Ontario’s plan to pour colossal amounts of money into nuclear, wind and solar could bury the province
Just over a decade ago, Ontario Hydro died, buried under the weight of an unserviceable debt. The chief agents of its destruction? Uneconomic nuclear power, in the form of the $14-billion Darlington nuclear power plant, and uneconomic alternative energy generation, in the form of $6-billion in contracts with private power producers. Taxpayers and ratepayers are still paying off the $30-billion debt that Hydro left behind through higher taxes and higher electricity bills, with no end in sight — 90% of the debt remains.
This week, the Ontario government published its Long-Term Energy Plan. Under it, the province and Ontario Hydro’s successors are committing to more uneconomic nuclear power projects and more uneconomic alternative energy generation contracts, but on a far bigger scale than the old Ontario Hydro ever undertook. The grave the government is digging this time is big enough to bury the province as well as the power sector.
Where the four reactors at Darlington cost $14-billion, the new long-range plan calls for $33-billion, more than double the previous price tag, and that’s to build just two new reactors and refurbish 10 old ones, including those at Darlington. That $33-billion estimate is more a wish than a firm projection. Nuclear reactors, notorious for their cost overruns, typically come in at two to three times their original estimates. Darlington, originally estimated at $3.5-billion, came in at four times its estimate. Refurbishments likewise run up the bills, as seen in the two Bruce reactors at Lake Huron. In 2005, the estimate was $2.75-billion. Today, the refurbishment is already three years behind schedule and $2-billion over budget. No one would be surprised to see the $33-billion estimate balloon to $99-billion or more by the time the plan is complete.
Amazingly, the nuclear boondoggle may not represent the biggest blowout. Where the original alternative energy contracts with private power producers cost $6-billion, the new round of alternate energy projects envisaged in the Long-Term Plan cost more like $27-billion — or more like $45-billion once the supporting infrastructure for these alternative projects is factored in. This $45-billion,like the $33-billion estimate for nuclear power, may itself be a gross underestimate, partly because the supporting infrastructure is subject to cost overruns, partly because the bulk of the new alternative energy projects — unreliable wind and solar — are likely to require expensive backups to avoid blackouts.
All told, the province plans to spend $87-billion on a 20-year plan that will bring Ontario a system highly dependent on nuclear, wind and solar, all of which have a track record of being unreliable and all of which, by the government’s own reckoning, will contribute to much higher power rates in future.
Is the investment sound on non-energy grounds? Ontario’s Long-Term Plan touts jobs.
“Ontario’s landmark Green Energy and Green Economy Act, 2009 is projected over three years to support over 50,000 direct and indirect jobs,” it claims, without foundation. Germany’s green energy plan, on which Ontario’s is based, has been deemed a job killer, according to Economic impacts from the promotion of renewable energies: The German experience, a blue-ribbon German report released last year.
“While employment projections in the renewable sector convey seemingly impressive prospects for gross job growth, they typically obscure the broader implications for economic welfare by omitting any accounting of offsetting impacts. These impacts include, but are not limited to, job losses from crowding out of cheaper forms of conventional energy generation, indirect impacts on upstream industries, additional job losses from the drain on economic activity precipitated by higher electricity prices, private consumers’ overall loss of purchasing power due to higher electricity prices, and diverting funds from other, possibly more beneficial investment.
“Proponents of renewable energies often regard the requirement for more workers to produce a given amount of energy as a benefit, failing to recognize that this lowers the output potential of the economy and is hence counterproductive to net job creation. Significant research shows that initial employment benefits from renewable policies soon turn negative as additional costs are incurred. Trade [benefits] — and other assumptions in those studies claiming positive employment — turn out to be unsupportable.”
Other studies in other single-mindedly green jurisdictions concur. In fact, the evidence has become so compelling that the Ontario government’s own Task Force on Competitiveness, Productivity and Economic Progress, in a study released just this week, concludes: “While the [Green Energy Act] may create 50,000 new jobs, the higher energy costs may result in employment losses elsewhere in the economy, particularly in industries that are intensive energy users.”
