Beyond the propoganda of the nuclear industry, I haven’t seen a single credible study that calculates the cost of (new) nuclear to ratepayers below 13 cents per kilowatt-hour. Indeed, there are many reports that suggest nuke power is above 20 cents per kilowatt-hour, particularly when you choose to not hide the hidden costs and subsidies. This makes wind power, landfill gas systems, waterpower and even some large biogas systems competitive with nuclear on a kilowatt-hour basis. And, of course, under the FIT we’re not held hostage to delays or cost overruns like we have been in the past with nuclear. You pay for what you get under the FIT. No risk, no large single points of failure, no risk of meltdown, no worries about handling future radioactive waste, and very high price transparency.

Now, Hudak would have Ontario voters believe that the rate we pay today is what we should expect to pay for future generation. I don’t believe this is a naive belief on Hudak’s part; I believe it’s to intentionally mislead. Fact is, there isn’t a single form of clean (or dirty) generation that can be built new today that isn’t more expensive than the 6 or 7 cents per kilowatt-hour that Hudak (and most media, for that matter) recklessly bandies about. Now, could we get wind generation cheaper through a competitive process? Yeah, we could maybe carve a couple of cents off the FIT rate. But the FIT was intentionally designed to lower barriers to market access — to open up the market beyond the big, deep-pocketed corporate giants who can afford the upfront millions required to respond to a request for proposals (RFP) and, after participating in such a process, can afford to walk away empty handed. The province created the FIT to encourage community participation, and to stimulate the kind of growth that would attract manufacturing and jobs — and it has, despite a few spineless moments and missteps from the Liberal government.

 Now, on to solar. Hudak and his legion of backers, including National Post columnist Parker Gallant (who has somehow managed to turn his column into an official soap box for the Ontario PCs — hell, he even hands over fresh quotes for Hudak’s press releases now), always point to solar prices when talking about the FIT. After all, it’s easier to anger voters by saying generally that we’re paying 80.2 cents per kilowatt-hour under the FIT and that this is 10 times more than the wholesale market rate for electricity. Wow — 10 times more! Crazy. But the comparison shouldn’t be to the wholesale market rate, and the rate itself is far from representative of the FIT program pricing. That scary 80.2 cents, which will soon be lowered, is for less than 1 per cent of FIT contracts when measured on a megawatt-hour contribution basis. Also, that money doesn’t go to big corporate conglomerates intent on vacuuming money out of Ontario. It goes to farmers and homeowners who are taking risks to become participants in the electricity system. The thousands of people taking part are literally changing the energy landscape in Ontario and they’re creating local jobs. You can see it just driving around this province. Put into perspective, the premium being paid to them is more than worth what the province is getting back. Hudak, however, would prefer to demonize them to score votes.

Now, let’s talk about the elephant in the room — big solar. Big, multimegawatt solar projects are getting 44.3 cents per kilowatt-hour. But unlike the small solar rooftop systems, these larger systems will collectively have an impact on electricty rates over the coming years. At the same time, we have to acknowledge that it is because of these large systems that a lot of manufacturing has shifted to Ontario. Still, it’s a lot of solar and a lot to pay, and this is in my view the Achilles heal of Ontario’s FIT program. If there are going to be changes to the program, the most dramatic changes have to come here, but it has to be done in a way that balances the need to nurture an emerging industry and the interests of ratepayers. The answer, in my view, is to embrace a competitive bidding process for these large-scale projects and set caps (targets?) on the amount of big solar we want in Ontario by 2015, 2020 and 2025.

But Hudak isn’t thinking or talking that way. He wants to throw the baby out with the bath water, and in doing so kill investor confidence in the Ontario market, kill green jobs and build new nuclear plants that we’ll have to start paying for 10 years before the first kilowatt-hour is generated. His approach is reckless at a time when Ontario needs surgical, not blunt force, solutions. He’s being destructive at a time when Ontarians want our politicians to be constructive.

On a final note, let’s keep in mind that we don’t have to choose nuclear over renewables or vice versa. While building new nuclear plants may be an unwise decision economically, there is plenty of job creation to come from reburishing or extending the life of Ontario’s existing nuclear fleet — even if we retire a couple of plants, such as Pickering. Indeed, OPG and Bruce Power have expressed concerns about doing these refurbishments and building new because of the limited labour pool and the logistical nightmare of taking so much on in such a tight window. So, the message here is you can continue to aggressively build green energy and capture the associated jobs while keeping folks in our nuclear industry gainfully employed for the next 10 years, simply following through on an existing refurbishment schedule. Talk of building new nukes is a distraction — there will be opportunities in both sectors, and plenty of jobs to go around. We don’t have to choose one over the other.

Highlights:

• 80.2 cents per kilowatt-hour for rooftop solar.
• 19 cents for offshore wind of any size (first jurisdiction in N.A. to set price)
• 13.5 cents for onshore wind of any size
• 14.7 for biogas under 5 MW.
• 44.3 cents for 10-MW-plus solar, sliding to 71.3 cents as projects scale down to 10 kilowatts.

