Former US Vice President Al Gore was in Toronto last month to participate in Premier Wynne’s announcement that Ontario will shut down what little is left of coal power generation by next year. Coal usage has dropped dramatically in recent years largely because refurbished nuclear generation, and new hydro came on stream. Last year coal provided less than 3% of Ontario’s needs. Still it was a time for celebration, Premier Wynne saying “Our work on eliminating coal and investing in renewables is the strongest action being taken in North America to fight climate change… protect our children, our grandchildren and our fellow citizens.” Echoed Gore, “Ontario has distinguished itself as a leader in Canada and around the world. “
So coal is out, but at what long term cost to the economy? Less than a week after the Gore- Wynne announcement, Energy Minister Bob Chiarelli delivered the price tag confirming most of the assertions made two years ago, by Auditor General Jim McCarter. His 33-page report described an ideologically driven green energy program that bypassed provincial energy expertise in its rush to get wind and solar power on stream. The report detailed a litany of poor planning decisions, huge cost overruns, bad forecasting , non-existent business plans and exaggerated claims that remain with us today. Some examples:
- The government deliberately neutered the Ontario Energy Board, who normally oversee the power system and granted sweeping powers to the Minister of Energy to ramp up the use of wind and solar power, as a result the oversight and due diligence normally provided by the OMB was missing in some future decisions.
- Even with coal out of the mix, the new green power contracted will result in an oversupply of power in Ontario of 20%. The nature of the power grid requires a constant balance between supply and demand. Ontario may be forced to spill cheap hydro power in order to be able to use all the expensive green power it has committed to.
- Ontario has licensed about 10000MW of green energy but lacks the transmission capacity needed to hook the new power up. Nonetheless the government will be forced to pay for the unused power under terms of long term contracts it signed. The auditor general estimates that will cost between $150 and $225 Million annually. Hydro One says there are no large-scale transmission schemes on the books that would allow connection of the stranded green power..
- Speaking of those contracts, the province has massively overpaid for long term wind and solar projects allowing private operators to reap after tax profits of 25 per cent—more than double the profit margins being offered in other jurisdictions. Renewable energy contracts will represent about $2.5 Billion by 2014.
- Because of the intermittent nature of wind and solar the government has had to install more than 20 back-up gas-burning generators to supplement the renewable power.
- Even before the additional future green energy comes on stream the province is already exporting a greater amount of energy than wind and solar are currently providing; and at a large financial loss, estimated at $2 Billion so far.
- It turns out that most of the 50,000 green energy jobs the province touted as partial justification for the program are short term construction jobs.
- The public were told green energy would increase their hydro bills by about 1 per cent per year, instead rates will rise by nearly 8 percent a year.
Perhaps most disturbing—the Auditor General report notes that nowhere, as these multi-billion dollar decisions were being made, could they find any “ independent, objective expert investigation…to determine the potential effects of renewable energy policies on process, job creation and greenhouse gas emissions and no thorough and professional cost/benefit analysis had been conducted to identify potentially cleaner more economically productive, and cost-effective alternatives to renewable energy.” Hence, decisions like the aforementioned licensing of 10,000 mw of power with no transmission system to use the power.
By 2025, Ontario will be capable of generating more than 40,000 MW of power, with demand on the hottest days sitting at about 25,000 and average demand somewhere around 18,000—a massive oversupply which will force Ontario to continue to export large blocks of power at a loss to places like Quebec where they can throttle down their hydro generation to allow their grid to accept our cheap power. More than half of Ontario’s power comes from nuclear, which is much more difficult to switch on and off. Tom Adams of the energy watchdog Energy Probe says Ontario has lost sight of the purpose of the system, which was to provide affordable power to industry and residents. “Now we are in a state where the customer is an afterthought—the game has changed to the pursuit of wind turbines and getting kudos from Al Gore. It’s become an industry that benefits insiders and lobbyists and ignores the customer.”
Guelph University economist Ross McKitrick has published several papers that take issue with many underlying assumptions of the government’s Green Energy policy which he describes as “nuts.” With regard to the benefits of shutting down coal and the massive expansion of wind and solar, McKitrick told the Bay Observer, “ The province had commissioned work in 2005 that showed that shutting down the Lambton and Nanticoke power plants would reduce concentrations of these contaminants by about 1/10 of 1% in urban locations around Southern Ontario, the same as would have been obtained simply by finishing the new pollution control systems that were then being installed. Had the province simply finished the pollution control retrofit it would have obtained all the same environmental benefits at a small fraction of the cost of the Green Energy Act.”