The Ontario government’s Long-Term Plan endorses the decision to scrap the privatization of Ontario Hydro in favour of its publicly owned successors, which it sees as engines of the economy. Yet with those successors, Ontario lost its status as Canada’s economic leader. Since 2000, the province’s real per-capita GDP declined by 8%, the country’s worst economic performance. No longer does Ontario boast Canada’s highest real per-capita GDP next to resource-rich Alberta; Ontario is now fourth highest, and a recipient of equalization payments.
It isn’t too late to turn things around. Just bury the long-term plan, none of which passes muster, and resurrect the privatization of the power system. Power rates would drop and Ontario’s economy would soar.
Financial Post
Lawrence Solomon is executive director of Energy Probe and the author of The Deniers.
Read more: http://opinion.financialpost.com/2010/11/26/lawrence-solomon-an-87-billion-grave/#ixzz16VENebuq
Saturday, November 27, 2010
Thursday, November 25, 2010
Power hikes will zap jobs
http://www.windsorstar.com/news/Vander+Doelen+Power+hikes+will+jobs/3881812/story.html
There seems to be no end to the creative ways Ontario's Liberal government can find to shoot itself in the foot.
The latest: Not only are hydro rates going to double again over the next 20 years -- after nearly doubling over the past seven -- you're going to like it, the province announced Tuesday as it unveiled its long-term energy plans.
The higher rates are needed to pay for the $87 billion they're going to shovel into nuclear power generation and "green" energy from solar and wind generation.
The Liberals say the investment will create 50,000 new jobs, many of them temporary, many of them in Windsor.
They were mum on how many permanent manufacturing jobs will likely disappear due to the higher cost of producing steel and building cars in Ontario.
Bizarrely, they seemed to rub consumers' noses in the coming pain. Not only are you going to like the next round of hikes, you are even "willing to fight" for the right to pay higher rates, Energy Minister Brad Duguid said in a sound clip that will probably come back to haunt the party in the election next fall.
Who told them Ontarians are willing to "fight" for higher hydro rates? Probably a bunch of well-heeled and high-minded activists plucked off the streets of downtown Toronto for focus groups they tested the message on.
Anybody in Windsor or London or Cambridge or the other high unemployment cities could have told them it was a bad idea to essentially taunt consumers about the rate pain to come.
But it is doubtful this tone-deaf government would have listened or even understood the nature of the public mood even if they had heard.
I've always been of the mind that it's a good idea to pay top public officials well, to get good help in government.
But this is one of the downsides of paying a cabinet minister $165,851.04 per year, not including expenses or the cost of the chauffeured limo.
It probably isn't a big deal to the $165K club to hear the family hydro bill is going to double. So they don't think the rest of us will mind, either. Wrong.
It's a safe bet that Duguid and the rest of the Dalton McGuinty government are about to find out just how depressing that spectre is to the Ontario outside the sycophantic bubble surrounding Queen's Park.
Three groups are going to go nuts on them in the weeks to come, starting with the one million or more citizens who live in households crippled by unemployment.
Next will be the millions more living from paycheque to paycheque.
And finally, they're probably going to hear an angry word or two about the rate hikes from the still-bruised survivors of the manufacturing industries. So says Pete Mateja, co-director of the Office of Automotive and Vehicle Research at the University of Windsor.
"It's bad enough right now with the exchange rate -manufacturers are getting hammered," Mateja, a veteran of the automotive and steel industries, said Wednesday.
"Anybody in steel or aluminum or plastic injection moulding -anything with a furnace or a press running -is going to hurt" from higher hydro rates, says Mateja. "It's going to be really tough for them to compete."
Ontario's steel industry could be devastated by the hikes, along with auto parts producers which consume energy, says Mateja, who was once a vice-president of Algoma Steel in Sault Ste. Marie.
