(May 27, 2011) Ian Harvey of the Huffington Post takes a look at how would be premier Hudak’s proposed policy changes will affect renewable energy in the province of Ontario. The entry notes Energy Probe’s conclusions that the FIT scheme is a “disaster” as it breeds reliance on nuclear energy on days when the weather is not conducive to renewable energy generation.
Canadian politicians know well enough to avoid hot buttons like religion or tax hikes. So why then is Ontario Progressive Conservative Leader Tim Hudak trash talking one of the biggest motherhood-and-apple-pie issues of the last decade – green energy?
With wind turbines sprouting like white mushrooms across the Ontario landscape and solar panels cropping up on homes, schools and factories, promising renewable energy for generations to come, his platform to scrap the Feed In Tariff program (FIT) which pays up to 80 cents per KwH for roof top solar electricity and to dismantle a $7-billion deal with global conglomerate Samsung C & T, would seem like political suicide.
Instead, the strategy appears to be resonating with voters and has sent the sustainable energy sector into speed wobble. It will be front and centre at this weekend’s Ontario PC Party convention, where Hudak will unveil his platform.
As it stands, more than half of Ontario’s power is generated by four nuclear facilities, with hydro producing about 25 per cent on any given day, followed by natural gas, which usually only kicks in on high demand days. Coal, which is being phased out, accounts for less than 2 per cent. Wind’s contribution is less even than coal yet accounts for just over three per cent of the steadily rising residential electrical bill.
Between debt retirement charges, higher rates, smart metering that charges a premium during peak times and the harmonized sales tax as of July 1 last year, Ontarians will be paying 42 per cent more for electricity by 2015 compared to five years earlier, according to government estimates.
With voters still reeling from the global financial crisis – and with an election set for Oct. 6 – Hudak has seized on the fear card, cannily connecting the Liberal’s Green Energy Act to rising rates and drawing a straight line to the family budget.
“Taxpayers like green energy in principal but not paying for it,” said political consultant and commentator Gerry Nicholls. “It’s what hurt [former federal Liberal leader] Stéphane Dion. When he proposed a carbon tax, he made it easy for the Tories to paint it as a tax grab and it stuck. Politics is finding something that already resonates with voters and then exploiting it.”
Hudak is taking a risk on green energy, but it’s a calculated risk, observed Nicholls.
“Generally people go with the status quo, because with change comes fear,” he said.
That fear has helped unite voters of all political stripes, driving grassroots resistance in groups like Wind Concerns Ontario, which successfully fought plans for a $700-million wind farm two kilometres offshore in Lake Ontario. The government backed off by declaring a provincial moratorium on offshore wind farms.
“Green energy is not a sacred cow any longer, there’s been a massive shift in public opinion,” says Wind Concerns president John Laforet, a former Liberal riding president who’s made life miserable for members of his old party by insisting that wind turbines are a visual pollutant and health risk to those living nearby, despite their “green” moniker.
Laforet, who claims Wind Concerns has two million supporters, is touring the province, working to stop onshore wind turbine developments in rural communities.
But it is Hudak who has landed a body blow to the green energy sector by hitching his wagon to the anti-Green Energy Act movement.
“Hudak has politicized energy and it has become partisan issue,” said Kristopher Stevens, executive director of the Ontario Sustainable Energy Association, whose 1,500 members comprise private citizens, co-operatives, farmers, First Nations, businesses, institutions and municipalities. “What’s so surprising is that conservation and renewable energy are such motherhood issues and they’re being attacked. It’s crazy.”
There’s room for improvement, Stevens acknowledged. While rates are scheduled to be revisited, they could be reviewed more quickly as sustainable power ramps up.
The Liberals counter that Hudak’s plans are “reckless” and will throw the province’s economic recovery into chaos. They note that the Green Energy Act created 13,000 jobs by the end of 2010 and will create a total of 50,000 jobs by the end of next year, establishing Ontario as a manufacturing centre for renewable energy technologies while allowing the province to phase out coal-fired generation.
The province’s controversial deal with Samsung C & T, for instance, guarantees the company will open four manufacturing plants in Ontario for solar and wind products in exchange for guarantees to supply turbine technology to wind farm developers and electricity to the province’s transmission grid – at premium rates.
Premier Dalton McGuinty launched the Green Energy Act by attacking and politicizing “dirty coal” as the source of pollution and soaring health care costs.
However, staking the future on wind and solar was a bad idea, said Dr. Bryne Purchase, an adjunct professor specializing in energy policy at the School of Policy Studies at Queen’s University.
Last fall he hosted a conference at Queen’s Institute of Energy and Environmental Policy on TheFuture of Coal in Ontario which concluded that the McGuinty Liberals pursued an anti-coal policy without any independent analysis of “the feasibility, of the timelines, or the reasonably estimated economic or environmental costs and benefits of such an initiative compared to alternative policy approaches,” Purchase summarized in his report.
“Unfortunately but predictably, all subsequent government analysis has been done simply to justify the initial political decision already taken.”
Even groups which might be expected to align along green energy policy initiatives have diverged. Energy Probe, a long standing opponent to the growth of nuclear energy, has attacked the ditch-coal-for-FIT-scheme as a “disaster” because the net effect is more reliance on nuclear power for back-up on the days the wind doesn’t co-operate – which is more than 70 per cent of the time.
Hudak’s posturing, of course, may be nothing more than pre-election rhetoric, as some pundits suggest. It will be difficult, if not outrageously costly, to undo contracts which have already been signed, including the much maligned Samsung deal.
Samsung C&T responded to Hudak’s recent green energy musings by noting the company will spend $100-million to create 1,800 jobs. “Samsung C & T would expect any potential future Government of Ontario to honour the commercial agreement signed in January, 2010,” the firm said in a statement.
To which Stevens added: “What? Are they (Hudak) now saying Ontario isn’t open to investment? That it doesn’t want to be a world leader in sustainable and renewable energy?”
More worrying for the nascent industry is that without the FIT incentive, or with a reduced subsidy, the business model will collapse, taking millions in private money down with it.
“And they (critics) make it sound like everyone is getting 80 cents a KwH under FIT when it’s only rooftop solar under 10 KwH,” Stevens said. “It’s not like it’s going to save any money because the province only pays when the power is delivered.”
Scrapping FIT is also short-sighted, Stevens argued, noting investors and others have ramped up construction of sustainable technology factories based on the revenues under the program.
Stevens said other related technologies to store peak production power when demand is low are also coming online and that widely distributed wind and solar generation will lessen the impact of calm and overcast days.
Water, for example, can be pumped into storage and released during peak demand to drive turbines or frozen into ice overnight and used to cool buildings during the day, lessening reliance on traditional, more power hungry air conditioning. Lake water heating and cooling systems have shifted power demands in places like Denmark and downtown Toronto, and could easily be expanded across Ontario.
Still, those innovations will require more investment and disruptions in a province where spending is already deep in the red. Wind and solar power may be environmentally sustainable, but they are 20 years from being economically sustainable, even advocates like Stevens will concede.
If Hudak can harness the winds of change blowing around Queen’s Park in the lead-up to the next election, the Green Energy Act may also become politically unsustainable for the governing Liberals.