Ontario’s green-energy catastrophe

A transition to renewables sent energy prices soaring, pushed thousands into poverty and fuelled a populist backlash.

In February 2009, Ontario passed its Green Energy Act (GEA). It was signed a week after Obama’s Economic Recovery and Reinvestment Act in the US, following several months of slow and arduous negotiations. It also had grand plans to start a ‘green’ recovery following the financial crash – although on a more modest scale.

This was the plan: increased integration of wind and solar energy into Ontario’s electricity grid would shut down coal plants and create 50,000 green jobs in the first three years alone. Additionally, First Nations communities would manage their own electricity supply and distribution – what observers would later call the ‘decolonisation’ of energy – empowering Canada’s indigenous communities who had been disenfranchised by historical trauma. Lawmakers promised that clean and sustainable energy provided by renewables would also reduce costs for poorer citizens. This won an endorsement from Ontario’s Low Income Energy Network – a group which campaigns for universal access to affordable energy.

George Smitherman, Ontario’s energy minister in 2009, when contacted for comment, remarked that ‘drafting and passing the GEA were not the greatest challenges’ compared to its implementation. He was ‘proud’ that the ‘GEA passed on economic benefits to First Nations populations’. It’s hardly surprising that Smitherman passed the GEA relatively easily. Who wouldn’t support a programme promising to kickstart the economy after a financial crisis, with social and environmental benefits to boot?

But on 1 January, 2019, Ontario repealed the GEA, one month before its 10th anniversary. The 50,000 guaranteed jobs never materialised. The ‘decolonisation’ of energy didn’t work out, either. A third of indigenous Ontarians now live in energy poverty. Ontarians watched in dismay as their electricity bills more than doubled during the life of the GEA. Their electricity costs are now among the highest in North America.

Energy officials I spoke to cited one apparent success of the GEA: the 2014 shutdown of coal plants. This may be commendable. But in actual fact, the regulation to phase out the coal plants came into effect in 2007 – two years before the GEA. Between 2007 and 2009, Ontario’s greenhouse-gas emissions from coal had already dropped by 55 per cent.

In truth, the GEA had a devastatingly negative impact. And the need to disentangle it will burden Ontarians – especially poorer ones – for at least a decade to come.

To understand how the GEA went irreparably wrong, we must look at Ontario’s contracts with its green-energy suppliers. Today, Ontario’s contracts guarantee to electricity suppliers that they ‘will be paid for each kWh of electricity generated from the renewable energy project’, regardless of whether this electricity is consumed. As preposterous as this may seem, it’s actually an improvement on many of the original contracts the Ontario government locked itself into.

Earlier contracts guaranteed payments that benchmarked close to 100 per cent of the supplier’s capacity, rather than the electricity generated. So if a participating producer supplied only 33 per cent of its capacity in a given year, the state would still pay it as if it had produced 100 per cent.

This was especially alarming in context, as 97 per cent of the applicants to the GEA programme were using wind or solar energy. These are both intermittent forms of energy. In an hour, day or month with little wind or sun, wind and solar farms can’t supply the grid with electricity, and other sources are needed for back-up. As a result, wind and solar electricity providers can only supplement the grid but cannot replace consistently reliable power plants like gas or nuclear.

Many governments, including other Canadian provinces, have used subsidies of all hues to incentivise renewables. But Ontario put this strategy on steroids. For example, the Council for Clean and Reliable Energy found that ‘in 2015, Ontario’s wind farms operated at less than one-third capacity more than half (58 per cent) the time’. Regardless, Ontarians paid multiple contracts as if wind farms had operated at full capacity all year round. To add insult to injury, Ontario’s GEA contracts guaranteed exorbitant prices for renewable energy – often at up to 40 times the cost of conventional power for 20 years.

By 2015, Ontario’s auditor general, Bonnie Lysyk, concluded that citizens had paid ‘a total of $37 billion’ above the market rate for energy. They were even ‘expected to pay another $133 billion from 2015 to 2032’, again, ‘on top of market valuations’. (One steelmaker has taken the Ontarian government to court for these exorbitant energy costs.)

Today, this problem persists.

In April this year, the market value for all wind-generated electricity in Ontario was only $4.3 million. Yet Ontario paid out $184.5million in wind contracts. Extraordinarily, if this trend were to continue throughout the whole of 2020, it would still result in a lower payout than under the former contracting system. Ontario corralled taxpayers into long-term electricity contracts at eye-watering prices for electricity that suppliers did not even produce.

Furthermore, electricity demand from ratepayers declined between 2011 and 2015, and has continued to fall. Ontarians were forced to pay higher prices for new electricity capacity, even as their consumption was going down.

Despite the mounting costs, the GEA still has its defenders. But even if we were to attribute declining emissions to GEA-backed renewables, was it worth the cost?