"It's just staggering what even a small increase of one per cent does to their bottom lines," he said. "It's just another thing that's going to make us less competitive. It's going to have an impact on jobs" -both existing jobs, and the new ones we hope to create. "If you were looking to invest in North America, would you come to Ontario now?"
What's left of our shrinking middle class is going to hurt more, too. You may have heard some of the moaning in recent weeks about summer hydro bills topping $500 per month for the first time, either because of the cost of air conditioning or running a swimming pool.
You know what's going to happen to those luxuries once the bills hit $1,000 -not to mention the burgeoning electric car industry. Why buy one if gasoline is cheaper?
The better question is why the McGuinty government thinks voters want to create a relative handful of green jobs if the cost of doing so is losing their own.
Read more: http://www.windsorstar.com/Chris+Vander+Doelen+Power+hikes+will+jobs/3881812/story.html#ixzz16JIKQ1HC
There seems to be no end to the creative ways Ontario's Liberal government can find to shoot itself in the foot.
The latest: Not only are hydro rates going to double again over the next 20 years -- after nearly doubling over the past seven -- you're going to like it, the province announced Tuesday as it unveiled its long-term energy plans.
The higher rates are needed to pay for the $87 billion they're going to shovel into nuclear power generation and "green" energy from solar and wind generation.
The Liberals say the investment will create 50,000 new jobs, many of them temporary, many of them in Windsor.
They were mum on how many permanent manufacturing jobs will likely disappear due to the higher cost of producing steel and building cars in Ontario.
Bizarrely, they seemed to rub consumers' noses in the coming pain. Not only are you going to like the next round of hikes, you are even "willing to fight" for the right to pay higher rates, Energy Minister Brad Duguid said in a sound clip that will probably come back to haunt the party in the election next fall.
Who told them Ontarians are willing to "fight" for higher hydro rates? Probably a bunch of well-heeled and high-minded activists plucked off the streets of downtown Toronto for focus groups they tested the message on.
Anybody in Windsor or London or Cambridge or the other high unemployment cities could have told them it was a bad idea to essentially taunt consumers about the rate pain to come.
But it is doubtful this tone-deaf government would have listened or even understood the nature of the public mood even if they had heard.
I've always been of the mind that it's a good idea to pay top public officials well, to get good help in government.
But this is one of the downsides of paying a cabinet minister $165,851.04 per year, not including expenses or the cost of the chauffeured limo.
It probably isn't a big deal to the $165K club to hear the family hydro bill is going to double. So they don't think the rest of us will mind, either. Wrong.
It's a safe bet that Duguid and the rest of the Dalton McGuinty government are about to find out just how depressing that spectre is to the Ontario outside the sycophantic bubble surrounding Queen's Park.
Three groups are going to go nuts on them in the weeks to come, starting with the one million or more citizens who live in households crippled by unemployment.
Next will be the millions more living from paycheque to paycheque.
And finally, they're probably going to hear an angry word or two about the rate hikes from the still-bruised survivors of the manufacturing industries. So says Pete Mateja, co-director of the Office of Automotive and Vehicle Research at the University of Windsor.
"It's bad enough right now with the exchange rate -manufacturers are getting hammered," Mateja, a veteran of the automotive and steel industries, said Wednesday.
"Anybody in steel or aluminum or plastic injection moulding -anything with a furnace or a press running -is going to hurt" from higher hydro rates, says Mateja. "It's going to be really tough for them to compete."
Ontario's steel industry could be devastated by the hikes, along with auto parts producers which consume energy, says Mateja, who was once a vice-president of Algoma Steel in Sault Ste. Marie.
"It's just staggering what even a small increase of one per cent does to their bottom lines," he said. "It's just another thing that's going to make us less competitive. It's going to have an impact on jobs" -both existing jobs, and the new ones we hope to create. "If you were looking to invest in North America, would you come to Ontario now?"
