Ontario Makes Sense on Green Energy
One province has finally got it right on green energy. Ontario Premier Dalton McGuinty has just announced a $7 billion deal that will have Samsung commit to a major transformation of the electricity generating system. Samsung will invest in a big way in wind and solar energy as part of a move away from dependence on fossil fuels. Samsung will also make a commitment to develop secondary industries associated with these new green energy sources. Incentives are included in the package to ensure the creation of over 150,000 new jobs. Transmission capacity will be reserved on the grid to ensure that the new green electricity will get to Ontario consumers when they need it.
Contrast this to the approach in British Columbia under Gordon Campbell. Campbell is trying to sell a hopefully gullible public on a plan to subsidize large numbers of private investors to develop hydro power at sites on sensitive rivers and in vulnerable watersheds across the province. These projects, such as the giant Plutonium power project in Bute Inlet, are destroying pristine rivers, salmon habitat, and forested valleys out of the sight of most British Columbians. Valuable licences and other incentives are being offered up by the BC government to the private companies – the venerable BC Hydro is not permitted to develop any of the projects. The biggest problem with the whole undertaking is that it can do little to displace fossil fuels as the source of electrical energy when river runs and lake levels low, but indeed increases the need for fossil fuels during such periods. Under the deals the government has put into place, BC Hydro is forced to pay exorbitantly high prices for energy produced when it isn’t needed (when lakes and rivers are high and Hydro can meet demand with its own large dams), which it must then resell at a large loss, and then it will have to go outside the province for mostly dirty coal fired electricity when the rivers are low, purchasing this power at exorbitantly high prices. These outside purchases are being forced on BC Hydro because the government has ordered the shut down of the relatively clean and efficient Burrard Thermal plant.
The sad fact is the the BC scheme is just a large scale scam to line the pockets of the friends of the government who are getting the permits and licenses for these new, dysfunctional private hydro projects. They get guaranteed high prices for electricity that is not produced when it is needed, and when it is produced must be resold by BC Hydro at a large loss because it all comes when it is not needed; a sweetheart arrangement if ever there was one. And most offensive of all, the whole plan is being “green washed” by the claim that it is a green energy plan. Sadly in this it has had the support of a couple of high profile BC environmentalists who one has to assume do not understand the admittedly complex scheme.
The Ontario plan is completely different. There will be no-payoffs to private interests who are friends of the government for unneeded power. The new wind and solar plants will to together produce power when it is needed in a planned, balanced, systematic way. Old dirty energy will be replaced by new clean energy. There are no complex transfers of money to friends of the government at the expense of provincial ratepayers. Spin-offs and new jobs will be assured. And there is no green washing, because the plan, unlike the BC one, really does, replace old dirty energy with clean energy.
Predictably the self serving private power producers who have lined up at the trough in BC are complaining about the Ontario plan. If nothing else, their criticisms confirm that the scheme they are pushing have nothing do do with green energy. If it did they would be demand that the BC governments adopt real green energy plans like the Ontario one. The fact is that the flawed BC plan is the fault of a patronage obsessed government and a corrupt arrangement that does nothing to advance green energy. It is time that energy specialists, the media, academics, and environmental groups debunk the nonsense of their claims. Until that happens all of these groups must share some of the blame for the collaboration in the green washing that has accompanied the BC plan (the worst offender is the Vancouver Sun, which has virtually become the public relations arm for the BC plan. So much for a critical, watchful media).
Ontario is to be congratulated for going green in a meaningful and in many ways radical shift in direction. What a refreshing change.
Finally, a government in Canada has done something significant and even radical.
I have been puzzled by the clamour from environmental interests favouring Gordon Campbell’s initiatives on token carbon tax while granting private interests unlimited access to public water ways for profit. McArthur puts his finger on the difference between a plan in the public interest and the faux environment policies of the BC government.
Let us hope that Ontario’s plan will be assessed with the same enthusiasm that it will garner the criticism of private interests that want access to public resources for private gain.
Hi. I’m curious what your take is on the new Samsung / South Korean deal. From what I understand, the deal involves earning a higher price for the power they produce than other (smaller) Ontarian producers. You said in your blog that “There will be no-payoffs to private interests who are friends of the government for unneeded power… There are no complex transfers of money to friends of the government at the expense of provincial ratepayers.” The media here in Ontario is criticizing the McGuinty gov’t for giving a sweet deal to the South Korean consortium at taxpayers expense. I want to believe its better than that. Any insights?
This makes for interesting debate, Doug, but there are a couple of key things that you seem to have missed:
(a) The Ontario Green Energy Act provides for a very high level of subsidy to the power producers – that’s the way that feed-in tariffs work.
Here in British Columbia, BC Hydro paid an average of 8.5 cents kWh in its recent Clean Power Call. In Ontario, under the Green Energy Act, the Ontario Power Authority will pay:
44 – 80 cents kWh for solar PV
12-13 cents kWh for run-of-river hydro
10-19.5 cents kWh for biogas power
13.5 – 19 cents for wind power
13 – 13.8 cents kWh for biomass power
10.3 – 11 cents kWh for landfill gas power
(See http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260)
These prices increase by 0.4 to 1.5 cents kWh for Aboriginal and community-owned power. See
http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10380&SiteNodeID=1103&BL_ExpandID=260
Why do you call the BC Hydro prices “exhorbitant”, while praising the Ontario scheme, when the BC Hydro prices are all much lower than the Ontario prices? It doesn’t make any sense.
The BC Hydro price is a market price, that requires no subsidy. It’s the Ontario prices which are deliberately NOT market prices, which require a subsidy.
(b) The private sector is 100% involved in providing the power, every bit as much as in BC – there’s no difference on that front. Why are the private power producers “self-serving” in BC, but noble heroes in Ontario? It makes no sense.
(c) For the run-of-river power in BC, BC Hydro only pays only 5 cents kWh during the freshet period, April-June, precisely because – as you say – it does not need the power then; this is to minimize the risk that BC Hydro will have to sell the power for less than it pays for it.
If I was the Premier of Ontario, I’d do exactly as they have done – so make no mistake, I’m a great champion for their cause. But here in BC, if we adopted a Feed-in Tariff, the new power generated would primarily be for export, since we are close to having 100% green power already. This is why it is difficult for BC to adopt the Ontario approach. It’s one thing for Ontario rate-payers to subsidize their own province getting more green power.
But would BC residents accept the same, knowing that the power was destined for export?
I’m glad you praise the Ontario scheme, since it is – as you say – meaningful and in many ways radical. But I don’t understand how you can use the Ontario Green Energy Act to attack the BC green energy approach, since they both empower the private sector IPPs, yet Ontario pays up to ten times higher prices – as a subsidy- than BC does.