Lots of folks are thrilled by Ontario’s big new investment in clean energy. Among them is Jim Creeggan, who plays bass guitar for the Barenaked Ladies. That’s because the government is going to pay him to put solar panels on his roof. “It’s a thrill to be able to power my own lights while, at the same time, contributing to my city’s electrical needs,” he enthuses. “I’m glad solar power is getting out of the fringe and into the mainstream.”
Should the rest of us be enthused? Maybe not. In solar terms, Toronto is not exactly Southern California. Even there, nobody has figured out how to make solar power cheap. The government will pay Mr. Creeggan and other solar producers around 80 cents a kilowatt hour for the power they sell back to the grid. That’s about 15 times more than the current spot price that consumers now pay for power. The difference will eventually show up on their electricity bills.
Welcome to the wacky world of green power, where misguided governments have sparked a massive corporate feeding frenzy (at taxpayers’ expense) to achieve little or nothing of any social benefit. This week, Ontario Premier Dalton McGuinty announced $8-billion more in green investments, on top of the $7-billion he announced a short while ago. He’s determined to outspend B.C. Premier Gordon Campbell, who also wants to be the king of green. The heart of their strategy is to pay massive subsidies to wind, solar and other renewable energy producers – many of them large multinational corporations – for the next 20 years.
Some people think this is a terrible idea. One of them is George Monbiot, the environmental firebrand in Britain, which has just introduced its own subsidy scheme. “The feed-in tariffs [the rates paid to power generators such as Mr. Creeggan] about to be introduced here are extortionate, useless and deeply regressive,” he fumed. “The technologies the scheme will reward are comically inefficient.”
Michael Trebilcock, a professor of law and economics at the University of Toronto, figures that the cost of renewables will average out at two to three times the cost of conventional power. Large wind producers, for example, will get 13.5 cents a kWh (and small producers will get more). These costs will be fed through to industrial, commercial and residential consumers through additional charges on their electricity bills. There will be additional costs to extend the transmission grid.
And that means consumers are about to get a nasty shock. Ontario’s Energy Minister said soothingly this week that the green scheme will add only a few dollars a year to people’s hydro bills. But energy costs were already set to spike by 25 per cent, and energy experts say households will soon be paying several hundred dollars more a year. “The government is sitting on a political time bomb,” says Peter Murphy, a Toronto energy lawyer.
Green-energy advocates say the extra cost is worth it. Renewable energy will reduce our use of fossil fuels, cut down on greenhouse-gas emissions, and bolster the economy by kicking off a new era of green jobs.
Don’t bet your solar panel on it. Renewables simply can’t produce the large volumes of reliable energy that our economy needs. “These energy sources are so intermittent and unreliable that you have to have backup power at all times,” says Prof. Trebilcock. For every wind farm we build, we’ll have to have a coal or gas-fired power station waiting in the wings to take over when it’s 20 below. “I think we’ll get next to nothing on carbon dioxide abatement,” he says.
Mr. Monbiot agrees. Germany, he says, has spent €1.2-billion on solar roofs. Their total contribution to the country’s electricity supply was 0.4 per cent. Their total contribution to carbon savings is zero.