What's left of our shrinking middle class is going to hurt more, too. You may have heard some of the moaning in recent weeks about summer hydro bills topping $500 per month for the first time, either because of the cost of air conditioning or running a swimming pool.
You know what's going to happen to those luxuries once the bills hit $1,000 -not to mention the burgeoning electric car industry. Why buy one if gasoline is cheaper?
The better question is why the McGuinty government thinks voters want to create a relative handful of green jobs if the cost of doing so is losing their own.
Read more: http://www.windsorstar.com/Chris+Vander+Doelen+Power+hikes+will+jobs/3881812/story.html#ixzz16JIKQ1HC
Wednesday, November 24, 2010
Liberal Projections for Future Renewable Power
Those numbers in the last post that Duguid claimed just did not add up. So I did some simple math on them. What he is claiming is their goal is physically impossible to achieve.
http://ontariowindperformance.wordpress.com/2010/11/25/chapter-9-1-liberal-projections-for-future-renewable-power/
http://ontariowindperformance.wordpress.com/2010/11/25/chapter-9-1-liberal-projections-for-future-renewable-power/
Ontario expects rates to drop for green power
http://windconcernsontario.wordpress.com/2010/11/24/ontario-expects-rates-to-drop-for-green-power/
By Susan Taylor
(Reuters) – The Canadian province of Ontario is expected to reduce the rich rates it pays for green energy next year, but the government will introduce changes in a way that continues to support investment in clean power sources, the minister of energy told Reuters on Wednesday.
“I think most in the industry would expect that the rates will likely go down, but we’re confident we’ll do that in a way that maintains confidence in the investment climate in Ontario,” Brad Duguid said in an interview.
Canada’s most populous province launched an incentive program for renewable energy producers last year, aiming to create jobs and eliminate coal-fired power generators.
On Tuesday it expanded on its green energy program by outlining a 20-year plan that will emphasize nuclear power, renewable energy, and conservation, but will also see a doubling of electricity rates over that period.
Feed-in tariffs introduced in October 2009 offer above-market prices to producers of energy from renewable sources like the sun and wind. They are the richest and most comprehensive in North America and follow similar programs in Europe.
It is expected that any rate changes would be discussed and made in consultation with an industry group, similar to a group formed this summer when the province said it wanted to cut the rate for small ground-mounted solar projects, Duguid’s spokesman said.
Tariff rates are reviewed every two years by the province, a process that starts in 2011 and will conclude by the autumn, Duguid said.
Japan complained to the World Trade Organization in September that Ontario’s Green Energy Act and its local procurement requirements represent a “prohibited subsidy.”
Duguid said WTO talks are currently under way, so he could not comment on progress or provide any details.
NUCLEAR “CLOUDS TO CLEAR”
Under the 20-year plan announced on Tuesday, Ontario committed C$87 billion ($86.1 billion) to meet its future energy needs and lower greenhouse gas emissions.
It plans to buy two nuclear reactors and refurbish 10 others, while investing in new wind, solar, hydroelectric, and biomass power. Coal power will be eliminated by 2014.
Critics say Ontario is significantly underestimating nuclear expansion costs, throwing into doubt the province’s forecast of a 3.5 percent annual electricity rate increase over the next 20 years.
The federal government’s plan to sell its troubled nuclear technology agency, Atomic Energy of Canada Ltd, from which Ontario planned to buy the two reactors, raises further questions.
“There’s no question that the federal government’s decision to put AECL up for sale was problematic for us in the middle of our procurement process,” said Duguid.
“We’re eagerly awaiting for the clouds to clear around AECL. We expect that will be soon, and when that takes place we will determine where we go from there in our efforts to purchase two new units, and ensure that we do so at a fair price.”
The province will spend about C$33 billion on nuclear power, which represents the “best possible estimates” currently available, Duguid said.
Nuclear power will continue to make up around half the province’s power supply, while renewable energy sources will increase to about 13 percent in 2018 from 3 percent today.
