The gloves are off: anti-green Hudak says he will kill Ontario feed-in-tariff program and Samsung deal

Ontario Progressive Conservative leader Tim Hudak has been great so far at telling Ontarians what he won’t do, or what he plans to kill. As far as what he will do, he’s pretty much a blank slate aimed at fueling taxpayer anger with misleading commentary. Sound familiar?

His latest press release makes clear that he plans to kill Ontario’s feed-in-tariff program and, associated with that, the Ontario government’s deal with Samsung to bring green jobs and green manufacturing to the province. “An Ontario PC government will integrate renewable energy into Ontario’s energy supply mix by ensuring the process is competitive and transparent and, above all, affordable to Ontario families,” Hudak says.

For one, Hudak is delusional if he thinks he can “bring relief” to hydro bills and at the same time assure a “competitive” and “transparent” market, as well as a reliable electricity system.  Bringing relief entails hidden subsidies that keep Ontarians believing they can continue to get cheap electricity while overhauling and cleaning up an electricity system that has suffered years of neglect during the 1980s and 1990s. Such subsidies will come from the tax base, so he’s going to steal from Paul to pay Peter. Great strategy.

Meanwhile, is he going to stop upgrading the power and transmission system and let it deteriorate? He once talked about aggressively building nuclear plants, at least until the disaster at Fukushima. Suddenly, Hudak doesn’t talk about nuclear as much, let alone the cost of building it (which according to a California Energy Commission report (see page 20, Table 5) is much  more expensive than relying on wind and other renewables). And even with an all-out nuclear strategy, that just won’t cut it. Deciding tomorow to build new nuclear plants means we still wouldn’t see that power until 2020. What do we do until then? Burn more coal? Burn more natural gas? Well, Hudak has also criticized the current buildout of natural gas plants, so I guess Hudak’s only answer is to kill the coal phaseout strategy and spend billions of dollars cleaning up half-century-old plants that, even with upgrades, will continue to spew CO2 (since scrubbers don’t capture CO2 and carbon capture and sequestration isn’t an option in Ontario).

The fact is Hudak doesn’t have a plan, has no concern for climate issues, and has abandoned many of the principles of the PC party to fuel anger and score votes. The little snippets he’s released indicate that his “alternative” approach will also come with a heavy pricetag and may be impossible, given the timelines he is constrainted by.

What Hudak talks about is likely to cost more, not less. He wants to scrap a smart meter program that’s already paid for. He wants to subject the government to potentially billions of dollars worth of lawsuits by breaking FIT contracts, at the same time making Ontario an even less attractive jurisdiction in which to do business, as investor confidence would be all but destroyed. He wants to take away green jobs and green manufacturing that is just beginning to gain momentum in the province. He wants to continue to use tax money to subsidize electricity rates. He wants to aggressively build nuclear, despite the risks, long-term buildout and rising costs.

Now, what would be a reasonable approach that still accommodates voter concerns? Continue nuclear refurbishment projects, which would keep the nuclear industry busy and folks working, but scrap plans for any new builds. Keep but rework the FIT program by limiting the size of projects, adjusting FIT rates lower (as originally envisioned under the program) and requiring that big projects (say, 10 megawatts or higher for wind, 1 megawatt or higher for solar) bid under a competitive process. Also, we should provide guidance to the market by setting a target for how much large wind, solar and other renewables we want on the system by a given date. Beef up the commitment to electricity conservation. And finally, follow through on programs that provide assistance to folks on low or fixed incomes, so they can better cope with what is a global transition to higher energy prices. The Liberals have failed miserably on this front and they’re suffering for it as a result.

Hudak is doing nobody any favours by misleading voters. Sure, some of his criticisms of the existing Liberal plan are fair and changes are necessary. But from what I’ve heard, Hudak’s alternative approach is no better from a cost perspective and certainly much dirtier.