The government will commence eight-week consultation process and expects to have the prices in effect this summer. More to come….

UPDATE: Here’s an article I just filed to the Toronto Star’s Web site. It contains more info regarding the proposed tariffs. Ontario introduced basic feed-in tariffs two years ago under its standard offer program, but project size was capped at 10 megawatts. The new advanced feed-in tariff program lifts the cap (though solar is still capped at 10 megawatts). It also offers higher prices for smaller projects, such as community-based wind and solar projects or residential solar. Most groups seem happy with the pricing with the exception of large solar developers, who despite getting a 2-cent increase to 44 cents per kilowatt-hour still argue it’s not enough to make projects economical (especially if you factor in poor Canadian-U.S. exchange rate and persistently tight credit markets).

Of course it remains to be seen whether this new feed-in tariff structure, despite being generous and being first on the continent, will be enough to attract investment, development, manufacturing and jobs. Curious to hear viewpoints on this.  Michigan introduced a bill last year that proposed similar advanced tariffs but it never got passed. Hawaii has proposed less ambitious tariffs, but Ontario’s will be first to go into effect and will be the most ambitious to date.

The next step, I imagine, is to perform a more comprehensive apples-to-apples test on a larger turbine. Hopefully these results will help the company raise the capital it needs to take its testing to the next level. Perhaps at some point it will begin catching the attention of some of the bigger wind-energy players.

McGuinty said the province’s new Green Energy Act to be tabled later this month will aim to streamline/clarify/override local bylaws and regulations that can be used by certain groups to delay or stop proposed renewable-energy projects.

It’s a laudable goal. As McGuinty has said, achieving energy and climate change targets is a tradeoff, and while not all projects are perfect most renewable-energy projects are far better than the alternative: coal and natural gas. At the same time, the province must do a better job of assuring communities that the technologies being used are safe and don’t have an unacceptable impact on the environment — i.e. bird populations, fish, etc… One approach is to pre-screen potential areas. That is, instead of assessing sites on a case-by-case basis, it might speed up things if certain sensitive sites are excluded from the outset.

On the issue of health, debate will continue over whether wind turbines cause sickness or unnecessary noise. Hell, welcome to the 21st century. The same debate still exists around cellphones, Wi-Fi networks, chemicals in food, and a thousand other issues. If we killed every projects because a couple people claim it causes them headaches, we’d never get anywhere.

The best way the government can reach a compromise is to come out with clear guidelines regarding set-back restrictions for turbines. Right now there’s no hard and fast rule, but I think the setback from a residential property is currently well under 100 meters. Increasing that setback, say to between 200 and 500 meters depending on the zoning, would go a long way in satisfying those who are concerned about noise and ice shedding. Rules should also make clear the responsibility that wind developers have in decommissioning or rejuvenating sites once the equipment reaches the end of its life. There’s a perception in many of these communities that old rusty turbines and concrete bases will just be left there like an eyesore. If this isn’t true, then the province needs to communicate this fact.

The bottom line is bad rules that allow for unnecessary delays must be replaced with good rules that make it absolutely clear how projects should be responsibly developed. McGuinty is right to crack down on NIMBYism, but at the same time he needs to recognize that some of those NIMBYers aren’t against the projects per se — they just want the plans tweaked or just want more clarity on the rules. This is quite reasonable.

For this reason, it’s unwise to paint all NIMBYers with the same brush. The fact is, some wind sites are just plain stupid and should be challenged, if not to kill a project then to at least fine-tune it.

Here’s the current ranking of U.S. states, based on total installed capacity: Texas (7,116 MW), Iowa (2,790 MW), California (2,517 MW), Minnesota (1,752 MW), and Washington (1,375 MW).

AWEA cautioned that 2009 could be a rough year, but who are we kidding? Early indications show that incentives from a new U.S. stimulus package will keep the strong winds blowing into this year and beyond. The challenge will be in passing the necessary legislation as quickly as possible to avoid extended lulls in a credit-challenged market.

Now, in Canada, our federal government just announced today our own “stimulus” budget and I’m disappointed to report that the Conservatives just don’t get it. The current production incentive for renewables is 1 cent per kilowatt-hour produced over 10 years. The program has been quite successful — perhaps too successful — because all the monies will have been allocated by the end of March, two years early.

Industry groups were calling for an expansion and extension to 2014, which would have supported deployment of  an additional 8,000 megawatts. Of course, an extension would have also provided much certainty for wind developers and their investors during turbulent economic times. That uncertainty is, well, gone. Instead of building on success, the federal government is simply letting the market go from boom to bust.

“Our ability to compete with the United States for investment in wind energy projects and manufacturing opportunities will decline as a result of this budget,” said Robert Hornung, president of the Canadian Wind Energy Association, in a statement. “At a time when the United States has made measures to support renewable energy deployment a key component of its plans to stimulate the U.S. economy, Canada is moving in the opposite direction.”

