Questions Arising from the Auditor General’s 2011 Report on Renewable Energy Initiatives Compiled by Keith Stelling, MA, MNIMH, Dip Phyt, MCPP
With comprehensive and detailed evidence gathered independently from inside the Ministry of Energy– much of it previously unavailable to the public– the Auditor General’s Report unambiguously challenges both the rationale and implementation of the Green Energy Act.
The Act has been promoted as a mechanism for cutting greenhouse gas emissions, increasing job opportunities, and creating a competitive business environment. However the Auditor General’s investigators found little evidence that these objectives have been or would be realized. Instead it suggests that the escalating electricity costs resulting from the addition of solar and wind power to the grid with their extravagant feed-in-tariffs are having the opposite effect.
The report emphasizes “that wind and solar renewable power will add significant additional costs to ratepayers’ electricity bills”. (89) However there will be additional costs because “wind and solar are not as reliable and require backup from alternative energy-supply methods such as gas-fired generation”. (89) Nevertheless, the public was led to believe increased costs would be minimal (1%). Surveys indicated that people were willing to pay only up to 5% more for renewable electricity.
The report indicates that the escalating increase of electricity prices will continue to gain momentum as rising costs for backup, connection of renewable energy projects, spilling hydro and nuclear, and payments to renewable energy producers not to produce electricity increase. The negative implications of increased electricity costs on employment and the economy in general further challenge the practicality of the Green Energy Act. The Auditor questions whether the estimate of the number of jobs that the government claims have been created by the Act is accurate and asks why those that are being lost are not being accounted for.
However the report goes beyond assessing the financial liability of imprudent expenses and overly generous feed-in-tariffs offered to energy producers. “No comprehensive business-case evaluation was done to objectively evaluate the impacts of the billion-dollar commitment. Such an evaluation would typically include assessing the prospective economic and environmental effects of such a massive investment in renew¬able energy on future electricity prices, direct and indirect job creation or losses, greenhouse gas emissions, and other variables”. (89) Alarmingly, decisions continue to be made piecemeal without overall cost and effectiveness evaluation. The investigators found that “the ministry’s internal audit service team . . . had not recently conducted any audit work on renewable energy initiatives”. (88)
The government’s adamant contention that there are no adverse health effects from industrial wind turbines is also questioned by the Auditor General who notes that the report by Ontario’s Chief Medical Officer of Health “was questioned by environmental groups, physicians, engineers, and other professionals, who noted that it was merely a literature review that presented no original research and did not reflect the situation in Ontario”. (119-120)
Even more worrying, is the lack of appropriate oversight and transparency. Decisions have been made by ministerial directive and directions, relying largely on the opinion of a single inexperienced minister, while circumventing both the recommendations regarding feasibility by expert energy professionals in the Ontario Power Authority (OPA) and frustrating the responsibility for oversight by the Ontario Energy Board (OEB) to ensure that renewable energy resources are obtained in a cost-effective manner.