16 thoughts on “The gloves are off: anti-green Hudak says he will kill Ontario feed-in-tariff program and Samsung deal”

  1. Tyler, even you must acknowledge that Ontario’s feed-in-tariffs are the most generous in the world. The program is designed with the developer, not the ratepayer, in mind. Ending the FIT is a smart move for all Ontarians, including the renewable energy industry.

    The press release indicates that renewables will still have a place in the supply mix. Bit it is up to the industry how big a place it will have. A competitive bidding process will drive costs down and put pressure on Ontario renewable technology suppliers to develop less expensive and more efficient technology. Only then will they be able to compete in global markets and that will be key to their ability to create truly sustainable “green” jobs.

  2. I agree that the rates — not all of them, but some of them — were set too high and all of them need to phased down, as originally envisioned in the program (and which is a component of any FIT program). I also am a critic of how the Samsung deal went down and question its necessity. But is that a reason to kill an entire program? It seems more reasonable to adjust those rates and turn to competitive bidding where it makes sense — large, multimegawatt projects. Honestly, are projects under 10 kilowatts, or even 50 kilowatts, going to have a meaningful impact on rates? The PCs like to talk about the 80.2 cents, but what they should be hammering is the 44 cents for multimegawatt projects, not the smaller projects that are empowering citizens and communities to actually care about their energy future. Ending the FIT cold turkey is not a smart move, it’s another abrupt, knee-jerk, politically motivated action that will further reduce investor confidence in Ontario and kill thousands of jobs in a forward-looking industry; in an industry that shows tremendous promise for growth and is enjoying momentum worldwide.

    Yes, the press release and Hudak’s speech say “renewables have a place” — that’s a nice, convenient thing to say. It means nothing unless there’s a description of what that place is and when it will come to be. You say it’s up to industry to determine it’s place. Industry will do what it does best — make profits, and that means building the cheapest and dirtiest stuff they can get away with. Now, if Hudak was to commit to some sort of Renewable Portfolio Standard that set some sort of target that industry could aim for, fine — I’m open to that, and I agree it will help drive down costs (again, for large project, but keeping the microFIT in tact). But Hudak hasn’t made such a commitment and I doubt he will. Hudak doesn’t talk about “green” jobs, or climate change, or anything else. He, like other Conservatives, put economy before all else and refuses to look at economic growth through the lens of sustainable growth.

    Finally, do you truly believe we can keep electricity rates affordable by building more nuclear and, perhaps, hydroelectric in the far north that needs transmission to get to southern Ontario? Do you believe the grid needs renewal? Do you believe Hudak has to answer these questions? Do you believe a nuclear buildout is going to be truly transparent and market-based? There are many inconsistencies in Hudak’s approach, at least from what can be seen so far. I’m tired of him saying what’s broken and want to hear, in convincing detail, how he plans to fix it WHILE keeping rates affordable for Ontarians. I don’t think he can, but I’m willing to be pleasantly surprised.

    It’s funny — people are bitching and complaining about high gas prices today. That, my friend, is the market in action. The market doesn’t always keep things affordable. Yes many, including Conservatives, want the government to do something about it to help hard-working families. Hmmm…. you mean intervene in the market? There’s a double-standard here, and it exists to win votes and nothing else.

  3. Good summary Tyler. Thank you. We need to find a way to build bridges with the Conservative party and do a better job in explaining what the GEA can bring to Ontario. Developers and communities both need to step up and have a conversation with each other and the political parties about the future of energy in Ontario.

  4. Tyler

    I respect that you usually keep to the facts about Green stuff and avoid too much political commentary but this post is right on target and more than nessessary, thanks

    Considering the questions your are asking and the kinds of fixes you think the system needs I would suggest you interview Mike Schreiner one of these days, or offer him a guest post on this issue.

  5. Regarding competitive bidding – that is already happening. The solar manufacturers are competing for the business of the solar developers / integrators. The integrators are competing for the business of the FIT contract holder.

    This has already caused a drop in costs, both from the installers and the manufacturers. The panel manufacturers are coming out with higher power panels in the same footprint, and the racking companies are coming out with better racking on a regular basis. There are more and more inverters available every month, which causes more competition and therefore lower prices per watt, or at least improved quality and usability – which is directly tied to sustainability.

