Escalating electricty costs

Impact of Industrial Wind Turbines on Ontario Electricity Rates

How much more will electricity cost us?

According to Gerry Angevine, Energy Economist with the Fraser Institute, electricity prices will go up a further 46% for the average family next year. In 2015, residential rates will increase 66% from 12¢ to 20¢ per kWh. Ontario residents will pay an average of $285 million more for electricity each year for the next 20 years as a result of subsidies to renewable energy companies. By 2014 Ontario’s rates will be the highest in North America. Not counting grants, wind energy costs FOUR times more than hydro. (http://www.fraserinstitute.org/publicationdisplay.aspx?id=18217&terms=wind). Businesses and industrial customers will be hit by almost $12 billion in additional costs over that period, and work in the province will become uncompetitive. As a result of unaffordable electricity rates, businesses are already leaving Ontario.

Why such increases in the cost of electricity?

We are paying for the subsidies and tax breaks on renewable energies and for the Samsung deal.

What is the Green Energy Act and how does it affect electricity rates?

The Green Energy Act (GEA) was enacted in 2009 to increase the use of renewable energy (wind, solar, biomass) and to facilitate the replacement of coal.  However noble these goals, they are costly and difficult to implement. Ontario, unlike other jurisdictions, already has an energy mix that is significantly greenhouse gas (GHG) emission-free.  Hydro and nuclear energy supply nearly 80% of electricity generation.  Coal was already a very minor part – less than 3%.  Renewable energy could theoretically replace coal and gas, but due to the intermittency of sunshine and wind they are unreliable as sources of baseload power.  Ironically, wind usually requires gas backup.

Nonetheless, the GEA introduced the Feed-in-Tariff (FIT) program that pays wind producers a significant premium over other electricity generators with the exception of solar.  Moreover, the FIT program guarantees purchase of the electricity whether or not there is a demand. Since electricity cannot be stored on a utility scale, it must be used when it is fed into the grid. If there is not sufficient demand in Ontario, the IESO (Independent Electricity System Operator) must find another “customer” in the Northeastern Grid who wants the power, and then negotiate a price.  But this price is often lower than Ontario producers were paid. Usually it is about a third. Sometimes, no other user really needs the power, but the IESO must pass it along to maintain grid stability. Then the price turns into a payment to take Ontario’s wind-produced power. Not exactly a good deal for Ontario, is it?

Can wind energy meet Ontario’s electricity needs?

Everyone agrees (including the industrial wind industry) that the wind blows more at night than during the day and more in the spring and fall than during summer or winter. Everyone also agrees (including the industrial wind industry) that peak demand for electricity happens during the day when businesses are open and especially on summer days when air conditioners are blasting.  Yet wind production is at its lowest point during the summer months. See the recent report from the Ontario Society of Professional Engineers, Wind and the Electrical Grid: Mitigating the Rise in Electricity Rates and Greenhouse Gas Emissions, http://www.ospe.on.ca/resource/resmgr/doc_advocacy/2012_doc_14mar_windelectrica.pdf.    The wind industry, however, ignores this inconvenient truth entirely in its messages to the people of Ontario. It pretends that wind can provide steady, reliable power on demand. But unlike hydro or gas or nuclear, that is one thing it cannot do. If the wind is not blowing, no electricity is generated. So, why would we want to pay more for wind than for other forms of energy when it is not available when we actually need it?

If the consumers and taxpayers of Ontario are not benefitting, who benefits?

Profits to the corporations are huge: typically $500,000 per turbine, per year x 20 years = $10 million dollars per turbine.

Landowners who have leased their land receive annual payments linked to electricity production. Typical gross revenues are approximately $8,000/turbine per year, or $160,000 over 20 years. This is a real financial incentive for landowners, too.

Ontario has plans for 7,000 wind turbines, but independent analysts have calculated that 27,000 would be required to meet the proposed 15% of electricity needs. See http://ontariowindperformance.wordpress.com/2010/09/18/how-many-wind-turbines.

In a recent article in the Financial Post, Bruce Sharp, a professional engineer and 25-year veteran of the Ontario energy industry, explains why wind energy is a bad deal for Ontarians: In the end, Ontario will have expensive renewables that do not replace coal, do not deliver health savings, may cause a net job loss and that also contribute to a costly supply glut. Who pays for all of this? Ontario electricity consumers in steerage. The upper decks, including offshore suppliers, far-flung and local project developers and investors, are all making out like bandits … and those setting Ontario’s course seem strangely indifferent to what’s happening on the lower decks. http://opinion.financialpost.com/2012/04/04/ontarios-power-trip-the-great-electricity-bill-cover-up/    Image ID:10342816

  1. I see someone is trying to survey the costs of electricity on Ontario residents
    http://www.ontariotenants.ca/electricity/Heat-Electricity-Survey-01.phtml

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