November 29, 2010
Dear Sir/Madam,
Ontario’s Green Energy Act is not without its flaws, but to blame it for all that ails Ontario’s electricity system, as the article in this Saturday’s Star (“Green goals, bigger bills”) seems to do, borders on the ridiculous. The system’s problems run far deeper and go much further back than the adoption of the legislation last year. The reality is that Ontario’s electricity system has been lurching from crisis to crisis for much of the past four decades. A major factor is the succession of crises has been the repeated failures of the system’s architects to grasp the implications of the structural changes occurring in the province’s economy for the likely future direction of electricity demand, while remaining wedded to models build around large, centralized generating facilities that have been unable to adapt to the province’s changing circumstances. Unfortunately the government’s new ‘Long-Term Energy Plan’ does little to address that problem.
With respect to costs, it is important to remember that the current market electricity price bears no relationship to the actual costs of providing the new sources of electricity needed to replace the province’s aging nuclear and coal plants. Compared to the current market price of 3.47 cents per kilowatt hour 13.5 cents for wind power under the Green Energy Act Feed in Tariff Program sounds terrible. But compared with the likely costs of new build nuclear facilities that emerged from the province’s efforts to procure new reactors of somewhere well above 20 cents per kilowatt hour, it doesn’t look so bad. The reality is that all of the available sources of new supply, with the exception of conservation, will cost more. The government does deserve some credit for attempting to be honest about that reality, and for putting the opposition parties on the spot with respect to what their alternatives are. That said, those who are really concerned about future costs should be far more upset about the government’s unwavering commitment to 50 per cent of the province’s future electricity supply coming from nuclear power where, based on what we have learned from the province’s procurement efforts and the rebuilding projects at Bruce and Pickering, the government's estimated cost of $33 billion can only be regarded as wildly optimistic.
Ontarians deserved a serious conversation about the future direction of their electricity system. Simply laying the system’s problems at the feet of the Green Energy Act does little to help with that effort.
Yours sincerely,
Mark S. Winfield, Ph.D.