual obligations for power generation from wind, and action to mitigate further costs to the system, and the over-burdened people of Ontario.”
WCO called for cancellation of all the wind power contracts given in 2016, the FIT 5.0 program, and further, cancellation of all contracts for projects not yet built or which are not going to make a critical commercial operation date. In fact, all wind power contracts should be reviewed and paid out, as Ontario can save money by eliminating the need to dispose of the surplus electricity.
WCO vice-president Parker Gallant and president Jane Wilson speak on Ontario’s mismanaged electricity sector, energy poverty, wind turbine noise regulation, and what’s ahead for 2017
(C) Wind Concerns Ontario
Q:You’ve been telling people about the impact of renewables, specifically wind power, on Ontario’s electricity or hydro bills. How much of our electricity bills is due to the wind power/renewables program in Ontario?
Parker Gallant: I recently reviewed the cost of wind and solar generation relative to its contribution to Ontario’s demand for electricity and its impact on our electricity costs is shocking. Wind and solar in the first six months of 2016 delivered 8% of our generated power and represented 35% of the Global Adjustment which appears set to average over $1 billion per month. That represents a cost of over 36 cents a kilowatt hour (kWh), including the hourly Ontario energy price (HOEP).
Q: Parker, you’ve also been telling people about the Global Adjustment or GA, which is where a lot of charges are hidden. Do you think these charges should be detailed on our bills, or is that even possible?Parker Gallant: While I believe in principle the GA should be revealed on our monthly bills, in practice, that would require reams of paper. How will the local distribution company explain how much you are billed for curtailed wind generation or the meteorological stations that measure the amount of curtailed wind that might have been generated? How to explain, say, the cost of spilled hydro or steamed off nuclear or the water fuel fee, or how to tell the ratepayer how much they are subsidizing the rates for large industrial clients, or what it is costing under the rural and remote rate plan (RRRP) that transports diesel fuel to remote First Nations, among dozens of other items included in our monthly bills?
Q: The Premier and Energy Minister are now saying that parts of their policies have been a “mistake” and that they need to get bills down. Wind Concerns is saying that canceling wind power contracts is necessary for that to happen. Can you explain? How much are the 2016 contracts worth?
Parker Gallant: Interesting they are now admitting a “mistake,” but when George Smitherman was Energy Minister he was provided with a long-term energy plan that had been carefully developed by “experts” within the crown agencies. He chose to cancel the plan and instead, impose one developed in conjunction with outsiders who were NOT experts. Previous Energy Ministers (Dwight Duncan comes to mind for his “smart meter” for every ratepayer) made mistakes, as did those who followed such as Brad Duguid and were roundly criticized by both the media and by ratepayers. The canceling of wind power projects not yet built or even contracted is only “step one” and will slow the climb in our bills. The current Minister, Glenn Thibeault has only suspended Large Renewable Procurement or LRP ll, and needs to cancel it, as well as LRP I and any of those contracts now past their agreed-to start date. There are ways to reduce costs almost immediately.
Jane Wilson: Wind Concerns Ontario prepared a detailed document for the IESO on the Long-Term Energy Plan, suggesting ways they could save $1.7 billion annually. That would have an immediate cost reduction impact.
Q: The Energy Minister says that now, Ontario is a “net exporter” of electricity like that’s a good thing. He claims we’re making money: is that true?
Parker Gallant: Being a “net exporter” of 16.8 terawatts (TWh) in 2015 is simply a demonstration of being a bad planner and manager of the system. If one adds the spilled hydro and curtailed wind to the net exports, the 21.2 TWh could have provided over half of all average Ontario households with power for a full year, yet we sold it 2.36 cents/kWh while we paid 10.14 cents/kWh for its generation. Ontario contracted for far too much intermittent and unreliable wind and solar power creating a domino effect the increased our costs of generation. Paradoxically, if Ontario ratepayers consumed more of the annual excess power (15.5% in 2015) it would help reduce our per kWh cost.
Q: What is WCO’s stance on climate change?
Jane Wilson: Our position is that everyone wants to do the right thing for the environment, whether that is preventing air pollution or using the most efficient forms of power generation — but that isn’t industrial-scale wind. For example, the Ontario Society of Professional Engineers or OSPE says that the proliferation of large-scale wind will actually increase greenhouse gas emissions, therefore not achieving the government’s stated goals. In the OSPE’s most recent report, they say “Wind generation offers less GHG reduction value in Ontario because base-load generation is already carbon-free and wind generation often displaces hydroelectric and nuclear base-load generation.”
