Ontario lowers premiums for wind, solar power
Energy plan review to give local councils more say in renewable energy projects location.
TORONTO — Ontario municipalities will get more say, but not a veto over the location of wind farms and solar-power projects when the province releases a review of its green energy plans this week.
“As far as the location of renewable energy projects, municipalities and communities will see that we have listened,” Energy Minister Chris Bentley said in an interview. “We’re not going to a veto, and I’ll leave the details of how we’ve reached the good balance (until the report is released).”
Several mayors and reeves from smaller communities walked out of a recent speech by Premier Dalton McGuinty to protest the lack of local decision-making power over solar and wind projects.
The Progressive Conservatives believe local governments are entitled to a say over where green-energy projects go in their communities, while the NDP says the Liberals should have done a better job of making sure local councils were consulted.
Professor Warren Mabee of the Queen’s University Institute for Energy and Environmental Policy said giving municipalities a veto would add delays in getting project approvals.
“They’ll certainly be involved more in the planning process, which takes us back a little bit to the days when municipalities had that jurisdictional right, and where there was lots of discussions,” Mabee said. “In fact, that was one of the problems: It was difficult to get projects approved at all levels to move forward, (and) that was something they tried to deal with in the Green Energy Act.”
The review of the feed-in-tariff, or FIT program, will also lower the lucrative premiums the province pays for future wind and solar power contracts, which the Opposition blames for rising electricity bills.
“The auditor general estimated the cost of this program is about $6.4 billion more than it would have been if we had a competitive supply system, if we actually would have had a tendering process instead of handing out these contracts,” said PC Leader Tim Hudak.
The government knew it would have to lower the premiums after the incentives attracted thousands of new green-energy proposals, which resulted in 20-year contracts with guaranteed rates much higher than normal.
Small solar projects were guaranteed 80.2 cents a kilowatt hour and large solar installations get 44.3 cents a kwh, while wind-power projects were given a lower subsidy of 13.5 cents per kwh. Residential hydro users pay about 10 cents a kilowatt hour at peak rates.
The Progressive Conservatives blame the “massive subsidies” for creating what they call a gold rush in Ontario’s power system.
“The feed-in-tariff, the green energy program, has created a huge economic bubble, and we know that all bubbles will one day burst,” Hudak said. “You can’t power a 21st century economy based on when the sun shines and the wind blows.”
The New Democrats defend the subsidies and want the government to rely even more on green energy. They want the government to forget spending $33 billion on refurbishing nuclear power plants and building two new reactors.
“The simple reality is if you’re going to get involved in a new technology, there will be some prices that will be striking to people,” NDP energy critic Peter Tabuns said. “The price of renewable technologies has been dropping, while the price of nuclear technology has been climbing, and we need to bet on the future.”
The Association of Power Producers of Ontario knew the FIT rates its members are paid will come down, and said what companies really want when deciding whether to invest is predictability and stability.
The association suggested the government drop the FIT program in favour of a request-for-proposals bidding system that power producers believe would get better value for taxpayers’ money.
“The issue is not so much exactly what the price is, because what we have suggested is for larger projects, why not go to an RFP system,” said association executive director David Butters. “That kind of gets around the ‘did we pick the right price, is it too much, too little’ (questions). Let a competitive process determine that.”
Ontario wants to follow Germany’s lead and become a manufacturing centre for the components used in industrial wind turbines and solar panels. Giving businesses a clear schedule of FIT rates and when they will change would help that effort, Mabee said.
“Industry likes stability, predictably and one of the problems with the way the feed-in-tariff is working right now is the uncertainty around these reviews,” he said.
“If one of our main goals is to create a thriving green energy or clean tech sector, we need to look at ways that we can make that environment less uncertain. More predictable declines in the rates would be a good thing.”
Many experts agree wind and solar power are still such a small fraction of Ontario’s electricity mix that they really aren’t the reason electricity bills are rising so quickly.
The province is spending billions of dollars to upgrade and modernize the electricity system, including building new transmission lines.
© 2012 The Canadian Press