Q – What’s wrong with the Ontario Green Energy Act

The Ontario government’s Green Energy Act (GEA) has caused a number of individuals and organizations to have a closer look at the implications, for example the Ontario Bar Association, Consumers Council of Canada, Fraser Institute, CD Howe Institute, Clean Affordable Energy Alliance, London Economics International for the Ontario Conservative Party, the eminent Dr. Robert McMurtry, Tom Adams a prominent independent consultant on energy matters, Association of Municipalities of Ontario, and Wind Concerns Ontario, representing 29 regional groups. Although often expressing approval for the intentions, these and others are raising concerns, a brief summary of which is:

Behind a façade of energy efficiency, conservation, more wide-spread use of other renewable energy sources, and job creation, the outcome (intention?) will be an emphasis on industrial wind plants. A consequence will be movement towards Danish and German electricity prices, which are among the highest in Europe and multiples of existing Ontario prices.

Germany is touted as a model that we must emulate, or be left behind in the fight against climate change and the development of 21st century industries. The reality is that Germany is a “basket case” with respect to electricity generation. At the beginning of this decade, Germany was below the European average in the use of renewables, and its electricity generation the largest producer of CO2 emissions of all its industry sectors. The German Renewable Energy Act was passed to address this. It featured Feed In Tariffs (FIT), which are premium prices to be paid for renewable energy electricity sources, and a core element of our GEA. The result of such policies (focussing on means rather than ends) was to encourage substantial industrial wind plant implementation. Today, after a monumental effort in installing these, it now obtains only 14 per cent of its electricity from renewables (5-6 percent each for hydro and wind and the remainder mostly biomass), and wind power has made little, if any, contribution to CO2 emissions reductions.

In summary, Germany was, and remains, an ailing entity in the generation of electricity, for which a radical and experimental treatment was administered, which does not work.

Canada obtains almost 60 per cent of its electricity from renewable sources, and Ontario is at 22 per cent (going to 31) by 2015. In Canada, electricity generation is a distant third in CO2 emissions, behind the transportation and industrial sectors. We produce about the same amount of electricity as Germany but with 60 per cent less CO2 emissions. We are a relatively healthy entity for which the same failed, radical and experimental treatment is being prescribed (in part by Herr Scheer, the chief architect of Germany’s very questionable energy policies). If we are serious about combating climate change, we should focus on the transportation and industrial sectors.

In Germany (and Denmark) a positive result of the emphasis on wind power is the creation of jobs. As they have both quickly saturated their domestic markets, they are now dependent upon international markets to sustain these. This is endangered by the soon-to-emerge presence of the U.S, China and India in these markets.

The Ontario government claims that commitment to renewable energy will create 50,000 jobs here within three years. There are independent projections that support this, but it is important to understand the breakdown of these jobs. Most will not be directly “green”, or net new jobs, and there has been some controversy about this in academic circles. Do not be distracted by this, because it is the relative breakdown between energy efficiency and conservation and individual renewable energy sources that is important.

Within renewables, wind contributes only 14 per cent of the possible jobs, and in 3 years, this amounts to less than 7,000. About one-half of these would be dependent upon export markets and some proportion of the remainder for small-scale wind turbines. So the total for industrial wind, assuming manufacturing plants in Ontario, would be about 2,500 jobs. Because we would quickly saturated our domestic market, this job group would not experience anywhere near the growth in subsequent years as all the other conservation and renewable energy opportunities. Finally, the notable number is that energy efficiency and conservation would produce about four times the number of jobs of all renewables combined.

There is much made about establishing a smart grid infrastructure in the GEA, which is implied to be needed to accommodate the planned large amount of volatile industrial wind. This is an incorrect view of smart grid concepts. Smart grids will be based more on networks of micro-grids incorporating small-scale, local, independent generation means that support the immediate community’s or organization’s demand, providing a high degree of independence and reliability, with intelligent interconnection to the larger, also improved, grid backbone. They will utilize new consumer devices, communications and new management technologies, many of which are not yet developed. Smart grids must include local electricity storage capabilities to accommodate otherwise unreliable renewable energy installations, especially wind and solar, as this is one means of obtaining useful electricity from these intermittent sources. For the foreseeable future, storage is confined to small-scale installations, and this is where the overwhelming emphasis should be. Unfortunately, the GEA will promote industrial wind plant development, which in the absence of adequate industrial-scale storage, requires an equal amount of shadowing balancing gas turbine capacity to render its output useful.

In any event, fully functional smart grid deployment will take 30-40 years to develop and evolve, and deployment of small-scale renewables in parallel will be consistent with this. As industrial-scale storage capabilities are also in the distant future, other generation technologies that have more of the desired characteristics will become available, by-passing any present and future need for industrial wind plants.

Last updated May 16, 2009

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