By Lorne Gunter, National Post
Seriously, I wouldn’t have believed there were any wheels left to fall off of Ontario Premier Dalton McGuinty’s green-energy bus. But I was wrong. On Thursday, the European Union filed a complaint with the World Trade Organization claiming that the huge subsidies Ontario is offering developers of alternate energy violate international trade rules. Of course, without enormous subsidies, green energy is a non-starter. It doesn’t make economic sense. So if the EU complaint is upheld, Ontario will have to abandon its Green Energy Act of 2009, once and for all, but not before it has cost Ontario taxpayers and consumers billions of dollars.
Over the last 12 months, the Ontario Liberals have already had to abandon their plans to build huge wind-power turbine farms in the Great Lakes. cancel construction of a huge natural gas-fired power plant in Oakville, Ont. and admit there is no practical way to connect to the provincial power grid all the solar panels they encouraged farmers and landowners to erect. That means the tens of millions of dollars they spent subsidizing the building of solar collectors was wasted (as was the tens of millions private landowners invested with the promise of energy income when the government’s scheme came true).
The plan was always an example of magical thinking. It was always a case of believing that if good people wished hard enough for good things, those good things would just happen — like planting enchanted beans and expecting them to grow into a beanstalk that leads to untold treasure.
There is a reason alternate energy hasn’t replaced traditional energy already: It doesn’t make economic sense. And governments can’t change that reality simply by overtaxing citizens or overcharging consumers and giving the booty to “green” energy companies. That’s false economy. And as soon as those being fleeced realize that subsidies are all that is keeping the green dreams afloat, they will demand the end of the subsidies, which in turn will pop the green-energy balloon.
Alternate energy is not being kept down by a conspiracy organized by Big Oil or Big Coal. It isn’t being kept down at all. It remains alternative rather than mainstream because you can’t change the laws of economics. If a commodity costs more to produce than it can be sold for, it will never replace profitable competitors.
But it’s not as if the Europeans are wearing halos on this one. They have been as guilty of magical thinking on green energy as Ontarians — maybe more so. It’s just that economic and budget realities caught up with them sooner. The EU has been every bit as generous with subsidies to wind, solar and bio fuel. However, their budgets ran out of room for grants to alternate energy producers before Ontario’s did. So, at least in part, their complaint to the WTO is an attempt to beggar Ontario in the same way their decades of free spending have already beggared them.
If you want to understand what a shell game green energy is, just ready between the lines of this article from Technology Review, an online publication of MIT, the Massachusetts Institute of Technology.
As governments around the world are scaling back support for renewable energy, venture capitalists are shifting their clean technology investment strategy. They’re focusing less on high-risk technologies and more on ideas that could have a faster payoff but a smaller impact, such as technologies for improving energy efficiency …
Venture capitalists have traditionally focused on companies with low capital requirements that can quickly get bought up or go public … But in recent years, many venture capitalists have been enticed to risk longer-term, high-capital energy investments in clean energy, thanks to generous government subsidies in renewable energy markets.
I guess you don’t actually have to read between the lines to get the jist here. What has attracted investors to renewable energy projects to date has been the vast government payouts available. Politicians eager to appear concerned for the environment or global warming have used the coercive force of government to extract billions from taxpayers and consumers and transfer it to investors. That is not a “clean technology investment strategy,” it is a plan for subsidy harvesting.
Also on Thursday, it was reported that Silfab Ontario, a solar-panel maker less than four months old, already has a huge backlog of unbought panels and may have to layoff workers. Landowners who might have bought solar energy systems are now reluctant to do so because the Ontario government is no longer prepared to contract with them to supply the province with power at well above market value. Since Ontario can see no way of connecting thousands of tiny solar projects to the provincial power grid in a way that makes economic sense, it has stopped making ridiculously expensive deals with s0lar-panel operators. In turn, those operators have stopped buying panels.
The main point is, wishing does not make something so. It is not possible for governments to wave (expensive) wands over nice thoughts and have those thoughts transform into benevolent realities simply through magic and good intentions.
In responding to the EU challenge at the WTO, Ontario Energy Minister Brad Duguid — a politician who indulges in fanciful thinking as much as any in the world — insisted it was a sign of the Europeans’ envy. The EU sees “the thousands of jobs being created here and the billions of dollars of investment flowing into Ontario,” and they turn green for another reason.
Really!? Does anyone actually imagine that if thousands of jobs and billions of investment dollars were rushing into Ontario, the Liberals would have abandon their green dreams and Silfab would have hundreds of unsold solar panels?
But I suppose it is the mark of the True Believer that even after his dreams have been shown to be false, he clings to them even more fervently; with every bit of bad news, he claims with even more enthusiasm that everything is fine, better than fine, and that soon the rest of the world will see paradise as he does.