The Green Energy Act and feed-in-tariffs enticing wind developers to Ontario have caused serious issues. One of these is the rising rates of electricity.
The Act requires that wind energy must go on the grid first whether it’s needed or not; inflated feed-in-tariff prices are paid for it and if there is an excess, it is sold to neighboring jurisdictions, often for a loss and sometimes paying them to take the excess.
Fifty million dollars was lost from January to May 2011 and more millions since then. We are paying wind developers $135 per mega watt whether we use it or not!
Our hydro rates will increase 46% by 2015 with over half of that cost due to the feed-in-tariff, as the Ontario government admits. We are now paying six to eight cents per kilowatt hour (kWh) for electricity while Denmark is paying 46 cents/kWh for their electricity, which is now 20% powered by wind.
In Denmark, massive subsidies and having to sell two-thirds of their wind power to Germany, Sweden and Norway below market rates have caused Denmark to now have the most expensive electricity in the developed world. Sound familiar?
In an article in Financial Post on October 5, Glenn Fox, a professor of natural resource economics, and Parker Gallant, a retired banker, both whom are directors of Energy Probe, pursued a study to cost out the Green Energy Act’s embedded costs focusing on the numerous directives the Minister of Energy, Brad Duguid and his predecessor had issued to the Ontario Power Authority.
Their study concluded that: “for the average ratepayer, an annual electricity bill will escalate from $1,700 per year to $2,800 by 2015 and by the time the renewables envisaged in the Long Term Energy Plan are largely in place (expected in 2018) an average rate payer will be paying in excess of $4,000 annually- well over a doubling. Put another way, Ontario’s ratepayers will be paying in excess of 40 cents per kWh.” Ontario can’t afford to go the way of Denmark.
Would you buy a car that worked only 30% of the time? Because that’s how intermittent wind energy is. Other sources of power have to be at the ready to power up when there is no wind and Denmark has not reduced its CO2 emissions due to the addition of wind power as coal-fired plants back them up. In southern Ontario, much of our CO2 pollution comes from the Ohio Valley, where a group of coal-fired power plants are located. However, the plan in Ontario is to convert our coal-fired plants to natural gas.
Ontario has the highest industrial electricity rates in Canada now; more than double those of Quebec and Manitoba. Our manufacturing has already been affected by rising electricity rates. What will happen to our remaining industries when rates double?
The rising cost of electricity is only one serious issue that the Ontario government’s Green Energy Act and feed-in-tariff program for renewables are causing, but it is one problem that will negatively affect everyone.
Ontario is headed for the same demise as Denmark but it’s not too late to get this right in Ontario. Scrapping the Green Energy Act and feed-in-tariff would help restore our democratic rights; return the energy system to the competitive market of supply and demand, which is sound economics; help our manufacturing sector; and keep all our electricity rates from soaring out of reach.
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