Posted: Thu Sep 29, 2016 1:07 pm Post subject: Wynne government to stop the hydro stupidity too late
There was a time when Ontario Hydro was a role model, as far as public utilities were concerned. After decades of mismanagement and bad policy decisions, it is saddled with a huge, politically-inspired 'green energy' boondoggle. This is a Dalton McGuinty blunder that has only grown over time. Wynne has done little to address the problem, until now.
Terence Corcoran: Ontario Liberals’ huge green energy about-face shows renewables aren’t so doable after all
... It’s the latest defensive electricity market move by the Wynne Liberals, who are down in the polls and facing a crisis over electricity prices. An eight per cent provincial sales tax recently imposed on power was suddenly eliminated and rural Ontarians will receive rebates on part of their soaring electricity costs.
But there’s more to the decision to suspended 1,000 MW of wind and solar projects than attempting to mollify unhappy consumers. The real objective is to keep consumers and the public in the dark over the electricity mess that exists after a decade of Liberal policy based on the slogan “Renewable is doable.” In the rush to green, Ontario’s electricity sector has become an overbuilt collection of electricity-producing assets selling power at high prices into a declining market. Since 2006, annual electricity demand within Ontario has dropped 6.5 per cent, mostly a function of declining industrial sectors. Meanwhile, installed capacity soared by more than 25 per cent, mostly a function of the government’s expensive wind and solar schemes.
This is an abrupt about-face for a province that had made green energy a religious mission
While masses of new generating and transmission capacity have been added, the latest report from the province’s Independent Electricity System Operator warns that electricity demand is unlikely to increase over the next 20 years. The only way to boost demand, it projects, would be to adopt Plan C: mandate residential conversion to electric water and space heat, reduce commercial and industrial use of fossil fuels, and turn 2.4 million automobiles into electric vehicles.
The government now appears to realize none of the above is going to happen, leaving consumers to bear the cost of new capacity that’s not needed.
The excess capacity, supported by government-mandated feed-in tariffs and expensive transmission-grid modifications, has propelled Ontario electricity prices higher. Since 2006, the average price of electricity has risen 6.4 per cent per year in nominal terms. Residential consumers pay higher rates still.
The decision to stop buying more wind and solar is also an abrupt about-face for a government that had turned doable renewables into a religious mission. The planned new capacity — including 600 MW of wind and 250 MW of solar—had only been ordered by ministerial directive last April. Known as Large Renewable Procurement II, the new plan follows LRP I, which set out earlier to contract 300 MW of wind and 145 MW of solar. Those projects have not yet started.
The surplus electricity capacity means that nuclear, gas, hydro, wind and solar power producers are often paid not to produce electricity. At other times, surplus power is exported at cheap prices to neighbouring states. Ontario’s power regime pays 11 cents a kilowatt hour then exports the same power at two cents. Almost 15 per cent of Ontario’s annual power production is now dumped into the U.S. market. Ontario power consumers pay for these losses.
This will be the lasting legacy of the Dalton McGuinty/Kathleen Wynne Liberal administration, surely one that rivals Bob Rae for wretched excess. It ought to stigmatize that party for decades into the future.
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Wynne government to stop the hydro stupidity too late