The failure of green-energy policies throughout Europe provides an important lesson for Canadian politicians – especially Ontario Premier Dalton McGuinty and his fellow Liberals, who have rushed headlong into green alternatives such as wind, solar and biofuel with as much enthusiasm (and taxpayer money) as any government in North America.
In less than a decade, Germany has given power companies and consumers $130-billion in subsidies, mostly to develop a market for solar energy. Despite all that cash, solar electricity still accounts for only 0.3% of Germany’s power supply. Because only some of that total has been covered by taxpayers, and the rest has been passed on to all electricity consumers, the cost of German green-power subsidies will add nearly $300 to the average German family’s power bill this year alone. For industrial power consumers, the added costs can run into hundreds of thousands of euros per year. Philipp Rosler, the federal minister of economics and technology, warned earlier this month that the cost of green power was a “threat to the economy.” As a result, the federal German government is looking to get out of the subsidy business, and the German solar industry is gasping for air.
Without subsidies, most forms of renewable energy would be unaffordable, both for power companies to produce and for consumers to use. Solar power is at least four times as costly as electricity produced in coal-fired power plants. Wind power is more than six times as pricey. And neither wind nor solar power is as reliable as electricity produced using fossil fuels. On calm or cloudy days, it is still necessary to generate vast amounts of conventional energy to compensate for the missing alternate sources.
Its rush to adopt alternative energy sources also has increased Germany’s reliance on foreign electricity: German purchases of power from nuclear plants in France and the Czech Republic have risen over the past five years, and are projected to rise again in the next five.
All of this might be worth it if Germany really were decreasing its output of greenhouse gasses. Yet an analysis performed by Slate magazine concludes that all of the billions Germany has spent on solar energy will cut that country’s greenhouse gas output by only about 1%, enough to slow man-made global warming by just 23 hours over the coming century. Climate Armageddon will arrive on a Wednesday rather than a Tuesday in the year 2100.
To put this analysis in dollars and cents, consider that Europe has a carbon trading market in which companies seeking permits to emit more carbon dioxide can buy credits from companies that are not producing their quota. At the moment, a ton of CO2 is selling for $9. But according to Slate, the cost to German taxpayers and consumers for each ton of CO2 reduced through green-energy subsidies is more than 100 times that amount: at least $1,100.
In Spain, too, the government is looking to end green-energy subsidies. There, the government has spent at least $25-billion over the past five or six years covering the added costs of solar and wind energy. Power rates are regulated, meaning consumers pay a fixed rate for electricity as set by a government power commission, and no more. When the actual cost of producing energy entering the grid rises above the regulated price, the national government picks up the added cost. For wind and solar power, those added costs have run to tens of billions of euros over the past half-dozen years.
And that’s not all. Two weeks ago in Britain, more than 100 government MPs publicly demanded the Tory government end or at least “dramatically cut” the $700-million in annual subsidies paid for wind farms because the unsightly turbines are expensive and produce very little power – less than one-half of 1% of Britain’s total consumption.
Ontario’s frightfully expensive green-energy campaign will almost certainly go the way of its European forbearer. The only question is how much money gets wasted in the interim.
Mr. McGuinty’s Ontario government has abandoned most of its eco-power initiatives already: Over the past 18 months, it has announced it won’t stick the provincial landscape full of giant wind tower turbines, and it will orphan the small-scale solar-panel farms it encouraged landowners to build because there is no economical way to get the power they generate into the provincial grid. About the only part of its strategy that remains is the higher power prices needed to cover development of the alternate sources that have already gone ahead.
If the Ontario government were to stop now, the province’s consumers would still likely have to pay power costs 20% to 30% higher than in 2008 – the year before the Green Energy Act – for the rest of this decade, just to pay for the failed initiatives to date. Ontarians should tell their government to take a lesson from Europe: It’s time to awaken from Dalton McGuinty’s misguided green dream.
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