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The Doug Ford government’s renewable energy policy revolves with the regularity of a windmill. First, wind and solar were out. Then they were briefly back in. Now they seem to be out again, although not necessarily.
Many will remember that Ford campaigned against the Liberals’ Green Energy Act, the one that saddled Ontario with over-priced wind and solar power. Once elected, he cancelled 750 pending green power projects. The move cost taxpayers $231 million, but the government said it would avoid future costs of $790 million. Unfortunately, the province was stuck with existing projects and will continue to bear their high costs for years.
Last December, Ontario made a surprising announcement. It would acquire an additional 5,000 megawatts of renewable energy, roughly doubling the province’s existing wind and solar capacity. It was an approach that Todd Smith, then the energy minister, had been touting. Green energy was back.
At the end of August, new Energy Minister Stephen Lecce offered yet another plan, one that ought to make green energy enthusiasts considerably less happy. Ontario’s new energy procurement will now be “energy agnostic” and will decide on future energy sources based on lowest prices. The expansion could include natural gas and nuclear, as well as wind and solar.
Politically, the new approach is rather subtle. It allows the Ford government to claim it doesn’t oppose wind and solar while engaging in a procurement process that is likely to produce little of either. The plan includes multiple protections for farmland and allows communities to veto energy projects if they don’t want them. More than 150 Ontario municipalities have already said no to wind, one-third of all the municipalities in the province. Together, those provisions will make it tougher for wind and solar projects to proceed.
The new policy has the dual benefit of giving opposition parties one less thing to complain about while making future energy choices on the rational basis of cost. Conveniently, the bids won’t be in until after the provincial election, widely anticipated to be held next spring. That lets the Ford government look green, at least for now.
For those who worship at the Church of Renewable Energy, this new agnosticism is bad news. They argue that wind power, which is far more prevalent than solar, has significant climate benefits. Further, they say the cost of wind power has come down dramatically, so much so that it’s now cheaper than alternatives. If so, this is the put-up or shut-up moment for the wind industry and its supporters. There is one thing working in wind power’s favour. Ontario has commissioned battery storage facilities across the province. These would enable unneeded wind power to be stored for times when it’s required.
The good news ends there. Wind fans received a new blow this week in the form of a thorough examination of Ontario wind power costs by the Ottawa-based Macdonald-Laurier Institute. The think tank concluded that not only is wind power costly now, it will continue to be costly in the future while delivering minimal environmental benefit.
The report’s author, Toronto economist Edgardo Sepulvada, has done a detailed analysis of the real cost of wind power, taking into account its environmental benefits. As the MLI report points out, wind is only valuable to the extent that it replaces natural gas-generated power. If it is replacing emissions-free nuclear or hydro, as it often does, there is no net environmental gain.
Ontario is currently paying $151 per megawatt hour (MWh) of wind power. Ontario taxpayers subsidize 70 per cent of that price. Power users pay the rest. Subsidies to keep wind and solar power superficially affordable for power users cost the government $3 billion a year. In total, Ontario will spend $7.3 billion this year on various electricity subsidies. The subsidies began in 2017, under the Liberals. Sepulveda notes that no other provincial government has subsidized power by so much for so long.
To be competitive, wind’s price will have to drop dramatically. Sepulvada estimates that wind would have to be priced at $46 MW/h for its benefits to equal its costs. Ontario expects to pay nearly double that in the next supply procurement.
The full impact of wind power can’t be captured by prices or emissions numbers, however. Wind “farms” and solar energy installations deface the rural landscape and reduce the quality of rural life. That’s of little concern to city dwellers who like to be green, but it’s a real issue for rural Ontarians.
If they are approached by a wind power company, Ontario municipalities should just say no. They would be doing their residents and future generations of Ontarians a favour.
Randall Denley is an Ottawa journalist. Contact him at [email protected]
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