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Renewables, FITs and the Future of Ontario’s Electricity System.

Last week’s announcement by the Government of Ontario of the first round of contracts under its Green Energy Act Feed-in-Tariff (FIT) program, although welcomed by renewable energy developers and environmentalists, has been met with a host of criticism from other quarters. These criticisms have focussed on two dimensions of the initiative: its impact on electricity costs for consumers; and the environmental and health effects of wind turbines.

The cost and impacts of the renewable energy sources whose development the FIT program is so effectively promoting need to be considered in light of the performance of the energy sources they will be displacing. A large portion of Ontario’s existing electricity generating infrastructure will reach the end of its operational life over the next twenty years and will need to be replaced. Virtually all of the available new supply options (with the possible exception of conservation) will come in at higher costs than the current electricity price paid by consumers.

The more appropriate measure therefore of the costs of the FIT program is relative to the expected costs of other new supply options. In this context, the costs of renewables under the FIT program are relatively competitive. We know, for example, that under the procurement process that the province wisely suspended last summer, the electricity cost for new build nuclear reactors came out at at least 20 cents/kwh. A 13.5 cent per kwh FIT for wind power, which is likely to make up the bulk of the energy provided under the initiative, doesn't look bad by comparison. The reality is that whatever options the province takes, electricity costs in Ontario are going to rise. The key issue is to make choices that keep these costs as low as possible while building a more resilient, adaptable and sustainable system.

The second line of attack being advanced in relation to the FIT relates to the health and environmental impacts of wind turbines. Again it is crucially important to keep in mind the performance of the energy sources that the projects initiated under the FIT would replace. Over 660 premature deaths per year have been attributed air pollution from coal-fired electricity in Ontario alone. This is to say nothing of the upstream impacts and risks of coal mining, be they the occupational hazards of underground mining so terribly demonstrated in West Virginia last week, or the destruction of entire landscapes via open-pit or mountaintop removal mining.

Nuclear for its part, in addition to its cost, security and weapons proliferation risks, produces extremely hazardous waste streams which will require management and care over hundreds of thousands of years. Uranium mine-mill operations are associated with the extensive contamination of biota and surface and groundwater with radioactive, toxic and conventional pollutants, resulting, among other things, in significantly elevated cancer risks for consumers of 'country' food in the vicinity of such facilities. Natural gas, although a much cleaner burning and more efficient fuel than coal, is associated with increasingly severe upstream impacts as North American gas supplies shift from ‘conventional’ to ‘unconventional’ (e.g. shale gas or coal bed methane) sources.

The biophysical impacts of wind turbines, for which the evidence of adverse effects in the formal literature is decidedly thin despite two decades of large scale deployments in the densely populated landscapes of Western Europe, look rather less serious by comparison. If we are to build more environmentally sustainable energy systems then low impact renewable energy sources like wind will have to play a major role in the process.

Although the initial round of contracts announced last week represent an important start towards building a viable renewable energy industry in Ontario, the sector still faces some critical barriers. Chief among these is whether the various constraints on renewables development that remain in place will choke off the sector’s development before it can reach the critical mass needed to attract and sustain major value added design and manufacturing activities. Even more seriously looms the uncertainty over the overall direction of the province’s electricity system and the role of renewables within it. That question was highlighted by Energy and Infrastructure Minister Brad Duguid last week when he suggested that new renewables would never constitute more than ten per cent of the system. If that is the government’s intent, then the investments announced last week may only signal a flash in the pan, rather than a laying of the foundation for a new ‘green’ economy in Ontario and a permanent realignment of the province’s electricity system in the direction of sustainability.
April 9, 2010