by Andy Frame, P.Eng., consultant in the electrical power industry and formerly Senior Adviser, Electric Utilities, Ontario Ministry of Energy, and past Municipal Hydro Chairman and Chair of the Utility Association.
The McGuinty government is spending the Ontario electricity revenue to encourage investments in wind and solar green-power generation, without any chance of a benefit to the system or to the customer.
The big corporate investors in wind farms and maybe solar farms will reap rich rewards for 20 years, while the customers pay higher and higher prices for electrical energy.
This push for more green power while at the same time delaying decisions on extending the Darlington nuclear plant, could result in a power shortage within four to five years, and be a major blow to the Ontario economy and the need for more jobs.
The Ontario electrical load, which two years ago was peaking at 26,500 megawatts (MW) power requirement, will, because of the recession, have a winter peak in January 2010, of between 19,000 and 20,000 MW.
This 7,000 MW reduction has given the government the time to push for the Green Power Plan, and thus delay making any decisions on the need for new nuclear power units at Darlington.
The government was told two years ago in a report by the Ontario Energy Authority (OEA) that “wind and solar power will never be more than a niche supplier of power in Ontario.”
The geographic reality of Ontario is that there is not enough sun or consistent wind to make these power sources a significant supply to the system. However, the government has adopted the program of shutting down coal plants, wants to look green, and wants to make all of its voters believe that green power can solve all the problems. Coal is bad — green is good — so spend lots of money on green power.
Subsidies are available to developers of large windmill operations with 20-year contracts for energy supply at guaranteed prices that will ensure a return on the investment.
They consider the complaints of the neighbourhood around a 200-windmill farm only a minor issue that will go away. Green is good — so live with it.
The green plan also encourages individual users to invest in a windmill and save money, by buying less energy from a utility. However, the analysis of the investment shows that there is no benefit.
A 3.5-kilowatt unit supplied by a prominent builder in Saskatchewan costs $12,500 plus $500 shipping plus 10 per cent tax. Installation will cost about $3,000. The total investment of $17,000 will, at 5 per cent finance, cost $850 a year, and there will also be maintenance costs.
How much energy will be produced each year by the 3.5-kW unit? Who can tell you? It depends on how much wind blows and the number of hours.
The OEA uses 18 per cent when estimating the contribution to the system of installed windmill power systems. At only 18 per cent the individual will reduce his energy cost on his bill from about 11.46 kilowatt-hours in Toronto, down to an average of 5 to 6 cents per kilowatt-hour, and will still have to pay all of the fixed charges from his utility system, because it has to be there when the wind doesn’t blow. It’s a feel-good thing — no coal burning — but the $900 annual cost will result in a loss of about $250 a year.
Subsidies for investments in wind power and the guaranteed contract prices of 13.8 cents per kilowatt-hour for onshore wind installations, and up to 80 cents per kilowatt-hour for other generation, are paid by the Global Investment Fund designed by the OEA.
It puts the cost on the user’s bill, increasing the rate paid for energy. For large industrial customers the extra charge can be a significant cost and a major cost of many thousands of dollars. In November 2009 the Global Investment Fund charge was 3.1 cents per kilowatt-hour
All of the green power generation and the money being spent do not have any impact on the Ontario power system at the present time. The load is down 17 per cent in Southern Ontario and over 50 per cent in northern Ontario with the forestry and mining industries having been hit hard.
However, the economy is showing some signs of recovery. Both federal and provincial governments are making investments to encourage new industry and more job creation.
We will still have an automotive and a steel industry, but on a smaller scale.
The power requirement for industry together with the needs of our growing populations will require a higher power level. At the same time, our existing power plan is aging and the government is going ahead with the closing of coal plants.
Where does the new power come from? The OEA has said don’t count on wind and solar. Nothing but a major supply can provide the expanded needs. New gas-fired turbine units are coming online soon, better than coal but still with carbon emissions, not green.
The plan to enlarge the Adam Beck generating plant capacity has been delayed because of tunnel problems. Most important is the McGuinty government’s delay of the decision on the Darlington extension. They are still trying to get the federal government to guarantee part of an AECL generating plant, but have not made any progress.
The end result of the McGuinty government green plan is that the investment in wind, solar and other green sources looks good because they displace coal plants, but they cost a lot of money which is going to corporate wind farm developers and other investors. The little windmill operator saves nothing and the customer pays more.
And, the overall green plan will not provide significant supply to the electrical power system.
As our electric power plan continues to age, we wait for large new generating plants to be put in place, an eight- to 10-year build time. We may come to the time where we have to ration power, a time when investors in new industry in Ontario will have to apply for a power permit so that they will know that electric power will be available.
This will be a disaster for Ontario. Expanding the electrical power supply now in Ontario is essential. We will need power for new industry and new jobs. Green power won’t do it!