A recent study of Onario's mixed energy programs, by two concerned and knowledgeable Ontario citizens has unveiled a plethora of hidden costs, mixed directions and puzzling energy directives.
The study and the follow-on report, published in the peer-reviewed Bulletin of Science, Technology & Society documents the embedded costs contained in the provincial government's diverse, some would say 'divergent,' multi-faceted energy programs, under the aegis of the Ontario Power Authority, ranging from the Green Energy Act to the feed-in-tariff (FIT) program, energy conservation plans, the Samsung contract, Ontario content mandates, community power programs, nuclear power generation refurbishment, on-again-off-again offshore wind energy approvals, transmission line expansion, and predicted job creation form the use of energy alternatives.
Ontario's Long Term Energy Plan (LTEP)
The province's LTEP describes how Investments in Ontario are transforming the electricity system. Since 2007, the provincial govenrment has used a formal 20-year planning process to help forecast and meet the province’s electricity needs.
Among the changes which have occurred in the province as the 20-year energy plan unfolds, now in its fourth year of implementation, are the following:
- Upgrades to 5,000 kilometers of transmission and distribution lines
- Implementation of a smart electricity system enabling consumers to have greater control over energy usage
- Closing of coal-fired generation plants
- Predictions of job creation from renewable energy projected to support over 50,000 direct and indirect jobs
The province's LTEP states that Ontario needs to rebuild or create another 15,000 MW of generating capacity over the next 20 years, and also needs to continue to upgrade and update transmission and distribution lines.
Coal-fired Generation Plants Had to Go
Prior to 2003, Ontario’s electricity system was weakening and unreliable. Reliance on coal meant that our electricity sources were polluting and dirty.
Between 1995 and 2003, the electricity system lost 1,800 megawatts (MW) of power — the equivalent of Niagara Falls running dry. Energy infrastructure was crumbling, a shortage of supply caused risks of brownouts, and Ontario relied heavily on five air-polluting coal plants, which were polluting the air - coal-fired generation was having an impact on health, increasing the incidence of various respiratory illnesses.
Over the past seven years, the McGuinty government has made progress in changing the elctricity-generating mix in Ontario, although the greatest proportion of generated power is still provided by nuclear energy (just over 50 percent as of October 2011), with hydro being the second largest contributor.
Energy Mix is Still in Long-term Planning Stage
Today, Ontario's electical power system is cleaner, more modern, and may be somewhat more reliable than in the past, although renewable energy sources such as wind and solar still have a long way to go before they can be considered to be significant, reliable sources within Ontario's energy mix.
The McGuinty government has made electricity cleaner. Ontario is on track to eliminate coal by 2014, the single largest climate change initiative in North America in that timeframe. Coal-fired electricity generation has already been reduced by 70 per cent, and last year Ontario's greenhouse gas emissions from the electricity sector reached their lowest point in 45 years. This is all good news, but at what cost?
LTEP Omits Additional Costs
In a report issued recently, Parker Gallant, a retired banker, and Glenn Fox a professor of natural resource economics at the University of Guelph, focused on renewable energy for wind and solar, and detailed the additional costs to Ontario taxpayers, which are omitted from the LTEP. The study, entitled Omitted Costs, Inflated Benefits: Renewable Energy Policy in Ontario, examines the additional costs to Ontario ratepayers not included in the ministry's LTEP, and which need to be properly accounted for if the real costs of generating energy is to be known by Ontarians. The report also disputes the ministry's claims regarding the projected increase in ratepayers' electricity bills to 2015, which forecast a 46 percent increase by 2015, followed by a more modest increase after that, for an average 3.5 percent annual increase for the period 2010 to 2030.
The Gallant/Fox analysis determined that the Ontario ministry was remiss in not quantifying the 'knock-on' effects of the push for 8,400 MW of industrial wind generation plants and the 2,600 MW of solar plants that are needed to achieve the goals outlined in the LTEP.
Backup Power Generation Required for Wind and Solar
For example, the ministry did not adequately account for the fact that wind and solar require backup fossil-fuel generation to ensure no blackouts or brownouts occur. The Parker/Fox study shows that solar will underperform in conditions of cloud cover, and wind power underperforms when there is no wind.
This past summer, in a hot and dry, wind-deficient Texas, a state with almost 10,000 MW of installed wind capacity, rollling blackouts occurred and the state had to restart mothballed coal plants. Could Ontario revert to its moth-balled coal plants if a similar situation occurred?
Wrongtime Delivery is Costly
Another problem with wind-generated energy, which is highlighted in the study, is the predilection of wind to produce power at the wrong time. Wrongtime delivery is costly, and there have already been two reported instances where Ontario had to export power at a significant cost, paying other jurisdictions to take Ontario electricity, because the province was producing too much!
The Ontario Green Act promised to create 50,000 jobs. This study concludes that each of those jobs will require a ratepayer subsidy of $200,000 annually, which effectively means that - as the LTEP reaches fruition - $10-billion will be extracted from ratepayers each year, a huge per-job penalty.
This is what the study revealed: for the average ratepayer, an annual electricity bill will escalate from $1,700 per year to $2,800 by 2015 and by the time the renewables envisaged in the LTEP are largely in place (expected in 2018) an average ratepayer will be paying in excess of $4,000 annually - well over doubel the current annual bill. This means that Ontario ratepayers will be paying in excess of 40¢ per kWh, on a par with Denmark, which, ironically, has the the highest cost of electricity in the developed world, and the most electricity (about 25 percent) generated by wind of any other country!
Sources:
http://bst.sagepub.com/search/results?fulltext=Parker+Gallant&x=12&y=15&submit=yes&journal_set=spbst&src=selected&andorexactfulltext=and
http://www.financialpost.com/news/power+bill/5503257/story.html
Duane Sharp - I am a retired professional engineer (electronics), with over 40 years of writing experience in technology topics, with a focus on the IT ...
