Saturday, 19 July 2014

Ontario Liberals Energy Reign of Error by Will Dubitsky, July 19, 2014

Ontario provincial Liberal energy policies to-date are a dog's breakfast, because the Liberals have had a terribly bad habit of making announcements and then retracting after each announcement with a series of less and less ambitious goals -- to a point where it became, and still is, almost impossible to base anything on their word.  

To this effect, when the Ontario government came out with its Green Energy Act several years ago, it set an objective for a non-hydro renewables capacity of 10.7 GW by 2015.  This was latter re-set for 10.7 GW by 2018 and the latest announcement, December 2013, has the objective pegged for 2021.

The May 2013 WTO ruling that rendered "illegal" the Ontario content requirements pertaining to solar and wind farm projects -- 50% and 60% Ontario content to be eligible for Feed-in-Tariff (FIT) rates for wind and solar farms respectively --  put Ontario into a tail spin.  The Ontario Liberals have spoken of a long term procurement plan to replace the FIT program, but quite frankly, they don't see to know themselves what they are talking about.

For several reasons the Ontario Liberals' capitulation on the WTO content ruling strikes me as based on a lack of initiative on Ontario's part.

First, since Quebec has a 60% Québec content requirement via Hydro-Québec for wind projects, one would think that Ontario could have found a way around the WTO ruling if it had wanted to. 

Second, Brazil's state development bank, Banco Nacional de Desenvolvimento Economico e Social,  has wind energy project local content rules for preferential financing arrangements.  It has a staggered plan to require the wind sector to eventually source 60% of their content for projects by, around mid 2016. In June 2014, Vestas of Denmark invested $43.6M in Brazil to meet Brazil's local content requirements.

Third, there is the US which applies it's Buy American Act to just about every infrastructure project.  Note that this suggests that even the Canadian federal government has plenty of wiggle room to set it's own national rules on Canadian clean tech content. Only the NDP would have the courage and conviction for such a policy.  It's been an awful long time since we have had a federal government that stood up for Canadian interests!!!!!!!!!!!!!!

Returning to Ontario backtracking, the Ontario Liberals have scaled back a deal involving Samsung, Korea Electric Power and Pattern Energy, made outside of FIT in the early Green Energy Act days.  The original deal would have had the Ontario government spend $9.7B to purchase 2500 MW of solar and wind energy in return for 4 clean tech manufacturing plants.  But in June 2013, Ontario announced it was downsizing the agreement to $6B for 1369 MW.

Actually, Ontario Liberal energy policies is reminiscent of the corny Clairol cliché ads of the past, "Keep them guessing!"


  1. Those FIT contracts went to Liberal energy insiders who jumped in when the Green Energy Act was created. We also have Enbridge, the oil barons in there. And why not, considering that intermittent wind power needs to be backed up by fracking natural gas, hence why those gas plants needed to be built. Oh, did I mention P3s which have been a financial disaster where ever they go.

    1. Should you so wish, we could expand the article to include the points you raised to publish it as a co-authored article in The Common Sense Canadian, for which I am a contributor.
      On fracking, poor economic run-away methane GHG as well as water and air pollution make this a very unclean fuel.