Must we despoil Ontario’s environment in order to save it?
On Feb. 8, the Environmental Review Tribunal will consider an application to build nine large wind turbines on one of the most scenic points in one of Ontario’s most scenic places.
Ostrander Point Road bisects the small peninsula leading to the Prince Edward Point National Wildlife Area. The peninsula is an open area of meadows and wood thickets, bounded to north and south by the Lake. It’s a true beauty spot, but it also happens to get a lot of wind. Which is why the Ministry of the Environment has approved a project to generate up to 22.5 megawatts of electricity from wind turbines 200-300 feet tall.
This project is the first of many planned for Prince Edward County. This uniquely beautiful region of Ontario – now enjoying an economic revival thanks to winemaking, artisan farming and tourism – is to be spiked with turbines to realize the McGuinty government’s green-energy ambitions.
Moving Ontario off coal is a laudable aspiration. But moving to power that flunks the market test is no boon to the environment. Money is a limited resource, too, and money that is wasted on projects that don’ t make sense is money unavailable for other purposes: hazardous waste clean up, water purification, land conservation.
Wind energy continues to flunk the market test. Ontario buys wind energy at a price 50% higher than it would have to pay for electricity from natural gas. (A new natural gas facility can make money selling electricity at 7-8 cents a kilowatt-hour. Ontario buys newly installed windpower at prices of about 11 cents per kilowatt-hour.)
Worse, unlike solar power, windpower is not likely to become more economic in the future. The main items in the cost of wind are the cost of acquiring the ground underneath the turbines, the cost of wiring turbines to the grid, and the cost of maintaining those wires – in other words, land and labor. Solar power can at least promise to slide down a cost curve. Wind can’t.
Yet Ontario already has installed 1,500 megawatts of wind capacity and is committing to more. Why? There are cheaper and less landscape-blotting ways to go green. But a series of bad decisions in the past have pushed Ontario into a cul-de-sac demanding more and more bad decisions in the years ahead.
The cheapest and cleanest of all energy sources is hydropower. That was true in the past, and it remains true now. Canada has abundant hydro potential – and in fact Manitoba and Quebec have abundant hydro for sale right now.
But if Hydro is cheap in the long run, it requires big investments in the here and now: big investments not only in dams and other facilities, but also big investments in the transmission wires to move the electricity to market.
Those investments must be financed by debt, and Ontario flinches from piling new debt atop its terrifying mountain of existing debt.
Here’s the real beauty of windpower from the McGuinty government’s point of view: The higher cost of wind electricity can be hidden from view, tucked into Hydro consumers’ bills, hidden by gimmicks that few people notice and fewer people understand.
In exchange for receiving a higher price for his power – a much higher price – the wind power producer shoulders the capital cost of financing new electricity capacity. The transaction has the same loan-shark logic as “rent to own” vs. borrowing to buy: You pay more over the life of the product in return for not tapping your dwindling credit.
The bad decision is pushed along by a heavy seasoning of ideology: wind good! dams bad!
And of course lobbying and interest-group politicking exert their own sway over Queen’s Park: A power source that costs 50% more than its next competitor can always find a few hundred thousand dollars to hire and reward friends and supporters.
Wind enriches lobbyists. It satisfies certain varieties of environmentalists. And it protects the McGuinty government from awkward financial realities. That’s a win-win-win all around, except for the over-charged power customers (who won’t know what’s happening until it’s too late) and the people who live upon the brutalized landscape of Prince Edward County (and how many of them – us! – are there anyway)?
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