“The 10,700 megawatts of renewable energy that we plan to have online by 2018 is a target; we could ultimately end up with more,” Duguid said.
------------
RW: 10,700 is 2.5 times the number for 15% by 2030. Something doesn't add up with his numbers. See: http://ontariowindperformance.wordpress.com/2010/09/18/how-many-wind-turbines/ Assuming the bulk of this is from wind, we would need to build more than 60,000 of them in the next 20 years. Yeah, right...
By Susan Taylor
(Reuters) – The Canadian province of Ontario is expected to reduce the rich rates it pays for green energy next year, but the government will introduce changes in a way that continues to support investment in clean power sources, the minister of energy told Reuters on Wednesday.
“I think most in the industry would expect that the rates will likely go down, but we’re confident we’ll do that in a way that maintains confidence in the investment climate in Ontario,” Brad Duguid said in an interview.
Canada’s most populous province launched an incentive program for renewable energy producers last year, aiming to create jobs and eliminate coal-fired power generators.
On Tuesday it expanded on its green energy program by outlining a 20-year plan that will emphasize nuclear power, renewable energy, and conservation, but will also see a doubling of electricity rates over that period.
Feed-in tariffs introduced in October 2009 offer above-market prices to producers of energy from renewable sources like the sun and wind. They are the richest and most comprehensive in North America and follow similar programs in Europe.
It is expected that any rate changes would be discussed and made in consultation with an industry group, similar to a group formed this summer when the province said it wanted to cut the rate for small ground-mounted solar projects, Duguid’s spokesman said.
Tariff rates are reviewed every two years by the province, a process that starts in 2011 and will conclude by the autumn, Duguid said.
Japan complained to the World Trade Organization in September that Ontario’s Green Energy Act and its local procurement requirements represent a “prohibited subsidy.”
Duguid said WTO talks are currently under way, so he could not comment on progress or provide any details.
NUCLEAR “CLOUDS TO CLEAR”
Under the 20-year plan announced on Tuesday, Ontario committed C$87 billion ($86.1 billion) to meet its future energy needs and lower greenhouse gas emissions.
It plans to buy two nuclear reactors and refurbish 10 others, while investing in new wind, solar, hydroelectric, and biomass power. Coal power will be eliminated by 2014.
Critics say Ontario is significantly underestimating nuclear expansion costs, throwing into doubt the province’s forecast of a 3.5 percent annual electricity rate increase over the next 20 years.
The federal government’s plan to sell its troubled nuclear technology agency, Atomic Energy of Canada Ltd, from which Ontario planned to buy the two reactors, raises further questions.
“There’s no question that the federal government’s decision to put AECL up for sale was problematic for us in the middle of our procurement process,” said Duguid.
“We’re eagerly awaiting for the clouds to clear around AECL. We expect that will be soon, and when that takes place we will determine where we go from there in our efforts to purchase two new units, and ensure that we do so at a fair price.”
The province will spend about C$33 billion on nuclear power, which represents the “best possible estimates” currently available, Duguid said.
Nuclear power will continue to make up around half the province’s power supply, while renewable energy sources will increase to about 13 percent in 2018 from 3 percent today.
“The 10,700 megawatts of renewable energy that we plan to have online by 2018 is a target; we could ultimately end up with more,” Duguid said.
------------
RW: 10,700 is 2.5 times the number for 15% by 2030. Something doesn't add up with his numbers. See: http://ontariowindperformance.wordpress.com/2010/09/18/how-many-wind-turbines/ Assuming the bulk of this is from wind, we would need to build more than 60,000 of them in the next 20 years. Yeah, right...
Task Force on Competitiveness, Productivity and Economic Progess Report Slams GEA
Canada’s premier has been trying for several years to promote green renewable energy alternatives in the state. As a consequence, TCF (government’s Task Force on Competitiveness, Productivity and Economic Progess) has finalized a thorough study regarding this case. McGuinty planned to pursuit the Green Energy Act, but TCF proved that it would be extremely costly.