Q: Why does the Ontario government continue to force wind turbines on communities that don’t want them?
Jane Wilson: The government is acting on an ideology that is not supported by fact and to do that, it erased communities’ right to local land-use planning with the Green Energy Act. We think that’s wrong, and are supporting the now 116 municipal governments that have demanded a return of that control and also that community support be mandatory for wind power contracts. There is a concern too about communities in the North where there may not be elected municipal governments, where contracts can be awarded for wind power projects that have a significant negative impact on the natural environment, for little or no benefit.
WCO worked with Ontario municipalities on the mandatory support resolution.
Q:Can the government really cancel wind power contracts? Can a new government cancel the subsidy programs?
Jane Wilson: Yes. There are clauses in the contracts under LRP I that are “off-ramps” in the case of cancellation, and which set out the financial steps needed to do that. For example, the contract with EDP for the “Nation Rise” project south of Ottawa in North Stormont, worth $430 million over 20 years, would cost $250,000 plus reimbursement for development costs that must be justified, to a maximum of $600,000. And yes, government can cancel subsidy programs. The LRP II, now “suspended”, should be cancelled outright.
The other opportunity is to cancel wind power projects that do not have a “Notice-to-Proceed”: this is straightforward. WCO has also suggested to the IESO that the government look seriously at all contracts and review them for opportunities to cancel. Even costly negotiated buy-outs will reduce hydro costs significantly, due to the high cost of disposing of surplus power.
Q: What is WCO doing to help people already living with wind turbines, and the noise they produce?
Jane Wilson: We support the public health investigation being done by the Huron County Health Unit, and hope that other municipalities will take similar action. We are also looking at how research can be done to help change the Ontario regulations on noise –which are not based on current science and in fact, are completely inadequate to protect health. We prepared a detailed document on how to revise noise enforcement regulations, another on how the approval process must be changed to protect health, and we submitted a document to the World Health Organization which is preparing global noise regulations for wind turbines. In short, we take every opportunity possible to explain the situation for people living in communities where wind turbines and their noise emissions have been forced, without consent, on the people of Ontario, with the goal of having regulations and processes changed.
Q: What’s ahead in 2017?Jane Wilson: It’s a very different world for wind power now, than in 2009 when the Green Energy Act was passed. People are genuinely questioning the benefit of high-impact, large-scale wind power development, especially when there seem to be few, if any, benefits, and we are seeing the shocking results of the government’s complete mismanagement of the electricity sector such as lost jobs and rising energy poverty. We believe the government will have to take dramatic action if it is serious about getting electricity bills down. The fact that Ontario municipalities are speaking out on this issue and taking action will also have results, we believe. We are hoping for a complete halt to the ongoing damage of the government’s policies, and that there will be help for people already living with the noise and other impacts of industrial-scale wind turbines.
As for Wind Concerns Ontario, we are not stopping our work.
No community support for greed in Nation Twp [Photo: Ontario Farmer]
December 6, 2016
Residents of Nation Township and North Stormont recently gathered signatures on a petition and letters demanding the Ontario government halt the Large Renewable Procurement (LRP) process permanently (it is currently “suspended”), cancel the LRP I contracts awarded for five wind power projects earlier this year, and cancel contracts for wind power projects that have not yet been built.
The Premier of Ontario recently admitted that her government’s energy policies were a “mistake” that resulted in higher costs for Ontario citizens.
The Ontario Association of Food Banks recently released its Hunger report, placing the blame for Ontario’s “shockingly high levels of food bank use” on the electricity bills, and other factors. Hydro rates have increased 3.5 times and “off-peak” rates are now eight times what they were. Remedies proposed by the Wynne government, the association says, are a “drop in the bucket.”
The petitions filed at Queen’s Park yesterday refer to the high electricity rates and growing poverty and also to the fact that the Wynne government, specifically Energy Minister Glenn Thibeault, says it now has a “robust supply of power” for the years ahead.
So why pay out the millions for these new contracts, for power we don’t need, say the residents.
MPPs Jim McDonell and Grant Crack (the LIBERAL MPP for Glengarry-Prescott-Russell) read the petitions in the Legislature yesterday, while representatives of Save The Nation/Sauvons La Nation and Concerned Citizens of North Stormont watched from the Gallery.
In January 2014, John Terry, the lawyer for the well-funded wind power development lobbyist the Canadian Wind Energy Association (CanWEA) told the panel of judges in an Ontario court at the appeal of a decision at Ostrander Point, that their decision was very important for the future of wind power development in Ontario because, he said, “This [a successful appeal] was never supposed to happen.”
