Why dismantling the Green Energy Act could hurt rural Ontario

ANALYSIS: The Progressive Conservatives have promised to repeal the legislation — but farmers and residents have been counting on the income that renewable energy generates
By Mary Baxter - Published on June 13, 2018
wind turbines on the edge of a lake
There are now more than 2,500 wind generators across the province. (Lars Hagberg/CP)

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LONDON — Over the past decade, wind turbines have been popping up across the province. There are now more than 2,500 of them, mostly in rural Ontario — and some local residents aren’t happy.

Some worry about the effects of wind farms on the environment and property values — and they put the blame on the 2009 Green Energy Act, introduced by the Liberals under Dalton McGuinty, which facilitated the proliferation of wind turbines.

The Progressive Conservatives, whom rural Ontario largely supported in the recent election, have pledged to “stop sweetheart deals by scrapping the Green Energy Act.” But experts caution that abruptly doing away with the legislation could have serious consequences for rural Ontario.                                                                                                           

The Liberals promised that, through their green-energy plan, they would cut emissions, upgrade the province’s aging electrical grid, and make energy production more sustainable. It was also pitched as a means of creating jobs.

Renewable-energy projects did generate some jobs, but many of them weren’t permanent. And when the government closed its coal-fired plants, as it had promised to do, the move caused job losses in areas where the economy was struggling.                                                                       

Some of the green-energy programs were also mired in dysfunction. The Feed-in Tariff and microFIT programs, designed to pay small-scale producers for the energy they generated, experienced long delays as utilities discovered that their aging electrical grids lacked the capacity to accommodate the projects — which included turbines, biodigesters, and solar arrays — without expensive upgrades.

Ontario’s green-energy shift also produced scandals; a contract with Samsung, for example, became a contentious issue during the 2011 election campaign. (The province had given the South Korean corporation preferential access to the electricity grid, undermining its own plans to attract investment in the green-energy sector.)

In 2015, Ontario’s auditor general blamed overly generous renewable-energy contracts for having inflated the cost of electricity. Bonnie Lysyk estimated that Ontarians would pay $9.2 billion more for renewable energy over the next 20 years than they would have under the province’s previous energy policy.

“We can all say things could have been done more cost effectively — could have, should have — but the reality is, there is an irreversible push to see more renewable energy deployed,” says Dan Goldberger, board chair of the Ontario Sustainable Energy Association, an industry group for the renewable-energy industry.

Supporters of the Green Energy Act say rising hydro costs aren’t the result of expanding green-energy production. They argue that inflation and the expense of running nuclear plants are the real culprits. (Some observers also suggest that the cost of replacing aging infrastructure is a factor.)

Meanwhile, as green technology has improved, green-energy prices have come down. Late last year, for instance, the Alberta government negotiated a deal to buy electricity from wind-turbine projects for $37 per megawatt hour — one economist told the CBC that the cost was a “fraction” of what it would’ve been just a few years earlier.

Goldberger says cancelling green-energy production contracts could scare off potential investors. “The worst thing the government could do is to cancel everything [signed] over the last 10 years,” he says. “It just sends out the wrong message when you need [these companies] to reinvest their money and their services in Ontario as we transform our 100-year-old system into something that’s a lot more modern.”

Scrapping the Green Energy Act and related contracts could have legal consequences. Trillium Power Wind Corp., for instance, is suing the province for $500 million for placing a moratorium on off-shore wind-farm development in 2011 — something that the company alleges was a deliberate thwarting of its plans to develop an offshore wind farm on Lake Ontario. (This week, court proceedings were expected to begin on the claim, which has not been proven.)

Abruptly cancelling the act could also damage rural businesses: many farmers and small-business owners in rural Ontario have signed on to programs such as microFIT and net metering to offset hydro costs by producing their own electricity. Other property owners lease land to larger producers of renewable energy. Many participants in microFIT will not break even on their projects until 2019 or later — if their contracts were cancelled, they would face potential losses.

“I’ve known farmers that have said they earned more money from the solar panels on the barn than they did from the chickens that were under the roof,” says Paul Parker, a professor of geography and environmental management at the University of Waterloo.

He says that if the act is dissolved without being replaced by something else, the province’s fledgling green-energy industry may not survive.

David Mayberry, the warden of Oxford County, hopes it will. He says the county aims to become self-sufficient in renewable-energy production by 2050. County residents, businesses, governments, and organizations currently spend in excess of $400 million a year on hydro generated elsewhere, he says. So being able to produce even some of that energy would result in long-term benefits for the community.

Mayberry says he’s confident that even if the new government’s energy goals differ from the those of Oxford County, the two levels of government should be able to find common ground. “Are they actually going to prevent sustainable energy production going forward?” he asks. “I would be very doubtful that that would happen.”

Correction: This article originally misstated the rate that the province of Alberta has agreed to pay for wind-generated electricity. TVO.org regrets the error.

This is one in a series of stories about issues affecting southwestern Ontario. It's brought to you with the assistance of faculty and students from Western University’s Faculty of Information and Media Studies.

Ontario Hubs are made possible by the Barry and Laurie Green Family Charitable Trust & Goldie Feldman.

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