On top of the 1-cent incentive, where are the loan guarantees for large-scale renewable projects to help ease the credit crunch? Where’s the announcement of a green bond that could raise low-cost capital for renewable projects? Again — zilch.

The irony, as CanWEA pointed out, is that the federal government gave a Throne Speech just before Christmas committing Canada to getting 90 per cent of its electricity from “non-emitting” sources by 2020. Today’s sidestepping of renewables makes the Conservatives’ intentions clear: non-emitting sources will come from nuclear and “clean coal,” even though neither will be built within the next nine or 10 years.

No wonder Canada refuses to join the newly created International Renewable Energy Agency.

 At this point, it will take a push by individual provinces to make up for this federal neglect. Fortunately, Ontario appears to be doing a good job in this regard. Last week it awarded long-term power purchase agreements for five new wind-farm projects totalling nearly 500 megawatts. A Green Energy Act is on its way, and we’re starting to see a ramp-up in green-collar job training. The news was buried, but last Friday Premier Dalton McGuinty attended St. Lawrence College a couple hours east of Toronto to announce the province’s first wind-turbine technician program, which will begin this year. It was a small announcement, but the fact that McGuinty attended it personally may hint at intentions.

ExRo says its technology can dramatically improve the efficiency of turbines because its unique design allows the generator to adapt more quickly to changing wind conditions and tap a wider range of wind speeds. In addition to my column, you can find more detailed explanation of ExRo’s technology at Greentech Media and Technology Review.

And let’s not forget the potential of hydraulic wind-energy storage, or EEStor’s EESU and its massive potential for storing wind energy. “We’re talking to people very seriously about that,” says EEStor co-founder and CEO Dick Weir.

Oh, and I should also give a brief update on what Thane Heins is doing and its potential benefit to wind-turbine generators. You’ll recall that Heins’ company, Potential Difference Inc., says it has come up with a way to eliminate Back EMF in a generator that acts as a source of magnetic friction and reduces the generator’s efficiency. Eliminate the Back EMF and you get more output from the generator — theoretically. Heins’ has signed (or is close to signing) a licensing agreement with Montreal-based Tesnic Inc., a startup developer of small vertical-axis wind turbines. If Heins’ approach does eliminate the Back EMF, it will allow the turbine to operate at much lower wind speeds because the magnetic resistance will be eliminated. “I don’t have any comment at this point in time… it’s too premature at this time,” said Tesnic founder Horia Nica when contacted by phone.

I’m mentioning all this stuff because I think it’s important to remember that the renewable technologies we see being deployed today aren’t necessarily representative of what we’ll see, say, in 10 years. People seem to appreciate this point more with solar technologies, but not with wind — that is, it’s just a big windmill, right? For all the limitations of wind energy, mostly related to its intermittency, the technology behind it can and will significantly improve. As it does, it will hopefully silence more of the anti-wind folks and inspire electricity system planners who, to date, have approached wind with a skeptical eye.

Lancaster won’t go into much detail about this, preferring to wait until it has filed all its patents. But CEO Daniel Kenway says the plan is to take knowledge and expertise in the Alberta oil patch, as well as manufacturing capabilities, and apply them to wind-energy systems. Intriguing. He also says a first project, partly funded by Sustainable Development Technology Canada, will demonstrate a 1-megawatt turbine with a 2-megawatt-hour storage capability. After which the company plans to scale up by “orders of magnitude.” Kenway says two configurations are possible: storage paired to a single turbine, or a larger-scale storage system paired with clusters of turbines. The latter, obviously, would prove more economical because of economies of scale. But he says the single-turbine storage system could prove useful in remote communities that are dependent on diesel generators. 

As Kenway told me in an interview (and this comment wasn’t in the column), “If you choose your components correctly, it turns out it’s possible to store as much as a few hours worth of energy at the side of the turbines. How we do that I would leave as a secret for a little while. But the notion is that in the end all of what we’re using are elements of technology already commonly found in Alberta. It’s not like we’ve discovered some new vanadium cell or some speculative thing. It’s a case of using good engineering principles and novel integration.” The only detail he gave is that the initial stage of the energy storage conversion process has to do with pressurization in a hydraulic circuit. Beyond that, we’re left guessing.

The result is dispatchable wind energy, and the goal is to achieve the same degree of reliability and efficiencies as found with coal or nuclear plants. Kenway says with economies of scale means the cost of the storage would be about 10 per cent of the cost of the turbines, and capital efficiency could reach about 85 per cent. “When you start looking at how much money you spend on the means of energy production, versus how much money you spend on storage, and how you allocate your capital ratios, that interplay (let’s you) effectively put most of the grid on renewable energy,” he says.

T. Boone Pickens may be interested in this one. Lancaster is working with the Wind Energy Institute of Canada and the University of Alberta on the SDTC project. One of the most interesting aspects of its planned storage system is the fact that it can be retrofitted to existing turbines or wind farms. In other words, if the company’s system works as planned at the costs forecasted, the tens of thousands of wind turbines already in operation around the world can be coupled with storage.

Now wouldn’t that be wonderful?