Category Archives: Green Energy

Understanding the Changes in Ontario’s Electricity Markets and Their Effects

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Source: Fraser Institute|Published: April 12, 2018

Energy consumption is a driver of economic growth. Policymakers in Ontario have made poor policy decisions, resulting in rising electricity costs, lower employment, and lower competitiveness, while achieving minimal environmental benefits. This publication presents a series of collected essays that critique the reasoning behind Ontario’s electricity policy changes and spell out the long term consequences.

Ontario’s main policy shift began around 2005 when the government made a decision to begin phasing out coal. The next major step occurred in 2009 when the government launched its Green Energy Act (GEA). The centerpiece of the GEA was a Feed-In-Tariff program, which provides long-term guaranteed contracts to generators with renewable sources (wind, solar, etc.) at a fixed price above market rates. In order to fund these commitments, as well as the cost of conservation programs, Ontario levied a non-market surcharge on electricity called the Global Adjustment (GA). Between 2008 and 2016, the GA grew more than 70 percent, causing a drastic increase in electricity prices. The high cost associated with aggressively promoting renewable sources is particularly troubling given the relatively small amount of electricity generated by these sources. In 2016, renewable sources generated less than 7 percent of electricity in Ontario while accounting for almost 30 percent of the GA.

Ontario’s decision to phase out coal contributed to rising electricity costs in the province, a decision justified at the time with claims that it would yield large environmental and health benefits. The subsequent research showed that shuttering these power plants had very little effect on air pollution. Had the province simply continued with retrofits to the coal plants then underway, the environmental benefits of the shift to renewables could have been achieved at one-tenth the cost.

The issue of rising electricity costs in Ontario can be partly attributed to the imbalances between supply and demand of electricity. Between 2005 and 2015, the province decided to increase its renewable capacity to facilitate the coal phase-out. However, since renewable sources are not as reliable as traditional sources, the government contracted for more natural gas capacity as a back-up. Meanwhile, the demand for electricity declined, partly due to rising electricity costs. The increase in the total installed capacity, coupled with lower electricity demand, has resulted in excess production being exported to other jurisdiction at a significant loss.

As a result of these structural shifts and poor governance, electricity costs have risen substantially in Ontario. Ontario now has the fastest growing electricity costs in the country and among the highest in North America. Between 2008 and 2016, Ontario’s residential electricity costs increased by 71 percent, far outpacing the 34 percent average growth in electricity prices across Canada. In 2016, Toronto residents paid $60 more per month than the average Canadian for electricity.

Ontario’s skyrocketing electricity rates also apply to the province’s industrial sector. Between 2010 and 2016, large industrial users in Toronto and Ottawa experienced cost spikes of 53 percent and 46 percent, respectively, while the average increase in electric costs for the rest of Canada was only 14 percent. In 2016, large industrial users paid almost three times more than consumers in Montreal and Calgary and almost twice the prices paid by large consumers in Vancouver. Some select large industrial consumers were granted rate reductions but still paid higher rates compared to large electricity users in Quebec, Alberta, and British Columbia.

Soaring electricity costs in Ontario have placed a significant financial burden on the manufacturing sector and hampered its competitiveness. Compared to multiple comparable American and Canadian jurisdictions, Ontario has exhibited the most substantial decline in its manufacturing sector over the past decade. Overall, Ontario’s high electricity prices are responsible for approximately 75,000 job losses in the manufacturing sector from 2008 to 2015.

Given the critically important role that affordable energy plays in economic growth and prosperity, the authors urge the Ontario government to pursue meaningful policy reforms aimed at lowering electricity costs for all Ontarians.

Authors:
Elmira Aliakbari;Kenneth P. Green;Ross McKitrick;Ashley Stedman

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Council needs to protect Residents

a - WindFarm_6Letter to Editor published April 6, 2018| Opinion: North Country Now

To the Editor:

My wife and I live south of 72, in Hopkinton. We are totally against the North Ridge Wind Project and the expansion south of 72.

Do I feel the wind law is strict enough? No, but there has already been enough compromises on our part.
Time after time the majority of residents have voiced they are against this project.

And, yes, we all know what we signed and do know what a PILOT is, so please stop insulting our intelligence and insinuating that these signatures are not legal residents.

