TORONTO—A national industry association is voicing its concern about the Ontario PC Party’s approach to wind energy, warning it could spell disaster for future investment.
As Ontario gears up for a summer election, the Canadian Wind Energy Association (CanWEA) is calling for Tim Hudak and his Progressive Conservatives to reassess the party’s energy policy to include provisions for wind-generated power.
The association’s concern arises from a PC plan that would see the province’s Feed-in Tariff (FIT) program axed should the party claim victory on June 12.
The PCs said they would also halt any wind and solar energy projects currently pending approval in the province, and end “special deals” with Samsung Renewable Energy Inc., one of Ontario’s largest renewable energy investors since the FIT program launched in 2009.
“We’re concerned that the PC position is based on inaccurate assumptions or a misunderstanding of wind energy’s cost competitiveness,” CanWEA president Robert Hornung said in an interview.
“The (PCs) have spoken a lot about wind and renewable being the key driver of electricity cost increases in Ontario, but there have been multiple studies that have shown that the overwhelming majority of responsibility for electricity price increases over the last … five years has been (due) to investment in upgrading existing generation or building new infrastructure.”
Hornung cites a report from consulting firm Power Advisory LLC that found wind energy was responsible for only five per cent of the increase seen on electricity bills in the province between 2009 and 2012.
Hornung conceded that wind energy will contribute to the increase on Ontario electricity bills moving forward—a recent study said wind, solar and bioenergy will account for 16 per cent of the total by 2024, up from the current nine per cent—but said it’s a case of six of one, half dozen of the other.
“Yes, wind is going to contribute to price increases in the future, but if you (aren’t) going to build wind you’re going to build something else,” he said. “We think that wind is cheaper than new nuclear, (and) we think wind is certainly cost competitive with hydro-electric power.”
According to Hornung, his association admits that wind-generated power is not as cost competitive today as natural gas, but said that could change drastically in the future.
“You can’t just base it on the cost today—you have to base it on the cost for the life of the investment,” he continued. “Although natural gas prices are low today, you’re going to build a natural gas plant to run for 25 to 40 years, and (if) you don’t think natural gas prices are going to go up as a result of supply or demand changes … I would say that’s a fairly unrealistic assumption.”
Indeed, natural gas is a market-driven commodity—its price is determined by a number of factors that often cannot be predicted over the long term.
Wind, on the other hand, is not impacted by market volatility as it does not require fuel to maintain the flow of electricity to the grid.
The Progressive Conservatives say they will end subsidies for renewables—Ontario has spent $46 billion subsidizing wind and solar power, according to the party—and invest in “more affordable sources of energy.”
Hornung said there is also a lack of recognition from the Progressive Conservatives of the mass economic spinoffs that were ushered in alongside the FIT program.
“We’ve seen very little from the (PCs) that recognizes the benefits that wind actually has brought to Ontario in terms of new manufacturing facilities (and) economic benefits in local communities,” Hornung said.
According to CanWEA, wind energy firms have spent more than $5 billion since 2009 to develop Ontario’s wind energy industry, with every megawatt of new wind energy in the province representing an investment of about $2 million.
With the PCs publicly planning to end those deals should they win the upcoming election, Hornung said the province risks losing what has become a well established industry.
“This creates significant uncertainty for investors, it threatens to strand investment that’s been made in good faith,” he said. “It challenges investor confidence.”