One might think that he meant the approval process was so rigorous that wind power projects should pose no danger to the environment or to people and that’s why “this,” the successful Ostrander appeal shouldn’t have happened. But no, what he meant was, the rules and procedures attached to wind power development were supposed to be so iron-clad that mere citizens acting on behalf of the environment, wildlife and their own health, could have no hope of success. Lawyers acting for appellants have said, the test set up by Regulation 359-09 to prove serious harm to human health and serious and irreversible harm to wildlife was impossible to meet.
Except, now, that test has been met.
The successful appeals at Ostrander Point, White Pines, Settlers Landing and yesterday, Clearview, show that when proper attention is paid to the requirements to preserve the environment and actually balance development against potential harm, the wind power developments can be demonstrated to be in the complete wrong place.
But the wind power development industry, coached and encouraged by their huge lobbyist and the very compliant Ontario government, felt entitled to propose wind power projects wherever they found willing landowners. Such was the case at Clearview where the eight, 500-foot turbines were to be located near not one, but two aerodromes, the Collingwood Regional Airport and a private airstrip. WPD Canada felt so entitled to success and money that it believed it could locate huge turbines even where pilots’ safety would be in danger and where wildlife would almost certainly be killed.
The Environmental Review Tribunal decision was released Friday, October 7: yes, there would be serious harm to human health because of the risk to aviation safety and yes, there would be serious and irreversible harm to the endangered Little Brown Bat.
Paragraphs [149-151] are interesting: the appellants’ expert witness arguments were “informed and reasoned” the panel wrote, finding they had established “the evidentiary base to support their qualitative assessments.”
Although a remedy hearing is possible, the Tribunal expressed doubts as to the effectiveness of any measures proposed.
The Tribunal used very strong language in places in the decision, saying “it would be trite to say …” or “it is obvious …” and they noted the federal Ministry of Transport’s carefully crafted opinion letter on aviation safety at the airport.
The people of Ontario have despaired at times as wind power projects have been put in fragile environments, too close to people’s homes and workplaces, without any real demonstration of environmental benefit. Millions have been spent by ordinary citizens as they took on corporate Big Wind to defend—what? The environment against their own Ministry of the Environment.
One lawyer for the Ministry has often been heard to say “wind trumps everything.” She is wrong, as this latest decision demonstrates.
Actions taken in the name of preserving the environment must really do that, and not rely on ideology-based trite statements for justification. Ontario has still never done a cost-benefit analysis on its wind power program even though clearly, wind power has a high impact on the natural environment, on communities, and on the economy, without actual demonstrated benefits.
Clearview was a victory for all Ontario, and the environment.
The Mayor of North Frontenac has written to Energy Minister Glenn Thibeault on behalf of all the 115 municipalities demanding change to the Large Renewable Procurement process. While relieved the next round of bids is “suspended,” he says, the municipalities say more can be done to stop the dramatic rise of Ontario electricity bills.
October 5, 2016
Mayors across Ontario who united together as a result of a resolution being supported to have municipal support mandatory for industrial wind turbines are relieved that procurement of future wind power has been cancelled for now. The Mayors still feel however that the government needs to take very aggressive actions to address the ongoing crisis caused by high electricity costs in this province. Taking steps to not add $2.45 per month in 2020 does not address the real hardship being felt by our residents now. It is also not clear that the other measures announced by the government will even offset the ongoing increases in hydro rates that can be expected in the short term unless additional changes are made.
It was important that the Minster of Energy’s statement confirmed that the province has a “robust” supply of electricity and the procurement process could be cancelled without increasing greenhouse gas emissions. This provides room for more aggressive actions that will address increasing costs. Our tracking of wind turbine contracts shows that there are still many wind turbine projects in the pipeline that will add at least another $7.9 billion to electricity generating costs. This is equivalent to another $82 per annum for each Ontario electricity user. Seven of these projects are under construction but will not be connected to the grid until sometime this fall or in 2017. Another five have not been issued ‘Notices to Proceed’ as they are, or have been until recently, involved in Environmental Review Tribunal proceedings or other legal appeals of Renewable Energy Approvals. The final six projects are in the pre-MOECC submission stage. These include the five contracts issued in early 2016 plus one outstanding project from earlier FIT offers.