Ontario’s auditor general in 2015 stated that: ‘The implied cost of using non-hydro renewables to reduce carbon emissions in the electricity sector was quite high: approximately $257 million [£150million] for each megatonne of emissions reduced.’ Per tonne of carbon reduced, the Ontario scheme has cost 48 per cent more than Sweden’s carbon tax – the most expensive carbon tax in the world.

Clearly, bad policy has led to exorbitant waste. This wasn’t the result of corruption or conspiracy – it was sheer incompetence. It’s a meandering story of confusion and gross policy blunders that will fuel energy poverty in Ontario for at least another decade.

As democracies across the West respond to the coronavirus crisis with hastily prepared financial packages for a ‘green recovery’, they should consider the cautionary tale of Ontario.

The disaster of the GEA has had political consequences, too. Unsurprisingly, in the 2018 elections, the Liberal Party, which had drafted the GEA when in power, suffered the worst election results in its 161-year history, falling from first to third place – a defeat so terrible it lost is status as an official party. Disdain for renewable energy is now a key indicator of voting intention.

Ontario is now governed by a populist leader who has since taken a ruthless and costly approach to cancelling renewable-energy contracts. But this is understandably well-supported by the public.

The GEA’s stubborn defenders refuse to recognise that poor policy, even with the best intentions, discredits future efforts at cutting emissions. ‘Green New Deals’ for the post-pandemic recovery in the US and Europe should learn from the GEA. Clean energy at any cost will be rightfully short-lived and repealed, and its supporters will be unceremoniously booted out of power.

https://www.spiked-online.com/2020/09/17/ontarios-green-energy-catastrophe/

Dominion Green Energy Costs Grow Again

Dominion Energy Virginia’s major capital projects listed in its pending integrated resource plan. The SCC staff added the lifetime revenue requirement, the total dollars extracted from ratepayers over time which includes financing costs and the company’s current profit margin. Source: SCC

As sobering as they were, the initial estimates of how a green energy conversion will explode Dominion Energy Virginia rates have now been revised up. The State Corporation Commission staff now sees it costing an additional $800 per year for a residential customer to purchase 1,000 kWh per month by 2030, an increase of just under 60%.

The main drivers of the higher costs will be all the offshore wind and solar generation Dominion proposes to build, as outlined in its most recent integrated resource plan. That plan is now being reviewed by the SCC, and the staff filed its analysis late last week, summarized here on pages 4-5.

The separate cost analysis by Carol Myers of the SCC’s Division of Utility Accounting pushed up the utility-issued estimate by disputing assumptions the utility made. Staff disagrees with the utility projection that by 2030 less than half of its electricity will be used by residential customers. It is now about 55%. Should the portion shrink as Dominion projects, more of the project costs would be imposed on commercial users.

Myers reported it is also unrealistic to assume most residential households use 1,000 kWh per month, when the history show usage at or above 1,100 kWh. Plugging that into the data would increase the projected cost to families even beyond $800. Myers’ testimony also shows huge increase in commercial (60%) and industrial (65%) power costs by 2030, even larger on a percentage basis than residential. For the state’s economy, they also matter.

Reading her testimony demonstrates how many variables are involved in these projections. Behind the “gotcha” headlines, it is clear these estimates could easily be too high or too low. Much but not all of the coming price increases can be blamed on the 2020 Virginia Clean Economy Act, which is dictating the massive wind, solar and storage investments. The General Assembly is also responsible for the vast majority of the other recent decisions driving up your future bills.

There is also no reason to assume that a General Assembly which has rewritten utility law several times in the past decade will not continue to do so going forward. Each integrated resource plan seems to survive as a useful document only until the next General Assembly session, if that long.

One of the major unanswered questions is whether the North Carolina regulatory authority will impose these capital costs on its citizens served by Dominion. If not, that will further increase the bill on Virginians.

The new analysis by the State Corporation Commission staff confirms that the green energy law passed by the General Assembly is indeed the “Clean Energy We Don’t Actually Need Act.” Dominion Energy Virginia will be collecting $100 billion from its customers to build far more electricity generation than we need, either to meet renewable energy goals or to simply meet demand.

Environmental opponents of the plan will seek to stop continued operation of the coal-fired Virginia Hybrid Energy Center in Southwest Virginia, which on an accounting basis is actually a money-losing operation with a net present value of negative $472 million by 2030.

Along with fossil fuel plants not being closed, Dominion proposes to add 970 megawatts of new natural gas generation by 2024, “to address what (Dominion) characterizes as probable system reliability issues resulting from the addition of significant renewable energy resources and the retirement of coal-fired facilities,” the staff wrote.

SCC Staff versus Dominion estimates of residential cost increases by 2030. Plan B assumes a 25% solar capacity factor, and B19 assumes a 19% capacity factor.

Like Gaul, your future Dominion bill increases are divided into three parts in Myers’ testimony, as her table above illustrates.