TCF’s study was released on Tuesday and it revealed the great impact the Green Act would have upon Canada’s economy and labor force. It seems that the costs for shifting to green electricity have been underestimated, while the new jobs that would appear would not compensate for the losses. Ontario Liberals calculated the benefits of creating 50,000 new jobs in the green energy market, but the study revealed the side effects of this action: higher energy prices are very much likely to disintegrate as many jobs as produced and even more.
Furthermore, energy-intensive industries would be widely affected, industrial colossi in manufacturing and agriculture corporations as well.
Experts in UK state that the Green Energy Act will lead to higher electric bills for average consumers and companies, bringing between $247 and $631 more to the electric bill per household per year. The Liberals aimed to conduct a 10 percent deduction for the hydro bills, but these reductions would be ineffective, as costs would meet an increase of 6.7 percent to 8.0 percent yearly.
Liberals’ good intentions to become “green” and contribute to planet’s health are cut down by the potential economic changes and analysts believe that the economic climate in Canada would be jeopardized.
http://www.staho.com/solar-panels-for-sale-in-canada-green-energy-act-knocked-off-by-tcf/208078/
TCF’s study was released on Tuesday and it revealed the great impact the Green Act would have upon Canada’s economy and labor force. It seems that the costs for shifting to green electricity have been underestimated, while the new jobs that would appear would not compensate for the losses. Ontario Liberals calculated the benefits of creating 50,000 new jobs in the green energy market, but the study revealed the side effects of this action: higher energy prices are very much likely to disintegrate as many jobs as produced and even more.
Furthermore, energy-intensive industries would be widely affected, industrial colossi in manufacturing and agriculture corporations as well.
Experts in UK state that the Green Energy Act will lead to higher electric bills for average consumers and companies, bringing between $247 and $631 more to the electric bill per household per year. The Liberals aimed to conduct a 10 percent deduction for the hydro bills, but these reductions would be ineffective, as costs would meet an increase of 6.7 percent to 8.0 percent yearly.
Liberals’ good intentions to become “green” and contribute to planet’s health are cut down by the potential economic changes and analysts believe that the economic climate in Canada would be jeopardized.
http://www.staho.com/solar-panels-for-sale-in-canada-green-energy-act-knocked-off-by-tcf/208078/
Tuesday, November 23, 2010
Benefits of Green Energy Act exaggerated, report says
By Lee Greenberg, The Ottawa Citizen November 23, 2010
Ontario's government is overstating the benefits of its Green Energy Act, according to a new report on economic competitiveness to be released today.
The report, by the Task Force on Competitiveness, Productivity and Economic Progress, points out that rising electricity costs could nullify some of the 50,000 new jobs the Liberals claim will be created.
The prediction is based on some stunning price estimates that go much further than the government's own projections of hydro rate increases.
The task force notes a study of the Ontario green energy program by London Economics International, a global consultancy which estimated the Act's cost at between $247 and $631 per household per year, or the equivalent of two to six additional monthly electrical bills per year.
The task force report also cites a study by Aegent Energy Advisors Inc., an energy consulting group, which estimated recently that partly because of GEA-related expenses, residential electricity costs are expected to increase at an annual rate of between 6.7 to eight per cent over the next five years.
The government has said the program would lead to a more modest one-per-cent annual increase -- or $15 per year.
The predicted job creation impact is also based, the report says, on what happened in Germany, which has implemented a similar green energy program that initially saw job increases that were eventually eroded by rising power prices.
"I think the province would be wise to have a fresh look at this and really ask themselves is this the best way to go," says Jim Milway, executive director for the Institute of Competitiveness and Prosperity, the task force's government-funded research arm. "I'd strongly reconsider it before we get too far wedded to this."
Milway says impact on rates "will probably be higher than what the government says."
