Guest post: In defense of the Ontario FIT program

The following post comes from Tom Rand (PEng, PhD), director of VCi Green Funds and author of Kick the Fossil Fuel Habit.

Fast forward to the year 2030: Canada and the U.S., driven by energy and climate security, have invested hundreds of billions in a continent-wide low-carbon Energy Internet. Vast wind and solar farms, biogas and geothermal power plants, spread across the continent feed that grid. So do countless smart buildings, energy storage facilities and electric vehicles. Will Ontario be a net seller, or buyer, of that technology? The answer depends largely on how, and if, the Green Energy Act (GEA) rolls out. It’s the Liberals, and not the NDP or Conservatives, who are promoting the policies that will ensure Ontario is positioned to become a major manufacturer and producer of clean technology.

The Conservatives would kill the GEA. This is the economic mistake of a lifetime. Clean energy technology is a bigger opportunity today than the microchip was in 1960, or the automobile in the 1940s. Those two sectors took off with strategic government support. The Interstate Highway System and subsequent Autopact grew the automotive sector, and initial demand from the academic and military communities seeded what became Silicon Valley. Entire industries do not emerge from nowhere, and clean energy is no different. The GEA places Ontario firmly at the forefront of the single largest global market of the 21st century. Killing the GEA, as Hudak as promised, is very short-sighted.

The GEA is big business, and a good deal for taxpayers. Currently 7,400 MW of power are contracted which could power 1.9 million homes. This represents $26 billion in investment. What’s the cost to the taxpayer? The equivalent of a coffee and doughnut added to your bill every month.

To deliver on the promise of jobs, the GEA must do three things. It must engage and motivate the private sector, remove as many hurdles to clean energy projects as possible, and most importantly – provide a long-term, steady hand on the tiller. The NDP’s proposed policy does none of these.

The NDP would have Ontario Power Generation (OPG) own and operate all clean energy projects over 20 MW.  That represents about 70% of all contracted projects. It’s out with the private sector, and in with the public. This brings back the days when large central government agencies had a virtual monopoly on power production. That’s not the way to build a globally competitive industry. Large, private sector players – whether it’s TransAlta or Samsung – must be at the table if we are to create an industry that can grow to compete on the global stage.

When Samsung comes to Ontario, they will not only build and operate large clean energy projects. They will establish manufacturing facilities, and – just like the Ford plants in Ontario – this will create the capacity, and the jobs that come with it – to sell across North America. Samsung, like Ford, will outsource most of the components, spurring the growth of a large supporting ecosystem of companies right across the province. That’s what the big players bring to the table, and we cut them out of the picture at our peril.

To placate wind energy opponents, the NDP have also indicated they would give back a municipal veto on energy projects. The health concerns cited by many opponents of wind energy are nonsense, as any review of the medical literature reveals. Pandering to a small, but vocal minority, would kill many projects before the shovel is in the ground.

Most importantly, what the private sector needs to see is continuity. The veto and the change to public ownership of large projects introduce the worst sort of political risk. Whether it’s entrepreneurs or the big banks, the private sector will only step up if they can be assured the rules will stay the same. By broadcasting that they will change the fundamental dynamics of the policy, the NDP’s policy will have the renewable energy industry heading for the hills.

Ontario has established a lead in ensuring that we will be a seller into the emerging, global clean energy economy.  When Michael Prue, NDP MPP for Beaches and East York says “You can get [clean energy] for half if you buy it from Quebec as opposed to putting up the wind farm” he shows the NDP just don’t get how to create the New Economy jobs of the future. It’s not about the cheapest electrons today. It’s about who gets to make the clean electrons tomorrow.

10 thoughts on “Guest post: In defense of the Ontario FIT program”

  1. Great logic…. If the Ontario government would pay me 20 times the going rate to make a special (Green of course) toilet paper in Ontario, and force consumers to use it, I would invest the needed money. It may cost the consumer less than a cup of Green tea, but I would laugh all the way to the bank.

  2. Coal is not an option for Ontario, health costs have put an end to that future, nuclear needs a lifeline from the government to work, and is ten years away at best, natural gas is expensive for electricity generation. So, wind and photovoltaic electricity generation have become necessary parts of our grid mix. Wind used to be more expensive and has come down considerably, the first few 100’s of MW of PV is expensive and the cost will come down and it will be deployed more widely. Encouraging a fraction of a percent of PV microFIT on the grid establishes an industry in Ontario. This industry in Ontario is likely (risk is inherent in all business growth) to grow rapidly now that PV prices are seeing significant digression. If there is a cost effective alternative strategy to supply new electricity supply to the grid on a timely basis, let’s see it.

    Cheers

  3. Coal is being used world wide. Do you really think the particulates do not find their way into Ontario lungs from Kentucky and South Carolina. It is extremely short sighted for a government to put so many eggs in this technology basket. Solar thermal, ground source heat pumps, geothermal, landfill gas, fuel pellets, stirling engines, agricultural waste, small hydro, home efficiency, replacement of all appliances with Energy Star- all of these are possibilities. The GEA places a burden on all taxpayers for generations to come.

