Liberals re-elected in Ontario: Green Energy Act and feed-in-tariff program live on

Happy to report that the re-election of the Ontario Liberal government last night means the province’s landmark Green Energy Act, which gave birth to the continent’s first comprehensive Euro-style feed-in-tariff program, has survived its first major challenge. The opposition Progressive Conservative party vowed to scrap the FIT program if elected and neuter the green energy legislation that has brought billions of dollars of investment to Ontario, thousands of jobs, and a new economic pathway for a province that needs to reinvent itself for the 21st century.

The election outcome means the admittedly far-from-perfect FIT will remain and the legislation protected, at least for a few years — enough time for these ambitious initiatives to prove their worth to Ontarians. In many ways, the fact Premier Dalton McGuinty’s Liberals were left 1 seat short of a majority government is a good thing, as it forces the government to consider and take seriously some legitimate concerns with how the FIT has rolled out and the lack of attention paid to energy conservation initiatives. The New Democratic Party of Ontario, which won 17 seats, are generally supportive of both the GEA and the FIT, but the fact they hold the balance of power could — and should — nudge the Liberal government to improve its approach.

1. The NDP has been rightly critical of the Liberals for their lack of attention to energy conservation programs, so perhaps now they can light a fire under the Liberals, which have done some important things on conservation but recently have only paid lip-service to it, despite the fact it’s the best and most permanent way — from both a cost and environmental perspective — to create jobs and reduce the province’s dependence on fossil fuels.

2. Expect the NDP to also force the government’s hand on the nuclear file — specifically plans to build two new reactors at the Darlington Nuclear Generating Station. Can we afford it? Does it make sense? Would the money be better spent on deep energy conservation efforts and programs to help low-income Ontarians deal with the energy transition taking place in this province?

3. The NDP’s idea of putting all the power back in the hands of a re-constituted Ontario Hydro is flawed beyond belief, but certainly one can envision a new role for Ontario Power Generation. Why not let OPG develop renewables such as wind, particularly in the far north, in a way that still respects the need for independent power developers and the partly competitive market we currently have? It won’t be easy, but certainly the question should be asked. Letting OPG put some flesh in the game could also change the dialogue with the Power Workers’ Union, which has bashed the McGuinty green energy plan partly — if not mostly — because it threatens the jobs of its unionized workers at coal and nuclear plants.

4. I would hope the Liberals, backed by the NDP, also put pressure on Hydro One, which many believe has purposely dragged its feet when it comes to upgrading transmission and distribution to accommodate green energy projects, in hopes the PCs would win the election last night. Sorry folks — your wish didn’t come true. Time to deliver on what your shareholder has asked you to do. And if Hydro One can’t do it, perhaps the government should consider the idea of permitting merchant lines in Ontario, allowing private-sector transmission developers to enter the game to fill a vacuum left behind by our public utility.

5. Finally, the NDP did seem to emphasize a need to listen to the concerns of municipalities more closely. The Liberals were too dismissive of local concerns when the GEA and FIT were launched, declaring they would have no tolerance for NIMBYism. Well, obviously that wasn’t an issue when it came to natural gas power plant protests, so the Libs have exposed themselves as hypocritical on this file. Some of those protesting wind farms in rural Ontario are extreme, and they will never be pleased. But many have more legitimate and addressable concerns that need to be heard and, when possible and reasonable, acted on. The government needs to show more goodwill in this area, otherwise it will never get the rural buy-in that it desperately needs for Ontario’s green-energy future to remain bright.

Anyway, these are just some of my initial thoughts. Please consider this an open thread. I’m interested in hearing other views out there.


9 thoughts on “Liberals re-elected in Ontario: Green Energy Act and feed-in-tariff program live on”

  1. Hi Tyler,

    Recently i have been talking to a lot of people living in areas where windfarms are proposed. Surprising, there is a lot of support out there, despite the substantial opposition too. However, one thing that even supporters of wind say is that they don’t mind a few windmills but they don’t want millions. This brings to my mind the resource-based tariff for power produced in less windy areas, which was advocated by the Green Energy Act Alliance, and which exist in Switzerland, Germany and France. I think it is time we again called for resource -based wind tariff in order to better distribute windfarms across the province by attracting investors to less windy areas if they can make the same returns. This way wind ghettos are prevented and everyone in the province shares the burden of putting up with windmills. What are your thoughts on this?