The task force, created by the Ontario government in 2001 to recommend strategies to bolster long-term wealth, also casts doubt on the job creation from the act.
"While the GEA may create 50,000 new jobs, the higher energy costs may result in employment losses elsewhere in the economy, particularly in industries that are intensive energy users," the report states.
The Green Energy Act offers huge 20-year guaranteed contracts for wind, solar, hydro and bioenergy projects at rates up to 20 times more generous than the current market price for electricity. The legislation was seen as a way to kickstart a home-grown green energy industry, but has lately become the focus of consumer anger as its costs begin to show up on home electricity bills.
Those bills have risen 20 per cent in the past seven months.
In the past week, the government has moved to mitigate the mounting political damage, introducing a $1.1-billion hydro subsidy on Thursday and hinting Sunday it will expand off-peak pricing by two hours each weeknight, moving the start to 7 p.m. from its current 9 p.m.
A major report to be released by the energy minister today is also expected to set limits on the amount of green energy contracts being awarded.
The task force report, meanwhile, also points to continued troubles with productivity in Ontario's economy.
Ontario ranks 14th of 16 equivalent-sized North American states and provinces. It is trailed only by Michigan and Quebec.
"Ontarians are among the leaders in developed economies in work effort, hours worked per person, but we are laggards in creating economic value per hour worked," says Roger Martin, chair of the task force. Martin is also the dean of the Rotman School of Management at the University of Toronto.
The shortfall in productivity is the result of numerous factors. Ontario businesses invest less in research and development, produce fewer patents and its managers are still not as good as those in comparable U.S. jurisdictions. Ontario workers also have less university education, are less urbanized and our businesses invest less in technology.
Its authors praise recent tax changes made by the McGuinty Liberals, including the imposition of the harmonized sales tax (HST), a lowering of corporate tax rates and the elimination of Ontario's capital tax.
But they also criticize other policies.
The institute bemoans the government's focus on hard sciences and invention rather than innovation, which could be nurtured through investments in business programs that develop good managers.
The task force report has in the past been highly influential on Liberal policy, and is in part credited with pushing Ontario into enacting its harmonized sales tax.
Other recent policy measures, including the $30 million investment in university scholarships for foreign students, have roots in task force recommendations.
The group is now pushing for an Ontario carbon tax similar to B.C.'s.
Read more: http://www.ottawacitizen.com/business/Benefits+Green+Energy+exaggerated+report+says/3869835/story.html#ixzz1684CueLR
Ontario's government is overstating the benefits of its Green Energy Act, according to a new report on economic competitiveness to be released today.
The report, by the Task Force on Competitiveness, Productivity and Economic Progress, points out that rising electricity costs could nullify some of the 50,000 new jobs the Liberals claim will be created.
The prediction is based on some stunning price estimates that go much further than the government's own projections of hydro rate increases.
The task force notes a study of the Ontario green energy program by London Economics International, a global consultancy which estimated the Act's cost at between $247 and $631 per household per year, or the equivalent of two to six additional monthly electrical bills per year.
The task force report also cites a study by Aegent Energy Advisors Inc., an energy consulting group, which estimated recently that partly because of GEA-related expenses, residential electricity costs are expected to increase at an annual rate of between 6.7 to eight per cent over the next five years.
The government has said the program would lead to a more modest one-per-cent annual increase -- or $15 per year.
The predicted job creation impact is also based, the report says, on what happened in Germany, which has implemented a similar green energy program that initially saw job increases that were eventually eroded by rising power prices.
"I think the province would be wise to have a fresh look at this and really ask themselves is this the best way to go," says Jim Milway, executive director for the Institute of Competitiveness and Prosperity, the task force's government-funded research arm. "I'd strongly reconsider it before we get too far wedded to this."
Milway says impact on rates "will probably be higher than what the government says."
The task force, created by the Ontario government in 2001 to recommend strategies to bolster long-term wealth, also casts doubt on the job creation from the act.
