[U of T submitted assignments]
The Green Energy Act of 2009: Where did it go wrong?
Of course, there would still be some who are critical of the Green Energy Act. The Fraser Institute, a politically conservative think tank, claims that the GEA would cause exorbitant increases in the prices of electricity throughout Ontario, which they claim would then disproportionately hit manufacturing and mining industries. They estimate that around 75 thousand manufacturing jobs in Ontario were lost between 2008 and 2015, and they blame the higher energy costs which drove many businesses to either downsize, move to other provinces, or otherwise totally shut down. Also, they state that the costs for electricity for small-scale industries increase by around 48% between 2010 and 2016 (Toronto Sun, 2017).
It is noteworthy, however, that Winfield & Dolter (2014) state that actual employment data in Ontario’s renewable energy industry is extremely limited, and that data on industrial employment from Statistics Canada is too broad to be used to pinpoint exact numbers on Ontario employment for the renewable energy sector. As such, they state that to date, it is hard to correctly attribute whether the government claims or opposition claims are accurate.
They also claim that the provincial peak demand for energy is out of sync with wind power production. This then results in Ontario being forced to export a majority of the power produced to other provinces and some states in the United States of America. Artuso (2017) of the Toronto Sun states that an analysis made by the Ontario Society of Professional Engineers (OSPE) claims that the province lost between $732 million to $1.25 billion in exports of excess electricity during 2015-2017. The OSPE claims that they calculated this number by computing “the difference between what Ontario agreed to pay to produce nuclear, water, wind and solar power, and the bargain basement price it sold it for on the international market” (Artuso, 2017). In line with the above critique on wind power, the most prominent critique on the GEA and the use of renewable energy is that renewable energy is not that reliable and as such, requires other energy production sources, particularly natural gas, as backups. Because of the use of natural gas as a backup generator, critics claim that this would still result in greenhouse gas emissions, essentially negating the goals of the GEA (McKitrick, 2013). Also, Gallant & Fox (2011) claim that because of the need for backup generator systems to be operational, electricity costs would increase by around a total of $22.58 per megawatt-hour. Critics also claim that because of the GEA, electricity costs have increased by around 40%-50% (Artuso, 2013).
It is noteworthy though, that Winfield & Dolter point out that majority of the added prices to the cost of electricity in Ontario have come from “global adjustment” costs from nuclear, gas-fired, and the previous coal-fired power plants. According to the Independent Electricity System Operator (IESO), global adjustment costs are “the component that covers the cost of building new electricity infrastructure in the province, maintaining existing resources, as well as providing conservation and demand management programs.” These global adjustment costs are then added to the Hourly Ontario Energy Price (HOEP). Table 1 & 2 shows the breakdown of global adjustment (GA) costs in Ontario from February 2017 – February 2018 (taken from IESO data):
| GA by Component – expressed in $000,000 (million dollars) | Feb-17 | Mar-17 | Apr-17 | May-17 | Jun-17 | Jul-17 |
| Conservation | 38.04 | 1.27 | 45.41 | 50.86 | 42.37 | 44.30 |
| Hydro | 46.57 | 49.22 | 57.81 | 66.35 | 78.48 | 66.56 |
| Nuclear (non-OPG) and Natural Gas | 291.92 | 262.58 | 343.48 | 385.44 | 419.81 | 342.68 |
| Industrial Electricity Incentive Program | 5.06 | 5.53 | 5.22 | 6.24 | 7.48 | 6.62 |
| Financing Charges and Funds | (0.08) | 0.35 | 0.45 | (0.49) | (1.95) | 0.91 |
| Wind | 202.06 | 158.14 | 113.08 | 139.77 | 149.00 | 133.02 |
| Solar | 53.66 | 103.15 | 138.57 | 163.59 | 180.54 | 193.54 |
| Biomass, Landfill and Byproduct | 22.78 | 21.57 | 24.48 | 26.54 | 23.59 | 24.50 |
| Ontario Electricity Finance Corporation – Non-Utility Generation | 17.50 | 15.70 | 9.9 | 23.3 | 28.4 | 21.0 |
| Ontario Power Generation – Regulated Nuclear and Hydro | 172.6 | 152.5 | 227.3 | 282.9 | 281.1 | 263.0 |
| GA Total by Components | 850.1 | 770.0 | 965.7 | 1144.5 | 1208.8 | 1096.1 |
Table 1: February 2017- July 2017
| GA by Component – expressed in $000,000 (million dollars) | Aug-17 | Sep-17 | Oct-17 | Nov-17 | Dec-17 | Jan-18 | Feb-18 |
| Conservation | 31.21 | 29.52 | 23.77 | 28.84 | 39.28 | 45.65 | 31.52 |
| Hydro | 65.70 | 65.11 | 59.09 | 65.51 | 65.28 | 68.91 | 53.29 |
| Nuclear (non-OPG) and Natural Gas | 323.55 | 261.10 | 422.25 | 301.34 | 408.18 | 234.49 | 241.34 |
| Industrial Electricity Incentive Program | 5.69 | 4.46 | 5.04 | 6.55 | 4.32 | 5.45 | 0.23 |
| Financing Charges and Funds | 0.16 | 0.03 | (0.22) | 0.08 | 0.01 | 0.04 | 0.65 |
| Wind | 129.35 | 48.52 | 125.54 | 155.16 | 208.39 | 232.57 | 189.24 |
| Solar | 199.81 | 187.38 | 165.43 | 104.97 | 65.38 | 34.59 | 54.92 |
| Biomass, Landfill and Byproduct | 23.61 | 23.20 | 23.60 | 23.52 | 22.81 | 19.66 | 24.47 |
| Ontario Electricity Finance Corporation – Non-Utility Generation | 19.3 | 20.5 | 24.3 | 16.8 | 15.1 | 13.4 | 10.2 |
| Ontario Power Generation – Regulated Nuclear and Hydro | 231.0 | 181.3 | 250.4 | 212.1 | 194.5 | 132.0 | 190.4 |
| GA Total by Components | 1029.4 | 821.1 | 1099.2 | 914.9 | 1023.3 | 786.8 | 796.3 |
Table 1: August 2017- February 2018
As can be seen in the tables above, around 30%-50% of the total global adjustment costs come from nuclear and natural gas energy production alone. This proves Winfield & Dolter’s claims, and subsequently disproves the critics’ claims of the GEA being the main reason for electricity price hikes.
As for criticisms regarding the unreliability of renewable energy (as a result of the desynchronization of peak supply and peak demand), now there are possible solutions for that. One great example would be the installation of a warehouse-sized battery storage system in Toronto’s Port Lands (Pittis, 2017). Set to be connected to the Ontario electricity grid by spring 2018, these storage facilities would be able to store a total of around 28 megawatts of power. This then would be able to bridge the disconnect between the peak supply hours and peak demand hours for energy, as the battery would be able to store excess energy produced by renewables instead of simply selling and exporting them at a loss to other provinces.
Finally, Jami & Walsh (2016) discovered that there has been plenty of vocal public opposition to renewable energy, particularly wind, projects. This is because the GEA only requires developers to conduct two public meetings in the locality where their projects are to be built. Also, as mentioned before, municipal approval for projects are no longer required for developers, further angering communities and making them feel that their ability to participate and vocalize concerns is limited. I must agree with this criticism; by limiting the ability of communities to participate in the approval process for renewable energy projects, the GEA and the government set itself up for plenty of vocal opposition from consumers.
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