First, identified in the document as Plan A, are increased costs not directly tied to the 2018 or 2020 legislation. Those include the Assembly-approved plans to remove coal ash, to place hundreds of miles of residential tap lines underground, and various demand management programs where customer A pays customer B to use less power. Also included are the cost of gaining new 20-year operating licenses for Dominion’s four nuclear reactors.

The second tranche of higher costs are projects which were mandated in the 2018 Ratepayer Bill Transformation Act (also called the Grid Transformation Act). That includes a portion of the planned solar, a broadband program subsidized by ratepayers, even more demand management, and a planned pumped storage facility to provide 300 megawatts of backup to renewables.

The third tranche comes from 2020’s VCEA: Four or more waves of wind turbines built off Virginia Beach, thousands of megawatts of new solar, battery storage, the cost retiring coal plants early, and the new carbon tax Virginians will pay as part of the Regional Greenhouse Gas Initiative.

Myers includes a table comparing the new generation sources, the amount of energy generated when they operate and their initial cost and all-in cost, including financing and profits over time. That’s how $45 million in capital costs translates into $100.6 million in customer payments.

Do the division and it turns out the offshore wind will cost $7 million per constructed megawatt, solar will cost about half that at $3.7 million per megawatt, and the natural gas generation less than $2 million per megawatt. The disparity is even worse, in reality, because solar and wind are unreliable, intermittent producers.

https://jeffersonpolicyjournal.com/2020/10/dominion-green-energy-costs-grow-again/

UK: Boris Johnson Announces 200% Rise in Electricity Prices

Ignoring clear evidence that the underlying economics of renewables are disastrous, the Prime Minister has today committed the UK to a further expansion of offshore wind power by 2030, with frightening implications for electricity prices, which would have to treble to pay the real costs.
This is not only economically foolish, but incoherent climate policy since today’s decision will ensure that other low emission goals, such as the electrification of vehicles and domestic heating, become unaffordable for most Britons.

Despite the wind industry’s smoke and mirrors, offshore wind remains an extremely expensive way of generating electricity. Meeting the Prime Minister’s target will actually increase current costs still further because of the need to build turbines in deeper water with much higher operating costs.

In addition, the hidden costs of integrating high levels of intermittent wind generation into the electricity system add at least 50% to the direct costs of the wind fleet

This rash and misconceived pledge throws any prospect of post-Covid and post-Brexit recovery into desperate jeopardy. With the prospect of much higher electricity prices no reasonable investor will put money into any UK manufacturing or related businesses with above average electricity consumption.

The implications for net employment are also devastating. Subsidy may create some soft UK jobs in the wind industry, and many more in China and the Middle East where wind turbines are made, but will not offset the loss of real UK jobs in other businesses that are no longer viable because of high energy costs. The net effect for the UK will be severely negative.

https://www.thegwpf.com/boris-johnson-announces-200-rise-in-electricity-prices/

There’s no such thing as clean energy

All good environmentalists detest renewables and are appalled at the money wasted on the industrial renewables corporations.

All the rest are unwitting marketing agents who provide free advertising for banks and multinational conglomerate profits. In the process they hurt the poor and scorch the Earth.

In short: The world spent $3.6 trillion dollars over eight years, mostly trying to change the weather. Only a pitiful 5% of this was spent trying to adapt to the inevitable bad weather which is coming one way or another. Both solar and wind power are perversely useless at reducing CO2, which is their only reason for existing in large otherwise efficient grids. Wind farms raise the temperature of the local area around them which causes more CO2 to be released from the soil. Solar and wind farms waste 100 times the wilderness land area compared to fossil fuels, and need ten times as many minerals mined from the earth. Biomass razes forests, but protects underground coal deposits.

The role of large wind and solar power in national grids is to produce redundant surges of electricity at random or low-need times. They are surplus infrastructure designed in a religious quest to generate nicer weather. They always make electricity more expensive because the minor fuel savings are vastly overrun by the extra costs of misusing and abusing perfectly good infrastructure, which has to be there to provide baseload and backup, and yet is forced to run on and off, sitting around consuming capital, investments, labor and maintenance. It is simply impossible to imagine a situation where unreliable generators have some productive purpose on major grids other than to generate profits for shareholders or their mostly Chinese manufacturers.

Despite the extortionate, futile mountain-of-money paid to wind and solar parasites, they produced a pitiful 3% of all the energy needed on Earth, while fossil fuels produced 85%.

Everyone who loves renewables should be asking themselves how much they hate the poor.

http://joannenova.com.au/2020/10/theres-no-such-thing-as-clean-energy/

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My other blogs:

http://dissectleft.blogspot.com (DISSECTING LEFTISM)

http://snorphty.blogspot.com TONGUE-TIED)

http://edwatch.blogspot.com (EDUCATION WATCH)

http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)

http://john-ray.blogspot.com (FOOD & HEALTH SKEPTIC)

http://australian-politics.blogspot.com (AUSTRALIAN POLITICS)

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