Wente continues to mislead, misinform Canadian public
Climate blogger and author Joe Romm of Climateprogress.org has a new book out called Straight Up, and it’s largely a selection of his best blog postings over the past few years related to climate change issues. One section is devoted to the Status Quo Media, and is a stinging critique of how poorly the mainstream media has covered global warming and, I would add by extension, the need to embrace clean energy. One repost, dated Jan. 25, 2009, refers to a study by Eric Pooley, former managing editor of Fortune and national editor at Time. Romm pulls the following quote from Pooley’s study:
The press failed to perform the basic service of making climate policy and its economic impact understandable to the reader and allowed opponents of climate action to set the terms of the cost debate. The argument centred on the short-term costs of taking action — that is, higher electricity and gasoline prices — and sometimes assumed that doing nothing about climate change carried no cost.
As Romm later writes: “Although Pooley doesn’t make the point, the problem he identifies is compounded by the fact that the mainstream economic community also overestimates the cost of action and underestimates the cost of inaction.”
This brings me to Globe and Mail columnist Margaret Wente, a talented, award-winning writer who regularly crosses into the realm of fiction when talking about climate change and green energy. She’s a generalist — knows squat, really, about climate change science and the economics or technology around green energy technologies — but she continues to put herself out there as an authority on such issues. As a result, she’s misleading a Canadian public that’s seeking constructive (and truthful) guidance on the tough choices that lie ahead.
Take Wente’s latest column, which appeared on Saturday, titled “Welcome to the wacky world of green power.” In it, she weighs in on the Ontario government’s announcement last week that it has awarded power-purchase contracts to 184 green energy projects representing 2,500 megawatts of power capacity and up to $9 billion in private investment in the province. “Welcome to the wacky world of green power, where misguided governments have sparked a massive corporate feeding frenzy (at taxpayers’ expense) to achieve little or nothing of any social benefit,” she writes.
Let’s deconstruct this latest column:
Should the rest of us be enthused? Maybe not. In solar terms, Toronto is not exactly Southern California. Even there, nobody has figured out how to make solar power cheap.
No, Toronto isn’t exactly Southern California, but we know that Southern Ontario isn’t much further north than Northern California. We also know that Toronto is a heck of a lot sunnier than Germany, the global leader in solar deployment and technology. But this isn’t the point. Fact is, a feed-in-tariff program only pays generators for the power it produces. You produce less, you get less. Exposure to the sun is something developers have to worry about to support their business case. Ontario ratepayers only pay for what they get. As for nobody figuring out how to make solar power cheap, last I checked nobody has figured out how to make nuclear power cheap, or “clean” coal for that matter. And what constitutes cheap? Solar prices have fallen dramatically over the past few years and continue to fall. We have figured out how to make solar cheaper, but doing that — like most industries — requires economies of scale. Most analysts and economists see solar technology costs reaching grid parity within this decade. As solar technology costs fall, the cost of nuclear and fossil-fuel generation (with carbon pricing) rises. Wente demonstrates here her complete ignorance of the market, and — as Pooley points out — focuses strictly on short-term cost while ignoring long-term benefits. Many argue, and I’m sure Wente takes this position, that if green technologies are so great they should be able to stand on their own in the marketplace. Problem is, it ignores the fact that early (and hidden) government support and subsidy allowed nuclear technology, oil sands development, the Internet, GPS satellite services and a host of other innovations to eventually hit the mainstream. No other major technology in the past has been forced to stand alone without early government support. Why should we treat green energy, for all the benefits it can bring to humanity, any differently?
The government will pay … around 80 cents a kilowatt hour for the power (small rooftop solar generators) sell back to the grid. That’s about 15 times more than the current spot price that consumers now pay for power. The difference will eventually show up on their electricity bills.
Yes, the province’s feed-in-tariff program will pay 80.2 cents per kilowatt-hour for small rooftop solar. But let’s put that into perspective. So far, less than 10 megawatts worth of contracts have been awarded. If, in southern Ontario, you get roughly 1,200 kilowatt-hours per kilowatt of solar PV installed per year, then 10 megawatts equals roughly 12 million kilowatt-hours. Ontario required roughly 150 billion kilowatt-hours in 2009, meaning the small rooftop solar contracts so far awarded represent .008 per cent of total electricity consumption in Ontario. So when Wente write that difference (the premium) will eventually show up on peoples’ bills, she’s right, kind of. It’s just that it will be too small to measure. Now, she could have focused on the several hundred megawatts of ground-mounted solar that will be built, which will be able to fetch roughly 42 cents per kilowatt-hour, but even several hundred megawatts will hardly dent bills. Oh, and I should add, by mentioning “current spot market prices” Wente is ignoring the fact that spot market prices can change quite dramatically in a short period. Hedging her comment with “current” is a common tactic, but it misleads the reader. Finally, why didn’t she talk about all the job creation that will come from putting thousands of solar systems on rooftops?
