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Ontario’s Green Energy Act sparks spirited debate

NORTHUMBERLAND – The Green Energy Act, with its goal of continuing to increase alternative energy as Ontario faces the need to update its power-generating and transmission infrastructure, is being hotly debated by members of the public, municipal councils, provincial politicians and those in the business of creating power. The following are two sides of the energy story, looking at what the future holds and the directions Ontarians might take.

In support of the act

The Green Energy Act, with its Feed In Tariff Program (FIT) goal of creating 10,700 megawatts of green power over the next 20 years, can’t be evaluated in isolation of the fact that the existing generators of power in this province need replacing and/or refurbishing, as do the transmission lines that deliver power to the people throughout Ontario, says green energy proponents.

Ontario has managed to overcome the shortage of power it experienced about 10 years ago and as it goes forward “needs to keep the balance,” says Bob Delany, parliamentary assistant to Minister of Energy Bob Chiarelli.

What that means is bringing new green energy into the mix, as repairs are undertaken and new power facilities constructed, he said in an exclusive interview with Northumberland Today.

“As Ontarians, we’ve got a lot to be proud of,” he said, referring to what has already been accomplished.

The reduction of greenhouse gases is taking place faster than planned with the last coal-fired generator to be phased out a year earlier than scheduled, while 5,000 kilometres of new transmission lines have been put in place to help carry traditional and new power sources, solar and wind-created power. Green energy has developed about 30,000 new jobs during the past six or seven years, Delany said.

Wind turbines, for example, are precision engineered and result in high value added jobs, he said.

“The rest of the world is beating a path to Ontario’s door to see how renewable energy (is being developed),” he added.

Ontario’s energy mix has a new balance and there is no reliance on one source of power, Delany said, referring to the staples of nuclear and hydro electric power.

Over the past 10 or so years, hydro bills have risen about 3.5% per year and the best estimates are that it will continue to rise at that rate over the next 20 years, Delany said.

He takes this position even with the amounts being paid for 20-year solar and wind contracts being let by the Ontario Power Authority and the heavy criticism against those contracts levied by opposition MPPs and even private individuals.

When Rich Tyssen of Cobourg (who has both roof and ground-mount solar panels operating at his home and a nearby property, and who is part of a group attempting to establish community-based solar projects) was asked if the backlash against the Green Energy Act is affecting the latter projects, he replied, “Not for us.”

The Northumberland Community Power group is awaiting a response from the Ontario Power Authority on its application, expecting for an answer in late May or June. With approval, the marketing of community “bonds” to finance the proposal will be the next step, he said.

Tyssen is not only a supporter of green energy but of conservation. His home is a statement to that approach, as is his use of cycling as much as possible, to reduce greenhouse gases.

Like the Ontario Environmental Commissioner Gord Miller, Tyssen says the cheapest source of power is conservation.

“That’s worth investigating…,” he said. “Let’s do that first.”

Conservation can create power at 2.5 cents to 4.5 cents per kilowatt-hour, he said.

Miller estimates that at about three cents per kilowatt-hour compared to the 10 to 11 cents for the cost of power on our hydro bills. At this time, nuclear power is about 6.5 cents per kilowatt-hour and natural gas about 6.5 cents.

The public at large doesn’t really understand the power generating and transmission system in Ontario, Tyssen says.

Some are taking their views from the very vocal opponents of green energy.

But energy generation and transmission is very complex, he says.

Tyssen has undertaken an analysis that begins with a look at the need, over about the next 10 years, to “rebuild or retire” up to 43% of Ontario’s generating facilities.

“No matter how one attempts to spin it, rebuilding, refurbishing, and replacing at least some of the worn-out systems will be a costly process whoever runs the government, and regardless of the options we choose,” he writes in the analysis.

He also points out that choices must be made in the midst of climate change and the need to reduce the burning of fossil fuels.

“To avoid catastrophic change (over two degrees Celsius), you must emit only about 565 gigatons of CO2 (carbon dioxide) between now and 2050,” he writes. “There are about 2,795 gigatons of C02 in proven fossil fuel reserves. This means that we can only burn doubt 20% of proven (already discovered) reserves.”

To reach that target, Canada needs to reduce emissions by at least 7% annually, Tyssen writes, and that means coal and gas should not be the “fuel choice for electrical plant production.”

The options begin, in his view, with conservation, and his criticism that this approach is not being pursued.

Another option – power from natural gas – would generate “significant greenhouse gas emissions” and pricing carbon at “$200 per tonne” would add about 10 cents per kilowatt-hour to the price of electricity, Tyssen estimates, without any of the adverse effect from fracked gas.

He prices the cost of nuclear power plants, assuming “historical overruns… in the 19 to 27 cent range.”