In all of these cases, the IESO has the option of terminating the agreement for any reason with very limited cost liabilities relative to the 20 year commitment to electricity that is not required. We respectively ask that all industrial and solar wind projects be cancelled to avoid ongoing costs to our residents.
Bids were to be accepted beginning early in 2017. But Ontario now says it has enough power and wants to take steps to reduce electricity bills, so it doesn’t need the new renewable power capacity.
September 27, 2016
Moments ago, the Wynne government announced it is suspending its controversial Large Renewable Procurement program for sources of power such as wind and solar.
“Ontario will immediately suspend the second round of its Large Renewable Procurement (LRP II) process and the Energy-from-Waste Standard Offer Program, halting procurement of over 1,000 megawatts (MW) of solar, wind, hydroelectric, bioenergy and energy from waste projects. …
On September 1, 2016, the Independent Electricity System Operator (IESO) provided the Minister of Energy with the Ontario Planning Outlook, an independent report analyzing a variety of planning scenarios for the future of Ontario’s energy system. The IESO has advised that Ontario will benefit from a robust supply of electricity over the coming decade to meet projected demand.”
Wind Concerns Ontario(and two Auditors General for Ontario) has been saying for years that a cost-benefit analysis of the renewable energy program was never done, and should have been.
“Now, the impacts of this program are clear,” says President Jane Wilson.”We have unsustainable and punishing rises in electricity bills for the people of Ontario, with a corresponding rise in rates of energy poverty, while there is no evidence of any environmental benefit. In fact, there are widespread concerns about the damage being done to the environment from this high-impact form of power generation.”
Wind Concerns Ontario says that in addition to suspending the Large Renewable Procurement program, contracts for power projects not yet under construction need to be cancelled immediately.
“The government admits it has adequate power,” Wilson says. “There is no need to continue this assault on Ontario citizens, on our economy, and on the natural environment for little or no benefit.”
Wind power is produced out-of-phase with demand in Ontario, so the Wynne government is forced to export the surplus. The government claims this brings in revenue but the truth is, it costs Ontario ratepayers. How much? And how does that cheap power benefit others? Parker Gallant comments on his Energy Perspectives blog.
September 6, 2016
The state of Michigan is outperforming Ontario. That’s according to a recent study by the Fraser Institute. Since the end of the “’Great Recession” Michigan has out performed Ontario, increasing their GDP in 2013 by 2.8% versus Ontario’s growth of only 1.3%. Unemployment levels in Michigan are currently at 4.6% versus Ontario’s 6.4%. Those are two very important economic indicators.
That news plus the fact Ontario has become a “have not” province in Canada, it seems policies adopted by the Ontario Liberal government to “build Ontario up” is having the opposite effect.
One of those policies resulted in Ontario’s electricity sector focusing on acquisition of renewable energy from industrial-scale wind turbines, solar panels and biomass. The passing of the Green Energy Act (GEA) in 2009 resulted in adding intermittent and unreliable renewable energy that is unresponsive to demand (wind power is produced out-of-phase with demand in Ontario). This had the effect of driving down the price of electricity.
The free market trading (HOEP) of electricity has resulted in Ontario exporting a rising percentage of our generation to buyers in Quebec, NY and Michigan, with the latter the biggest buyer. In 2015 Michigan purchased 10,248 gigawatts (GWh) or enough to power1.1 million “average” Ontario residential households. We sold it at an average of 2.36 cents per kilowatt hour (kWh) and were paid $242 million, but it cost Ontario’s ratepayers just over $1 billion.
Michigan doesn’t have to pay the Global Adjustment. You do.
Michigan appears delighted to be able to purchase our cheap subsidized electricity. Now they are seeking further transmission links to Ontario with an eye on the grid out of Sault Ste Marie. Hydro One earlier this year announced they “entered into a purchase agreement to acquire Great Lakes Power Transmission LP from Brookfield Infrastructure for $222 million in cash plus the assumption of approximately $151 million in outstanding indebtedness.” One has to wonder, did Hydro One know about this, and see it as an opportunity to increase transmission revenue?
This new transmission line could send both cheap hydro and expensive bio-mass generation to Michigan.
Ontario Power Generation (OPG) operates 11 hydro stations with 680 MW of capacity and also two bio-mass facilities (Atikokan and Thunder Bay) converted from burning coal and now using wood pellets with a combined capacity of 358 MW in the region. The latter two facilities were focused on by the Auditor General (AG) in her November 2015 report. In the case of Thunder Bay, the report indicated the cost of generation was “$1,600/MWh—25 times higher than the average cost at other biomass facilities in Ontario.” For Atikokan the AG had this to say: “The plant is expected to generate 140,000 MWh for $74 million per year, putting the cost of electricity from this facility at $528/MWh—about eight times higher than the average cost of existing biomass from other facilities in Ontario.” Industrial wind turbines have also invaded the beautiful landscapes painted by the Group of Seven.