Welcome to the wacky world of green power, where misguided governments have sparked a massive corporate feeding frenzy (at taxpayers’ expense) to achieve little or nothing of any social benefit.
Misguided governments? Who says? Apparently, she says. I guess she’s entitled to that misguided opinion. A massive corporate feeding frenzy? Yes, uh, that’s kind of the point — to spur job creation and investment in the province. I fail to see how this is different than handing $20 billion to a consortium of big companies so they can spent 10 years building a nuclear plant that will likely be over budget and late. Also, this “feeding frenzy” brings geographic and trade diversity to all corners of the province — Aboriginals in Ontario’s north, farmers in the northeast, to small towns in southwest Ontario, to community co-ops in Toronto, and yes, to dozens of mid- and large-sized companies that have a profit motive. This is the kind of broadly dispersed investment and job creation this province needs. Giving it to the nuke industry or OPG keeps this money within a tight circle of companies and a narrow grouping of skills/trades. By the way, folks like Wente talk of the green lobby like it’s some kind of disease. Let’s keep in mind that the influence and size of the green lobby still pales in comparison to the nuclear and fossil fuel lobbies.
Another error Wente makes is that she says it’s all at taxpayers’ expense. This is simply wrong, and the difference is important. This will be shouldered by electricity ratepayers, all of whom have the chance of buffering the impact by becoming more efficient with their energy use, and all of whom have a chance to participate in the upside. For example, any Ontarian can buy shares in a community solar or wind co-op that will pay them a dividend over 20 years. This is highly inclusive. Also, they have a chance to educate and train in the emerging job fields that will be created. As for Wente’s claim this will achieve little or nothing of social benefit, I think I’ve just described above a lot of social benefit, on top of the known environmental benefits. But to support her claims, Wente cites Guardian columnist George Monbiot (she likes to cite other columnists or writers, rather than do the analysis herself):
Some people think this is a terrible idea. One of them is George Monbiot, the environmental firebrand in Britain, which has just introduced its own subsidy scheme. “The feed-in tariffs [the rates paid to power generators such as Mr. Creeggan] about to be introduced here are extortionate, useless and deeply regressive,” he fumed. “The technologies the scheme will reward are comically inefficient.”
I’ve actually exchanged views with Monbiot on this one. First, it should be noted that Monbiot is strictly talking about the suitability of a feed-in-tariff program for the U.K., given its gloomy, cloudy year-round weather. I would tend to agree with him on that point. And while he’s critical of solar, he’s supportive of large, centralized wind installations. Wente doesn’t pass along this context in her own piece, of course, but rather uses a few select quotes from Monbiot to support her own argument. I e-mailed Monbiot shortly after the column referred to by Wente appeared in the Guardian. I pointed out Ontario got much more sun that the U.K., though this shouldn’t matter, because — as I mentioned — participants in any feed-in tariff program only get paid for the electricity that’s produced. I also pointed out that community co-op programs allow all people — not just rich folks with big homes — to participate in the feed-in-tariff upside, so it’s not necessarily elitist unless it’s designed that way. Regarding claims that solar has no impact on lowering emissions, that’ s just plain wrong. The problem is the design of the European Union’s cap-and-trade system, which gave too many allowances to polluting industries. Ontario hasn’t made clear what it plans to do with any carbon credits it accumulates from its feed-in-tariff program, but the right thing to do would be to retire them so polluting states like Michigan can’t buy them up and keep on polluting. Finally, I agreed with Monbiot that conservation programs is where a good chunk of policy and resources should be targeted, but I don’t agree it should be to the exclusion of other — even if less efficient — approaches. We need to pursue all angles to tackle climate change, and this, if you actually look at the plan in any detail, is what Ontario is trying to do (though they could always do better on the conservation side).