I commend the three women on Hopkinton town board for wisely listening to the majority of your constituents and the Wind Advisory Boards recommendations.

Unfortunately, I question if the two men on the board have drank the Kool-Aid.

One’s dad is a lease holder so ethically must recuse himself and the other being Hopkinton’s fire chief and Avangrid publically stating thousands of dollars ear marked for the fire district, appears he may have some ethically questionable motives and perhaps he should also recuse himself.

A no brainer: Guaranteed 100 percent assessment. If you own a shack or a mansion — we each pay the same assessment. This company has a lot more money than any of us and if this is such a good financial deal for our town, lets guarantee that by making them be fair to each of us.

Pay your full 100% assessment like we all do!

When all is said and done and Avangrid has packed their bags and “gone with the wind,” we will still be here. We have thrived for over 200 years and will continue to thrive.

As our elected town representatives: Will you be able to hold your head high knowing you took your position to represent and protect the majority of the towns people in the highest regards?

Robert Blum

Hopkinton, New York

More about: North Ridge Wind Farm

NextEra renewables sale to CPP speaks volumes

Parker Gallant Energy Perspectives

April 5, 2018

Canada Pension Plan’s investment in part of a wind-solar power portfolio seems to ignore a lot of negatives, including the energy poverty rising in Ontario due to electricity bills

Canada Pension Plan contribution rates are rising again, as reported by the Financial Post December 14, 2017: “the contribution rate (i.e., the CPP tax) has increased from 3.6 per cent when the CPP was launched in 1966 to its current rate of 9.9 per cent. It will increase further to 11.9 per cent beginning in 2019.”

The Canada Pension Plan Investment Board (CPPIB) is an active investor, looking for good rates of return without taking “excessive risk.” So they either searched for assets that pay guaranteed above market rates, or were approached by U.S. Power giant NextEra who sold them their Ontario portfolio of 396 MW of wind and solar contracts. CPPIB paid $1.871 million per MW for a total of $741 million CAD and also assumed the debt (US$689 million) attached to the NextEra portfolio. The press release associated with the acquisition had this quote from Bruce Hogg, Managing Director, Head of Power and Renewables: “As power demand grows worldwide and with a focus on accelerating the energy transition, we will continue to seek opportunities to expand our power and renewables portfolio globally.”

Perhaps Mr. Hogg was unaware “power demand” in Ontario has actually fallen from 153.4 TWh in 2004 to 132.1 TWh in 2017 despite an increase in our population of approximately 450,000. He may also be unaware industrial wind turbines create health problems, cause property values to drop and kill birds and bats including those on the endangered species list.

What the CPP acquisition means is Ontario ratepayers will be indirectly contributing additional funds to the CPP without the benefit of reducing either their annual tax burden or increasing their future pension benefits. A “win, win” for CPP and a “lose, lose” for Ontario’s taxpayers. The sole redeeming feature is that the money will stay in Canada instead of flowing elsewhere.

Ironically, the CPP by acquiring and holding those assets will also be showing their support for energy poverty. The Ontario Energy Board (OEB) in their December 2014 report noted: “Using LIM* as a measuring tool, and relying on Statistics Canada household data, Ontario has 713,300 low-income households.” At that point in time the 713,300 households represented almost 16% of residential ratepayers in the province and one should suspect that number has increased over the past three years.

So, one should also wonder why NextEra, headquartered in Florida, sold those assets and their above market returns? The press related to their announcement of the sale speaks volumes: “As discussed during our earnings call in January, we expect the sale of the Canadian portfolio to enable us to recycle capital back into U.S. assets, which benefit from a longer federal income tax shield and a lower effective corporate tax rate, allowing NextEra Energy Partners to retain more CAFD** in the future for every $1 invested.”

No doubt the NextEra sale may be a sign of the future as the Canadian economy has shown serious signs of slowing as taxes rise and foreign investment falls. The bulk of the investment in the renewable energy sector in Ontario came from offshore companies who rushed to take advantage of the above market rates and guaranteed prices offered under the Feed-in-Tariff (FIT) program available under the Green Energy Act.

Those investors will look to cash in on the sale of those assets, so we should expect to see more public and private Canadian pension funds stepping up to purchase them.