Another option is renewable energy. “Through FIT 2.0 contracts, based on a blended average rate reflecting current FIT contracts, is about 21 cents. FIT prices are rapidly falling. The FIT 2.0 price for wind power, for example, is currently 11.5 cents per kilowatt hour. The blended average FIT price has fallen over the last two years from FIT 1.0 to FIT 2.0 by about 21%, and is continuing to fall,” Tyssen states.

“It is likely that blended FIT prices will soon be less expensive than electricity from both gas-fired plants (including the cost of greenhouse gas emissions) and nuclear plants.”

Tyssen’s analysis does, however, note the problem of wind and solar production’s “intermittency” and expense of storage systems and a “smart grid.”

No one has a power system that is 100% based on green energy but Germany is moving in that direction, he states.

Importing power from Quebec has been discussed and some groups, like the Clean Air Alliance, believe that Ontario’s wind and solar and Quebec’s hydro-electrical systems could be co-ordinated, Tyssen writes.

The bottom line in his view: “There is no quick fix.”

But after setting environmental limits (such as as the cap-and-share approach) “we must use our ingenuity and creativity to design a sustainable society which provides a good life living within these limits.”

The other side of the story

From private individuals to municipal councils, there is a growing backlash to the cost and direction of the Green Energy Act.

Last week, former security company CEO Stew Henry made a presentation to Hamilton Township Council predicting that the 20-year green-energy contracts being let by OPA, if the generation goal of 10,700 megawatts of green, renewable energy is reached, would cost taxpayers significantly more than the $58 billion he previously predicted based on an 80/20 split between wind and solar.

Given the state of the economy, this is an extra cost that could be reduced by going another route entirely, he said.

Henry urged that council petition Ontario Premier Kathleen Wynne to meet with her Quebec counterpart to negotiate an agreement to have Quebec use its hydro surplus to meet Ontario’s green needs, instead of letting more OPA contracts. He asked the local council not to support the provincial direction of the Act, and to demand the Ontario Auditor General review the existing contracts for expensive cancellation clauses, and if found, cancel them.

Council heard the presentation and, in conjunction with a report on wind turbines heard at its corporate services committee meeting of March 6, directed township staff to arrange a meeting to hear from both sides of the debate.

“We need to hear the other side,” Mayor Mark Lovshin said.

During the March 6 committee meeting, a recommendation was also made to hold a public meeting to see if township residents wanted to “be a host for large scale wind turbine/solar energy projects” and to possibly identify the municipality as an “unwilling host” for them.

No vote was taken about it at the committee of the whole level and presumably it will be discussed after the upcoming meeting at which a professional with the OPA and/or Green Energy Act will be present to provide the flip side of the green-energy story.

Nearly a month ago, during the Ontario Good Road Conference, Hamilton Township Deputy Mayor Isobel Hie and Councillor Donna Cole met with Energy Minister Bob Chiarelli and 10 other municipal representatives to express concerns about the Act and contracts being let though the FIT Program.

In the Feb. 27 presentation to Chiarelli, Cole reiterated the same financial concerns raised by Henry.

She also raised concerns about the changes to the Act’s regulations whereby wind and solar proponents seek municipal letters of support to gain points on their applications.

In a written document presented to the energy minister, Cole stated that in their view “the Ontario government has not considered… Hydro Quebec’s excess generating capacity” as an alternative, green energy source for Ontario; the ” true cost of the FIT Program’s green energy”; the Dec. 2012 World Trade Organization ruling against Ontario’s requirement for specified Ontario content in alternative energy infrastructure; “the need for municipal involvement in the FIT Program Application”; as well as how wind turbines affect the health of Ontarians.

Chiarelli replied with a standard thank you letter but did not respond to the specific questions put to him, Cole said.

Meanwhile, shortly before Cole’s presentation to the energy minister, Guelph University professor Ross McKitrick wrote the Ontario Energy Board quoting the Ontario Auditor-General’s 2011 report which warned that “no comprehensive business-case evaluation was done to objectively evaluate the impacts of the billion-dollar commitment” of the province’s direction with the Green Energy Act.

At Page 89 in the 2011 report, wrote McKitrick, the Auditor-General stated that “wind and solar renewable power will add significant additional costs to ratepayers’ electricity bills. Renewable energy sources, such as wind and solar, are also not as reliable and require a backup from alternative energy-supply methods such as gas-fired generation…. A typical residential electricity bill would rise about 7.9% annually over the next five years, with 56% of the increase due to investments in renewable energy.”

McKitrick also noted in his correspondence that surplus wind power is generated when Ontario’s peak periods are over and then is “dumped into the export market” sometimes requiring taxpayers to pay some other jurisdiction to take the excess.

“These costs must ultimately be borne by ratepayers,” McKitrick writes.

Most recently Alnwick/Haldimand Township Council was asked not to support two wind turbine projects near Grafton and Centreton by a local grass roots organization, and it agreed, lobbying other Oak Ridges Moraine municipalities to do likewise.

At this time, however, final decisions on if a project will go ahead, and where, are at the provincial level of government under the Green Energy Act.