Here’s how Monbiot replied to my e-mail:
I think the situation in Ontario is different from ours for the reasons you mention, though the FIT prices there suggest that there’s an efficiency problem. Despite the economic mitigation measures you mention, there’s likely to be a social distribution problem too, but perhaps not as severe as ours.
By efficiency I assume he’s talking about the efficient allocation of limited capital resources. And yes, right now, solar is the expensive kid on the block. But it won’t be like that forever. And while there may be some social distribution problems, this can be dealt with through the design of effective support programs for low- and fixed-income persons. It’s here where Ontario hasn’t done enough and, to agree with Monbiot, needs to do much more. I should also point out the fact that distributed rooftop solar puts the supply close to the load, meaning less investment required for transmission infrastructure — this helps somewhat to mitigate cost over the long term. Okay, back to Wente, who at this point in her column is quoting known wind-hater Michael Trebilcock, who uses his position as a law and economics professor at the University of Toronto to somehow give his views on renewable energy some credibility:
Large wind producers, for example, will get 13.5 cents a kWh (and small producers will get more). These costs will be fed through to industrial, commercial and residential consumers through additional charges on their electricity bills. There will be additional costs to extend the transmission grid. And that means consumers are about to get a nasty shock. Ontario’s Energy Minister said soothingly this week that the green scheme will add only a few dollars a year to people’s hydro bills. But energy costs were already set to spike by 25 per cent, and energy experts say households will soon be paying several hundred dollars more a year.
Look, I’m not going to argue that the feed-in-tariff program isn’t going to jack up the power bills of consumers, business and industry — it will, and to a certain degree that’s the whole point. But comparing the increase to what we currently pay for power, or to current wholesale prices, is misleading because it ignores the fact that any new generation, whether a new nuclear plant or a coal-fired plant with carbon capture and storage, is going to cost more and jack up bills. Sure, if you just throw up your hands and shout “screw the environment and future generations!”, then we could go on a coal-plant construction spree, but the vast majority of Ontarians might have a problem with that. Over time, we’d have to pay more anyway because of the introduction of carbon pricing. Wente, citing “energy experts,” says we’ll soon be paying several hundred dollars more a year. That, of course, is an average and it ignores the impact that conservation could have on lowering energy use, and it also lumps the green energy premium in with the coming harmonized sales tax and spending on transmission and distribution renewal, which has to happen anyway. Wente goes on:
Renewables simply can’t produce the large volumes of reliable energy that our economy needs. “These energy sources are so intermittent and unreliable that you have to have backup power at all times,” says Prof. Trebilcock. For every wind farm we build, we’ll have to have a coal or gas-fired power station waiting in the wings to take over when it’s 20 below. “I think we’ll get next to nothing on carbon dioxide abatement,” he says.
The above is quite simply a ludicrous statement. Yes, renewable energy like solar and wind is intermittent, but it’s not any less reliable than a nuclear plant. Trebilcock apparently doesn’t realize that we have to have backup reserve power anyway in case one of our big nuclear plants suddenly and unexpectedly go offline. Ontario plans to use a combination of natural gas (much cleaner than coal), demand response, biomass (through coal plant conversion) and hydroelectric imports from Quebec to help manage the flunctuations in energy supply related to solar, but mostly wind. It’s also looking — half-seriously, anyway — at building pumped storage facilities that could store wind energy overnight and dispatch it through the day. For Trebilcock to say we’ll get next to nothing on carbon dioxide abatement is untrue, period. Every kilowatt-hour of energy that comes from wind or solar or hydroelectric or biomass means a nearly a kilowatt-hour of energy not required from coal or natural gas. How is this getting “next to nothing”? Nobody is saying it won’t be challenging to manage the system, but as Ontario’s Independent Electricity System Operator gets more experience balancing these different green sources of energy the job will become easier and expertise will be developed over time. Growing pains are a reality. No doubt, there are folks out there like Wente who may not be willing to make some sacrifice for future generations, like our forefathers did when they built Niagara Falls at tremendous cost to the people at that time. Wente continues:
But what about green jobs? The McGuinty government confidently predicts that its green scheme will create 50,000 of them. Don’t believe it. Some will be temporary construction jobs. Some other jobs will disappear because higher electricity costs will make Ontario less competitive.