    And of course, thanks to domestic content rules, all of this is made in Ontario to some degree.

    The group getting the higher ROI as costs drop is the end user – and in the case of microFIT, the homeowner, community residence or small business/property owner funnels that ROI right back into the economy. After all, why not pay a subsidy to the people who are taking the risk that allows an entire industry to be created?

    Because that’s the other point that gets missed. No money is paid by the government until all the risk has already been taken – materials bought, labour used, engineering performed – all the businesses that form this new economy are paid BEFORE the government pays dime one (give or take a few days and a holdback period). And they only pay for what is produced. So, if it’s a shoddy system that doesn’t deliver as much energy, the payout reflects that.

    In a lot of respects, it’s the perfect Private Public Partnership that all the right-wing types seem to be clamoring for. No government risk, no up-front money – only pay for results. And the FIT contract holder can’t come back later and say, “Oh, due to bad economic times / unforeseen circumstances / shareholder second thoughts, we’re not making as much money as we thought, so we need to charge more.” as they often seem to do when given a lock on a contract to operate a government-built facility.

    One element of the rates may be starting off high (but see Gord Miller’s or other calculations for the actual effect), but the elements of the program itself seem to fit all that the economists routinely ask for. Not dictating suppliers (except broadly), lots of competition, no government risk, and certainty. “If you do THIS, you will get THIS.” We’re always told that markets like certainty, and this program, if continued, provides that.

  6. Always more important to be voting for something instead of against. Vote for us we will undo what the last guys did. Green or otherwise this is no way to restart, rebuild in any kind of fashion.

  7. Tyler,
    The key word here is “competition!”

    This political play by Mr. Hudak is nothing but an attempt to be the opposition. We must remember his strategy will only gain votes from those he can convince to disagree with the current plan!

    If Mr. Hudak truly believes in his own agenda then I challenge him to share a detailed report outlining a more attractive solution. Instead of offering a generalized promise that leaves the window wide open for whatever changes he feels to be FIT.

  8. What about the Clean Air Benefit on my hydro bill Tyler. Isn’t this a bilion dollar a year McGuinty subsidy that comes from the tax base, so he can steal from Paul to pay Peter. Before you accuse others of inconsistencies and double standards you better look at your own hero a little more honestly.

  9. “His latest press release makes clear that he plans to kill Ontario’s feed-in-tariff program and, associated with that, the Ontario government’s deal with Samsung to bring green jobs and green manufacturing to the province. ”

    And this is exactly why I will vote Conservative in October, it is the only reason why I will vote Conservative. I am a Liberal supporter for decades, but for the first time I voted Conservative federally a couple of years ago because Dionne was too far left, and I voted Conservative again last week for the same reason. It is why I will vote Conservative in October. Good bye Mcguinty.

    When my Liberal party returns to the center I will return to my Liberal party.

  10. This issue is not a left or right thing, as much as the Conservatives love to spin it that way. It is a “we” versus “me” thing, and those who take your attitude are on the “me” side.

  11. I have lived in 3 places where ratepayers receive the permanent “relief” of low electricity prices

    One of them had the good fortune of massive legacy hydro assets (I bet you can guess which province).
    One was a sub-saharan Africa country where price “relief” was accompanied by regular outages.
    One was a major East Asian country where price “relief” was accompanied by air so thick you could eat it.

    In my more pessimistic hours, I believe what we are experience is the effective “de-development” of North America. You want cheap electricity? Fine. But don’t complain when the power goes out…

  12. I’m no McGuinty (or liberals for that matter) fan but I do believe that voting for Hudak and his no-plan-at-all green strategy will have a serious impact on ontarian’s small and mid-size bussineses that are currently involved in GEA related projects. I do believe, also, in energy retrofits and I think that the current incentives program is a good one, although there are serious flaws in the delivery of the program and the application process. Looks like Hudak wants to kill that too. No vote from me, that’s for sure.

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