Parker Gallant

*Statistics Canada’s Low-Income Measure is simply defined as half of the median adjusted economic family income.

**Cash Available for Distribution

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pggy bank

Could Ontario cancel the wind contracts?

 

Cancelling Contracts: The Power of Governments to Unilaterally Alter Agreements

By: Bruce Pardy| Fraser Institute| Published on October 22, 2014

Government contracts are indeed contracts. In the normal course of events, their terms may be enforced and the Crown held liable for a breach. However, government contracts are not the ironclad agreements they appear to be because governments may change or cancel them by enacting legislation. This paper discusses the means by which governments can make unilateral changes to contracts by statutory enactment.

Legislative supremacy is a central feature of the Canadian system of government. The federal Parliament and provincial legislatures may pass laws of any kind, including laws that change or cancel legally binding agreements, and even if the enactment has the effect of expropriating property or causing hardship to innocent parties who negotiated with government in good faith in entering into the contract in the first place. The powers of legislatures are limited only by the bounds of their constitutional jurisdiction and the existence of constitutional rights. In Canada, there is no constitutional right to compensation for expropriated property.

Just because legislatures can enact an end to a contract does not mean that they should. Using that power erodes confidence in doing business with government, and thus impairs the credit of the Crown and economic conditions in the jurisdiction. On the other hand, if democratically elected governments are to establish their own policies, they require the ability to make unilateral changes to agreements made by previous governments. If they cannot legitimately do so, then their predecessors can control policy decisions beyond the terms of their democratic mandates….

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Cancelling Contracts: The Power of Governments to Unilaterally Alter Agreements:
(full report)

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Blighted Landscape

Wind energy is destroying the country more than any other industry.

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Blighted landscape…everything “blinking and rotating”

Read article (in German):  Windkraft zerstört das Land mehr als jede Industrie

Wind’s False Promise Of Energy Purity Now An Environmental Hell

“Public opinion of wind energy in Germany, once unanimously high, has eroded considerably over the past years as more people begin to realize that the country’s once-idyllic countryside is turning into a blighted industrial landscape”

Read article: Wind’s False Promise Of Energy Purity Now An Environmental Hell

Another Failed Wind Turbine Plant

“Starting in 2010, Nova Scotia taxpayers pumped $56 million into the operation via provincial loans and grants before the government called a $32-million loan in February 2016, pushing the manufacturing plant into receivership.”

Time and money running out on sale of idle wind turbine plant

DSME Trenton plant placed into receivership in 2016 after the province called a $32M loan

By Paul Withers, CBC News Posted: Feb 15, 2018

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The Nova Scotia government gave DSME Trenton $19.6 million for a 49 per cent stake in the company in 2010. (CBC)

After two years and no takers, Nova Scotia is poised to end its efforts to sell an idle wind turbine manufacturing plant in Pictou County, bringing to a close another failed government-backed industrial enterprise.

“At $150,000 per month to keep the operation at status quo, we want this to happen, we want to find a viable operator. But the clock is ticking,” Business Minister Geoff MacLellan said Thursday, after touring the mothballed DSME Trenton plant.

That money goes toward keeping the facility in a sellable state.

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Sensing but Not Hearing: The Problem of Wind Turbine Noise

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Interview with acoustician Steven Cooper,AU

By: Sherri Lange |February 2, 2018|Master Resource

Editor Note: Steven Cooper has advanced our understanding of how people react to real recorded pressure pulsations from industrial wind turbines. In the last six months he has presented eight papers at Acoustic Meetings in Zurich, Boston and New Orleans. With this interview, he breaks down some of the salient points of his research discoveries. Cooper’s work is expanding our knowledge about “soundscapes” near projects, which could result in new legal requirements for manufacturers and developers.

“In general, wind farm applications claim that turbines do not generate any low-frequency, tonal, or impulsive characteristics, which is a matter disputed by residential receivers. The consequence of the pulsating signal generated by turbines (whether audible or inaudible) could potentially require a further adjustment to any perception or impact generated by wind turbines.”

“On discussing the resident’s observations (with the residents) for the first two weeks I found the use of describing the impacts in terms of Noise, Vibration, and Sensation was accepted by the residents as a better concept.”

– Stephen Cooper

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