For the sake of Ontario ratepayers, one hopes Michigan will not access electricity from either of the two biomass plants as it will fall on us ratepayers to pick up the costs in excess of the HOEP price. In the case of Thunder Bay the cost to ratepayers could approach $1.60/kWh and for Atikokan it would be 55 cents/kWh.
Maybe the Ontario government staffers in communications should change their PR Slogan to “Building Michigan up”!
Worthy of a repost, from the National Post, this opinion from a renewable energy insider.
September 2, 2016
Ontario set an all-time peak electricity demand of 27,005 megawatts (MW) 10 years ago this summer. At the time, rising demand and plans to retire its coal-fired power plants dominated provincial energy policy. What followed was optimism for a new energy policy, focused on the ambitious procurement of large wind and solar installations. I felt great pride in helping to lead an industry that would make Ontario’s power system clean, responsive and cutting edge.
What a difference a decade makes. Intrusive policy and poor implementation are largely responsible for the energy market debacle Ontarians face today. But there is no excuse now for buying more mega-projects when our power supply is saturated and hydro bills are skyrocketing.
Coal-fired power generation effectively disappeared after 2010, by which time Ontario’s electricity demand had already started to plummet. Demand has fallen 13 per cent in the past 10 years, including consecutive reductions in each of the past five years. In 2016, Ontario will consume less electricity than in 1997.
Peak demand exceeded 23,000 MW only one day this summer, despite parts of the province seeing 35 days with temperatures above 30 C. Yet our installed capacity approaches 40,000 MW. The system will have reserves above extreme summer peaks well into the 2020s. The Independent Electricity System Operator (IESO) reinforced this point recently when it confirmed “Ontario will have sufficient supply for the next several years.”
Against this troubling background, the Ontario government is procuring an additional 1,300 MW of large wind and solar generation under the Large Renewable Procurement (LRP) program. This decision is indefensible. It makes the frequency of negative pricing (paying our U.S. neighbours to take Ontario energy during periods of low demand) and curtailment (paying wind developers for energy production even when the grid can’t use the power) even worse. These problems have become billion-dollar burdens for Ontario electricity customers.
Sweet contracts, painful electricity bills
Offering sweet contracts to large renewable energy developers while demand stagnates has helped push hydro bills higher. Electricity prices have increased by seven per cent a year since 2009. Costs have risen faster than Ontario’s inflation rate in each of the past several years. The province’s electricity rates are increasing faster than any other jurisdiction in North America.
It’s clear that change must begin with the renewable industry, since our industry alone benefits from the continued overprocurement of electricity. The fact is large wind and solar developers have been pampered by Queen’s Park for far too long. Although solar installation costs dropped 70 per cent in the past decade, the government froze prices for years at a time. When permitting delays enabled projects to be built as much as five years after contracts were awarded, multi-millionaires were created overnight.
Today, with no logical reason to build more wind and solar mega-projects in Ontario, renewable developers must confront the economic damage they are doing to their families, friends and neighbours, and to the next generation of citizens who will bear the brunt of this green corporate welfare.
Renewable energy companies must confront the economic damage they are doing.
We need to make four changes. First, Ontarians must demand a return to basic electricity policy principles: safety, reliability and cost effectiveness. Second, the government should revisit the IESO’s legal obligations associated with the current LRP process and exit this procurement process without paying the ransoms that characterized Ontario’s gas plant debacles. Third, the IESO should restrict renewable procurement to the smaller rooftop and distributed energy projects that actually benefit customers. Fourth, Ontario renewable energy firms must learn to export their pioneering expertise and target new domestic and international markets.
The global renewable energy revolution has just started. Solar energy is increasingly the cleanest, cheapest and most environmentally sustainable option. The advent of battery storage, smart grids and the Internet of Things will catalyze innovative economies that embrace change. Renewables have a bright future in this world, but we need to regain control of Ontario’s failing electricity policies — and do it soon — to ensure we seize the energy opportunities of the 21st century.
Jon Kieran is a Toronto-based renewable energy consultant. He is a member of the Canadian Solar Industries Association’s board of directors. He declines LRP work from clients.