  4. I have invested in the future of my fellow Ontarians by placing a $40,000 solar panel system on my home. I have invested in the job security of workers building panels at the Siliken plant in Windsor who were unemployed auto sector works ( thanks to GM and Chrysler , can we say bail out ). I have invested in the future of Mr. Hudak’s young family as he likes to say, and my young family. My investment is to provide clean non polluting energy albeit at a meager 4.8Kw production rate, in a short 39 days since I was hooked up we have produce enough energy to run 28 average homes for one day. If I and everyone else were to produce this type of energy there would be no need for centralized production such as nuclear or coal & gas.
    Problem is everyone who complains, when presented with an option opts for the easy way out. It is easier to let the big government and big business do the producing than do it yourself. There is a regional builder in Denver Colorado who now buts solar on every home he builds, and get this, out sells his competition buy 60 percent ( Google It if you don’t believe ). Why because the buying public didn’t have to do anything but they know it is the right way to go, with no effort on their part. If we as a province ignore these facts we will be outside looking in . I was supposed to have purchased Westinghouse panels political rhetoric stopped the plant opening cold in April this year (no jobs ) thanks to the PC platform. I was supposed to purchase Schuco panels in May again no plant opening and no jobs, see the pattern. Our fear of the unknown is holding us back, the subsides for big power, unions and government are clearly not the options that care about the future.
    Step out side stand in the sun and tell me I’m wrong. Thank you Siliken for putting people to work here in Ontario.

  5. Whenever someone talks about buying power from Quebec as a solution to Ontario’s problems, you have to wonder which river they intend to dam. All Quebec power is already spoken for. If we find another river to dam and build all the new power lines, do we have any idea how much that will cost? In Newfoundland, the planned Lower Churchill hydro development will come in at 14.3 cents per kWh. Whereas in Ontario, wind power is averaging 9-10 cents.

    The cost of renewable power will go up a few cents for a few years and then back down, and its proportion of the total will also grow. Still only a small fraction of the total, with minor effect on average price. The initial steps cost less, the first batch of wind cost only 8-9 cent per kWh. Why did the prices have to go up? We need enough new power to cover the permanent shutdown of coal and the temporary shutdown of nuclear for refurbishment. Rolling it out faster was going to be expensive, and for a bit more we could have local-content rules. Those rules provide political support for paying a bit more, but more importantly they ensure that the price of renewables keeps on going down. That’s the basis of the policy: the cost of fossil fuels will keep going up and the price of renewables will keep on going down. It doesn’t take a genius to figure that out.

  6. Yes, some of the above mentioned technologies can contribute to grid generation, but none at the 1000’s of MW needed in the immediate future.

    Solar thermal – great idea, but it mostly impacts natural gas sales
    Ground source heat pumps – good idea – also already subsidized through ecoenergy – so should we not subsidize it, is it any different than the GEA??
    Geothermal – no resources in ontario that I am aware of and technology to drill super deep is not commercially viable yet
    Landfill gas – good idea, but will produce far less than PV already on this grid
    Fuel pellets – the resource required to produce signiifcant amounts os electricity is staggering – not viable for major TWH level generation, despite what the PWU would have us believe. We should use this resource for heat, not for EG at 30%.
    Stirling engines – find me one in the word being used for significant grid generation, not commercially available at that scale
    Agricultural waste – modest potential, work out how much waste it takes to make 500 MW – it is staggering, again, use it for heat, not EG
    Small Hydro – some potential, but at about $200,000 to get through environmental studies, limited uptake.
    Efficiency is a great idea, and we need more of it at homes and industries, it is happening and will continue to happen, but we do not know how (yet) to make it happen fast enough to avoid the need for new generation.
    All of your suggestions have merit, but none can replace the 1000’s of MW possible with wind and PV.

    Cheers

  7. Once again, health concerns summarily dismissed. They may be real, they may be not. Here’s a suggestion:

    Why not have a Big Brother-like pajama party of at least one week in duration, held at one or more of the possibly-affected households and for all the prominent pro-wind advocates who say the health concerns are hogwash ?

    Tom Rand, Christopher Stevens, Robert Hornung, David Suzuki, Tyler Hamilton, Martin Regg Cohn … the list goes on.

  8. I’d do it, except for the fact it wouldn’t matter. The anti-wind crowd would dismiss it as only for a week, or they would say — correctly — that different people are affected different ways. At every turn Wind Concerns has rejected outcomes that don’t fall in their favour — tribunal hearings, lawsuits, the statements of public medical officers, etc… This latest lawsuit, based on a turbine that’s 1 kilometre away, will also go nowhere, but as intended the relatively small fee to file the lawsuit will generate the media attention the anti-wind crowd craves.

    There’s no easy way to address this issue, sadly. A request for an all-out moratorium on wind development is ridiculous, and even if there was a big study done, the outcome wouldn’t be accepted if it didn’t support the anti-wind cause.

  9. If you would “do it” methinks you would find a very congenial and appreciative group of what you call an “anti wind crowd” welcome you and yours into their homes with welcome arms and they might even feed you some good home cooked farm fresh meals and make you feel rather “at home”!
    These people are not a militant group of “anti-green” protesters, they are actually real hard working honest Ontario Citizens who care very dearly about their Democratic Rights, their homes, their farms and their Province along with the future of their children and grand children. In fact you may find “these people” very indicative of what a true Ontario Rural Resident represents: REAL PEOPLE! To label them otherwise is “insulting and degrading!”

  10. Don’t recall calling them “these people.” They have been labelled only as “anti-wind” — if you find that insulting and degrading, apologies, but it seems an apt description for individuals who argue vocally against wind projects in their community. Fair enough, many may say they support wind if it’s not in their own communities, but a good portion flat out call it at scam, a “big green lie” as your own WordPress blog calls it.

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