  2. Thanks again Tyler, agree with your sentiment and hope that the NDP come through and push for the FIT to be improved, encourage more community projects and collaboration, end talk of new nuclear, and continue the push for conservation, particularly in helping low-income homeowners and landlords retrofit buildings to reduce energy costs. Only renewable energy in Ontario comes from domestic fuels. Energy efficiency measures keep money in the provincial economy.

    I also hope they’ll leave aside their populist and misguided efforts to cut HST for fuels. Dale Marshall’s blog did a great job of providing a much better way forward for low-income Ontarians.

    Thanks again for your good work.

  3. Energy efficiency and renewables – I like what you have to say. As a US Sierra Club member on the Niagara Group’s Energy Committee trying to promote FITS in NYS, what do you believe has been the top problems with the FITS in Ontario? What ideas do you have on mitigating or eliminating these problems? Do you have any information on studies regarding any consumer savings from the Merit order effect based on the introduction of renewable energy such as wind power into the Ontario grid.

    Thanks for any insight.

  4. Tyler, you may be on to something when it comes to Hydro One, but the NDP is not going to be helping with your solution, which involves further privatization. On the other hand the NDP was completely unrealistic with two parts of their plan, one that the big crown corporations, the very ones that were the greatest obstacles to rolling out green energy, should be given complete control, and the second that community-based organizations, who are already paid 10% more under FiT and have not responded to the opportunity, should be the only exception to that monopoly.

    Hydro One has two roles: it runs the old-style transmission grid designed for coal and nuclear plants, and it also runs a few local distribution networks. There are roughly a hundred local distribution companies in Ontario, almost all of them community-owned, and they have had a lot less trouble with connecting small-scale generation than Hydro One’s distribution grid. Connecting directly to the low-voltage distribution grid is one of the great benefits of FiT and microFiT, precisely because it avoids the huge costs and losses of Hydro One’s transmission grid.

    Hydro One should divest itself of the local distribution business and let it all be community owned. Then those Local Distribution Companies could be given a higher profile when it comes to local community engagement with green energy. Under the current plan, it is the LDCs that are given the targets for conservation, demand response, and peak shifting. The NDP plan for electricity conservation made no sense – it’s a existing program with little effect on electricity. It’s through the LDCs that a lot of conservation will be achieved, through commercial and industrial pricing, smart meters and home demand response, home automation innovations and fuel switching. None of the four parties has made a credible plan for deep conservation, but the Liberals’ conservation targets for LDCs is at least targeting in the correct place yet too hands-off and frankly not all the spending is worthwhile.

  5. Tyler,

    Nice summary. I like the idea of merchant lines. North America in general has transmission upgrade issues. I think a similar program to the GEA with the transmission sector would help to build out Ontario’s expertise in this area. Let firms bid or apply for various projects. Throw in educational programs at various institutions and you have skilled labour for both HydroOne and the private firms. The engineering firms will also benefit from the environmental assessments and design work that are required. The Construction industry will like the work as will the northern communities that will benefit. All around a solid idea but I doubt HydroOne will let go of its control.

  6. Tyler,

    Agree wholeheartedly with your analysis. The Liberals missing a majority by one seat is not a bad thing for the people of Ontario. I believe that the NDP are correct in their critique of a lack of ‘community power’ under the FIT Program (although there are provisions and ‘adders’) and in their focus on conservation and energy efficiency (which you raised at #1, above). A kW NOT generated is more than kW saved and there is no reason why the province’s peak demand cannot continue to drop via smart-grid technologies even as population figures and industries continue to grow.

    Most importantly, the industry that the GEA set us out to become a North American leader in will continue to exist and will surely benefit from an additional check and balance in the form of the opposition parties. I look forward to seeing green jobs coming into the province and hope that Hydro One jumps on board.

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