This is a strange comment. Yes, “some” will be temporary construction — like, say, building a nuclear plant or coal plant, or building a highway or whatever. What’s her point? And yes, some jobs may disappear, but this is a highly speculative comment. Ontario only becomes less competitive if the rest of the world stands still. The fact is provinces and states across the continent are seeing higher and higher electricity rates and are running to create the same kind of green jobs that Ontario is gunning for. Ontario electricity prices may grow higher than the U.S. average, but that comparison is based on today’s U.S. average. That, too, will increase, so this is all a moving target. Unless all industry wants to pick up and locate to Quebec and Manitoba, then we’re all pretty much in the same boat. Wente continues:
The world is littered with cautionary tales about subsidized renewables and overblown promises. Spain went wild on solar, and set off a speculative boom. Inefficient, poorly designed plants popped up everywhere. The lavish subsidies inflated costs. When Spain plunged into recession, the subsidies were ratcheted back, and the industry collapsed.
Oh yes, and most of the cautionary tales couldn’t possibly have been told by Conservative/Libertarian think tanks funded by the fossil fuel industry. For every study that tries to discredit Spain or Germany or Denmark for their aggressive moves into green energy there are two or three that debunk them. Spain did go wild on solar, and it made some mistakes, but that was an issue of program design. Also, to say the Spanish solar industry collapsed during the recession is, well, not surprising — since there were a lot of industries that collapsed during the recession, like, say, the global financial sector! That said, Ontario could learn an important lesson from European countries that were on the bleeding edge.
Wind economics are shaky, too. In Britain, “too many developments are underperforming,” says Michael Jefferson, an expert on energy sustainability and economics. Wind developers, he says, have grossly exaggerated wind potential. “The subsidies make it viable for developers to put turbines on sites they would not touch if the money was not available.” As The Times of London notes, even environmentalists admit that some of Britain’s treasured landscapes may have been blighted for only small gains in green energy.
I can’t argue with this point. Again, this comes back to poor program design. Wind turbines shouldn’t just be put anywhere. And prices for a feed-in-tariff should be set to reward high performing wind sites. That said, if a wind site doesn’t perform well it doesn’t cost anything to the ratepayer — again, you only pay for what you get. Wente ends with the following:
Does this mean there’s nothing we can do to cut down on fossil fuel emissions? Not at all. Ontario has an abundant supply of clean energy that hasn’t yet been tapped – hydro. “There’s enough northern Canadian hydro power to satisfy Ontario’s needs for decades,” says Prof. Trebilcock. Ontario could impose a carbon tax, and invest the money in research to find ways of making green power less expensive. There’s also conservation – more retrofitting and smart metering.
So this is interesting. She slams wind partly because of the cost of building new transmission, yet she ends on a positive note for developing hydroelectric resources in Ontario’s far north, where tremendous amounts of new transmission will be required to bring the power south — nevermind the losses of 10 per cent or more as the electricity is carried. Don’t get me wrong, I’m a big supporter of developing new hydro in the north, but as part of a diverse plan — hydro alone won’t do it, and isn’t necessarily a more economical option, as Wente seems to indicate. If we’re going to build that kind of transmission, might as well build a couple of massive pumped storage sites up north and use that to store wind power in the region. Funny, Trebilcock says there’s enough hydroelectric power up north to serve all of Ontario’s needs for decades. Yeah, that’s the same as saying there’s enough solar energy hitting the planet to provide all our energy needs for centuries, or ocean wave movement or wind energy, etc… Of course there is — the challenge is accessing it economically. What Trebilcock is getting at here is that he doesn’t want wind turbines in southern Ontario because he doesn’t like them and considers them an eyesore, but it’s okay to spend billions and billions of dollars building massive transmission lines up north to hundreds of small hydroelectric sites on aboriginal lands. If he and his friends don’t have to see it, then that’s okay.
It’s also humorous when Wente says Ontario could create a carbon tax, or do conservation, or invest more in research to reduce emissions. For one, she would be the first one to write a scathing column if the province said it was going to create a carbon tax. But a carbon tax alone won’t do it. Market forces won’t do it. This isn’t just about reducing some emissions. We have to reduce a lot of emissions — like 80 per cent by 2050. This isn’t done by just tinkering. This requires an all hands on deck approach — carbon tax, green energy, conservation, technology R&D, you name it.
But, you know, as Wente has shown with her columns on climate change, all we need is tinkering in her mind — the kind of tinkering that comes with no pain, no sacrifice, and unfortunately the kind of tinkering that accomplishes absolutely nothing.