"While the GEA may create 50,000 new jobs, the higher energy costs may result in employment losses elsewhere in the economy, particularly in industries that are intensive energy users," the report states.
The Green Energy Act offers huge 20-year guaranteed contracts for wind, solar, hydro and bioenergy projects at rates up to 20 times more generous than the current market price for electricity. The legislation was seen as a way to kickstart a home-grown green energy industry, but has lately become the focus of consumer anger as its costs begin to show up on home electricity bills.
Those bills have risen 20 per cent in the past seven months.
In the past week, the government has moved to mitigate the mounting political damage, introducing a $1.1-billion hydro subsidy on Thursday and hinting Sunday it will expand off-peak pricing by two hours each weeknight, moving the start to 7 p.m. from its current 9 p.m.
A major report to be released by the energy minister today is also expected to set limits on the amount of green energy contracts being awarded.
The task force report, meanwhile, also points to continued troubles with productivity in Ontario's economy.
Ontario ranks 14th of 16 equivalent-sized North American states and provinces. It is trailed only by Michigan and Quebec.
"Ontarians are among the leaders in developed economies in work effort, hours worked per person, but we are laggards in creating economic value per hour worked," says Roger Martin, chair of the task force. Martin is also the dean of the Rotman School of Management at the University of Toronto.
The shortfall in productivity is the result of numerous factors. Ontario businesses invest less in research and development, produce fewer patents and its managers are still not as good as those in comparable U.S. jurisdictions. Ontario workers also have less university education, are less urbanized and our businesses invest less in technology.
Its authors praise recent tax changes made by the McGuinty Liberals, including the imposition of the harmonized sales tax (HST), a lowering of corporate tax rates and the elimination of Ontario's capital tax.
But they also criticize other policies.
The institute bemoans the government's focus on hard sciences and invention rather than innovation, which could be nurtured through investments in business programs that develop good managers.
The task force report has in the past been highly influential on Liberal policy, and is in part credited with pushing Ontario into enacting its harmonized sales tax.
Other recent policy measures, including the $30 million investment in university scholarships for foreign students, have roots in task force recommendations.
The group is now pushing for an Ontario carbon tax similar to B.C.'s.
Read more: http://www.ottawacitizen.com/business/Benefits+Green+Energy+exaggerated+report+says/3869835/story.html#ixzz1684CueLR
Another Horror Story
Dear Richard
I saw your blog and I thought you might be interested in my story. We bought a rural home 2 years ago..It is 2200 SQ FT. We are on electric heat, but even so, I think our bills would SHOCK YOU!!!! We paid $8900 last fiscal year in Hydro.. That is not a misprint. During the winter bills of over $1000 were common, with Hydro bills stating we had used 10,000 + KW/h per month. Even in the summer, with no air conditioning running and only running the neccesities, our bills were in the $400 range!!! And that's just running the lights and normal household items. I had contacted hydro one and was told everything was running fine. I have never heard or seen anyone stories of residential owners paying that high, even after speaking to several other people on electric heat. These amounts are unheard of and to this date we have no idea what is the cause, but needless to say, Hydro One is pricing me out of my home.
Regards
Darryl Aspin
I saw your blog and I thought you might be interested in my story. We bought a rural home 2 years ago..It is 2200 SQ FT. We are on electric heat, but even so, I think our bills would SHOCK YOU!!!! We paid $8900 last fiscal year in Hydro.. That is not a misprint. During the winter bills of over $1000 were common, with Hydro bills stating we had used 10,000 + KW/h per month. Even in the summer, with no air conditioning running and only running the neccesities, our bills were in the $400 range!!! And that's just running the lights and normal household items. I had contacted hydro one and was told everything was running fine. I have never heard or seen anyone stories of residential owners paying that high, even after speaking to several other people on electric heat. These amounts are unheard of and to this date we have no idea what is the cause, but needless to say, Hydro One is pricing me out of my home.
Regards
Darryl Aspin
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