Skip to main content

The sting of high electricity costs – and the potential for more pain in the near term – has decisively punctured Ontario's infatuation with high-cost renewable energy sources, such as wind and solar. "Achieving Balance" – the latest version of the province's Long-Term Energy Plan – is a courageous attempt to right the wrongs and administer the right dose of medicine to the patient at about the right time.

Will this effort to curtail the excesses of the Green Energy Act be sufficient to allow Ontario to turn the page and establish a policy framework stable enough to withstand electoral surprises?

The Green Energy Act's policy directives remained doggedly indifferent to the key question of cost: Clean tech jobs were suggested as the pathway to prosperity. Reality has turned out to be a cruel test of that thinking.

Story continues below advertisement

To its credit, the new plan has introduced a high degree of flexibility, responded to the diversity of views across Ontario and charted a course that allows a glimmer of light. The tool kit for ongoing course correction is there, and there is solid evidence of a determined effort to limit cost impacts.

The open question is whether it will be sufficient to placate a consumer backlash, given that the plan cannot completely make up for past mistakes.

It would be unfortunate if the plan's positive features were to unravel under the withering glare of an electorate that can no longer abide more short-term pain. Cost increases in the order of $1-billion to $1.5-billion a year will arise from 3,800 MW of new wind and solar generation (the same order of magnitude as the onetime cost of gas plant cancellations) to be absorbed in the system over the next 18 months.

The Ontario experience mirrors developments in several other jurisdictions around the world, in particular Spain, Germany and the United Kingdom, where there are cautionary tales of hubris and how good intentions muddled with poor policy prescriptions can lead to unpalatable consequences.

Energy poverty is generally defined as the threshold when energy costs – electricity and heating – either approach or exceed 10 per cent of household income. European energy price increases, driven primarily by green obligations and subsidies, have translated into an increasing number of households facing energy poverty.

Germany's electricity costs are among the highest in Europe, approximately 40 cents per kWh compared to 10 cents in Ontario. The installed capacity for wind and solar combined (65,000 MW) is almost twice the size of Ontario's total system. Subsidies for green energy equal 10 cents per kWh, with a total cost of $25-billion in 2013. For a country that has built such a large capacity in solar and wind, it is disconcerting to observe that 17,000 MW of new coal capacity by 2022 is in planning or under construction to provide base-load power that would act as backup to fickle wind and solar resources. If renewable generation simply turns into a strong embrace of fossil fuels, then this clean energy pathway is fraught with danger.

The challenge for Ontario's new plan is clear: Are the long-term targets for renewables credible?

Story continues below advertisement

An even more compelling question for the global context, in light of the German and Spanish experience, is this: Can carbon emissions truly be reduced effectively by building renewables on a very large scale? Ineffective environmental performance by renewables may turn out to be more damaging than ineffective cost performance.

Jatin Nathwani is professor and Ontario Research Chair in Public Policy for Sustainable Energy at the University of Waterloo.

Report an error
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter